Business Models Used in Smart Cities—Theoretical Approach with Examples of Smart Cities

Abstract

This paper examines business model implementations in three leading European smart cities: London, Amsterdam, and Berlin. Through a systematic literature review and comparative analysis, the study identifies and analyzes various business models employed in these urban contexts. The findings reveal a diverse array of models, including public–private partnerships, build–operate–transfer arrangements, performance-based contracts, community-centric models, innovation hubs, revenue-sharing models, outcome-based financing, and asset monetization strategies. Each city leverages a unique combination of these models to address its specific urban challenges and priorities. The study highlights the role of PPPs in large-scale infrastructure projects, BOT arrangements in transportation solutions, and performance-based contracts in driving efficiency and accountability. It also explores the benefits of community-centric models, innovation hubs, revenue-sharing models, outcome-based financing, and asset monetization strategies in enhancing the sustainability, efficiency, and livability of smart cities. The paper offers valuable insights for policymakers, urban planners, and researchers seeking to advance smart city development worldwide.

1. Introduction

Today, cities are competing with each other on various levels of development. In an era of ever-evolving technologies, competition between cities is increasing. Digital innovations are a force for urban development and raising the quality of life of residents. The city, with its idea of many people functioning together in one space, is the greatest achievement of civilization. Living in cities creates many opportunities for human development. Decision-making, scientific, economic, industrial, and service centers are concentrated in cities. Modern cities are bastions of innovation, and the link between the city and innovation is holistic [1]. The holistic link between the city and innovation is a dynamic and multifaceted relationship that encompasses various interconnected elements of urban life and technological advancement. Cities, as vibrant centers of human activity, serve as fertile grounds for creativity, collaboration, and the exchange of ideas. Their dense and diverse populations facilitate the interaction of individuals from different backgrounds, disciplines, and cultures, sparking innovation through the cross-pollination of perspectives and knowledge [2,3,4,5]. Within cities, institutions such as universities, research centers, and innovation hubs play a crucial role in fostering innovation by providing platforms for knowledge exchange, research, and collaboration [6,7]. These institutions act as catalysts for technological advancement, bringing together researchers, entrepreneurs, and policymakers to address pressing urban challenges and develop novel solutions [6,7,8,9,10].

Entrepreneurship thrives in urban environments, driven by the availability of resources, talent, and networking opportunities [11]. Cities offer a conducive ecosystem for startups and innovative ventures, with access to capital, mentorship, and markets [12]. The proximity of like-minded individuals and supportive infrastructure accelerates the pace of innovation, enabling entrepreneurs to test and scale their ideas more rapidly. Infrastructure and smart technologies are integral components of innovation in cities [13,14,15,16,17]. From smart transportation systems and energy-efficient buildings to digital governance platforms and IoT-enabled services, cities serve as testbeds for innovative solutions to urban problems [17,18,19,20,21,22]. These technologies not only enhance the quality of life for residents but also contribute to the sustainability and resilience of cities in the face of environmental and socioeconomic challenges [23,24,25].

Effective urban governance and forward-thinking policies are essential for fostering innovation within cities [4,5,6]. Policies that support entrepreneurship, research, and development, as well as investments in education, infrastructure, and public services, create an enabling environment for innovation to flourish. Moreover, participatory decision-making processes empower citizens to contribute to the co-creation of innovative solutions that address their needs and aspirations [7,8,9,10].

Changes in cities support the development of countries. In recent years, urban development has been strongly influenced by digitality, which has opened up new opportunities for the future of cities. Technologies increase the flexibility of cities, reduce infrastructural barriers, monitor the provision of resources, transmit information, etc. [26,27]. More and more urban needs are being met through ICT. The popularity of ICT in cities has led to a resurgence of the smart city concept. This is because the concept had its roots in the smart growth a movement of the 1990s, which promoted new principles of urban planning, but today, the word smart is used to describe modern, intuitive, and smart cities [28,29,30]. Smart solutions create modern cities, thus providing more optimized and efficient city functions.

Smart cities, as a modern and efficient cities model, are described by six key areas: smart living, smart environment, smart mobility, smart economy, smart people, and smart governance [31,32,33,34,35,36,37]. Innovative technologies, particularly information and communication technologies, are an integral part of a smart city and play an important role in its development. They are a tool to improve operations in all areas of the city and for all its residents. The smart city concept is based on “community,” “governance,” and “technologies” [38,39].

In smart cities, digital solutions are implemented in various fields such as healthcare, mobility, energy consumption, education, knowledge transfer, and urban management. Innovation serves as the most important element of contemporary smart city development, catalyzing the evolution of business models towards sustainable and technologically adept frameworks [40,41]. Within this paradigm, businesses find themselves at the nexus of dynamic urban ecosystems, where the convergence of digital technologies, urban infrastructure, and societal needs precipitates novel approaches to value creation and service provision [42,43].

The model of a smart city is embedded in sustainable development, in line with global environmental policies—SDGs [44]. Cities, through the concept of sustainable development, strive for ecosystem balance and a new quality of life for residents. The literature on the smart city concept indicates a consensus on the basic characteristics of smart cities, which include sustainable development, advanced ICTs, high-tech governance and citizen participation, an innovative and highly skilled society, and a knowledge-based economy. Climate change and pollution are major global and European concerns, and making cities safe, resilient and inclusive is one of the key goals of the Agenda for Sustainable Development [44], which includes mobility as a key aspect.

This paper attempts to identify business models that are particularly common in smart cities, building on existing proposals for smart city models and emphasizing the role of smart innovation in city development. The first part of the paper focuses on the existing knowledge of smart city models. This part presents the constructs of smart cities models. The second part of the paper refers to the innovativeness of the cities rated in the rankings as smart cities.

Identifying the key dimensions of business models in smart cities is appealing for both researchers and managers due to several reasons. While there are existing studies on smart cities [45,46,47,48,49,50,51,52,53,54,55,56,57,58,59,60,61,62,63,64,65,66,67,68,69,70], there is still a need for more comprehensive research specifically focusing on the business models underpinning smart city initiatives. Many studies in the field often emphasize technological aspects or urban policies [6,7,13,14,15,16,17,18,19,20,21,22,23,24,25,71,72,73,74,75,76,77,78,79,80,81,82,83,84,85,86,87,88,89,90,91,92,93,94,95,96,97,98,99,100,101] without delving deeply into the business strategies and models driving smart city projects. By focusing on business models, researchers and managers can gain a more holistic understanding of how smart city initiatives are conceptualized, funded, and implemented.

