Smart Cities. Data-driven innovation

Overview and examples

Term Paper 2017 9 Pages

Economy - Theory of Competition, Competition Policy


Table of content

1. Introduction

2. Smart cities and data production

3. The electricity sector

4. The transportation sector
4.1 Mobile Apps
4.2 Road traffic management

5. References

1. Introduction

In the following paper, I want to provide insight into the two aspects of Smart Cities: the electricity sector and the transportation sector. In both sectors I want to highlight how real time data is used to make life in a city more efficient and improve its quality.

The paper is organized as follows. At first chapter 2 will give insights in smart cities and data production. Chapter 3 will continue with the electricity sector. Here I will go into detail about how smart meters can improve the energy management of utilities and customers. Chapter 4 will proceed with the transportation sector. This chapter is divided into two parts. The first part is about mobile apps and will present two successful transportation apps on the market (Moovel and Citymapper). The second part is about road traffic management, it will highlight the system of Stockholm, Singapore, and London.

2. Smart cities and data production

Smart city is a term to describe the development to make cities efficient, technological advanced and eco-friendly. A smart city tries to use information and communication technology and internet of things to manage a city’s assets, like schools, transport systems, hospitals, power plants or waste management. The goal for a smart city is to improve quality of life and to make services more efficient. Information and communication technology allow to interact directly with the city’s infrastructure and monitor what is happening in the city, how the city is evolving, and how to enable better quality of life. The key to manage inefficiencies is to use large amounts of data from citizens and devices.1

The first step of providing a city with a large amount of data is the data collection. The data collection in a city can be divided into three main categories: Flows, States, and Activities.

Flows are all information that can be collected by a city’s infrastructure. A city has several different types of infrastructure (e.g.: transport, energy or water network). These networks transport products, people, and flows of information across the city. At some point along their way, they will pass sensors or gateways. These control points allow to gather information about these Flows across the city. An example for such a flow could be a parcel a costumer ordered to his home. When this parcel will reach a certain reload site, it will be scanned, recorded, and the costumer can track the parcel on its way to his/her home.

The second category for data collection is States. The inner and outer environment of a city is under constant change. This change can be manmade or through nature. Satellites, cameras or weather stations will collect constant information about the city’s environment, like air temperature, air quality, density of people or light and sound levels.

The last category of urban data collection are Activities. Activities cover all information about transactions or consumption and communication patterns. These can be people’s interaction among each other, interaction between people and their environment, or interactions with institutions or businesses. Examples for Activities are crime records, tax records, credit card payments, consumption behaviour, and sales behaviour.2

These three categories are the main ways to collect city relevant information. There are several actors who will use this information. On the one hand there are the citizens and direct consumers, but on the other hand there are actors which will use the information to create innovation and make life in the city easier and more comfortable, like for example the government or entrepreneurs.

3. The electricity sector

One field in which real time data can be used to improve a city’s infrastructure is in the electricity sector. There is an ongoing discussion to implement smart energy meters in households to reduce power consumption.

The difference between a smart energy meter and a traditional energy meter is that it enables a two way communication between the power provider and the meter. The smart meter is an electronic device that tracks the consumption of electronic energy in intervals of an hour or less and sends this information to the energy provider for billing and monitoring.

The idea behind smart energy meters is to match the power consumption with the power production. Traditional energy meters only measure the total consumption of a household, and provide no information of when the energy was consumed. Smart meters will track the time specific consumption and allow utility companies to introduce different prices for consumption based on the time of day and season. The meters will inform households of real time electricity prices based on the current power demand and supply. Low prices should incentivise consumption and high prices should discourage households to consume energy. This system should level out peaks in energy demand and reduce the overall energy consumed.

There are two main benefits of smart energy meters that utility companies are advertising with. On the one hand, smart meters would be the end of estimated bills, which are a major source of complaints by many costumers. With smart meters a power provider could see the actual consumption of the costumer at any time. Therefore, checking the energy meter at home or estimating the energy consumption based on the past energy usage is no longer necessary. The ability to read an energy meter remotely is a large labour saver for the utility. On the other hand, costumers additionally have up-to-date information about energy consumption. This will help managing power consumption and reducing the energy bills.

It is estimated that European households will reduce their energy consumption by 10% with the implementation of smart energy meters.3 A lot of countries are testing smart meters currently. Great Britain has the largest ongoing program. The government wants energy suppliers to install smart meters in every home in England, Wales, and Scotland. Their goal is that every home has a smart meter by the end of 2020.4 In the USA California, Maryland, Texas, Florida, Oklahoma and Arkansas started to implement smart meters in households. Italy had the largest smart meter deployment. The utility Enel installed smart meters to their entire costumer base with more than 30 million customers.5

In Germany smart meters are planned to be implemented in 2021. Smart meters will be implemented in all households with a yearly consumption of 6000 to 10000 kWh.6 Austria did not implement smart meters yet, but they had an estimation that an implementation of smart meters in 2017 will save 2 TWh per year and reduce 6.2 million tons of Co2.7

4. The transportation sector

4.1 Mobile Apps

In the transportation sector there are currently several entrepreneurs, who use flows, real time data and information, and communication technologies to improve travelling in a large city, especially on the mobile app market. Moovel or Citymapper are two examples for such apps.

Citymapper was founded 2011 in London by Amat Yusuf, a former employee of Google. Currently the app covers 29 cities around the world but is constantly expanding. The company received a great publicity boost in 2014, when Apple launched its new watch and mentioned Citymapper in their presentation as their app of the year.8

Moovel is a sub company of Daimler Financial Services, was founded in 2012 and is located in three cities in Germany (Berlin, Hamburg, and Stuttgart). Daimler Financial Services also owns car2go, my Taxi, Ridescout and parts of Flixbus, which are all implemented in the Moovel app.9

Both of these apps will inform an urban traveller of the fastest way from point A to B. In their apps they include all available transportation options. The options they are including are to walk, rent a bike, take the bus, take the train or call a taxi. The apps are including all kinds of information in their decision process. They are including weather information to exclude walking or riding a bike if it is rainy. They check the current traffic information on the route to rule out taking the car or a taxi if there is a traffic jam. Moovel and Citymapper are also providing the user with an option to buy his respective ticket directly in their app, which allows the user to identify the cheapest way of travelling.10


1 Sam Musa (2016)

2 OECD, 2015. “Data-Driven Innovation”, pp. 379-401.

3 EC (2011)

4 Smart Energy GB (2017)

5 Enel (2016)

6 Bundesministerium für Wirtschaft und Energie (2015)

7 PricewaterhouseCoopers Austria (2010)

8 James Titcomb (2016)

9 Moovel Group (2017) über uns

10 Moovel Group (2017) about us


ISBN (eBook)
File size
394 KB
Catalog Number
Institution / College
University of Marburg – Wirtschaftspolitik
Smart Cities Data-driven innovation electricity sector transportation sector data production smart meters energy management mobile apps Moovel Citymapper traffic management Big data




Title: Smart Cities. Data-driven innovation