Smart Cities: What They Are and Why They Matter

Smart City is the concept of a community, a town, or a city, that uses IoT technology to improve its services. Smart City companies develop IoT solutions.

June 5, 20198 min read

Ashok Chintagunta

Written by Ashok Chintagunta, MS Computer Science, Louisiana Tech University

CTO & Software Engineer, AI and Automation

Published June 5, 2019Updated September 2, 2026

A “smart city” is the concept of a community, such as a town or city, that uses technology—specifically the Internet of Things—to improve its services.

This may sound like science fiction at first. But smart city technology is the same technology people already use every day. Smart city companies have simply reused it. They use it to improve a community's infrastructure. When these projects are put in place, a community can work more smoothly and efficiently.

What is the Internet of Things?

The key to understanding smart city technology is knowing about the Internet of Things (IoT). This is an umbrella term for any physical object that is connected to the internet, often through a mobile app. For example, an IoT door lock would be a lock that one could access even when away from the door in question.

The advantage of IoT in this situation would be the ability to see on a mobile app that you had forgotten to lock the front door of your house.

Instead of going home to fix the problem, you could use the internet to lock your door from far away. It is clear that the ease IoT offers is already becoming a part of daily life for many people.

Of course, accessing the things you need from a remote location is one advantage of the Internet of Things, but there are many others. Some IoT devices are also connected to motion sensors.

A smart light, for example, could detect the motion of someone walking into a room. A smart garbage can could send an alert to its owner when it’s time to take out the trash.

What does this have to do with cities?

Connected street poles with traffic sensors and LED lighting in a smart city corridor

Smart city companies create these same technologies in a way that improves a city’s government-run services. Here are a few examples of how this might work:

PARKING

It’s a pain to drive around looking for a parking spot. Instead, a driver with access to smart city technology could access a mobile app that would show them available spaces.

This smart service would make life a lot easier for drivers in a smart city project by eliminating all the extra traffic created by people driving around looking for a parking spot and help them save on gas. And, of course, cutting out that traffic is good for the environment as well.

Columbus, Ohio takes its smart parking services further by partnering with smart city companies to provide charging stations for electric vehicles next to certain spaces.

TRAFFIC

A mobile app could show where traffic is bad. This would help cities and their people. The app could even suggest different routes with less traffic. Citizens could also report problems like potholes through the app. This would make it a two-way service.

WASTE

Instead of picking up trash on routine rounds, a smart dumpster would send an alert to the sanitation department in a smart city project. Notice how this is the same concept as the personal trash can above, only repurposed to serve a city.

WATER USAGE

A mobile app can tell citizens when they have used a certain amount of water each month. This is a very new way to partner with a smart city company. Users can set their own preferences. They can also keep track of their water use. This system is not just an idea. Cary, North Carolina, uses it to send water alerts to its citizens.

POLICE SURVEILLANCE

Smart video cameras can help the police department keep the community safe. Many cities already use cameras. These cameras record traffic violations and criminal acts. Smart city companies can provide smart cameras. These cameras come with technology to recognize license plates or faces. They can even send an alert to police if something suspicious happens.

Bill Gates’s Smart City and GOogle’s Smart CIty

The biggest tech companies are building their own smart city projects. For instance, Bill Gates' investment firm, Cascade Investment LLC, made an announcement in November 2017. They shared plans to build a completely new city. It will be near Buckeye, Arizona.

The new "Bill Gates smart city" will be called Belmont. This community will use solar energy. It will also take advantage of Arizona's easy rules for self-driving cars. This way, it can add smart city technology. Google also has big plans for a "Google smart city." Its sister company, Sidewalk Labs, is building it in Toronto. It will be called Quayside.

This neighborhood will feature smart city technology like raincoats for buildings, heated sidewalks for melting snow in cold weather, and self-driving taxis.

Microsoft Smart City

Microsoft smart city tools help governments. These tools allow them to meet the needs of their citizens in existing cities. For example, the government of Auckland, New Zealand, works with Microsoft. They create software and apps to improve transportation and parking. They also track what citizens say on social media.

