2023 Smart Buildings: Technology Benefits, Implementation

Truly smart buildings are one of those ideas that perpetually seem to lie somewhere just over the horizon. However, recent advances in technology and the driving need for sustainability have seen the concept gather momentum.

Smart buildings utilize internet-connected sensors, controls, and software to collect data and automatically adjust systems for improved efficiency, cost savings, flexibility, and sustainability.

As a green tech advocate, I’ve explored smart buildings and sustainable urban design in-depth. In this comprehensive guide, I’ll cover everything you need to know, from the technologies involved to the business case and steps for upgrading. But, exactly, what are smart buildings and how do you create one?

What are smart buildings?

Smart buildings leverage IoT sensors, building automation, data analytics, and connectivity to dynamically optimize performance. This allows them to improve energy efficiency by 10-30%, reduce operating costs, enhance health and comfort, demonstrate sustainability, and future-proof buildings.

This is good for building occupants, but – more importantly – it is essential for a sustainable future. According to the World Bank, some 56% of the world’s population live in cities. A figure that is expected to reach 70% by 2050.

If we can address this growth sustainably, then there are potentially huge environmental benefits. As I discuss here, smart buildings can play a large part in achieving this.

Why Smart Buildings are Crucial

smart building interior

The rapid urbanization of our world emphasizes the urgency of “greening” city living.

Smart buildings are one way that city planners and building owners can help urban areas become sustainable places for us to work, rest, and play. In other words, intelligent buildings have a crucial role to play in achieving social sustainability.

Here are some of the key reasons that underscore why smart buildings are critical for a sustainable future:

  • Urban Population Growth: With the World Bank projecting that 70% of the world’s population will reside in cities by 2050, there’s an imminent need for infrastructures that can accommodate this influx.
  • Smart Building Practices: The building sector plays a massive role in global carbon emissions and resource consumption. According to a recent study on smart buildings published by MDPI, the building sector accounts for over one-third of energy consumption, 30% of greenhouse gas emissions, and around 40% of natural resources.
  • Climate Change Response: As the effects of climate change become more pronounced, there’s a pressing need for infrastructures that can withstand and adapt to changing environmental conditions.

Smart buildings may not be a magic wand that will solve the climate issues with a flourish. However, as the urbanization of the world’s population rises, their role will be increasingly critical.

Smart Buildings Technologies

Smart Buildings Technologies

I mentioned in the introduction that smart buildings always seemed to lurk over the next horizon. The main reason for this was the immaturity of the key technologies.

It is fair to say that this is no longer the case. The foundational technologies of the Internet of Things (IoT), AI, and cloud computing have seen the concept come of age. The rapid evolution of smart building technology has been mirrored by impressive hardware improvements. The result is truly smart buildings systems are now becoming more widespread.

Let’s examine these key technologies in detail, including the role they play in smart building infrastructure:

IoT (Internet of Things)

The beating heart of smart buildings are Internet of Things devices. These collect real-time data from various building systems. This data is then analyzed to optimize energy consumption, enhance security, and much more.

Among common IoT devices are:

  • Sensors: These can detect changes in temperature, humidity, light, and occupancy, allowing for real-time adjustments to building systems.
  • Smart Meters: Monitor and report energy consumption, enabling more efficient energy use and cost savings.
  • Connected Cameras: Provide real-time surveillance with an IP CCTV camera system that can be integrated with other systems for enhanced security.
  • Smart Thermostats: Automatically adjust heating and cooling based on occupancy and user preferences.
  • Smart Lighting Systems: Adjust lighting based on natural light intensity and occupancy, optimizing energy use. Intelligent lighting systems allow dimming, zoning, scheduling, and daylight harvesting based on conditions. This can reduce lighting energy usage significantly, going well beyond the advantages of LED lighting.
  • Water Leak Detectors: Monitor for any water leaks, preventing potential damage and conserving water.
  • Occupancy Sensors: These use methods like video analytics, WiFi tracking, infrared, and Bluetooth beacons to determine occupancy levels. This allows for further optimizing HVAC (Heating, Ventilation, and Air Conditioning systems), lighting, cleaning, and space utilization based on demand.
  • Indoor Air Quality Sensors: Sensors that monitor temperature, humidity, CO2, VOCs, and particulates enable data-driven ventilation and air quality management for improved health.

