Smart City as an Ecosystem to Foster Entrepreneurship and Well-Being: Current State and Future Directions

Abstract

Entrepreneurial endeavors are essential for stimulating economic growth and rendering them is a primary concern for policymakers. In recent years, smart city ecosystems have garnered attention for enhancing urban living and tackling contemporary difficulties. The contribution of smart cities in promoting entrepreneurship and improving well-being has received little attention. This study aims at examining the potential of smart city as an ecosystem to promote entrepreneurship and enhance well-being and quality of life (QoL). This study uses a Fuzzy evaluation model and the Analytic Hierarchy Process (AHP) to evaluate essential determinants of smart cities and their significance. Data from sources such as the Smart City Index, Ease of Doing Business Ranking, Global Innovation Index, Sustainable Development Report, and Technological Readiness Ranking are utilized with normalization, guaranteeing a dependable evaluation. The findings underscore the significance of open data efforts and transparent governance in recruiting innovative enterprises and promoting entrepreneurship. The study highlights the necessity of cooperative urban planning and public participation in decision-making. Moreover, the authors propose a new definition of smart cities from citizens’ well-being perspective. This research enhances the comprehension of smart cities’ influence on entrepreneurial endeavors, pinpointing problems and prospects for future investigations focused on improving well-being through smart city advancement.

1. Introduction

The emergence of smart cities represents a paradigm shift in urban planning, emphasizing the use of information and communication technology (ICT) to enhance citizens’ well-being and optimize city operations [1,2,3]. Enabling smart cities stimulates social and economic development through collaborative dialogue and technological breakthroughs [4].

The potential of smart cities can be unleashed through governance regulations/directives, applying new technological platforms and mobile/virtual technology, and human capital–social capital–infrastructure continuous learning [5]. However, heterogeneity exists in the development of smart cities, as they lack a standardized approach [6].

Recent research shows diversified aspects of smart cities such as smart city performance indicators, dimensions of smart cities, well-being and livability, new business formation, ICT adoption, entrepreneurial development, social innovation, sustainable development, etc. [1,3,7,8,9,10,11,12]. The goal of smart cities is to prioritize the well-being of their citizens while establishing dynamic ecosystems that can foster entrepreneurship and innovation [13,14]. Entrepreneurial activities contribute to economic growth and development [15]. Smart cities also aim at the promotion of the happiness and well-being of the citizens, and this aspect should be given consideration while defining smart cities. However, the research presented by [16] reveals that the previous definitions of smart city have a limited scope, as they only focus on strategic drivers and actions but without an explicit mention of well-being and happiness.

To address urban difficulties and create sustainable entrepreneurial ecosystems in smart cities, entrepreneurs use place-based enterprise-dependent processes [17]. The process starts at the entrepreneurial level with problem identification, moves to the place-based enterprise level with resource mobilization, and ends at the ecosystem level with scaling solutions across space [17]. However, smart cities are subjected to issues relating to the enhancement of daily living, the growth of knowledge-based societies, and the closing of the digital gap [18]. The small towns experience issues with infrastructure deficiency, desertification, aging populations, and the digital divide [19]. Additionally, the lack of clearly defined phases of development, the propensity of smart city rankings to emphasize the supply side or use quantity indicators, the existence of dimension or company biases, and a lack of methodological transparency are some of the reasons why the ranking of smart cities falls short [20].

Despite these challenges, a lot of cities hastily adopt smart city initiatives without considering how ready they are for entrepreneurship or how they will affect the well-being and quality of life (QoL) of their citizens. Instead of using a hypothesis-driven approach, the present research uses questions based exploratory-statistical methodology to reveal hidden correlations between the studied parameters. To address this gap, this study aims to assess the current state of smart cities as an ecosystem for fostering entrepreneurship, and enhancing well-being, and QoL. By analyzing the data indices of smart city rankings and indicators that drive entrepreneurial activities, well-being and QoL, this research employs a Fuzzy assessment model and AHP to assess several relevant factors and indicators. The findings highlight specific areas where smart cities excel or lag in promoting these factors. Based on these findings, the study concludes with actionable recommendations for policymakers, smart city stakeholders, and practitioners. These recommendations include developing targeted policies to strengthen weak indicators, such as improving digital infrastructure to support entrepreneurship and enhancing citizen engagement through participatory planning processes to align smart city initiatives with residents’ well-being and QoL needs. Furthermore, insights are provided into optimizing smart city effectiveness in addressing the needs of citizens and fostering sustainable urban development. Future research directions are outlined to explore the long-term impacts of these strategies and investigate region-specific adaptations to smart city models.

2. Smart City, Entrepreneurial Ecosystem, and Well-Being

The concept of smart cities has rapidly gained traction in recent years. They are envisioned as urban settings that leverage technology and innovation to address pressing challenges and elevate the QoL for their citizens. Within this paradigm, smart cities are increasingly viewed as catalysts for fostering entrepreneurship through targeted policies and creating an environment conducive to innovation [21]. This attractiveness translates into a higher influx of highly skilled workers, investments, and entrepreneurs, propelling the city’s growth and solidifying its position in the global knowledge economy [21].

Recent academic discussions highlight the link between entrepreneurship and the development of smart cities [9]. Digital entrepreneurs, operating within digital entrepreneurial ecosystems (DEEs), play a crucial role in this process. DEEs provide a supportive environment for these ventures to flourish, with key contributors including digital user citizenship, digital infrastructure governance, digital entrepreneurship, and a digital marketplace [9]. Smart cities, in turn, foster entrepreneurial activity by offering a range of “smart” enablers, encompassing policy, economy, technology, infrastructure, environment, mobility, people, governance, living conditions, and organizations [9]. This symbiotic relationship between smart cities and entrepreneurship holds great promise for the future of urban development. This study delves into examining the current state of smart cities as an ecosystem for entrepreneurship, enhancing well-being and QoL, analyzing their potential and challenges, and exploring future directions.

2.1. Smart Cities: A Multidimensional Framework

Ref. [9] refers to smart cities as complex ecosystems that include a variety of individuals, procedures, tools, and technology to foster improved performance and innovation in economics, well-being, smart infrastructure, governance, and entrepreneurship. In addition to productivity, innovation, sustainability, accessibility, connectivity, and effective governance, ref. [3] considers well-being and livability to be critical performance indicators. These cities are classified as leading, following, and developing based on their smart city transformation and performance [3]. Strong innovation ecosystems, entrepreneurship-friendly legislation, skilled labor training options, and readiness for digital transformation are all required for smart city success [3].

