In collaboration with Imperial College we carried out a study on European smart cities to analyze the maturity of initiatives, develop recommendations and determine success factors for European smart cities.
This article focuses on the key success factors for the development of smart cities and the different challenges that these cities will have to face to fully succeed to become the real mainstay of the society of tomorrow. 

1) What are the challenges that Smart Cities will have to take up?

The complexity of issues faced:

Cities are confronted with vast and multifaceted problems, which often require structured and interlinking action plans. Take the problem of congestion. This common urban problem cannot be solved by improving public transport alone but involves an approach which combines various initiatives such as improving traffic flow systems, optimizing parking as well as introducing car-sharing and/or bike schemes.

Political short-termism:

Smart city projects are mostly long-term projects. It may be politically unpopular to invest large amount of taxpayers’ money into projects, benefits of which won’t be observed in the nearest term.

De-centralized city governance:

Andrew Collinge, a spearhead of London’s Data Store, recognizes that London’s 33 Borough make-up has proven “a key challenge to the development of a Smart City vision in London” as many do not wish to cooperate.

The innovation dilemma:

Many cities claim they want to lead the pack in terms of innovation. Yet, there is also an increasing desire to see previous examples of where innovative projects are proving successful. This need to see value is holding many back and also showing the hypocritical nature of many cities.   

Difficulty in creating valid business models and value propositions:

Currently, smart city initiatives are often conducted in partnership with a range of different bodies (e.g. city councils, companies, research institutes), many of which may have very different priorities when it comes to forming business models. This lack of consensus has, in many cases, formed a barrier to action. Professor Gann emphasized that creating a viable value proposition is one of the biggest challenges, particularly when some smart city solutions require integration horizontally across different industry silos.

Technological giants sometimes suggest solutions that are not feasible:

“City control room” solution is one of the possible ways to tackle smart cities. However, Andrew Collinge argues that it is not a realistic solution for most of European cities, and it would suit more when a city is built from scratch.         

2) What are the Key Success Factors for the development of Smart Cities?

Central Authority:

According to research made, existence of central authorities is one of the Key Success Factors for smart cities. Amsterdam and Vienna can boast the most advanced central governance, which positively influences a holistic vision of the city and helps to optimize all the processes. Andrew Collinge suggested that the existence Chief Innovation Officer supervising all smart projects in the city and optimizing the processes would solve many of the challenges and speed up city technological development, especially if this person has a political backing.

Clear Vision:

“People are beginning to coalesce around a common story” Duncan Wilson. Clear vision is crucial, as it will help to get right players on board and inspire all the stakeholders.

Innovation ecosystem:

Smart cities should be seen as innovation ecosystems. According to the research made it is very important to marshal efforts of different partners such as local authorities, big technological companies, academic institutions and start-ups to create this ecosystem, where numerous new forms of collaboration are emerging, in which everyone is playing on his strength to bring win-win smart solutions.

Government’s priority:

Smart cities should be a priority for governments not for the sake of technology itself, but for the sake of optimization, saved funds and resources, boosted economic growth and improved quality of life that technology can offer. According to Professor Stephen Caddick, Vice- Provost of UCL, smart projects will play a key role in economic recovery and growth for the UK.

Involvement of big private companies:

Currently smart city projects cannot always offer commercial gain. They often require substantial R&D spending, which will not be recovered in the short run. That is the reason why the majority of projects are run by government bodies. However, it is impotent to get big private players on board giving them right incentives as their funding and expertise can take projects on a different level. Private Public Partnerships are common forms of collaboration, as risks of private sector are balanced by involvement of public bodies and opportunities for commercial gain are numerous. London Oyster card is an example of a project that would not be possible without private players on board.

According to Professor Gann “Understanding users and markets for new services and creating entrepreneurial capabilities will be done in tandem with developing engineering systems and technologies. This combination will fuel the business models that we need for jobs and growth in the digital economy.”


In order to form smart cities is vital to foster innovation and encourage a start-up culture. Innovative new companies create new jobs, boost the economy and increase the competitiveness of a country. Moreover, many start-ups, such as Cleantechs, can make significant contributions to other smart categories.

Citizens participation:

It is important to involve citizens into smart city projects at the early stage. They are users of the city who can provide both ideas and financing for the smart projects.

 Small scale demonstrators:

In a successfully organized smart city projects should start at a small scale, the benefits should be proven, and the best projects should be scaled up on a city and then country level.


There is no one-size fits all way of creating a smart city, as much depends on size, population, key local issues and geographic location. To create a successful smart city, it is important to follow the key success factors such as getting start-ups and established companies on board, having available funding, and having citizens buy into a city vision.                                                             

“There’s no magic cream you can apply to make cities better” Duncan Wilson


From an Imperial College & BearingPoint study