Security and Surveillance

Modern smart buildings prioritize the safety of their occupants. Advanced surveillance cameras, biometric access controls, cloud computing, and intrusion detection systems combine to create a secure environment

Automated HVAC Systems

Heating, Ventilation, and Air Conditioning (HVAC) systems are unrecognizable from systems of just a few short years ago. Modern HVAC systems can adjust temperatures based on occupancy, time of day, and external weather conditions.

Energy Management Systems (EMS)

An EMS is a sophisticated tool that monitors, controls, and optimizes the energy consumption of a building. By analyzing data from various sources, EMS can make real-time adjustments to lighting, HVAC, and other systems, ensuring energy is used efficiently and sustainably.

Building Automation System

This centralized system integrates building subsystems like HVAC, lighting, EMS, and security onto a single platform that enables system-wide monitoring, control, and optimization.

Similar systems and concepts are also used in modern smart factories implementing Industry 4.0 technologies to increase productivity and sustainability.

Data Analytics Software

A smart building analytics platform collects, analyzes, and visualizes sensor data to identify issues, waste, and opportunities to improve building performance.

This can include the use of Artificial Intelligence (AI) and Machine Learning (ML) technologies to spot unnoticed correlations and suggest plans of action to improve efficiency.

Benefits of Smart Buildings

Ultimately, the technology has to prove itself with tangible benefits if it is to become mainstream. The widespread adoption of smart buildings, essential for promoting environmental sustainability, may face obstacles without providing direct benefits to building owners, occupants, and urban planners.

Fortunately, this is a technology that can satisfy both of these criteria. Here are the main benefits of smart buildings:

Upgrading to smart building technology requires investment, but the benefits make a compelling business case. The advantages include:

1. Enhanced Energy Efficiency by 10-30%

Smart buildings optimize energy use, reducing consumption and associated costs while lowering carbon emissions, contributing significantly to environmental conservation.

By optimizing HVAC, lighting, plug loads, and other systems based on occupancy and usage patterns, smart buildings reduce energy waste and costs significantly. The energy savings depend on the technologies implemented and existing building efficiency, but average around 10-30%.

2. Cost savings

Over time, energy savings and efficient resource management translate to substantial financial benefits for building owners and occupants, improving the bottom line and freeing resources for other investments.

With remote monitoring and data-driven maintenance, smart buildings reduce operating costs associated with manual inspections, emergency repairs, equipment downtime, and on-site staffing.

3. Improved Occupant Comfort and Health

Smart buildings provide lighting, thermal conditions, and air quality tailored to occupants’ needs, resulting in improved satisfaction, productivity, and wellness.

4. Increased Property Values

Given the efficiency gains and sustainability benefits, smart buildings typically achieve higher rental rates and sale prices compared to conventional buildings.

This follows a trend that can already be observed for residential real estate, where houses with solar panels are selling at a premium compared to the ones without them.

5. proof of Sustainability Efforts

By reducing energy consumption and waste, smart buildings contribute to a more sustainable and eco-friendly urban landscape, supporting global sustainable development goals and fostering responsible living according to the 3 pillars of sustainability.

Smart buildings generate granular data on energy, water, and waste reductions that can be used to gain green certifications like LEED as well as report on ESG metrics.

Moreover, in the near future, smart buildings may be able to automatically record data on blockchain systems and fully automate ESG compliance and reporting. This will become available thanks to smart contracts and data collected by IoT sensors in the building.

6. Enhanced Safety and Security

Integrated systems allow smart buildings to implement video analytics for occupancy monitoring, restricted access control, and automated emergency response.

Advanced surveillance and access control systems bolster building security, providing peace of mind to residents and businesses, and reducing the risk of unauthorized access.

7. Tax incentives and grants

In some jurisdictions, upgrading an old building to make it “smart” can attract interesting tax incentives and grants. Those can substantially reduce the financial costs associated with those kinds of upgrades.

8. Flexibility and Future-Proofing

With an open IoT platform, smart buildings can easily expand capabilities over time and implement innovations in areas like AI optimization, distributed energy resources, EV charging, and augmented reality.