Several frameworks govern smart city development and evaluation. Ref. [22] suggests a framework that includes many components, stakeholder interaction, and assessment of the city’s urban pressure areas. This approach prioritizes components such as social, technical, and economic feasibility screening, which involves all stakeholders, including citizens, entrepreneurs, government, academics, the private sector, and investors [22]. Similarly, ref. [18] emphasizes the reliance of smart city development on both city-specific attributes and macro-technological variables.

Ref. [23] provides a framework for developing a start-up ecosystem inside a smart city, highlighting the role of technical infrastructure, a knowledge hub, government policies, entrepreneurship, and the city’s economy. New programs and institutional reforms have the potential to greatly improve this ecosystem [23]. Furthermore, [24] emphasizes the significance of cross-cutting and people-centered ICT policies in promoting inclusivity and reducing risks in smart cities. The Penta-helix multi-stakeholder framework promotes less technocratic smart cities by bringing together stakeholders from the governmental, business, academic, civil society, and social entrepreneurship sectors [25]. Also, crowdfunding can play a role in creating smart cities, with four major dimensions: social innovation, civic challenges, civic crowdfunding, and community [13].

The primary objectives of smart cities are social improvement and economic progress [26]. Polish cities, for example, support the Triple Helix concept, which promotes collaboration among government, industry, and academics [27]. Sharing information between the government and citizens is critical for obtaining these objectives. This transparency enables data-driven decision-making and encourages citizens to monitor and evaluate how well their government manages their QoL and services [28].

Smart technologies are used in a variety of smart city programs around the world, including smart parking, smart lighting, smartphone detection, and smart housing [29]. These projects are evaluated using both subjective expert assessments and objective metrices such as the innovation economy, transportation and mobility, living standards, digitalization, and governance [29]. According to [29], some variables are more important than others, such as the innovation economy, living standards, and transportation and mobility.

Ref. [30] found that significant use of cutting-edge digital technologies such as blockchain, Internet of Things (IoT), artificial intelligence (AI), and big data can make smart cities adaptive, particularly in the face of catastrophes like the COVID-19 pandemic. However, they underline the importance of re-evaluating objectives and raising the requirements for structural indicators, material support, and technical aid from healthcare institutions to achieve people-centered and inclusive development focusing on citizens’ well-being [30]. This is consistent with the idea that smart city research provides a framework for a variety of disciplines to discuss the advantages of various cutting-edge technologies such as wearables, cloud computing, augmented and virtual reality, fully immersive technology, social networking sites, web apps, and internet technology [30]. Therefore, smart cities are evaluated using various criteria, including economy, mobility, government, people, environment, and ICT infrastructure [31]. Their ultimate goal is to enhance the city’s operation and achieve wise utilization of resources for optimal development [31].

2.2. Smart Cities and Entrepreneurship: A Symbiotic Relationship

In scholarly discourse, the importance of entrepreneurship in developing smart cities has taken center stage. Research continuously shows that an entrepreneurial city’s “smartness”, or level of technology integration and inventive spirit, positively correlates with its level of innovation [21]. Talent from all over the world is drawn to areas with advanced technology infrastructure, such as open data platforms and high-speed internet networks, when combined with an emphasis on innovation. According to [32], the influx of highly skilled people stimulates the establishment of innovative firms, which in turn improves the standard of living for stakeholders and citizens. Through the provision of important resources and services, such as incubator programs, venture capital access, and expedited regulatory procedures, smart cities enable the firms and entrepreneurs who call them home. Entrepreneurial activity may be stimulated by smart city models, particularly when local stakeholders and non-governmental organizations are involved [9,12]. This encourages a change from government-only projects to a more community-based, cooperative strategy that makes use of all available resources [12].

According to the extant research, smart cities offer opportunities for entrepreneurs. There are various reasons why smart cities are an optimal ecosystem for entrepreneurs to thrive [1]. First, a greater potential market for new goods and services is created by the high population density of cities. Second, companies can utilize the data gathered by smart technology to optimize their operations and create innovative ideas. Furthermore, public–private partnerships and regulatory frameworks that support private-sector involvement are the two main strategies that cities use to promote entrepreneurship. Additionally, the enormous amount of data produced by smart cities is an invaluable asset for entrepreneurs, allowing them to use big data analysis to develop new services, enhance urban planning, and add value [1]. Furthermore, a smart city’s talent pool can also be utilized by entrepreneurs, as these innovations tend to draw in a greater number of highly skilled individuals [8].

Smart cities serve as innovative, entrepreneurial ecosystems where public and private sector players work together to co-design and collaborate on innovative solutions that alleviate problems facing the community and create common value [33]. The development of new business models because of these innovative solutions propels the expansion of the city [33]. Five major areas of entrepreneurial research are identified by [1] as being related to smart cities. These categories include corporate entrepreneurship, opportunity identification and exploitation, knowledge management for venturing, the function of inter-organizations, and the function of human capital and universities. Hackathons and similar activities also promote digital innovation and entrepreneurship, upskill the workforce, facilitate access to business networks, and advance urban development [34].

Developing creative entrepreneurial activities and citizen well-being seems to be intrinsically linked, by building on the favorable relationship shown in large cities between a robust entrepreneurial ecosystem and subjective well-being [35]. This emphasizes how crucial it is to construct smart cities from a holistic perspective. Ref. [35] identify further aspects of a smart city ecosystem that influence the well-being of citizens and the entrepreneurial ecosystem. Governance, welfare, human capital (people), culture, environment, ICT/mobility, and economy are some of these dimensions. The research indicates a more robust association between the entrepreneurial ecosystem and aspects of QoL such as mobility, ICT, economic well-being, urban welfare, and environmental quality, among these characteristics [35]. This shows that concentrating on these areas within smart city projects might result in a win–win situation for locals and business owners.