Microsoft has also worked with Tel Aviv. Their goal was to make the government easier for citizens to access. This system works in two ways. Citizens can send a photo of a problem to the government using the "DigiTel Mobile App." The "Digitel Residents Club" app helps citizens stay updated. It shares news about local businesses and community events. Parents can even sign up their children for school through the app.

City operations center where technicians monitor traffic and utility telemetry

Any Town Can Be a Smart City

This short list of examples alone shows how a “smart city project” can take on a variety of forms. On the one hand, this variety can make the term “smart city technology” difficult because it isn’t very specific. Two places that use different smart technologies for unrelated purposes (traffic surveillance and water usage, for example) are both smart cities. A place is “smart” if it applies all of the above examples or just one.

On the other hand, this ambiguity is what makes the idea work so well. Every city is different: a smart city project that could be useful in New Orleans or Dallas would not be practical for our home base in Shreveport, Louisiana. There is a lot of freedom wrapped up in this idea for each city to decide what smart services would best meet the needs of its citizens.

Coming Up Next…

In our next article, we’ll discuss some of the “smartest” cities in the world, what makes them unique, and what we can learn from them, even in rural areas.

We will look at how governments have used smart city technology. This will help us find easy solutions. Small towns can use these solutions to offer better services. These services will be more efficient and convenient. They will also be better for the environment. Subscribe to our newsletter to learn more.

Smart City Project Examples

Company/Project
Location
Examples of Smart Technology
Belmont (Bill Gates)
Buckeye, Arizona
Solar energy, self-driving cars
Quayside (Google/Sidewalk Labs)
Toronto
Building raincoats, heated sidewalks, self-driving taxis
Microsoft partnership
Auckland, New Zealand
Transportation and parking apps, feedback tracking
Microsoft partnership
Tel Aviv
DigiTel Mobile App for problems, DigiTel Residents Club app

Smart city technology examples, domain by domain

Abstract descriptions of smart cities are not as helpful as looking at specific projects. Almost every real program uses sensors, a network, a data platform, and a decision. These decisions used to be made on a set schedule. Now, they are made based on evidence. The examples below are often implemented first by small and mid-sized cities. This is because these projects pay for themselves within one budget cycle.

Domain
What is sensed
Typical action
Indicative payback
Street lighting
Ambient light, presence, luminaire fault status
Adaptive dimming and fault-based maintenance dispatch
3-6 years, mostly from energy and truck rolls
Traffic
Vehicle counts, queue length, signal timing performance
Adaptive signal timing and corridor coordination
1-3 years in delay reduction
Water and utilities
Flow, pressure, acoustic leak signatures
Leak localisation before surface failure
2-4 years from non-revenue water recovery
Waste collection
Container fill level
Dynamic routing instead of fixed schedules
1-2 years in fuel and labour
Parking
Bay occupancy, session duration
Guidance apps and demand-based pricing
Under 2 years where enforcement exists
Public buildings
Occupancy, temperature, energy use by circuit
HVAC scheduling and load shedding
2-5 years in energy spend
Environment
Particulates, noise, flood level
Alerting, planning evidence, emergency response
Non-financial; regulatory and safety

Caption: the smart city technology examples with the clearest operational case for smaller municipalities.

What makes a deployment succeed or stall

  • Start with one measurable operating cost, not with a platform purchase.
  • Choose the network before the sensors — LoRaWAN, NB-IoT and mesh imply very different site work and running costs.
  • Budget for the ten-year battery and replacement cycle, not just the hardware purchase.
  • Insist on open data formats; proprietary lock-in kills the second project.
  • Set a data retention and privacy policy before the first camera or occupancy sensor goes live.
  • Assign an owner inside public works who is accountable for acting on the data.
  • Run a 90-day pilot on a single corridor or building before city-wide procurement.

The hardware for these programs involves tough tasks. Enclosures must withstand weather and vandalism. Power budgets need to last ten years.

