Smart cities may have emerged as a feature of urban development around the UK. What are the implications of smart cities for small businesses? How can businesses leverage innovative smart services to ensure privacy and foster environmentally-conscious urban living?

Smart services in the UK and tips for businesses

The concept of smart cities continues to evolve as governments, municipalities, and businesses transform their services to reshape urban life. There is growing demand that the UK should embrace innovation, data-driven decision making, and sustainability in its smart city development. Such cities should aim to improve citizen experiences, optimise resources, and foster sustainable growth.

But what do smart cities entail? The remarkable aspect of smart cities lies in the extensive adaptability of technological resources. Multiple devices can be interconnected under one cloud-based master application using Internet of Things software (IoT). These cities function as cross-sectoral ecosystems that include municipalities, citizens, and businesses across multiple industries such as tourism, urban planning, transportation, mobility, health, and more.

Smart cities appear to appeal to citizens. Even though a combined total of 57% of our survey participants were unfamiliar with the name, the concept, or neither  —once explained— 81% expressed interest in residing in a smarter city model. For London-based respondents, this sentiment was even stronger, with 92% of respondents wanting to live in a smarter city model with more smart city services available.

To understand more about the relationship between UK citizens and smart cities, and the steps businesses can take to integrate themselves into smart city initiatives, Capterra surveyed 1,058 adults living in UK cities. The full methodology can be seen at the end of the article.

Most widely available smart services in UK cities

Numerous services and sectors can leverage the use of digital technology and data to provide social, economic, and environmental benefits. We discuss the most widely available smart services that cities deploy and break down the top four according to our survey.

Smart city services used in UK cities

1. Smart mobility

Data and improved connectivity can improve transportation efficiency and help reduce congestion in cities. In fact, 72% of respondents stated that smart mobility services were already available in their cities. Additionally, 48% of respondents who said their city had smart services have either used smart mobility services in the past or are currently using them.

The availability of these services —which include electric vehicle recharging stations— and shared mobility services, are either moderately or very important for a combined total of 79% of user respondents of smart mobility services.

Tips for businesses: Vehicle recharging stations (50%), car sharing (49%), bike sharing (49%), and electric vehicles (46%) are among the most used services by smart mobility users. Knowing that there is a demand for these types of services, businesses can provide bike or car-sharing schemes to incentivise their use and cater to these needs. Additionally, companies can also offer company car-tax incentives if workers go electric.

2. Smart payments and finances

56% of respondents in the UK stated that their cities have smart payment services at their disposal, and 47% of respondents who were aware of such smart services had already made use of smart payment and finance technologies. 

Smart payment systems can help streamline the online financial transactions within a city. This includes digital wallets and other contactless payments. Surprisingly, while 61% of the same subset of respondents from Wales used smart payment methods, the number was lower in London (40%) and Northern Ireland (37%).

Tips for businesses: Seeing as 47% of the respondents who are aware of such smart services utilise these apps for digital payments, companies should equip themselves with appropriate payment processing software. Such software can allow them to process credit card payments via the internet or traditional POS interfaces.

3. Smart security

57% of respondents stated that their city had smart security services, such as video surveillance in the streets and within public transport systems. In addition, of those respondents who are aware of smart technology in their city, 31% said they had turned to smart security tools to feel more protected. Smart cities can be kept secure by utilising technology that can help protect citizens. These include sensors, scanners, acoustic and video surveillance, and biometrics.

Tips for businesses: As cities and businesses become smarter and use more technology, they may also become increasingly vulnerable to cyberattacks. Companies should deploy cybersecurity measures to safeguard themselves against these attacks. The UK’s National Cyber Security Centre (NCSC) has recently warned of increasing risks due to the volume of data stored by Internet of Things (IoT)-connected smart cities, which can be tempting for cyberattackers and hackers. To prevent this, the NCSC has provided a set of principles that businesses can follow.

4. Smart energy

Smart energy solutions involve integrating renewable energy sources, or energy-efficient solutions to reduce resource consumption and decrease the local carbon footprint. For UK residents, our survey revealed that 54% of respondents said that smart energy solutions were available in their cities. Additionally, of those respondents who have used or are currently using smart energy services, a combined total of 93% said that investments in smart energy and sustainability services were either moderately or very important. However, only 37% of respondents who knew their city had smart city services had used these energy solutions. 

This gap between perception and usage or adoption could stem from factors like a lack of funding or the elevated costs of adopting new technologies, inadequate supporting infrastructure for seamless integration, compatibility issues with existing systems, or limited technical knowledge when utilising such services.

Tips for businesses: To bridge this perception-adoption gap in smart energy services, businesses should augment their energy-efficient practices. This can be done by conducting audits to identify areas where energy can be saved and adopting renewable energy sources like solar panels. When possible, businesses should incorporate smart energy in the services they provide, reducing their reliance on traditional energy grids and also potentially generating surplus energy for sale.