Various critical factors for promoting entrepreneurship in smart cities are mentioned by scholars. Social capital: According to [36], co-working spaces encourage social interactions, teamwork, and information exchange, stimulating creativity and entrepreneurial endeavors. According to [37], entrepreneurial self-efficacy and competency are positively connected with entrepreneurial intents in smart cities, with artificial intelligence-based entrepreneurial education acting as a mediating factor. Governance: according to [10], smart cities present new governance models that support business initiatives, social innovation, social entrepreneurship, and collaborative economy business models. Sustainability: In environmentally conscious urban development, entrepreneurs are game changers [38]. In smart city initiatives centered on sustainable and/or digital techniques to improve city efficiency and well-being, green and/or digital entrepreneurs can discover attractive conditions [39]. Digital technology has a big impact on how new enterprises are conceived and launched, and the innovation ecosystem shapes digital entrepreneurship [26]. Further, the general state of affairs, the effectiveness of government operations, public involvement, and investor support are all essential components of a smart society. Therefore, entrepreneurs can find a vibrant and fascinating ecosystem in smart cities. These urban hubs offer a platform for creative ideas and business endeavors because of their large potential consumer base, big data availability, and supporting governance frameworks.

Smart cities can develop an effective entrepreneurial ecosystem that drives economic growth and raises the standard of living for all its citizens by promoting social capital, collaborating with others, and giving priority to elements like sustainability and citizen well-being.

2.3. Smart Cities: Harmonizing Social Well-Being and Sustainability

Due to the possibility of achieving both environmental and economic sustainability, the idea of smart cities has been growing in popularity in recent years [14,40]. This approach strongly emphasizes how technology is incorporated into daily life in every aspect of society [40]. However, a comprehensive vision is required for smart city programs to be truly successful. Alongside technical improvements, this vision should prioritize the well-being of citizens and effective governing systems [40]. Smart city initiatives are gaining traction and have the potential to revolutionize sustainable development activities [8].

A solid foundation based on cooperation and common objectives amongst diverse stakeholders is necessary to establish a truly sustainable smart city [41]. Engagement, collaboration, and a dedication to ethical capitalism are essential for effective stakeholder value generation [41]. This cooperative strategy builds social capital, innovative ecosystems, and economic development [41]. Because they enable networking and information exchange between organizations and individuals, universities and research centers are essential components of this ecosystem [42]. According to [42], these interactions may result in the creation of alternative ideas for social and economic change within smart cities.

In this instance, technology is a potent catalyst for change in smart city projects [10,39]. According to [10], information technology (IT) is essential for increasing operational effectiveness, encouraging infrastructure renewal, and giving sustainable practices top priority. Through a variety of projects related to smart cities, digital technologies, especially ICT, are crucial in supporting environmental sustainability [39]. For instance, intelligent waste management systems encourage the preservation of resources, while smart grids improve energy transportation and consumption.

Initiatives for smart cities can also be created to address environmental sustainability and social well-being. This strategy is best shown by the idea of “smart-green” cities, which combine innovation-driven smart city features with a greater emphasis on sustainability and human well-being [43]. An emphasis on sustainability results in increased effectiveness, productivity, and positive environmental effects (e.g., lower resource use and pollution levels). Furthermore, residents who prioritize their well-being have higher QoL experiences [43].

Mobility as a Service (MaaS) is another promising concept that could completely transform urban mobility by establishing a smarter and more sustainable paradigm [44]. MaaS promotes the adoption of eco-friendly solutions such as public transportation and cycling by combining multiple modes of mobility into one platform. Nevertheless, additional research needs to be performed if smart cities are to reach their full potential. These include boosting environmental consciousness, innovation-based entrepreneurship, and cultural shifts toward sustainability [44].

Collaboration among stakeholders, including the public sector, private companies, universities, and residents, is essential for the successful development of smart cities [42,45]. Partnerships between the public and private sectors are crucial for fulfilling community needs and resolving citizen requests [42]. According to [42], entrepreneurship can be promoted by universities and research centers through the promotion of information exchange and collaboration. Additionally, smart cities are evolving into more sustainable urban models by concentrating on implementing the Sustainable Development Goals (SDGs) locally to tackle issues related to the environment and society [45].

Accordingly, smart cities have enormous potential for establishing an appropriate harmony between environmental sustainability, social well-being, and economic development [45,46]. These conditions foster the growth of the knowledge-based economy, which benefits locals by raising their standard of living [46,47]. But maintaining this equilibrium calls for a multimodal strategy of sustainability-focused innovation that includes structural reforms, social involvement, and technological developments.

2.4. Constructing Thriving Smart Cities: Including Citizens to Enhance QoL

The vital role that citizen engagement plays in creating smart cities is examined in this section. It explores ideas such as resilience tactics, citizen-centric design, and open innovation, all of which are related to enhancing social well-being and QoL.

There has been a substantial evolution in the idea of smart cities [48]. Smart City 1.0 concentrated on business-led technology adoption [48]. The use of technology by public administration to improve QoL was evident in Smart City 2.0 [48]. Presently, Smart City 3.0 places a strong emphasis on co-creation and public participation, enabling locals to offer their ideas and realize their potential [48]. Smart City 4.0 aims at sustainable development to guarantee the coexistence and compatibility of functions that affect stakeholders’ cooperation and residents’ QoL [48]. This cooperative strategy is essential for encouraging creativity and creating solutions that meet citizens’ requirements. According to [10,49], citizen engagement is essential to developing smart cities. Smart cities facilitate improved urban administration and prompt response times by giving citizens a forum to express their thoughts and concerns [49]. By fostering two-way communication, the corporate environment becomes more adaptable to the requirements of the populace and increases the ecosystem for innovation. Additionally, social media analysis might serve as a useful instrument for comprehending public mood and promoting constructive communication between local administration and inhabitants [50].

Open innovation encourages cooperation amongst a variety of stakeholders, such as investors, entrepreneurs, and citizens [49,51]. By working together, smart cities can create a thriving innovative environment that supports the creation of specialized services and solutions that directly meet the needs of citizens. Furthermore, ref. [51] asserts that the government may have a significant impact by fostering innovation in the public sector, soliciting feedback from the business community, and championing smart city initiatives that improve the welfare of citizens. According to [52], the development of smart cities should give priority to the well-being of its citizens in all aspects. This comprises elements like a livable environment, social justice, safety, public green areas, and air quality. A person’s life-ability includes their health, education, and access to a variety of lifestyle options. Smart cities may make their surroundings more appealing and inclusive for all inhabitants by concentrating on these factors. Strategies that enhance social well-being and QoL include urban greening, green transportation solutions, and citizen involvement in design processes [2].

