October 2021 - Smart City | Cybersecurity

Cybersecurity is a Key Driver of Smart City Markets

Markus Schaffrin from the eco Association looks at the fundamental importance of security to the success of Smart City projects.

Cybersecurity is a Key Driver of Smart City Markets

© yucelyilmaz | istockphoto.com

Due to changes in the regulatory framework in Europe, increasing awareness of online threats, and the rise of digital business models, the demand for cybersecurity solutions continues to grow significantly and is thus also becoming a key driver of the Smart City market, a trend which Germany exemplifies. 

This is shown by the study “The Smart City Market in Germany, 2021-2026”, published by eco – Association of the Internet Industry together with the management consultancy Arthur D. Little, supported by NetCologne, Cloudflare, Uber, and the Vodafone Institute.

The Internet Services & Applications segment, in particular, is benefiting from this trend. According to the study, in Germany in 2020 alone, cybersecurity solutions accounted for around half of the 13.7 billion Euro in revenues in the so-called Layer 2*, “Internet Services & Applications”, of the Internet industry model. Public cloud services, particularly infrastructure and software solutions, accounted for the other half of the revenues in this layer. Internet services and applications are thus benefiting particularly strongly from the increasing implementation of IT security, with continued high growth rates.

Cybersecurity in the Smart City needed right from the start

According to my colleague Prof. Norbert Pohlmann, Board Member for IT Security at eco – Association of the Internet Industry, “increasing connectivity in Smart Cities is causing IT landscapes to become increasingly complex. Cities, service providers, and citizens exchange data across more and more IT systems and interfaces.” He goes on to note that “IoT devices, sensors, and platforms for data sharing and analytics with widely varying levels of security increase the risk for security vulnerabilities and cyber attacks. 

Therefore, when designing smart solutions for administration and citizen services, those responsible in the municipalities should think about cybersecurity right from the start.”

“The reliability, security and trustworthiness of all Smart City components stands or falls with the ability to protect systems from hackers,” believes Thomas Seifert, Chief Financial Officer of the infrastructure and cybersecurity company Cloudflare.

“Attacks on security systems in building automation, on digital patient records in the health sector, or interference with digital citizen participation in the course of elections are all scenarios that must be prevented.” As a contributor to the Smart City study, Seifert lists strategies to protect all organizations and citizens in a Smart City – from the public sector to private companies and individuals – from such attacks.

Secure and trustworthy data ecosystems are the foundation for successful Smart City platforms

According to the study, in order to pave their own way to the Smart City, cities and municipalities should continuously scrutinize their existing database landscape and validate it with technological trends and their requirements. This is because only a cross-segment architecture of data ecosystems and appropriate “data governance” allow the countless data points to be aggregated, new business models to be developed, and synergies between the segments and the building blocks to be exploited. Cybersecurity clusters are increasingly helpful in this regard. One example is the “Alliance for Cybersecurity” initiated by the German Federal Office for Information Security (BSI). This brings together research, industry, and government authorities to improve cybersecurity at all levels.

Among other things, holistic and intermodal mobility platforms must be protected, as well as an advancing wave of digitalization in the health and education sectors. Moreover, cybersecurity is a digitalization enabler across all solutions in the nine Smart City segments identified in the study. The importance for the health sector, public administration, building automation, and financial services is highlighted.

Further information on this topic was provided by ISD 2021 as part of the Smart World - Secure World thematic block.

*The layer model is set out in the study “The Internet Industry in Germany, 2020-2025” by ADL and eco, 2020.

The new study “Smart City 2021-2026” is available for download here.


As Head of Member Services at eco, the largest association of the Internet industry in Europe, Markus Schaffrin is responsible for the care of over 1,100 member companies from 70 different countries. The computer scientist has been a part of the IT world since the very beginnings of the Internet, and has more than 20 years’ experience in computer science and project management.   

He has worked for the eco Association for more than 20 years, and, together with his team, he oversees the specialist work of the ten Competence Groups, and the organization of around 100 events per year. Schaffrin is also Head of the eco Cyber Security Services, and, as an expert in IT security, is a regular guest on radio and television, as well as at many congresses and conferences.