The smart sensor is also a crucial and integral element in the internet of things. IoT technology makes it possible to provide a unique identifier for almost anything and to transmit data from or about those things over the internet or a similar sensor network. One implementation of smart sensors is as components of a wireless sensor and actuator network, which can have thousands of nodes. Each node is connected to one or more other sensors and sensor hubs as well as to individual actuators.

Low-power mobile microprocessors typically provide compute resources in IoT environments. At a minimum, a smart sensor is made of a sensor, a microprocessor and wireless communication technology of some kind. Computer resources must be an integral part of the physical design. A sensor that just sends its data along for remote processing isn't considered a smart sensor.

A  “smart sensor” has a “base sensor”, a “microprocessor”, is “communication-capable” and has some form of onboard diagnostics. Smart sensors are capable of a variety of functions and options. Smart sensors can perform self-assessments and self-calibration. They can detect issues, such as a “sensor contamination”, and a “sensor failure”.

Smart sensors are capable of multi-sensing, it can measure temperature, humidity, water flow and more.  play a very important role in the new era of “manufacturing and monitoring intelligence”. They will become more and more important as industry develops increasingly sophisticated and complex processes. The smart sensor plays a very important role in Industry 4.0 which is considered as the fourth revolution of the manufacturing and monitoring industry. A smart sensor can do more than sense singular basic properties. A smart sensor can perform data conversion, digital processing, and can communicate to external devices and “the cloud.”