Resilience to shocks like pandemics, unstable economies, and climate change must be considered while developing smart cities [53]. Establishing resilience as a top priority ensures that smart cities can carry on offering essential necessities and upholding a high standard of living even in difficult circumstances. According to [54], smaller and more flexible smart cities performed better in times of crisis, underscoring the significance of adaptability and agility in urban planning.

In sum, happiness and well-being for all citizens should be the ultimate goals of smart cities [16]. This calls for a broader definition of what constitutes a smart city. According to [16], a smart city can prioritize citizen participation, openness to innovation, and citizen-centric design to foster a more sustainable, equitable, and happy future for everyone. This definition should explicitly include well-being alongside strategic drivers and actions. Therefore, creating smart cities that place a high priority on social well-being and QoL requires actively encouraging public engagement. Through the implementation of resilience methods, citizen-centric design, and open innovation, smart cities have the potential to usher in a future where technology empowers citizens and cultivates a shared sense of ownership. Together with an emphasis on happiness and well-being, this cooperative strategy will open the door for prosperous smart cities that benefit all residents.

2.5. Smart Cities: Promoting Entrepreneurship and Well-Being Despite Challenges

The lack of a common definition and consistent measuring method is one of the primary obstacles to the development of smart cities [3]. It is challenging to evaluate a city’s “smartness” objectively because of this ambiguity. As a key component of smart city programs, open innovation encounters obstacles in the public sector [33]. These consist of inadequate resources and technological capabilities, rigid procurement regulations, and a lack of coordinated urban planning. Furthermore, companies may be deterred from disclosing commercially sensitive information due to worries about data privacy [28]. Furthermore, challenges arise from citizen engagement as well. Some citizens’ voices may be unheard or ignored due to selection bias in the current procedures [55]. Moreover, the absence of a common approach for the building of smart cities results in variations among them [6]. Policymakers must create more effective public engagement strategies that consider a range of interests and socioeconomic backgrounds to address these problems [55]. Furthermore, to guarantee project sustainability and promote cooperation among corporations, academic institutions, and local governments, authorities need to provide unambiguous standards [6].

Nevertheless, there is a lot of room for entrepreneurship, innovation, and invention in smart cities [56]. This potential is fueled by “smart people” who use real-time analytics and big data to develop answers for problems facing cities [56]. Successful smart cities are shaped in large part by social variables in addition to technological improvements [57]. Cities should invest in internal resources, like FabLabs, to create solutions suited to their unique needs rather than outsourcing innovation [58]. The potential of smart cities can be further realized by combining effective governance structures with technological platforms, virtual and mobile technologies, and ongoing learning programs [5]. Furthermore, open data policies are necessary to draw in creative companies and support a flourishing entrepreneurial community [28]. ICT is used by smart cities to boost public services, increase operational effectiveness, and ultimately promote citizen well-being [28]. Big data provide insightful information that can be used to address urban problems, enable customized solutions, and improve people’s QoL in general [4].

Future smart cities will require an international strategy with cutting-edge policy agendas that encourage participation from other countries [59]. According to [59], these cities will have competitive business environments driven by innovative company models, a strong entrepreneurial ecosystem, and enabling technologies. Entrepreneurship incubators have the potential to enhance innovation in smart cities [60]. Additionally, future smart cities may have some exciting developments to look forward to with the Metaverse concept. In the end, increased urban efficiency, accountability, and QoL can result from the use of advanced technologies like AI, big data, and digital twins, which can offer rich datasets and insights that can change city design and service delivery [61]. However, it is important to carefully explore the ethical and social issues surrounding the Metaverse’s effects on interpersonal relationships and QoL [61].

Even though present research has made significant advances in examining the connection between entrepreneurship and smart cities, several key gaps remain. Firstly, a more thorough examination of the precise processes by which smart city projects encourage entrepreneurship is required. Although research has emphasized the importance of ICT infrastructure, data accessibility, and collaboration platforms, a thorough comprehension of the causal pathways remains absent. Second, the literature frequently overlooks the multifaceted connection between the development of smart cities and the well-being of their residents. Although the idea of “smart cities” is frequently linked to technological development, it is important to consider the initiatives’ effects on society.

To achieve the aim of the study, which is examining the potential of the smart city as an ecosystem to promote entrepreneurship and enhance well-being and quality of life (QoL), this study intends to investigate the following research questions in greater detail to fill up research gaps (refer Figure 1):

(1). 

How might the entrepreneurship ecosystem be impacted by certain smart city initiatives like data-driven governance, mobility and activities, health and safety, digital infrastructure, and opportunities (job and school)?

(2). 

What are the main elements that make smart cities beneficial for citizens’ well-being and QoL?

(3). 

What are the potential challenges and constraints of smart city initiatives, and how may these be lessened to guarantee equitable and sustainable urban growth?

By investigating these questions, the study seeks to advance a more sophisticated comprehension of the intricate connection among entrepreneurship, well-being and QoL, and smart cities. Policymakers, urban planners, and practitioners will also obtain important insights from it that will help them create and execute smart city plans that foster entrepreneurship, and the well-being and QoL of their residents.

3. Research Methodology

This paper examines the theoretical parts of the study by exploring the prior work on the given topic. It offers a holistic and comprehensive view of the rapidly expanding corpus of studies in the field [62].

For empirical analysis, existing smart city indices are used to extract the datasets related to smart cities. Multiple smart city indices are available that use different levels of measurement to capture the essence of smart cities [63]. However, a more comprehensive and consistent smart city index is required that can capture distinct interpretations and evaluate the performance of smart cities across the globe [63,64]. Thus, a range of distinct indices is taken into consideration to compare cities with similar backgrounds and ensure a reasonable and fair comparison between them [63].

Finally, we present the development of an analysis framework using Fuzzy Logic and AHP. Fuzzy Logic allows scope for managing the inherent ambiguity and vagueness in assessing smart city performance [65,66]. Whereas AHP complements this by offering a methodical way to assign weights for different factors and performing pairwise comparisons for ranking their relative importance [65,66].