Business models play a crucial role in shaping the success and sustainability of smart city projects [102,103,104,105,106,107,108,109,110,111,112,113,114,115,116,117,118,119,120,121,122]. Understanding the key dimensions of these models allows researchers and managers to assess their effectiveness, identify best practices, and optimize resource allocation. Business models influence various aspects of smart city development, including financing mechanisms, partnership structures, revenue generation strategies, and governance frameworks [123,124,125,126,127]. By examining these dimensions, researchers and managers can uncover insights that contribute to the design and implementation of more efficient and impactful smart city initiatives.

While there are indeed studies examining different aspects of smart cities, such as technology adoption [94,95,96,97,98,99,100,101,128,129,130,131,132], urban governance [102,103,104,123,124,125,126], and citizen engagement [108], the focus on business models offers a distinct perspective. Business models provide a strategic lens through which to analyze and understand smart city development, offering insights into the economic and commercial dynamics at play [123,124,125]. By studying business models, researchers and managers can explore how value is created, captured, and delivered within the context of smart cities, shedding light on the underlying motivations, incentives, and stakeholders involved.

The authors likely chose to focus on business models because they serve as a central organizing framework that intersects with various facets of smart city development. While other concepts such as governance models [102,103,104,123,124,125,126,127], technological innovation [6,7,13,14,15,16,17,18], and urban planning [20,21,82,83,84] are undoubtedly important, business models provide a comprehensive framework for analyzing the economic and commercial aspects of smart city initiatives. By examining business models, the authors aimed to fill a gap in the existing literature and provide valuable insights that contribute to a more holistic understanding of smart city development.

On the basis of literature analysis, we observed the research gap that pertains to the literature analysis of business models connected to smart cities and the comparative analysis of smart city business model implementation across different urban contexts, in the cities best engaged in the smart city implementation. Despite the growing body of literature on smart cities [2,3,4,5,6,7,8,9,10,11,12,13,14,15,16,17,18,19,20,21,22,23,24,25,40,41,42,43,44,71,72,73,74,75,76,77,78,79,80,81,82,83,84,85,86,87,88,89,90,91,92,93,94,95,96,97,98,99,100,101,102,103,104,105,106,107,108,109,110,111,112,113,114,115,116,117,118,119,128,129,130,131,132,133,134,135,136,137,138,139,140,141,142,143,144,145,146,147,148,149,150,151,152,153] there are several notable gaps that warrant further investigation. Many existing studies on smart cities primarily emphasize technological aspects [6,7,13,14,15,16,17,18,19,20,21,22,23,24,25,71,72,73,74,75,76,77,78,79,80,81,82,83,84,85,86,87,88,89,90,91,92,93,94,95,96,97,98,99,100,101,154,155], urban policies [20,21,82,83,84,156,157], or citizen engagement [108], often overlooking the role of business models in driving smart city initiatives. This gap suggests a need for research that specifically examines the business strategies and models underpinning smart city development.

While there are individual studies on smart city initiatives in various cities around the world [57,158,159,160,161,162,163,164,165,166,167,168,169,170,171,172,173,174,175,176,177,178,179,180,181,182,183,184,185,186,187,188,189,190,191,192,193,194,195,196,197,198,199,200,201,202,203,204,205,206,207,208,209,210,211,212,213,214,215,216,217,218], there is a scarcity of comparative analyses that systematically compare the implementation of different business models across multiple cities. This gap hinders our ability to identify common trends, best practices, and contextual differences in smart city development. Existing research often focuses on theoretical frameworks and conceptual models, but there is a lack of emphasis on practical implications for city managers, policymakers, and industry stakeholders. This gap suggests a need for research that not only advances theoretical understanding but also provides actionable insights for the decision makers involved in smart city planning and implementation.

While there is existing literature on smart city initiatives and business models, there is a lack of comprehensive studies that systematically compare how these models are implemented in diverse cities and the advantages they offer within each context.

The research objective is to identify and analyze business models which are used in smart cities.

On the basis of research gap identification, we have formulated following research questions:

• What business models are implemented in smart cities?
• How are business models implemented in most developed European smart cities?
• What are the advantages of implementation of particular business models in the analyzed smart cities?

2. Methodology

This study applies a literature review as a method of research. The study utilizes a narrative review methodology to investigate the uses, obstacles, and potential future pathways of artificial intelligence within smart city contexts [215]. This narrative review methodology provides a flexible framework for integrating insights from various sources. In a narrative review, researchers typically begin by identifying the relevant literature on the chosen topic from various sources such as academic journals, books, reports, and conference proceedings [216]. They then analyze and summarize the key findings, themes, and trends emerging from the literature. This process often involves qualitative analysis techniques such as thematic analysis or content analysis to identify common patterns or themes across the selected studies [217].

In this paper, the narrative review methodology was employed to explore the applications, barriers, and future directions of artificial intelligence (AI) in smart cities. The researchers began by systematically collecting the relevant literature from various sources, including academic journals, conference proceedings, books, and reports, focusing on studies related to AI in the context of smart cities. After identifying a comprehensive set of studies, the researchers conducted a qualitative analysis to extract key findings, themes, and trends across the selected studies. This involved synthesizing information from diverse sources to provide a holistic overview of the current state of AI implementation in smart cities.

The authors conducted an analysis of publications indexed by Scopus (

Table 1. Search results for papers with the given keywords on Scopus.

Keywords		Number of Papers—Scopus		Number of Papers—Scopus from 2014
“smart cities”		32,424		31,903
“business models”		19,340		13,656
“smart cities” and “business models”		162		153
“sustainable cities”		2968		2594
“sustainable smart cities” and “business models”		9		9
“cities”		185,160		127,469
“cities” + “business models”		247		220
Keywords and field scope (FS_1)
Scope	Keywords		Results/QAC_1
FS_1	“cities”		127,469
FS_2	“smart cities”		31,903 articles were selected
FS_3	“business models”		13,656 articles were selected
FS_4	“sustainable cities”		2594 articles were selected
Keywords and research segments (RSs)
Segment	Keywords		Results/QAC_1
RS_1	“cities” + “business models”		220 articles were selected
RS_2	“smart cities” and “business models”		153 articles were selected
RS_3	“sustainable smart cities” and “business models”		9 articles were selected
Quality assessment criteria (QACs)
QAC_1	Filter in data base		Filter looking for period of 10 years, 2014 to 2024
QAC_2	Manual		Remove papers that do not use the search terms (publications with narrow, specialized areas of research have been removed)

Source: authors’ own work.