Delving deeper into smart energy practices, what steps can businesses take to enhance sustainability? We discuss this in the next sections.

Respondents prefer sustainability over convenience and accessibility

With climate change and the rising cost of living on many people's minds, users may value more convenient ways to monitor their resource consumption. In addition, one key goal of smart cities is to enhance sustainability. This was echoed by survey respondents when listing their top three smart city advantages. Specifically, 35% of respondents chose greater sustainability, followed by increased security (28%), and efficient urban planning (28%). 

Additionally, respondents highlighted sustainability as the primary focus for smart city development (39%), surpassing convenience (27%), safety (17%), and accessibility (16%). 

Smart energy can play a key role in boosting sustainability. From the variety of smart and sustainable energy services and methods available, we asked respondents who had either used or are currently using smart energy solutions the following:

Smart and sustainable energy service use in the UK

Best practices and insights for businesses to incorporate sustainability and smart energy

From the stats cited above, we can deduce the following conclusions and best practices for businesses:

  • Respondents are shifting to digital when tracking electricity or water consumption: over half of smart energy users use digital invoices to track their electricity or water consumption. Such energy management tools can help identify usage patterns and areas for potential savings using real-time data over traditional paper bills. Businesses can even spot peak consumption periods and offer recommendations, alerts, or even discounts when appropriate
  • Respondents are interested in secondhand shopping and anti-food waste services: the demand for secondhand shopping (47%) and anti-food waste services (44%) signifies a shift in consumer preferences toward sustainability and conscious consumption. Companies should be aware of an increasingly eco-conscious and budget-conscious audience seeking sustainable alternatives to traditional services. 

    Keeping this in mind, businesses can align their values with sustainable practices, such as participating in circular economy initiatives, where resources are kept in use for as long as possible through practices like recycling, reusing or refurbishing, instead of a traditional linear economy approach of 'take-make-dispose'. Businesses can also diversify their product offerings, and reduce waste to redistribute surplus products or communicate initiatives that showcase the business’s commitment to sustainability. 
  • Businesses in smart cities should ensure their products are easy to recycle: the UK has incorporated several waste management schemes in their cities. These can range from rubbish bins that send an alert when they are full, to AI-powered bins that sort your recycling. The use of these services suggests a rising awareness of the importance of recycling that should prompt businesses to take recycling seriously, use eco-friendly packaging, and waste management tools to contribute to waste reduction. 
  • Over a third of respondents use apps to check air and water quality or measure their carbon footprint: tools such as energy management software can be used to provide real-time monitoring and user-friendly reports, alerts, and data-sharing to contribute to a collective understanding of local water and air safety. Businesses can also use emissions management software to actively monitor and align their emissions with their carbon reduction goals.

Smart cities are here to stay: how can small businesses help?

UK smart cities face a dynamic landscape that combines efficient innovation, sustainability, and potential security issues. Keeping this in mind, businesses can play an important role in this transition and the outcomes. Smart city success and business success may go hand-in-hand, and this prosperity can hinge on fostering sustainability and building trust with citizens. 

Transparent data practices and robust cybersecurity measures could prove to be foundational for efficient smart city utilisation. For businesses participating in a smart city ecosystem, it is important to provide a user-friendly and secure infrastructure to adapt to smart services, while encouraging the use of sustainable transport and embracing smart energy solutions. These solutions can enhance efficiency and also showcase a commitment to environmentally conscious urban living, a sentiment amplified by consumer interest. 

The positive impacts of this may be immense. For example, smart energy users hope to witness positive impacts with the optimisation of environmental resources in their cities. The top three impacts they expect are improved air and water quality (52%), better waste management (49%), and improved education on sustainable issues for residents (38%). As an integral part of smart cities, businesses can take steps to tackle climate change and leverage consumer demands to be an active part of their smart city environment. 

To reach these objectives, businesses will need to turn to technology for help. Furthermore, having understood the smart services UK citizens desire, we now need to understand the technology behind these services. In the second part of our survey, we will delve further into the technologies driving smart cities and how businesses can leverage them to build smarter, more connected urban environments that meet citizen needs.

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To collect this data, Capterra surveyed 1,058 UK citizens in May 2023. The candidates had to fulfil the following criteria:

  • UK resident 
  • Above the age of 18
  • Live in an urban area with at least 50,000 habitants
  • Must have understood and correctly identified what smart cities are after being shown a definition

Respondents were provided with the following definition:

A smart city is a place where traditional networks and services are made more efficient with the use of digital and telecommunication technologies. This technology allows the sharing of information to improve the quality of citizen welfare, the quality of government services, and business opportunities.