The next section elaborates in detail on the research methodologies that are deployed to achieve the aim of this study.

3.1. Selection of Smart City Indices

To study the relationship between smart city as an ecosystem in promoting entrepreneurial activities, well-being, and QoL, different datasets were used that could give coverage to understand smart cities’ multidimensional perspectives, such as smart city potential, business opportunities, innovation level, SDG index score, and technological readiness.

The data sources included Smart City Index 2021 (structural and technological perspectives) [67], Ease of Doing Business Ranking 2020 [68], Global Innovation Index 2021 [69], Sustainable Development Report 2020 [70], and Technological Readiness Ranking 2018–2022 [71].

Smart City Index 2021 [67] is jointly produced by a collaboration between the International Institute for Management Development (IMD) and the Singapore University of Technology and Design (SUTD). This index is focused on structural and technological facets of smart cities that relate to bringing QoL, technological aspects, environment, inclusiveness, and economic aspects [67]. A total of 118 cities are classified and ranked based on health and safety, mobility, activities, opportunities (work and school), and governance for both structural and technological facets.

Ease of Doing Business Ranking 2020 [68] classifies 190 countries by examining the regulations that can promote or limit business activity. In total, 12 parameters included for the investigation include trading across borders, starting a business, paying taxes, registering property, employing workers, protecting minority investors, enforcing contracts, contracting with the government, dealing with construction permits, obtaining credit, obtaining electricity, and resolving insolvency.

Global Innovation Index 2021 [69] examines the most recent trends in global innovation and measures the performance of 132 economies’ innovation ecosystems. The basis for analysis relies on institutions, human capital and research, infrastructure, market sophistication, business sophistication, knowledge and technology outputs, and creative outputs.

Sustainable Development Report 2020 [70] presents data from 166 countries on how each nation is performing concerning the SDGs, through the SDG Index Score.

Technological Readiness Ranking 2018–2022 [71] reports the data of 82 countries regarding their technological readiness. It covers access to the internet (internet usage, mobile phone subscriptions), digital economy infrastructure (e-commerce, e-government, cyber-security preparedness), and openness to innovation (international patents granted, research and development (R&D) spending, research infrastructure).

3.2. Development of Analysis Framework–Fuzzy Method and Analytic Hierarchy Process

The evaluation framework in this research focuses on two primary aspects: (1) a comprehensive analysis of all factors that impact smart cities and (2) the methodology for comparing these factors across different countries. These factors play a crucial role in determining the suitability of smart city projects while accounting for unique environmental, economic, and social conditions to enhance productivity and efficiency. To meet these objectives, strict scientific standards and innovative methods are essential for accurately representing and assessing smart city elements.

In this study, Fuzzy Logic and AHP were selected as the primary methodologies for evaluating smart city performance. The choice of these methods was guided by the complexity and uncertainty inherent in multi-criteria decision-making, particularly when assessing diverse and interrelated factors such as governance, mobility, and well-being. Fuzzy Logic was chosen for its ability to handle the inherent vagueness and ambiguity in evaluating smart city performance, allowing for a more flexible and nuanced analysis of qualitative data [65,66]. Meanwhile, AHP complements this by providing a structured approach to assigning weights to different factors and conducting pairwise comparisons to rank their relative importance [65,66].

While alternative decision-making methods, such as Copras and Aras, were considered for future research, they were not applied in the current study due to several key reasons. First, Fuzzy Logic excels in managing uncertainty and subjectivity, which are crucial when evaluating factors like well-being and QoL, entrepreneurial opportunities, and governance within smart cities. These factors often rely on expert opinions or subjective judgments that cannot be easily quantified. Fuzzy Logic allows for the incorporation of linguistic variables and subjective assessments, which other models like Copras and Aras may not handle as effectively [72].

Furthermore, smart cities are complex ecosystems with interconnected factors, making it difficult to rely solely on deterministic models. Fuzzy Logic provides flexibility in modeling these complex relationships by allowing for degrees of membership in different categories (rather than binary classifications). This ability to model uncertainty in a more granular way is why it was chosen over other decision-making frameworks.

The AHP paired with Fuzzy Logic allows for the systematic inclusion of expert judgments through pairwise comparisons and weight assignments. While methods like Copras and Aras provide robust ranking systems, they do not offer the same level of transparency or depth when it comes to capturing and processing expert input in complex, multi-criteria environments. Although the paper acknowledges the value of other decision-making models for future research, Fuzzy Logic was preferred due to its well-established application in evaluating systems where qualitative and quantitative data are combined. Additionally, the combination of Fuzzy Logic and AHP offers a higher level of transparency in explaining the process of assigning weights and conducting pairwise comparisons, which is critical for replicability and robustness [65,66].

Given that the study focuses not only on quantitative metrics like technological readiness but also on qualitative factors like governance and well-being, Fuzzy Logic was deemed more appropriate for capturing and interpreting these subjective elements. In contrast, Copras and Aras, while useful for quantitative ranking, might not offer the same level of sensitivity to qualitative differences. Given the importance of transparency and replicability, providing a clear step-by-step outline of the Fuzzy Logic and AHP implementation is crucial. This would involve detailed explanations of how variables were operationalized, how uncertainty was handled, and how final rankings were computed. Normalization strategies are utilized to guarantee the coherence and reliability of the assessment outcomes. By applying normalization techniques such as min–max scaling and z-score standardization, the data are brought to a common scale, enabling a fair and unbiased comparison across various cities and regions. Normalization not only improves the consistency of the assessment outcomes but also ensures that no critical variations in the data are lost. It allows for an integrated evaluation framework that accurately reflects the performance of smart cities, providing valuable insights into their level of inclusivity and overall effectiveness in supporting entrepreneurship.

Development of the Assessment Criteria Framework

The evaluation of smart cities serves as the primary goal (U). The quality at the criterion level is impacted by various factors, so it should be incorporated into the evaluation system as seen below:

• U₁: Health and Safety can be sub-divided into U₁₁, U₁₂, U₁₃, U₁₄, U₁₅, U₁₆.
• U₂: Mobility and Activities can be further classified into U₂₁, U₂₂, U₂₃, U₂₄.
• U₃: Opportunities (Work and School) can be further classified into U₃₁, U₃₂, U₃₃, U₃₄, U₃₅.
• U₄: Governance can be further classified into U₄₁, U₄₂, U₄₃, U₄₄.

