The Internet of Things (IoT)—sensors and actuators connected by networks to computing systems—has received enormous attention over the past five years. A new McKinsey Global Institute report, The Internet of Things: Mapping the value beyond the hype, attempts to determine exactly how IoT technology can create real economic value.

What makes a great city? It is a pressing question because by 2030, 5 billion people"60 percent of the world's population"will live in cities, compared with 3.6 billion today, turbo-charging the world's economic growth. But for the leaders who govern cities, the challenges are tough. Those in many developing nations have to cope with urbanization...