A Smart city is an urban area that uses different types of electronic Internet of things (IoT) sensors to collect data and then use these data to manage assets and resources efficiently. This includes data collected from citizens, devices, and assets that is processed and analyzed to monitor and manage traffic and transportation systems, power plants, water supply networks, waste management, crime detection, information systems, schools, libraries, hospitals, and other community services.

The Smart city concept integrates information and communication technology (ICT), and various physical devices connected to the IoT network to optimize the efficiency of city operations and services and connect to citizens. Smart city technology allows city officials to interact directly with both community and city infrastructure and to monitor what is happening in the city and how the city is evolving. ICT is used to enhance quality, performance and interactivity of urban services, to reduce costs and resource consumption and to increase contact between citizens and government. Smart city applications are developed to manage urban flows and allow for real-time responses. A Smart city may therefore be more prepared to respond to challenges than one with a simple "transactional" relationship with its citizens. Yet, the term itself remains unclear to its specifics and therefore, open to many interpretations.

Major technological, economic and environmental changes have generated interest in smart cities, including climate change, economic restructuring, the move to online retail and entertainment, ageing populations, urban population growth and pressures on public finances. The European Union (EU) has devoted constant efforts to devising a strategy for achieving 'smart' urban growth for its metropolitan city-regions. The EU has developed a range of programmes under 'Europe's Digital Agenda". In 2010, it highlighted its focus on strengthening innovation and investment in ICT services for the purpose of improving public services and quality of life. Arup estimates that the global market for smart urban services will be $400 billion per annum by 2020. Examples of Smart city technologies and programs have been implemented in Singapore, Dubai, Milton Keynes, Southampton, Amsterdam, Barcelona, Madrid, Stockholm, Copenhagen, China and New York.