Products must also pass certification for public use. This is standard product engineering, but with very strict demands.

Our electronics design and design for manufacturing teams build devices like these.

We use the same product development process as for consumer hardware. However, our environmental testing takes longer.

Smart City Technology Examples, by Domain

Smart city technology usually fits into four main areas. These are transportation, public services, safety, and buildings. A project succeeds if its data reaches a person who must act on it. This is more important than the sensor itself. Many projects fail if this link is missing.

Domain
Example deployment
Hardware at the edge
Metric it moves
Mobility
Adaptive signal control on a corridor
Radar or video detection per approach
Average corridor travel time
Utilities
Acoustic leak detection on water mains
Battery hydrophones on valves
Non-revenue water percentage
Utilities
AMI electricity metering
Two-way meters plus mesh collectors
Outage detection time
Public safety
Connected streetlight with fault reporting
LED driver with NEMA controller
Lamp outage repair time
Buildings
Occupancy-driven HVAC in civic buildings
CO2 and PIR sensors per zone
kWh per square foot
Waste
Fill-level sensing in public bins
Ultrasonic sensor in lid
Collection miles driven

Cost and Payback Ranges

Deployment
Unit cost installed
Annual service per node
Typical payback
Streetlight controller
$70-140
$3-8
4-7 years
Bin fill sensor
$120-250
$12-30
2-4 years
Water leak node
$400-900
$25-60
3-5 years
Signal detection per approach
$3,000-9,000
$150-400
Congestion benefit, not cash payback
Building zone sensor kit
$250-600
$10-25
2-3 years

Payback calculations mainly depend on labor, not hardware. A bin sensor saves money faster in a city with high fuel and overtime costs. This is true even if it is the same sensor used in a smaller town. The sensor saves money by cutting out two collection trips per week. Therefore, pilot projects should focus on a route or area, not just the technology itself.

Procurement Checklist for a Pilot

  • Name the operator who reads the dashboard daily, before you buy anything.
  • Require open data export (CSV plus API) and written ownership of the data in the contract.
  • Specify battery life at the actual reporting interval, not the vendor best case.
  • Confirm the radio technology has coverage on the pilot route today, not after a planned build-out.
  • Set a firmware update path that does not require a truck roll.
  • Define a decommission plan and cost per node so the pilot can end cleanly.
  • Write the go/no-go metric and threshold into the purchase order.

Cities that put the go/no-go threshold in writing before installation reach a decision in one budget cycle. Cities that do not tend to accumulate pilots that neither scale nor stop, which is the most expensive outcome available.

Frequently asked questions

What are the most common smart city technology examples?

Smart street lighting and connected traffic lights are good examples. Systems that find water leaks are also good examples. Sensors can check how full trash cans are. Parking guidance can show empty parking spots. Building energy management also fits here. These solutions are popular. They use real-time measurements instead of fixed schedules. This method quickly helps save money.

Do smart city projects only make sense for large cities?

No. Smaller cities often see faster returns on their money. This is because a few main costs make up most of their spending. These include trash collection, street light electricity, and water waste. A well-chosen project can greatly improve one of these areas.

What network do smart city sensors use?

Most cities use specific networks for their smart devices. For sensors powered by batteries, they often use low-power wide-area networks like LoRaWAN or NB-IoT. For devices needing continuous power and faster internet, such as cameras or traffic signal controllers, they use cellular or fiber connections instead.

What are the main privacy concerns with smart city technology?

Many kinds of information can be tied to a person. These include camera images, license plate readings, and phone MAC addresses. Exact occupancy data is another example. There are common ways to guard privacy. One way is edge aggregation. This means raw data stays on the device itself. Another method is to keep data for only a short time. Also, you must set and share a clear policy. Do this before using any system.

How long does a smart city pilot take?

A single-domain pilot typically runs 90 days to a full season: enough to capture weather variation and a monthly billing cycle, and short enough to make a procurement decision within one budget year.

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