Privacy must play an instrumental role in any smart city strategy otherwise citizens might fear the introduction of other innovative technology, according to an executive at one of the world's largest infrastructure companies.

Wim Elfrink, executive vice president of industry solutions and chief globalisation officer of Cisco, heads up the company's smart cities team and warned that if cities did not give citizens the choice of whether or not to allow the government to use their data, they might opt-out of future initiatives.

"Having security policies, having privacy policies is a given. I think you have to first give the citizens the right to opt-in or opt-out," he said.

"Then all these policies, longer term, security and privacy are going to be the biggest imperatives. If we don’t solve this, people will opt-out more."

This is a message that Britain's councils will need to bear in mind as they launch projects with the aim of making the city more efficient by streamlining public services.

A number of councils have already installed a number of sensors around London with the aim of creating a smarter city. This is done through collecting large amounts of data – from information about available parking spaces, electricity usage and even refuse levels – before then analysing it and understanding problems they may not know existed.

Data from sensors in parking spaces in the City of Westminster, for example, showed the council that commuters typically went to a specific set of roads to find their parking and enacted policies to encourage them to find spaces in nearby streets.

Elfrink's warning also comes the year after two companies received major backlash when citizens learned their movements were being tracked.

A number of customers of American retail store Nordstrom, for example, were incensed when they found out that sensors within the shop were monitoring their behaviour around the store.

Closer to home, marketing company Renew was forced to shut down a programme that tracked individuals movements if they walked through Cheapside (near St. Paul's Cathedral) through sensors embedded into a number of recycling bins. The company's chief executive argued that citizens could opt-out of being monitored but many questioned the premise of opting out of something you didn't know was taking place.

Data is already affecting street lights in Barcelona

Elfrink has, in his own words, "been pioneering smart cities for seven years now" and has helped Cisco lead projects in a number of countries, and places particular emphasis on Barcelona, a city considered by many to be leading the way in Europe.

Alongside "smart parking" policies, Elfrink suggests that government could give citizens a tax break if they dump less waste. This is because it allows waste collectors to take more efficient routes and ignore bins that don't need to be collected.

"Most containers [in Barcelona] have sensors that say how full they are," Elfrink said. "Instead of picking up waste on Tuesday and Thursday, you have dynamic route management, thinking about the most efficient route, saving 20-30% energy."

But perhaps a more interesting case study is using data to change the intensity of street lights. In certain areas of Barcelona, Cisco use video to identify the density of public squares.

The company matches that data alongside other elements, such as whether there is a half- or full-moon and sends instructions of whether to reduce or increase the brightness of the LED street lights.

"If you have more people on the street, you have less light. If you have more people, you have less light. You wouldn’t figure that out without the data," Elfrink explains.

The best cities in the world will be the one where governments have better relationships with developers

Elfrink also said London is "definitely" a smart city and praised David Cameron for encouraging more innovation in technology, not only through Silicon Roundabout but more recent policies, which include doubling the budget for the internet of things, the idea that everyday objects such as kettles or fridges can be connected to the internet.

But more importantly, the Cisco chief consistently said that one of the most fundamental elements of any smart city is, firstly, a developed policy around open data and, next, a strong relationship between the head of the locality and the developer community.

Elfrink argues this is key to any city because it encourages entrepreneurs to build tools and apps not only around the available data sets but to also create more data.

A good example of this is fillthathole.org .uk, a website run by a national cyclist charity. Users can report potholes around the UK not only through the website but also through apps on the iPhone and more recently on Android phones, thanks to funding from the Department for Transport.

In turn, this creates a stronger relationship between the government and citizens, according to Elfrink, because developers are more likely to move faster, without bureaucratic boundaries, but also to create tools that are more helpful to the regular citizen.

"You'll get developers in cities, you'll unleash the potential and speed, and [unleash the] innovation close to citizens," he said.

Certain councils across the UK are already trying to introduce policies that create and make available new data sets to the public.

Westminster City Council showed off its efforts at an IoT-Bay Project event at the Westminster Boating Base earlier this month.

Alongside a number of partners such as IBM, EDF Energy and the Smart Homes & Building Association, the council has been working on creating an 'Iot-Bay', built around taking data from parking bay occupancy, street lights, energy use and crowd movement data and making it available for registered developers.

With cities around the world looking to invest in smart city projects, a number of companies are looking to promote themselves as the go-to brand for expertise and thought leadership.

Alongside Cisco, well-known competitor IBM is vying to set up infrastructure around the world. While Cisco has been involved in eight cities, they have been notably quiet in the UK, where IBM has appeared to take the lead.

Besides the project with Westminster Council, the company has recently been involved in developing ideas and providing so-called thought leadership in Coventry and Peterborough.

But although it is likely that large companies will provide the initial tools for cities to create more data and open up data sets, it is smaller organisations and developers that will create applications that will truly affect citizens on a daily basis.