This means that, as technologies evolve, smart buildings can easily integrate new systems and adapt to changing needs, future-proofing investments and ensuring long-term relevance.

For any technology to thrive it must prove itself to be not only innovative but also genuinely transformative, offering definite benefits to individuals, industries, and – of course – the environment. Smart buildings seem to tick all the right boxes.

Step-by-Step Guide to Implementing Smart Building Technology

While the benefits are clear, upgrading to smart buildings requires careful planning and phasing. Here is an high level overview of the implementation process:

1. Define goals and select use cases

Start by determining the main goals, like improving energy efficiency or occupancy monitoring. Then identify specific use cases like optimizing the HVAC runtime or enhancing conference room utilization.

2. Conduct an energy and technology audit

A detailed audit will uncover areas of energy waste and identify systems ready to be enhanced with smart technology.

3. Create a technology roadmap

Outline the systems to integrate, the data to collect, and the timeline for rolling out the technology in phases. Prioritize quick wins.

4. Select platforms and vendors

Choose flexible solutions that can easily scale over time. I would recommend leveraging open standards to avoid vendor lock-in.

5. Install sensors and IT infrastructure

Add IoT sensors and upgrade networks to support increased connectivity and cybersecurity needs.

6. Integrate and test systems

Bring subsystems like HVAC, EMS, and lighting controls onto the building automation platform and validate the operation and correct integration in the Building Automation System.

7. Deploy software and analytics

Implement software for visualization, monitoring, fault detection, forecasting, and optimizing based on the use cases.

8. Perform ongoing measurement and verification

Quantify energy, cost, and comfort improvements. Refine machine learning algorithms over time to improve optimization.

9. Expand with new use cases

Add capabilities like proactive maintenance insights, parking management, indoor positioning, etc.

Challenges and Considerations in Implementing Smart Buildings

While the promise of smart buildings is undeniable, there is no such thing as a free lunch. Littering the path to their widespread implementation are plenty of hurdles and challenges that will need to be overcome.

Among the key challenges and considerations, there are:

  • Cost Implications: The integration of advanced technologies can be financially substantial, potentially dissuading building owners from embracing smart building solutions due to the initial investment required.
  • Privacy and Security: Protecting personal data demands robust privacy measures and cybersecurity protocols to ensure occupants’ trust and safeguard sensitive information.
  • Interoperability: Ensuring seamless communication between diverse systems from different manufacturers can be complex, requiring standardized protocols and integration solutions.
  • Maintenance and Upkeep: Regular maintenance and updates are essential to keep systems effective, preventing issues and ensuring long-term functionality.
  • Regulatory Compliance: Meeting diverse regulations and standards, including building codes and data protection laws, is crucial to ensure legal and ethical operation.

While these are undoubted hurdles, the pressing urgency to improve the sustainability of our buildings is surely enough to push smart buildings over the finishing line.

Innovations Emerging in Smart Buildings

Technology continues advancing rapidly. Some innovations on the horizon include:

  • AI and machine learning for predictive building optimization
  • Integration of distributed renewable energy generation and storage
  • Vehicle-to-grid electric vehicle charging capabilities for electric trucks and cars
  • Natural language processing (NLP) and computer vision capabilities
  • Augmented and virtual reality applications
  • Integration with blockchain technology for ESG compliance
  • Tight integration with smart city and grid networks

Calculating the ROI of Smart Building Technology

Determining the return on investment (ROI) of upgrading to smart buildings requires comparing the capital and ongoing costs against the financial benefits:


  • IoT sensors and installation
  • Building automation system implementation
  • IT and data infrastructure upgrades
  • Software licensing fees
  • Training for facilities staff
  • Cybersecurity measures


  • Energy cost savings from efficiency gains
  • Lower maintenance/labor costs
  • Reduced tenant turnover and increased rental premiums
  • Higher property valuation and sale price
  • Rebates, tax benefits and financing incentives related to upgrades

An attractive payback of 3-5 years is typical with a well-planned smart building implementation. The monthly utility and operating cost reductions alone often exceed the technology costs over time.