). Using a search engine, we concluded that there are 32,424 papers with keywords “smart city” (31,903 from 2014) and 19,340 papers with keyword “business model” (13,656 from 2014). There are in Scopus database 162 papers with the keywords “smart city” and “business models”.

We also analyzed the Scopus database using “sustainable cities” keywords—2968 papers (2594 from 2014). There are nine papers with “sustainable cities” and “business models” keywords. The last analyzed keywords was “cities”—there were 185,160 papers in Scopus database with this keyword (127,469 from 2014). There are 220 papers in this database with “cities” and “business model” as keywords. We analyzed papers from 2014 up till 2024. We have analyzed the abstracts of those papers, and we use in this paper the studies that directly deal with topics connected with business models.

The authors employed a simple search strategy—a basic search, using keywords. The authors identified (Table 1) the primary area of knowledge using the words: “smart cities” and “business models”. Each of the keywords (meaning each word separated by a space) was connected using the logical AND operator. The search yielded 153 papers that contained the specified words.

Two search paths were used: general track (path) 1 and segment track (path) 2 (Figure 1). The segmental path was key to performing a literature review because the articles were strongly involved with analyzed research topic. Based on the path two, three research segments (RS) are obtained (Table 1): Segment 1 (RS_1), “cities” + “business models”; Segment 2 (RS_2), “smart cities” and “business models”; and Segment 3 (RS_3), “sustainable cities” and “business models”. The review included classical articles. The string presented in Figure 1 applied on 31 January 2024 at the Scopus data base, with a filter considering 10 years 2014–2024 and removing case reports, conferences and comments. After the initial selection of articles using keywords (Table 1), the authors reviewed the abstracts. Papers that narrowed the scope of the study were rejected (due to information hype). In jumping, great emphasis was placed on integrating seemingly separate, but crucial, issues related to the “smart city” and the “business model”. The research was centered on the search for the legitimacy of integrating the processes of city development and business processes within different areas of innovation, which fits into the models of modern cities called smart cities. At the end of the selection using the method based on analysis of the abstract, keywords, section contents checking, and conclusion, 220 articles were selected in RS_1, 153 articles were selected in RS_2, and nine articles were selected in RS3_3. The results of our search strategy are presented in Table 1.

The identified research area stemmed from the research objective: to identify business models that are implemented in smart cities. Moreover, in the research, we formulated the following questions:

• What business models are implemented in smart cities?
• How are business models implemented in most developed European smart cities?
• What are the advantages of implementation of particular business models in the analyzed smart cities?

The first question is primarily addressed through the literature analysis. The narrative literature review involves identifying and synthesizing existing research on business models implemented in smart cities. By reviewing academic journals, conference proceedings, books, and reports, the literature review aims to provide a comprehensive overview of the various business models conceptualized and applied in smart city contexts. It examines the theoretical foundations, conceptual frameworks, and empirical evidence related to smart city business models, thus addressing the question of what business models exist and are discussed in the literature.

The second question is primarily addressed through the comparative analysis of the three most developed European smart cities: London, Amsterdam, and Berlin. Through in-depth case studies of these cities, the comparative analysis examines how different business models are actually implemented in practice. It explores the contextual factors, stakeholder dynamics, and implementation strategies shaping the adoption and execution of business models in real-world smart city projects. By comparing and contrasting the experiences of these cities, the analysis sheds light on the processes and mechanisms involved in implementing business models in highly developed urban contexts.

The third question is addressed through both the literature analysis and the comparative analysis. The narrative review provides insights into the theoretical advantages and potential benefits associated with different smart city business models as discussed in the literature. It identifies the expected outcomes, anticipated impacts, and perceived advantages of implementing specific business models in urban contexts. Meanwhile, the comparative analysis examines the actual advantages and outcomes of implementing particular business models in the analyzed smart cities. By evaluating the experiences and results of real-world projects, the analysis assesses the effectiveness, efficiency, and sustainability of different business models in addressing urban challenges and achieving smart city objectives.

In the analytic part, we have compared the implementation of business models across the urban contexts of London, Amsterdam, and Berlin. We analyzed what the advantages of each implementation are within these specific cities.

The research was exploratory in the scope of existing review studies aimed at revising the current state of knowledge in the areas of “smart cities” and “business models”. The research process encompassed five phases:

• Formulating the research objective and defining research questions.
• Identifying the literature set. At this stage, relevant research/studies related to the research objective and questions were located, selected, and accessed. The identification of the literature involved choosing a database (Scopus) and a set of purposefully selected scientific publications, serving as a source of knowledge in the key research area: “smart cities” and “business models”.
• Selection and preliminary assessment of the dataset. This stage involved a thorough content analysis of entire publications. At this stage, the authors made decisions regarding the presentation structure of the key research area “smart cities” and “business models” in sections: (1) Innovation in smart cities; (2) ICTs in smart cities; (3) Sustainable smart cities model; and (4) Business models implemented in smart cities.
• Data analysis and synthesis. At this stage, the publications—the final literature base—were fragmented into component parts to identify common, distinct, and complementary aspects, aiming to identify threads of connection between “smart cities” and “business models”. The research area, encompassing 153 papers (Table 1), was expanded to include publications cited by the authors of the analyzed papers and repeated in multiple papers.
• Reporting the results. Our reporting went beyond the usual publication description by introducing a case study analysis. In Section 4, the authors presented the application of previously selected business models used in smart cities for the cities of London, Amsterdam, and Berlin.

At this stage of the research, the authors conducted a comparison of the analyzed smart cities (London, Amsterdam, and Berlin) from the perspective of the studied business models (discussion section in this paper). We have chosen those cities for the analysis on the basis of ProptechOS—Smart City index for 2023 [155]. According to this index, the three best-assessed smart city concept implementations in Europe are in London (73.7 points), Amsterdam, and Berlin (61.6 points) [155]. The data for the analysis were collected from papers from international databases, conferences papers, and reports about particular cities.

The literature analysis structure concludes with a summary highlighting the limitations of the conducted research and future research directions.