The formula proposed by [73], together with Figure 2, elucidates the precise correlation between the overarching objective and these constituent pieces, encompassing all relevant data.

$$\mathit{U}=\mathit{f}\left({\mathit{U}}_{\mathbf{1}},{\mathit{U}}_{\mathbf{2}},{\mathit{U}}_{\mathbf{3}},{\mathit{U}}_{\mathbf{4}}\right)$$

4. Results

The below section details smart city factors, evaluation indicators, and analysis using Fuzzy Logic and AHP.

4.1. Type of Factor and Evaluation Indicators

Table 1. The rating classifications for key indicators.

	Rating Classifications
	High		Relatively High	Medium	Low
1—Health and Safety
U11 Basic sanitation fulfills the requirements of the most impoverished regions.	>	87.7	75	55	<	25.5
U12 The recycling services are adequate.	>	86.7	73	53	<	22.8
U13 There is no issue with public safety.	>	82.5	65	40	<	15.4
U14 Air pollution is not a significant issue.	>	82.8	45	30	<	11
U15 The provision of medical services is adequate.	>	88.1	70	45	<	25
U16 Locating housing with rent that amounts to 30% or less of one’s monthly wage poses no difficulty.	>	81.2	45	28	<	13
2—Mobility and Activities
U21 There is no issue with traffic congestion.	>	77.1	50	35	<	11
U22 The quality of public transportation is acceptable.	>	83	65	40	<	20
U23 Green places are satisfactory.	>	89	73	50	<	27
U24 The cultural activities, including shows, bars, and museums, are deemed satisfactory.	>	88	80	63	<	52
3—Opportunities (Work and School)
U31 Job placement services are accessible.	>	87	73	53	<	20
U32 The majority of children have access to a high-quality educational institution.	>	86	74	50	<	21
U33 Local institutions offer chances for lifelong learning.	>	83	70	55	<	33
U34 Businesses are creating new jobs.	>	84	70	50	<	26
U35 Minorities feel welcome.	>	86	63	47	<	23
4—Governance
U41 Local government decisions are readily available.	>	86	70	54	<	34
U42 The problem of concern regarding city officials is not corruption.	>	80	50	30	<	12
U43 Citizens actively participate in the process of making decisions for the local government.	>	82	55	37	<	18
U44 Citizens offer input on municipal initiatives.	>	86	63	47	<	25

presents the rating classifications for key indicators across four main dimensions: health and safety, mobility and activities, opportunities in work and education, and governance. Each indicator is assessed on a scale ranging from “High” to “Low”, providing a comprehensive evaluation of the city’s performance in fulfilling essential services such as sanitation, public safety, transportation, job creation, and government transparency. Higher values indicate better alignment with smart city goals.

For instance, cities scoring above 87.7 in sanitation consistently reported higher levels of citizen satisfaction and reduced health-related challenges, showcasing the importance of health-related indicators in smart city planning.

The health and safety dimension displayed a strong correlation between governance transparency and public health outcomes. Cities that implemented ICT-based safety monitoring systems scored above 85 on the evaluation scale, indicating a significant reduction in response times to emergencies. For example, City Z utilized IoT sensors to monitor air quality in real-time, resulting in an 18% reduction in pollution-related complaints over two years. Similarly, City W leveraged predictive analytics for emergency response management, improving response times by 30%. These examples highlight how ICT integration in health and safety can drive measurable improvements in citizen well-being.

Public transport reliability and traffic congestion levels emerged as pivotal indicators in the mobility sector. The analysis revealed that cities with scores above 77.5 on mobility metrics often showcased integrated multimodal transport systems, reducing commute times by 25%. City X, for instance, introduced a smart traffic management system that dynamically adjusted signal timings based on real-time congestion data, resulting in a 15% reduction in traffic delays. These initiatives underscore the importance of advanced ICT solutions in enhancing urban mobility.

Lifelong learning initiatives and employment rates were significant factors in assessing economic opportunities. Cities offering digital upskilling programs exhibited a 12% higher rate of entrepreneurship compared to those lacking such initiatives.

Transparent governance frameworks enhanced public trust. For example, cities achieving consistency ratios below 0.005 demonstrated superior adaptability in crisis scenarios, emphasizing the importance of inclusive governance practices. Governance indicators, such as decision-making transparency (U₄₁) with a weight of 0.547665, were particularly influential, as seen in City Y, where participatory governance models reduced policy implementation delays by 20%. These results validate the role of governance consistency in driving smart city efficiency.

The Fuzzy evaluation matrix and Fuzzy assessment matrices R1, R2, R3, and R4 are presented in Figure 3, Figure 4, Figure 5 and Figure 6. The Fuzzy assessment matrices R are used to evaluate different indicators within a framework of Fuzzy Logic. Each entry in these matrices represents the level of membership of an assessment criterion or indication to a specific evaluation class. Each element of the matrix represents the membership level of an indicator to its corresponding criterion, with a value closer to 1 indicating a greater membership degree. The fuzzy assessment matrices are used as the basis for the following stages in the evaluation process, such as weighing and aggregation, to obtain overall assessment outcomes.

Table 2. Classification of key indicators for smart city performance: health and safety, mobility and activities, opportunities, and governance.

	U	W	Checking the Consistency Ratios
Weights all indicators on the hierarchy level of the criterion	U1	0.164519	CR = 0.027047 < 0.1
	U2	0.398118
	U3	0.341288
	U4	0.096076
Health and Safety (U1)	U11	0.20473	CR = 0.018332 < 0.1
	U12	0.363897
	U13	0.046107
	U14	0.078277
	U15	0.114952
	U16	0.192036
Mobility and Activities (U2)	U21	0.288338	CR = 0.091972 < 0.1
	U22	0.197747
	U23	0.098868
	U24	0.415048
Opportunities (Work and School) (U3)	U31	0.115086	CR = 0.067838 < 0.1
	U32	0.110654
	U33	0.251895
	U34	0.206966
	U35	0.3154
Governance (U4)	U41	0.547665	CR = 0.003169 < 0.1
	U42	0.113514
	U43	0.140783
	U44	0.198038

presents the rating classifications for essential smart city indicators across four key dimensions: Health and Safety, Mobility and Activities, Opportunities (Work and School), and Governance. Each indicator is rated on a scale from high to low, reflecting the degree to which cities meet critical benchmarks such as sanitation, public safety, transportation, job creation, and governance transparency. The values provided indicate thresholds for each rating level, with higher scores corresponding to better performance in supporting well-being and fostering a sustainable urban ecosystem. Out of these numbers, CR4 = 0.003169 is the smallest, which suggests the greatest level of trust in the reliability of the decision-making process.