Examples of Smart Buildings

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Smart building technologies have been implemented in various buildings worldwide, including:

The Edge – Amsterdam

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This high-tech office building utilizes thousands of data points to optimize lighting, HVAC, and other systems based on factors like sunlight, weather, and occupancy patterns. Energy savings are very substantial compared to conventional office buildings.

This allowed the smart building to achieve an impressive 98.36% BREEAM score for sustainability. What a great example of sustainable architecture!

Terminal 5 – Heathrow Airport – London

Sensor technology tracks the flow rates of passengers to reduce congestion and adjust ventilation as needed. The building automation system integrates and coordinates all electromechanical systems to reduce energy usage.

WELL Building Institute HQ

This building utilizes air quality monitoring with demand-controlled ventilation to ensure optimal indoor environmental quality. It became the first WELL-certified Platinum project under WELL v2.

Smart Buildings Use Cases

Smart buildings have a wide variety of use cases, including:

Commercial Office Buildings

Smart sensors and automation optimize lighting, HVAC, and security systems in office buildings based on occupancy patterns to improve worker comfort and energy efficiency. Environmental sensors also help offices maintain healthy conditions for occupants.

Government and Public Buildings

Smart government buildings like libraries, museums, and city halls can improve energy efficiency and building management while also providing an optimal visitor experience through data insights.

Hospitals and Healthcare Facilities

Smart hospitals implement IoT sensors, AI, and automation to create safe environments for patients and staff. Features like air quality monitoring, access control, and temperature regulation are crucial in healthcare settings.

Educational Facilities

Smart lighting tuned to circadian rhythms, HVAC optimizations, and room utilization tracking are just a few of the ways that schools and universities are creating better learning environments with smart buildings.

Multifamily Residential Buildings

Smart apartment buildings are using connected amenities, leak detection sensors, remote access systems, and smart home automation to improve living experiences and safety for residents.

Retail Stores and Restaurants

In retail and hospitality spaces, smart technology tracks occupancy rates, optimizes lighting based on daylight, and measures indoor air quality to improve customer experiences, safety, and energy management.

Warehouses and Manufacturing Facilities

Large industrial buildings can gain major efficiency and cost improvements from smart lighting, leak detection, inventory tracking with IoT sensors, and data-driven maintenance features.


Smart buildings leverage IoT sensors, analytics, and integrated systems to provide substantial efficiency, cost, health and sustainability benefits compared to conventional buildings.

While upgrading requires careful planning, the payback period is attractive. As technology continues advancing, smart buildings will become even more capable and essential.

Smart buildings are not just a matter of convenience, although it is a welcome side-effect. Rather, it’s a commitment to a sustainable future.

There are challenges to be faced – from cost considerations to privacy concerns. But the promise of energy efficiency, improved security, and environmental stewardship is too significant to ignore.

As our cities continue to grow, smart buildings represent a pivotal step towards greener, more resilient urban environments. By getting started now, you can maximize value while future-proofing your property.


How do smart buildings connect to smart grids and cities?

Smart buildings are connected to the internet, so they can exchange data and coordinate operations with smart city infrastructure and electrical grids to further improve efficiency and resiliency. This includes adjusting energy usage based on grid demand signals, sharing data on renewable generation, and coordinating EV charging.

What cybersecurity measures are needed for smart buildings?

Robust cybersecurity is critical for smart buildings. Measures like network segmentation, multi-factor authentication, encrypted data transmission, and regular patching and upgrades help secure systems and data. A cybersecurity risk assessment helps identify potential vulnerabilities to address.

How can you future-proof a smart building implementation?

To future-proof smart buildings, owners should select flexible and scalable platforms based on open standards, focus on network infrastructure, implement modular systems, emphasize software over hardware, and choose solutions backed by financially stable vendors.

How can you gain buy-in for smart building upgrades?

Strategies to gain stakeholder buy-in include focusing pitches on productivity and health benefits. Highlighting case studies and proven results from peers, phasing in changes gradually, pursuing rebates and incentives, emphasizing competitive advantages, and partnering with trusted vendors.

Which areas provide the fastest ROI with smart buildings?

Quick win areas for ROI include lighting upgrades, HVAC optimization, installing smart thermostats and water leak sensors, and implementing an energy management system. It’s best to start with the low-hanging fruit, and then proceed with further optimizations.