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How London’s smart city credentials boost its tech prowess

London smart city

In 2023 London was crowned the world’s top ‘smart centre’, beating US cities like New York and San Francisco for the first time, according to Z/Yen Group’s Smart Centres Index.

Not only does the achievement recognise London’s support for and intensity of tech innovation, it also demonstrates the success of the capital’s smart city roadmap, launched in 2018.

The strategy imagined a truly smart city – where continuous data from sensors, citizens, buildings and other sources could be used to understand what’s happening across the city in real-time, and better plan and manage public services and infrastructure.

In general, smart cities offer unprecedented opportunities to improve transport, the environment, health, housing and culture by leveraging digitally connected infrastructure and data from sources across the city.

While the benefits to society and public services are often the explicit driving force for smart city development, it also creates new business opportunities and advantages.

Eleanor Cox, SME Head of Tech for London, at Lloyds Bank, comments: “London’s tech prowess is world-leading; this is evidenced not only by the number and value of tech companies in the city, but also by the presence of smart technology in every area of city life, from transportation to cultural events.

“As advances are made in AI, 5G and IoT, London is in a strong position to ensure that all citizens and businesses reap the benefits.”

Business opportunities in London’s smart city

London’s smart city infrastructure has already delivered benefits for businesses and opportunities for innovation and growth. According to ProptechOS’ Smart City Index, London ranks second in the world (behind Paris) for connectivity infrastructure, with nine 5G towers installed as of 2022 – more than any other city.

Its average broadband speeds are better than 65% of the other cities analysed; according to research, a fast internet connection can produce productivity gains for SMEs of up to 10%.

Ashley Feldman, techUK’s programme manager for transport and smart cities, emphasises that smart city innovation has to be applied strategically to specific problems – which is why smart city initiatives often go hand-in-hand with opportunities for new business, since startups are similarly focused on tackling pain points and inefficiencies across different contexts.

He says: “Smart cities are not about technology for technology’s sake, but the application of technology to solve complex challenges that improve quality of life.

“London has become one of the world’s smartest cities through a clear push to embrace data and new technologies. It is a global hub for the research and development of innovation – from 5G and future networks, to AI and clean-tech.”

Last year London’s chief digital officer, Theo Blackwell, outlined the city’s achievements so far, including the foundations for widespread 5G connectivity and  processes to support ethical data usage and privacy protection.

He also highlighted examples of how opportunities from London’s smart city capabilities have already been put into action by new and established businesses.

For example, better data on air pollution hotspots in the city has led to a number of initiatives to support electric vehicle companies and infrastructure, including a trial with electric freight company Gnewt on low-emission last-mile delivery, and a project with Connected Kerb to install more curb-side electric vehicle charging points precisely where air quality is the worst.

Businesses can also take advantage of open data which is fundamental to London’s smart city evolution.  Construction software platform 3D Repo partnered with the Greater London Authority to turn data on planning proposals into an open-access planning portal which allows London residents and building developers to explore planning proposals in 3D.

Transport for London’s numerous open data sets are available to be used in independent services and projects, which generate around £130m in annual economic benefit.

Route-planning app Citymapper takes advantage of the TfL’s open data, as does city-focused wellbeing app GoJauntly, which uses street data to provide a digital “encyclopedia of urban walks”.

“City infrastructure is rapidly transforming in the digital age,” said Lloyds Bank’s Eleanor Cox. “London is showcasing the many benefits that digital connectivity brings for residents and for businesses in the transition to a net-zero economy and in creating public services that meet the city’s evolving needs.

“Data and digital leadership are essential to creating thriving local and regional economies across the UK, and this is even more crucial in London where the number of local authorities and public service providers could be a stumbling block for collaboration and data sharing. Ensuring London’s digital infrastructure evolves is vital to becoming a truly smart, interconnected city.”

Tech businesses play their part

While tech businesses are beneficiaries of investments in smart city infrastructure and new opportunities created as a result, they also have a significant role to play in building and implementing the tech-enabled tools and services needed.

Tech companies and local businesses are involved at every stage, from contributing to smart city policy and strategy to providing the cloud services needed to host and analyse hoards of open data.

Most obviously, tech companies are crucial for developing the hardware needed to support a digitally connected city, including IoT sensors, electric vehicle chargers and automation technology.

But there are also less visible roles for London-based businesses to play, whether that’s by collecting city data or providing software and resources needed for data analysis.

One of London’s most iconic institutions – its black cab network – is adopting and contributing to smart city initiatives. A trial on the largest fleet of electric black taxis, run by SME Sherbet, is fitting vehicles with sensors capable of collecting 15 data points, with a focus on environmental and safety data.

“In London, the black taxi penetrates the city more than any other vehicle type and by collecting multiple layers of data, they can and should become the eyes and ears of a smart city,” says Asher Moses, Sherbet CEO.

It’s proven essential for the success of London’s smart city initiatives that tech businesses also play a role in communicating with the public on issues like data privacy and accessibility.

The introduction of smart city technology has faced backlash from citizens on more than one occasion; a plan to use facial recognition technology at a new King’s Cross development was scrapped due to “public outcry“, and the introduction of digitally managed congestion and ultra-low emission zone charges divided opinions.

As tech companies find that their services become more deeply embedded in everyday lives, it’s more important than ever that they engage directly with London’s citizens to ensure feedback is taken into account and concerns can be addressed.

Alex Lubbock, global construction practice director at BSI, says that organisations like BSI play a key role in establishing digital trust and societal confidence in smart city technology. “What’s key is that smart city technology evolves with security in mind, to avoid significant security challenges,” he says.

The attraction of London’s ‘smart’ tech hub

The day-to-day benefits of London’s data infrastructure and connectivity make the city even more attractive for tech workers, since – as residents – they can take advantage of the efficiency gains in both their professional and personal lives.

London’s public transport network is one of the best in the world due in part to TfL’s data-enabled services, while the city’s Infrastructure Mapping Application also enables smooth journeys by minimising disruption from roadworks.

Smart city initiatives are also tackling pollution and energy costs, adding another pull factor for individual tech employees and businesses who want to live and work in a safe and healthy environment. The city is using data from air quality sensors and traffic sensors to roll out sustainability solutions where they are most needed, and retrofitting buildings with the ability to monitor and control energy usage.

“The continued focus in London as a smart city has enabled the tech sector to flourish,” comments Eleanor Cox at Lloyds Bank.

“Our Fintech Investment team looks to support tech sector growth by providing investment into early-stage businesses that are able to leverage the open data and digital infrastructure to offer products and services that positively impact consumers and companies.”

Ultimately, London’s progress towards a truly smart, connected city creates a virtuous circle in which improvements to connectivity and data infrastructure promotes more tech and business growth, which in turn enables even more smart technology innovation to be used in the city. This is at least partly responsible for London’s ability to maintain levels of tech investment in spite of the challenging economic landscape.

Lloyds Bank’s relationship managers are experienced in the tech sector and are keen to support further growth of this vibrant industry. Please get in touch today to discuss how we might help your business.

Eleanor Cox is SME Head of Technology for London at Lloyds Bank.


For more information about how Lloyds Bank supports UK tech businesses, click here.

In partnership with Lloyds Bank.