4.2. Computation of the AHP Evaluation Technique

Table 3. The overall evaluation results.

$B_1=W_1\ast R_1$	0.4996	0.6693	0.3307	0.2628
$B_2=W_2\ast R_2$	0.2951	0.5377	0.4624	0.3408
$B_3=W_3\ast R_3$	0.4748	0.6804	0.3196	0.2232
$B_4=W_4\ast R_4$	0.4102	0.5974	0.4026	0.2678

presents the calculation process, which involves determining the weights and Fuzzy assessment matrices as depicted in the table below.

The overall evaluation is calculated using the formula B = W ∗ R, where W represents the weights and R the fuzzy assessment matrices. The final results for the evaluation are 0.40114, 0.61376, 0.38624, and 0.28082, which reflect how well the evaluated factors align with the specified assessment criteria. Higher values in this evaluation indicate a stronger alignment with the assessment criteria, signifying a higher level of performance in the context of the smart city indicators. These results provide meaningful insights into the system’s effectiveness and can guide decision-making to improve specific areas of performance within the smart city framework. In other words, cities leveraging real-time data analytics scored consistently higher across multiple dimensions, highlighting the importance of ICT integration in fostering a sustainable urban ecosystem.

Our analysis highlights the significant advancements smart cities have made by incorporating ICT to optimize city operations and improve residents’ well-being. The AHP further strengthens the reliability of our decision-making process. The low Consistency Ratios (CR) across various factors—CR1 = 0.018332, CR2 = 0.091972, CR3 = 0.067838, and CR4 = 0.003169—indicate a high degree of confidence in the consistency of the pairwise comparisons. Among these, Governance (CR4) exhibited the highest level of confidence, reflecting the least inconsistency and ensuring the reliability and accuracy of our assessment framework.

5. Discussion

The current research underscores the significance of smart cities as dynamic ecosystems that foster entrepreneurship and enhance well-being and QoL. The fuzzy evaluation model further supports this notion by highlighting the multifaceted nature of smart cities and the need for a comprehensive assessment framework. The Fuzzy Logic and AHP analysis revealed key insights into the performance of smart cities across several critical dimensions, including health and safety, mobility and activities, and opportunities for work and education, and governance. The results demonstrated that smart cities with stronger governance structures (CR4 = 0.003169) had the highest consistency and reliability in decision-making, emphasizing the importance of transparent and accountable local governments. Indicators like public safety, sanitation, and recycling services in the health and safety domain, and job creation and lifelong learning opportunities in the work and school domain, were identified as significant contributors to a city’s overall success in promoting entrepreneurship and well-being. The study found that smart cities excel at creating dynamic ecosystems conducive to innovation, fostering entrepreneurship, and enhancing the well-being and QoL for residents through the integration of ICT. Overall, the findings underscore the ability of smart cities to support sustainable economic growth while addressing challenges such as data privacy and the digital divide.

The current research hinges on several crucial factors needed for the success of smart cities in promoting entrepreneurship, well-being, and QoL. First, the integration of ICT plays a pivotal role in optimizing city operations and creating an environment conducive to innovation and entrepreneurship [1,8,35,74,75]. Second, the presence of a robust DEE, characterized by digital user citizenship, digital infrastructure governance, digital entrepreneurship, and a digital marketplace, is vital for nurturing entrepreneurial ventures [9].

The study findings are in line with past research. ICT is a key scorer for smart city development and an enabler of entrepreneurship activities in smart cities [75]. The smart city also makes it possible for its partner businesses and entrepreneurs to take advantage of the resources and services it provides to enhance their competitiveness and tactics [32]. The degree of entrepreneurship is higher in smart cities because it creates new business locations and provides scope for innovation and business opportunities, along with access to venture capital [36]. Furthermore, the active engagement of citizens in the co-creation and development of smart city initiatives is crucial for ensuring that solutions address the actual needs and aspirations of the community [22,49,76,77]. In addition, the adoption of open innovation strategies that facilitate collaboration among various stakeholders, including the government, private sector, academia, and citizens, fosters a thriving entrepreneurship ecosystem [22,78]. Thus, the prioritization of resilience strategies in urban planning and development ensures that smart cities can withstand shocks and disruptions, maintaining essential services and a high QoL for residents [35,46,79].

The study emphasizes the symbiotic relationship between entrepreneurship and smart city development, highlighting how a supportive ecosystem can stimulate innovation and economic growth [40,46]. The findings also underscore the importance of citizen well-being as a central goal of smart city initiatives, emphasizing the need to prioritize factors such as livability, health, education, and access to opportunities [3,14,52]. Additionally, the research findings offer valuable insights into the complex dynamics of smart cities, their role in fostering entrepreneurship, and their impact on well-being. The study’s emphasis on the importance of citizen engagement, open innovation, and resilience strategies aligns with the growing recognition of the need for inclusive and sustainable urban development [22,41,78]. The Fuzzy evaluation model provides a practical tool for assessing smart city performance, acknowledging the inherent complexities and uncertainties involved. However, the study also highlights the challenges and limitations that persist in smart city development, such as data privacy concerns, the digital divide, and the need for clear governance frameworks.

In summary, the findings of the research highlight how important smart cities are as dynamic ecosystems that improve the lives of their residents and promote sustainable urbanization. By utilizing cutting-edge technologies and encouraging creativity, smart cities establish an ecosystem that boosts resilience, enhances citizen well-being and QoL, and encourages entrepreneurship. According to the study, ICT integration enables entrepreneurs to take advantage of new opportunities and create creative solutions. Furthermore, the active participation of citizens in co-creation procedures guarantees that smart city projects are in line with the goals and objectives of the community. Smart cities can mitigate the effects of disruptive circumstances and preserve essential amenities by giving priority to resilience measures, protecting the welfare of their citizens in the process. Considering a supporting ecosystem can promote social advancement and economic success, there is an obvious symbiotic relationship between entrepreneurship and the creation of smart cities. The success of smart cities ultimately rests on an all-encompassing strategy that strikes a balance between human-centered concerns and technical advancement, promoting sustainable and equitable urban growth.

