Understanding IoT technology is one step, creating a smart city is another entirely.

According to the McKinsey Global Institute, a smart city operates by using technology and data purposefully to ensure better decisions are made to improve quality of life.

What, how and why do smart cities work?

What Is a Smart City?

A smart city is one that utilises IoT technology to collect data from the environment and use the information gathered to make improvements. The aim is to better a city and the citizens occupying this space. To put simply, a smart city uses data to provide its inhabitants a higher quality of life and generate economic growth.


A smart city operates through technology and smartphones, where devices are connected to wide area networks in any given space. Firstly, data is collected through sensors in an environment. Once the information is collected, it is delivered out to inform people that need to know via alerts, insights or actions.

Smartphones now have the potential to work as the key to a city. How? Information on traffic, safety alerts, health, community and more are all being left in the hands of citizens who can access this through smartphone apps and devices.

To put this concept into practice, Telstra has been working with local councils around Australia that includes City of Casey in Melbourne to deliver a Smart Parking Initiative. The premise of this has been to deploy IoT ground sensors across high volume parking areas. Data is collected on parking spaces that become available. The information collected via this technology is then delivered to the user through a smartphone app.


The number of people moving to cities continues to rise, with an estimated 66% of the population set to be living in urban areas by 2050. It comes as no surprise that with greater density comes an increased strain on both resources and space. A smart city is built on the premise that these challenges can be overcome with the assistance of technology. Collecting relevant data can improve lives where needed.

Juniper Research found that a smart city has the potential to give its citizens back three weeks’ worth of working time per annum. A San Francisco study for this research found its city drivers waste 150 hours every year in congestion. To reduce this, the city recognised (through data) the need for its citizens to access on-demand, shared modal transport.

With the rise of rideshare companies and shared autonomous vehicles in San Francisco, data is being used to determine citizens travelling similar routes or destinations. This identified the need to increase use of multi-occupancy rides across the city. This initiative has reduced congestion, saving commuters time and money.

At a local level, the Australian Government is supporting a number of smart city projects for councils around Australia. An example is the funding being given to Moreland Council for 3D City Planning. Devices including virtual reality will be used to bring major council infrastructure projects to life. Creating 3D visual representations of planning aims to provide the community with a better understand of the planning and create greater opportunity for residents to voice opinion.

While there are many cities around the world adopting smarter technology initiatives, none of this can be successfully achieved without a smart government. Using technology in meaningful ways to better a society takes time and requires expert knowledge. Ready to learn more about IoT technology?