In the literature analysis phase, the objective was to gather a comprehensive understanding of the existing literature on smart city business models. This involved systematically searching and synthesizing relevant studies from academic journals, conference proceedings, books, and reports. The technique used (narrative review methodology) allowed for an examination of the theoretical foundations, conceptual frameworks, and empirical evidence related to smart city business models. By synthesizing findings from diverse sources, the approach provided a robust foundation for understanding the theoretical underpinnings of different business models and identifying key dimensions and factors influencing their implementation.

In contrast, the comparative case analysis aimed to complement the findings from the literature analysis by providing empirical insights into the real-world application of business models in three best-assessed (according ProptechOS—Smart City Index) European smart cities: London, Amsterdam, and Berlin. Through in-depth case studies, the objective was to examine how various business models were implemented in practice, understand their advantages and limitations, and compare their effectiveness across different urban contexts. The technique of comparative case analysis allowed for a detailed exploration of the contextual factors, stakeholder dynamics, and implementation strategies shaping the outcomes of smart city initiatives.

The study demonstrated consistency between its objectives and the techniques adopted to address them by leveraging the complementary strengths of literature analysis and comparative case analysis. While the literature analysis provided a theoretical foundation and synthesized existing knowledge, the comparative case analysis offered empirical evidence and contextual insights, thereby enriching the understanding of smart city business models and their implications for urban governance and development.

The detection of dimensions of business models identified in the literature analysis in the three urban contexts was achieved through a meticulous analysis of each city’s smart city initiatives, identifying the strategies and frameworks employed to achieve urban development goals. This comparative approach allowed for a nuanced understanding of how different business models were implemented and tailored to the specific needs and priorities of each city.

The authors conclude that the conducted analysis points to a systemic approach to implementing business models in smart cities. The concept of a modern intelligent city assumes its continuous, uninterrupted development through the application of advanced technologies in every area of urban functioning [2,3,4,5]. Innovations are intended to make life in cities better, more efficient, environmentally friendly, and overall, better for human life [6,7,8,9]. However, there is no universal smart city construct, because the concept of the smart city itself is relatively new and continually evolving, and it encompasses such a broad and dynamic spectrum of elements that the business models applied within it also evolve. In addition, this concept is democratized, and various institutions distribute the emphasis of their research methodologies somewhat differently in their rankings.

3. Literature Review

3.1. Innovation in Smart Cities

Central to the transformation of business models within smart cities is the emphasis on leveraging technological advancements to address urban challenges efficiently and effectively [2]. This entails the integration of IoT (Internet of Things), AI (Artificial Intelligence), data analytics, and other emerging technologies to optimize resource utilization, enhance operational efficacy, and foster seamless connectivity across urban systems [3,4]. Through the harnessing of big data and real-time insights, businesses can tailor their offerings to meet the specific demands of urban dwellers, thereby engendering greater customer satisfaction and loyalty [5,6].

The advent of smart city initiatives engenders a shift towards collaborative and ecosystem-centric business models [7,8]. Recognizing the interconnected nature of urban systems, businesses increasingly engage in partnerships and alliances with diverse stakeholders, including government entities, academia, non-profits, and other private enterprises [9]. Such collaborative endeavors facilitate the co-creation of innovative solutions, leveraging the complementary expertise and resources of various actors to tackle complex urban challenges holistically [10].

It can be stated that the proliferation of smart city technologies engenders new revenue streams and monetization avenues for businesses [11]. Beyond traditional product-centric models, businesses are increasingly adopting service-oriented approaches, offering subscription-based solutions, pay-per-use services, and outcome-driven contracts [12,128]. By aligning their revenue models with the delivery of tangible outcomes and value-added services, businesses can foster long-term relationships with customers while ensuring the sustainability and scalability of their operations [129].

The evolution of smart city business models necessitates a paradigm shift towards sustainability and resilience [130]. As urbanization accelerates and environmental pressures intensify, businesses are compelled to adopt environmentally conscious practices and integrate principles of circular economy into their operations [131]. This entails the adoption of renewable energy sources, the implementation of resource-efficient technologies, and the optimization of supply chains to minimize waste and emissions [132]. By embracing sustainable business practices, organizations not only mitigate environmental risks but also unlock opportunities for cost savings, regulatory compliance, and enhanced brand reputation [133].

In Table 1 there is a juxtaposition of the main important technologies used in smart cities. One of the fundamental pillars of smart cities is the Internet of Things (IoT) [6]. IoT sensors are ubiquitously deployed throughout the urban landscape, gathering real-time data on various aspects such as traffic patterns, air quality, waste management, energy consumption, and more. This data forms the foundation for informed decision making and optimized city operations [7].

Artificial intelligence (AI) stands as another cornerstone technology in smart cities. AI algorithms analyze the vast streams of data generated by IoT sensors to derive actionable insights [13]. These insights enable predictive analytics, facilitating better urban planning, traffic management, emergency response, and resource allocation. AI also powers personalized services and efficient automation systems, contributing to a seamless urban experience [14,15]. Blockchain technology introduces trust and transparency into various city services. It ensures secure and tamper-proof transactions in areas like voting systems, property records, and financial transactions [16]. By eliminating intermediaries and enhancing data integrity, blockchain fosters greater citizen trust in government institutions and enhances the overall efficiency of administrative processes [17].

Smart grids revolutionize energy management within smart cities [18]. These intelligent grids integrate renewable energy sources, such as solar and wind power, into the energy infrastructure. By optimizing energy distribution based on real-time demand and supply data, smart grids minimize wastage, reduce carbon emissions, and ensure a reliable and sustainable energy supply for urban communities [19]. Intelligent transportation systems (ITSs) address the complexities of urban mobility [20]. By integrating advanced technologies like GPS, traffic sensors, and communication networks, the ITS optimizes traffic flow, reduces congestion, and enhances public transportation systems. Initiatives such as smart parking and the integration of autonomous vehicles further contribute to efficient and eco-friendly urban mobility solutions [21].

Big data analytics processes the immense volumes of data generated by smart city infrastructure [22]. By extracting valuable insights from structured and unstructured data sources, cities can make evidence-based decisions in urban planning, public health management, and emergency response [23]. Big data analytics enables proactive measures to address urban challenges and capitalize on emerging opportunities [24,25]. Renewable energy technologies play a vital role in reducing the ecological footprint of a smart city [26]. By harnessing renewable energy sources, cities can mitigate environmental impact, achieve sustainability goals, and reduce dependency on fossil fuels. Innovative technologies ensure optimal generation, distribution, and utilization of renewable energy within urban environments [71,72].