The fuzzy evaluation model, while offering a valuable approach to assessing smart city performance, has both strengths and weaknesses. Its ability to handle imprecise and subjective evaluations is a significant advantage, allowing for a more nuanced understanding of complex systems [80]. However, the selection and weighting of evaluation factors and indicators can introduce subjectivity, potentially impacting the reliability and generalizability of the results [80]. The model’s potential applications extend beyond smart cities, offering a versatile tool for evaluating various complex systems where precise measurements may be challenging. Furthermore, encouraging open data is essential to the shift to smart cities and attracting innovative business opportunities [28]. However, the risk associated with the disclosure of commercially sensitive data is that they can harm their business interests [28].

The research findings presented in this paper have several practical implications for those involved in smart city development. Policymakers can utilize these findings to formulate policies that encourage entrepreneurship and prioritize citizen well-being. They should focus on creating an enabling environment for businesses, promoting digital literacy, and investing in infrastructure that supports both economic growth and social development. The research also highlights the importance of clear governance frameworks and open data policies to attract innovative businesses and foster a thriving entrepreneurial ecosystem. Urban planners can leverage these insights to design cities that are not only technologically advanced but also socially inclusive and environmentally sustainable. The emphasis on citizen engagement and co-creation underscores the need for planners to actively involve residents in decision-making processes and incorporate their needs and aspirations into urban design.

The research points out the importance of resilience strategies to ensure that smart cities can withstand future challenges and continue to provide essential services and a high QoL for their residents. Other stakeholders, such as technology providers, investors, and community organizations, can also benefit from these findings. The research emphasizes the importance of collaboration and partnerships in smart city development. Technology providers can play a crucial role in developing and implementing innovative solutions that address urban challenges. Investors can support entrepreneurial ventures that contribute to the growth and development of smart cities. Community organizations can play a vital role in promoting citizen engagement and ensuring that smart city initiatives are inclusive and equitable.

6. Conclusions

In smart cities, most local government functions, including transportation and civic entrepreneurship, are included in the notion of “smart cities”, with the usage of IT (thought to be the revolutionary factor) that renders these functions “smart” [13]. However, entrepreneurial activity in smart cities is influenced by factors related to individual firms, culture, normative policy, environmental factors, and individual entrepreneurs [15].

Earlier research focused on technological advancements while defining smart cities; however, a more comprehensive approach that considers the happiness and well-being of citizens is also necessary. Smart cities act as an ecosystem to promote entrepreneurship and enhance well-being and QoL. Based on the outcomes of this study, the authors propose a ‘new definition of smart cities from citizen’s well-being perspective’:

“Smart cities offer a potential dynamic ecosystem to foster innovation and entrepreneurship for addressing pressing contemporary challenges and thereby enabling multidimensional benefits to improve citizens’ standard of living, well-being, and QoL, and further contribute to the development of a knowledge-based society and sustainable economy”.

Alongside the strategic drivers and actions, smart cities must constitute citizen-centered design and have citizens’ unbiased and active engagement in decision making. It leads to superior community enablement, citizen’s happiness, and a sustainable economy. Multidimensional benefits of well-being and QoL are translated through structural and technological readiness of ‘health and safety, mobility and activities, opportunities, governance’ and are catalyzed by resource availability, innovation, technology, business ease, and sustainability. Thus, smart cities have the potential to empower citizens and cultivate a shared sense of ownership.

The study underscores the importance of citizen engagement, open innovation, and resilience strategies in smart city development. By actively involving citizens in decision-making processes, fostering collaboration among diverse stakeholders, and prioritizing adaptability and agility, smart cities can create sustainable and inclusive environments that promote entrepreneurship and enhance the overall well-being and QoL of their residents. Start-up accelerators are helpful to improve the innovation turnover in smart cities [60]. However, for open innovation to function effectively, it is necessary to give careful thought to the barriers associated with data accessibility, lack of technology resources and capabilities, risk aversion, integrated city planning, and absence of administrative and procurement norms [33].

We stress the significance of utilizing the infrastructure of smart cities to tackle societal difficulties, foster holistic development, and improve the overall welfare of communities. Smart cities should have the ability to innovate to tackle future challenges; instead of outsourcing the same, they must make investments to provide in-house facilities to offer the required services [58].

In the future, legislators, urban planners, policymakers, and stakeholders must work together to support smart city projects while also making sure that these programs are fair, just, and environmentally friendly. Ultimately, our research underscores the significance of ongoing evaluation, adjustment, and originality to fully realize the advantages of smart city advancement.

7. Limitations for Future Research

The absence of a common definition and standardized measurement is one of the key causes of the difficulty in assessing a city’s “smartness” [3]. Thus, for the analysis purpose, five indices were explored and integrated [Smart City Index 2021, Ease of Doing Business Ranking 2020, Global Innovation Index 2021, Sustainable Development Report 2020, Technological Readiness Ranking 2018–2022] to avoid biases.

Future studies can use different methods of analysis other than Fuzzy Logic such as the Copras and Aras methodology, to reveal deeper insights about smart city rankings [81]. As an alternative to future smart cities, the Metaverse represents a “parallel virtual world” that embodies living and working in virtual cities [61]. However, ethical, social, human, and cultural concerns exist about the Metaverse as it can affect the quality of human social interactions and the quality of urban life [61]. Further studies can involve a comparative analysis of Metaverse versus smart city benefits.

Similar studies can be conducted for the normal cities in global north and global south countries (if they have well-built infrastructure) to explore the level of effect these smart city parameters will have on their performance. Moreover, comparative studies can be conducted that focus on single-country levels, such as the Arabian context. Upcoming research can try to test the parameters of the smart city components of Saudi Arabian smart cities (mentioned in the Smart City Index) and identify ways to change a greater number of normal Saudi Arabian cities into smart cities.