Philips, McLaren Electronics and Hitachi Consulting are among a group of companies that have agreed to work together on technologies that will enable the construction of smart cities in the UK.

The consortium, led by software developer Living PlanIT, yesterday signed a memorandum of understanding, promising to develop applications that will enable communities to live and work in “an intelligent, efficient and sustainable urban environment”.

The signing was overseen by Universities and Science Minister David Willets, who also pledged his support for the project, stating that the development of smart cities is a “crucial commercial opportunity for Britain”.

Willets said the government is keen to ensure that Britain gets a “good slice” of an expected £6.5 trillion investment in city infrastructure globally over the next 10 to 15 years. Within that budget, the market for integrated city systems is estimated to be worth £200 billion a year by 2030.

“Britain is the right place to be doing this, as it was the first country to go through that crucial demographic shift to more than half the population living in cities,” he said. “We have more historic experience of being urbanised than any other country in the world.”

Applications developed by consortium members as part of the project will be integrated with Living PlanIT's Urban Operating System (UOS) – a software system that uses sensors to improve energy management, transportation, health services and education.

UOS takes in data from sensors that monitor environmental factors such as temperature, light and humidity in buildings, or heart rate, breathing and insulin levels in patients. The data is then analysed and used to automatically adjust conditions, in order to optimise efficiency.

This concept of machine-to-machine communication without human intervention is also known as the “Internet of Things”.

“We are determined to drive a robust set of technologies into the network that applications can read and use to deliver critical new services to individuals and to cities,” said Steve Lewis, chief executive of Living PlanIT.

Lewis said that, although integrated city systems require investment, the improvement in operational efficiency can drive significant cost savings. However, this will only be the case if organisations are able to make sense of the data they are collecting and use it in meaningful ways.

“If you're looking at a sensor every 10 feet, on average, you're producing more data in a month than Google produces in a year,” he said. “Critical is the understanding of the relationship between spacial environments and the data that comes up from that vast array of sensors.”

This is where software applications from consortium partners – Philips, Hitachi Consulting, Critical Software, McLaren Electonics, 8over8 and Buro Happold – will be central to the success of the UK smart cities project.

Christophe Melle, senior director of new business development for Philips, said that the collaboration with Living PlanIT would enable the company to deliver new smart lighting solutions. Sensors that detect natural light, time of day and movement of people in buildings, for example, could be used to adjust lighting for optimum safety, comfort and efficiency.

Living PlanIT is turning its offices on the Greenwich Peninsula into a testbed for these applications and encouraging companies in the local area to come and see how they could run their own businesses in a “smarter” way. Hardware for the project is being provided by Cisco.

The company is also working with property development company Quintain to integrate sensors and network components into new prefabricated buildings.

The decision to base the project in Greenwich reflects the government's intention to extend the East London Tech City cluster (also known as Silicon Roundabout) into Docklands. Greenwich Councillor Chris Roberts said that Tech City should be thought of as “less of a roundabout and more of an arc”.