Smart waste management systems leverage IoT sensors and automation to revolutionize waste collection and recycling processes [75]. By monitoring fill levels in waste bins and optimizing collection routes, cities can minimize operational costs and reduce landfill waste [76]. Waste segregation technologies further enhance recycling efforts, promoting a circular economy and environmental sustainability [77].

These innovative technologies, along with others like 5G networks, urban farming, smart buildings, and augmented reality, collectively redefine urban living in the 21st century. As smart cities continue to evolve, the integration of these technologies holds the promise of creating more resilient, inclusive, and prosperous urban environments for generations to come (

Table 2. Innovative technologies often used in smart cities.

Technology	Description of Usage in Smart City
Internet of Things (IoT) [38,39]	IoT sensors collect real-time data on traffic flow, air quality, waste management, and energy consumption for optimized city operations.
Artificial Intelligence (AI) [40,41,42]	AI algorithms analyze IoT data for predictive analytics in city planning, traffic management, emergency response, and resource allocation, enhancing safety and quality of life.
Blockchain Technology [43,44]	Blockchain ensures secure and transparent transactions in city services like voting, property records, and financial transactions, reducing fraud and improving trust between citizens and the government.
Smart Grids [45,46]	Smart grids integrate renewable energy sources and optimize power usage to reduce energy wastage, lower emissions, and ensure reliable energy supply.
Intelligent Transportation Systems (ITS) [47,48]	ITS manages traffic flow, reduces congestion, and improves public transportation with GPS, traffic sensors, smart parking, and autonomous vehicle integration.
Big Data Analytics [49,50,51,52]	Big data analytics processes structured and unstructured data for urban planning, public health management, and disaster response, facilitating evidence-based decision-making.
Renewable Energy [53,54,55,56]	Renewable energy sources like solar and wind power are integrated into city grids to mitigate environmental impact and achieve sustainability goals.
Smart Waste Management [57,58,59]	IoT-enabled waste bins monitor fill levels and optimize collection routes, while waste segregation technologies automate sorting for efficient recycling and reduced landfill waste.
5G Networks [60,61]	5G networks provide high-speed, low-latency connectivity for smart city applications such as autonomous vehicles, remote healthcare, augmented reality, and infrastructure monitoring.
Urban Farming [62,63]	Urban farming technologies like vertical farming promote food security, reduce emissions from transportation, and create green spaces within cities, fostering sustainable community practices.
Smart Buildings [64,65,66]	Smart building systems optimize energy usage, enhance occupant comfort, and improve maintenance through IoT sensors, automation, and data analytics.
Augmented Reality (AR) [67,68,69,70]	AR applications provide immersive experiences for urban planning, tourism, and education, enhancing citizen engagement and understanding of city infrastructure and services.
Drones [71,72]	Drones are used for surveillance, infrastructure inspection, emergency response, and delivery services, improving efficiency and safety in various city operations.
Smart Water Management [73,74,75]	IoT sensors monitor water quality, detect leaks, and optimize distribution, reducing water wastage, ensuring supply resilience, and preserving natural resources.
Advanced Mobility Solutions [76]	Mobility-as-a-Service (MaaS) platforms integrate different transport modes for seamless and sustainable urban mobility, reducing congestion and air pollution while enhancing accessibility.
Facial Recognition [77,78]	Facial recognition technology is employed for security, access control, and personalized services in smart city environments, enhancing safety and convenience in public spaces.
Noise Pollution Monitoring [79,80]	IoT sensors monitor noise levels in urban areas, enabling authorities to implement noise abatement measures and improve overall quality of life for residents.
Smart Street Lighting [81,82,83]	Smart streetlights equipped with sensors and automation adjust lighting levels based on traffic flow and environmental conditions, conserving energy and enhancing safety in cities.

Source: Author’s own work on basis of [6,7,13,101].

).

The ongoing conflict in Ukraine has highlighted the vulnerability of urban centers to military engagements and underscored the critical importance of urban resilience and adaptability in times of crisis. The principles of smart cities, such as robust ICT infrastructure, data-driven decision-making, and interconnected urban systems, offer valuable insights into how cities can better prepare for and respond to wartime challenges. One of the key aspects of smart cities is their emphasis on resilient infrastructure. In a wartime context, this resilience becomes crucial as cities face disruptions to essential services such as water, electricity, and communication networks. Smart city technologies can help cities preemptively identify vulnerabilities and strengthen critical infrastructure against potential threats. For instance, advanced sensors and monitoring systems can detect damages or intrusions early, enabling prompt repairs and minimizing downtime [219].

Smart city initiatives often emphasize the importance of public–private partnerships (PPPs) and community engagement. These partnerships can be particularly beneficial in wartime scenarios, where collaboration between government entities, private sector organizations, and civil society is essential for effective crisis management and recovery. PPPs can facilitate the rapid deployment of the resources, expertise, and technologies needed to mitigate the impact of conflict on urban populations and infrastructure. The case of Ukraine illustrates how smart city principles can be adapted and applied in a wartime context to enhance urban resilience and support civilian populations. Lessons learned from Ukrainian cities, such as Kyiv and Kharkiv, underscore the importance of proactive planning, investment in ICT infrastructure, and collaborative governance models in preparing cities for unexpected challenges [219,220].

3.2. ICT in Smart Cities

The smart city is a concept of contemporary urban development, involving urban planners, regionalists, local government authorities, residents, investors, and entrepreneurs. In city development focused on smartness, new technologies play a significant role and can help municipal authorities in dealing with contemporary challenges arising from the growing urban population, the increasing number of car owners, significant population migration, industrialization, air pollution, increasing waste mass, the growing demand for energy and water, etc. Innovative technologies, especially information and communication technologies, are an integral part of a smart city and play a crucial role in its development. They are tools that enable improvement of actions in all areas of city functioning and its residents. However, merely introducing innovative technologies into a city will not make it intelligent. It is the information they provide and their analysis that enables drawing better conclusions and taking actions to improve the quality of life for residents, protect the natural environment, and promote the economic development of the city.

Azkuna [221] points out that, traditionally, the smart city has been defined as a city that utilizes information and communication technologies to increase the interactivity and efficiency of urban infrastructure and its components, as well as to raise awareness among residents regarding the use of city functions. In smart cities, many public problems can be solved using ICT. The concept of the smart city has its roots in the digital city paradigm, which refers to a city that uses information and communication technologies to manage city infrastructure, create citizen and organization communication systems, share data and information, and integrate online services such as e-administration and e-democracy [222]. Solutions such as e-administration enable 24 h access to information, saving time and increasing user comfort, leading to an improvement in the quality of public services [223,224]. According to N. Komninosa [225], one of the determinants (among several) in the smart city model is developed broadband infrastructure, digital spaces, e-services, and online knowledge management tools. Information technology (digitization) is related to both access to public infrastructure and services and a wide range of activities for sustainable development [88,89,90,91,92,93,223,226,227,228,229,230], including industrial decarbonization [226].

Information and communication technologies have a significant impact on increasing energy production efficiency. Smart grids provide detailed monitoring and distribution of energy, including renewable energy such as solar or wind energy. Networks can also collaborate with building control systems to ensure effective heating, cooling, lighting, and power supply. Thanks to smart electricity and water meters, it is possible to minimize energy consumption and greenhouse gas emissions [231].

Supporting the development of ICTs in cities is embedded in the principles of functioning of Governance 4.0 [232]. Implementing ICTs in cities is a package of investment projects that support urban development [233]. In the Fourth Industrial Revolution and the strongly popularized concept of Industry 4.0 since 2011 [234,235,236], city authorities are interested in investing in high technology in all dimensions of city functioning. Digitization enhances many city functions and influences the quality of life of residents [237,238]. Smart city models are based on information technologies, emphasizing the need for continuous monitoring and integration of existing urban infrastructures.

The smart city model proposed by Hollands (2008) is based on three main directions of development, namely: technical-informational, organizational, and socio-cultural [239]. The technical-informational dimension of the smart city concept appeared earliest. Its main proponent was M. Arun (1999), according to whom, the foundation of smart cities is information technologies, with a focus on the quality of life of their residents [240].

The digital city or e-city is the basis for the smart city. The technical-informational area consists of investments in ICT systems, which are supported by activities in the area of new technology usage by city residents. Investments in ICTs entail a wide range of development of electronic and mobile services [241]. The culmination of this process was achieving full accessibility of these services in the city space.

ICT technologies are integrated within urban spaces to provide users of these spaces with high-quality services and to assist local authorities (cities) in environmental protection and achieving high-quality living conditions for residents [242]. Furthermore, this technology (ICT) creates opportunities for integrating the city’s community and enabling its engagement in urban policy [243]. Albino et al. [244] defined the following distinguishing features of a smart city: a network infrastructure enhancing the efficiency of political and cultural activities, business and creative actions promoting urban development, social inclusion of city residents and engagement of social capital, and the natural environment. According to A. Caragliu, C. Del Bo, and P. Nijkampa (2001) [245], a smart city is a city where investments in human and social capital, as well as modern ICT infrastructure and e-services, lead to sustainable development and an improved quality of life, made possible by the wise management of natural resources and participatory governance. Integrating ICT with public services requires innovation in government and public administration; it requires a rethinking of how governments interact with citizens, what actors will work with the government, and what new resources will be needed [246].

Smart cities are monitored, managed, and regulated in real-time using ICT infrastructure and pervasive computerization. Such systems enable efficient control of public usage and services, ensuring public safety and good outcomes in the economy and environment. Additionally, the information utilized can stimulate future city development [247,248]. Komninos [249] defines a smart city as a highly innovative urban space with a creative orientation. Such cities are equipped with digital infrastructure and communication technologies, and management efficiency is effective. Hollands [239] emphasized that smart cities focus on utilizing transportation and telecommunication infrastructure, ICT, and creative industries. Urban transportation needs can be met through innovative applications of information and communication technologies, providing more optimized and efficient travel. Urban transportation can also be managed using innovative technologies, ensuring more effective communication. Some of them enable the integration of public and private transport, which is particularly useful in larger cities. ICT is commonly used for scheduling, route changes, or logistical operations to improve service quality, encouraging more people to use public transport [231].

On the other hand, P. Hall (2000) [250] based the concept of a smart city on the assumption that it is a city that monitors and integrates the conditions of all its critical infrastructures, such as roads, bridges, tunnels, railway tracks, metro, airports, seaports, communications networks, water supplies, or energy sources, thereby better optimizing its resources, planning preventive maintenance activities, and monitoring safety aspects while maximizing services for residents.

Van der Meer and Van Vinden emphasize that ICTs [251] facilitate the management of public space and the effective resolution of social and environmental issues in the city. In terms of spatial planning, ICT influences making more informed decisions by providing practical solutions. This can affect the efficiency and functioning of infrastructure, roads, water, sewage, or emergency response. Urban sensors and advanced analysis allow providing individual units with a wide range of real-time environmental and spatial data. This is particularly useful in sectors such as traffic management, as information is constantly analyzed, facilitating rapid decision making. By offering innovative solutions, ICT technologies enable citizens to participate in the planning process, for example, through e-consultations available over the Internet [131].

The significance of ICTs in smart cities was well summarized by Dameri [252], who wrote that a smart city is a geographic area where the collaboration of high technologies such as ICT, logistics, energy production is utilized to create benefits for citizens, focusing on well-being, social inclusion, and environmental quality. Advanced technologies can help cities to respond more quickly and comprehensively to urban crises because they are smart [253,254,255]. The prerequisite for the supportive role of technology is the integration of city function control systems. Intelligence in cities should combine software and digital telecommunication networks, the way data are collected, and choices made regarding collaboration in achieving goals [243]. Authors G.P. Hancke, B. de Carvalho e Silva, and G.P. Hancke Jr. (2013) [256] believe that a smart city operates in a sustainable and intelligent manner by integrating all of its infrastructure and services using smart devices to monitor and control city functions. Timeus et al. [257] point out that practical solutions of integrated urban infrastructure streamline many internal functions.

People in cities need ICTs. Managed in accordance with the concepts of smart cities, people are thinking and creative, able to utilize technical and technological innovations and widely use ICT [258,259]. N. Komninos [225] emphasizes that this type of city is a space demonstrating learning abilities, focused on innovation, management, and problem-solving. On the other hand, Azkuna [222] indicates that it is an agglomeration that uses ICT to increase the interactivity and efficiency of urban infrastructure and raise awareness among its inhabitants. ICTs can open up new opportunities for citizens, actively shaping the city’s future by introducing new forms of residents’ activities, advancing social inclusion, increasing the accessibility of services for people with disabilities, reducing infrastructural barriers, and providing resources and information [260]. As Manual (2012) [260] writes, in the field of science, ICT enables online educational programs and e-learning platforms. For a long time, these technologies have been considered important tools for improving educational outcomes, enhancing the quality of educational systems, expanding educational opportunities, and increasing individual access to education. According to the author [260], in education, ICT enables the introduction of new educational services, such as e-learning platforms. They are considered essential tools in the process of improving teaching outcomes and providing individual programs according to the needs of the student. Moreover, teachers can also use educational platforms and develop their professional pedagogical skills, which promotes lifelong learning.

IC technologies are also being used to provide a level of security for residents. Emergency services, police, or firefighting units, thanks to the facilities provided by technology, have the ability to intervene and assist quickly, as well as access real data on what is happening in the city. High-quality monitoring makes it possible to reduce patrols in the city and focus efforts on those areas that require a special presence of city services. This reduces the incidence of violence, vandalism, homicides, and other crimes [261].

Advanced technologies, such as e-health systems, have an indirect but also positive impact on the health of residents through economic development and public health services [231]. ICTs are creating innovative ways to manage cities in the forms of smart buildings, intelligent traffic control for vehicles, e-administration, e-health care, better efficiency in energy consumption and waste management, and information and knowledge sharing [262,263,264]. An advanced set of technological solutions also has an impact on the visibility of cities. City websites are popular tools for attracting new investors, tourists, and residents [131].

The importance of ICTs has been exposed in many smart cities models. N. Komninos 2011 [265], in one of his publications, distinguished four basic dimensions of a smart city, which refer to the application of ICTs in building a digital city: (i) the use of ICT technologies to improve living and working conditions, (ii) the application of ICT technologies in advanced urban infrastructure, (iii) the integration of ICT technologies with human capital, and (iv) the stimulation of innovation and the accumulation and sharing of knowledge. A similar statement was made by H. Schaffers [266], who points out that smart cities are built by innovative economy, urban infrastructure, media, and management. In the smart city model created by Griffinger, Haindlmaier (2009) [267] there are six dimensions of smart, which are: smart economy, smart people, smart environment, smart mobility based on ICTs, smart governance, and smart living. The listed dimensions are used to rank cities. According to Glasmeier and Christopherson (2015) [268], a smart city has two basic attributes: the use of technologies to facilitate the coordination of dispersed urban subsystems, and the use of lessons learned to enable the creation of a new and better reality. IC applications encourage more efficient resource consumption, e.g., by improving buildings’ energy efficiency with sensors or increasing the efficiency of transport through real-time data analysis [269,270,271,272,273]. ICTs can be used to control the wide environmental aspects of industrial influence on the environment [274].

Modern cities are investing in open, flexible, integrated, and scalable ICT architectures that enable accelerated service innovations, such as providing automated and dynamic responses to city functions. Smart cities are making efficient use of their data resources to deliver better results. They are investing in a system that includes data capture, integration, and analysis functions. Open data underpins its commitment to transparency and real-time in-novation. IT networks enable them to segregate and analyze the data they receive and help them with the ways cities operate. Successful smart cities make the best use of data and digital technologies to invest in increased openness and transparency of city functions. Cities are harnessing the power of data and digital technologies for many urban functions. Digital infrastructure can positively impact a city’s economic situation, resources, and productivity, while also enhancing its social, cultural, and physical development.

3.3. Sustainable Smart Cities Models

The creation of “sustainable cities” has been a main vision for urban development since the establishment of sustainable development as a societal paradigm in the early 1990s. In the New Urban Agenda, a sustainable city is considered to be one that enhances and balances social, economic, and environmental dimensions. The 2030 Agenda for Sustainable Development contains an ambitious and comprehensive action plan including 17 Sustainable Development Goals (SDGs) [40], which are the basis for setting strategic directions for cities. The link between smart cities and sustainable cities is expressed by the nomenclature of so-called smart sustainable cities (SSCs), which are cities whose development, supported by modern technologies, contributes to meeting the needs of today’s urban residents without diminishing the development opportunities of future generations [275].

The UNECE and ITU developed a definition of smart sustainable cities. According to UNECE and ITU experts (over 300 international experts), a smart sustainable city is an innovative city that uses ICTs and other means to improve quality of life, efficiency of urban operation and services, and competitiveness, while ensuring that it meets the needs of present and future generations with respect to economic, social, environmental, and cultural aspects. The UNECE people-smart sustainable city concept advocates a broader understanding of smartness in city development as a set of capabilities-enhancing conditions directed at sustainability and focused on generating a harmonious society and improving quality of life. This means reducing gaps in capacity and efficiency, meeting social needs, and making cities more conducive to innovation [276]. The key performance indicators for smart sustainable cities (KPIs for SSCs), a United Nations standard on smart sustainable cities, were developed by the UNECE and ITU in 2015. The indicators were endorsed by the UNECE Committee on Urban Development, Housing and Land Management at its 67th session in 2016. They were further amended after taking into account the SDG indicators and endorsed by the Committee in 2017 (ECE/HBP/188). In a smart city, the following key directions are realized: energy saving, RESs, reduced air pollution, improved air quality, prevention of infrastructure failures, enhanced security, and optimized mobility.

Ongoing digital transformation and the development of smart pollutions have influenced the conceptualization of sustainable cities, bringing the ‘smart’ dimension as a new normative requirement for the technology-based society. After the Third Industrial Revolution, the role of information and communication technologies in urban infrastructure and decision-making has increased [277]. Urban management systems are more efficient, more environmentally friendly, and more economically sound. Smart cities promise integration, efficiency, sustainability and people-centricity. To be smart, a city needs high tech to create value space [278]. Moreover, smart sustainable cities use technologies to build strong relationships between citizens and city governments so that all citizens can benefit from, and even co-create, public services [276]. Broadly speaking, a smart city refers to the need to link environmental, environmental, and social issues [279,280].

The concept of sustainable smart city takes a holistic view of city development, based on the many dependencies of city components and its functions. Holism is a systemic approach to elements and phenomena occurring in the city. The city consists of many components and synergistic systems that occur in urbanized areas. The development of cities is a challenge that requires the multi-network and multi-faceted cooperation of residents, authorities, and businesses. Smart cities are a combination of the creativity and enthusiasm of their citizens and leaders and, potentially, their institutions and companies. To this must be added the use of modern technologies and innovative solutions to improve the functioning of cities.

The sustainable smart city model is being implemented with the spirit of the times and civil and technological progress [281]. In the debate on smart cities, the importance of technological innovation is important. Modern technologies can contribute to sustainable development. They create an opportunity for enormous energy and resource savings. They can promote sustainable lifestyles and raise the ecological awareness of the inhabitants. Systems-driven infrastructure is increasingly geared towards saving resources and energy and reducing waste and pollutant emissions to the environment [277,278,279,280,281,282,283].

According to Toli and Murtagh [284], sustainability is one of the strategic goals of smart cities. A city can be sustainable when social justice, protection of the nature of the environment and its resources, economic vitality, and quality of life are achieved. Based on the definitions of smart cities, the authors collated three sustainability criteria, namely, economic, ecological (environmental), and social, stating that there is a need for a broad and flexible view of smart city sustainability. Most environmental and social definitions focus on how smart cities integrate technology with management to improve quality of life and reduce the environmental impact of urbanism. Conversely, several economically oriented definitions proposed combining hard infrastructure and soft capital to create competitive cities and stimulate sustainable economic development. The authors said the definitions of sustainable smart cities focus on environmental performance, economies, mobility, people, quality of life, and governance. Despite the common features that sustainable city definitions presented, they also showed a number of variations. Different definitions of smart cities can include different dimensions of sustainability as their goals. In addition to definitions of smart cities focused on sustainability, some authors also pointed to definitions without such a component. Then, in such definitions, smart cities and the application of the latest technology to improve city functions were important directions. According to [285] based on [286], smart cities aim to promote urban sustainability, and an unsustainable city cannot be considered a true smart city. Modern cities such as Amsterdam, Barcelona, Berlin, Copenhagen, Helsinki, London, Milan, Melbourne, and New York have started to promote smart city development based on sustainable urban development [287].

To create a model of sustainable smart city, it is necessary to combine the components of the city with modern technologies, in economic, environmental and social aspects. The authors of the paper [285] proposed a sustainable design of smart cities where technology is an important tool and force in the design intervention of the “human–environment–society–economy–culture” system. The authors state that there are many factors in the model of a sustainable smart city, including human, environmental, social, economic, cultural, and technological aspects, with people being the most important because they are the ones on which cities are based. Currently, more than half of the world’s population live in cities, a number expected to reach 67% by 2050 [288]. In the model of the authors of the publication [285], the use of technology is a tool to solve the interrelated aspects of the “human–environment–society–economy–culture” system. Technology is a driving force for sustainable urban development. According to [45]’s methodological model of a sustainable smart city, in the course of constructing the model, it is necessary to take into account the interactions of several subsystems that determine the success or failure of the new trend in urban development in six dimensions: (1) government, (2) mobility, (3) sustainability, (4) people, (5) economy, and (6) quality of life.

To sum up, there are no universal models of sustainable smart cities, only guidelines and methodological assumptions. Modelling must be based on a holistic and multidimensional approach. According to Dhingra and Chattopadhyay (2016) [46], an intelligent and sustainable city has goals to be achieved in an adaptive, reliable, scalable, accessible, and resilient way, such as improving the quality of life; ensuring growth and jobs; improving the well-being of citizens by ensuring access to social and social services; establishing an environmentally responsible and sustainable approach to development; ensuring the smooth provision of essential services and infrastructure, such as public transport, water supply and sewage disposal, telecommunications, and other public services; having the ability to deal with climate change and environmental issues; and ensuring an effective regulatory mechanism and local governance to ensure fair policies. It is also important to highlight that sustainable smart city models are evolving [47]. Strongly popularizing the Industry 4.0 concept, Gajdzik et al. analyzed the segments of sustainability [48]. The constant question is the following: How much sustainability is in this concept? The technologies that are promoted in the Industry 4.0 concept can be an opportunity for urban development, provided the principles of balance between technological progress and environmental protection are maintained. In sustainable smart cities models, new technologies are supportive of top-down and bottom-up initiatives. Examples of the latter are energy cooperatives [49] and new behaviors of prosumers in energy market [50]. Some authors [51,52,53,54,55] wonder whether the concept and practice of smart cities can bring sustainable development to cities, whether smart city policies lead to sustainable urban development, and whether smart cities can bring good luck in promoting sustainable development.

An interesting methodology called Smartainability was proposed by Girardi and Temporelli [56]. Smartainability is aimed at estimating, with qualitative and quantitative indicators, the extent to which enabling technologies for smart solutions contributes to increasing energy efficiency and environmental sustainability in a city. These authors estimated, with qualitative and quantitative information, to what extent smart cities are sustainable thanks to the deployment of smart technologies.

In summary, the sustainable smart city model combines SDGs with ICTs; the linking process takes place in all six dimensions for smart cities (

Table 3. The six dimensions for smart city assessments.

Dimensions	Fields	Solutions/Examples
Smart living	Cultural activities, healthcare systems and safety (ensuring the safety of residents and the health of citizens) equality, housing quality, accessible public spaces, etc.	smart houses/smart buildings/smart infrastructure e-healthcare/e-health protection citizen safety—monitoring systems space monitoring systems in the city e-libraries knowledge management systems/knowledge platforms wide access to public, cultural, and entertainment services/integrated systems of communication and e-services virtual museums open access to data for residents
Smart environment	Natural conditions (e.g., green spaces and climate), pollution control and monitoring (monitoring environmental quality parameters), resource and energy conservation, RESs, biodiversity, resource management system (i.e., flexible energy, water, heat system), etc.	availability and high quality of water—water supply, heat settlement systems, control, monitoring air quality monitoring optimization of resource utilization and reduction of carbon dioxide emissions/control and monitoring systems platforms/environmental protection environmental maps (geo-location) waste system monitoring/utilization of technology and e-services
Smart mobility	Transportation, logistics management, ICT infrastructure, ICT accessibility, transportation ecosystem, etc.	mobile applications—urban communication, including ticket purchase, city parking fee payment, departure time checking, route planning, city bike systems bike rental systems real-time access to public transportation information services car-sharing—a way to rent a car by the minute platforms integrating and analyzing data from public transportation and cycling intelligent travel planners—the application proposes an optimal travel route, taking into account real-time data available electromobility (e.g., public chargers for individual drivers) Integrated traffic management systems—the system continuously analyzes vehicle traffic in the city intelligent traffic light control networks parking space monitoring systems in the city
Smart economy	Innovation, employment, and job creation, knowledge economy, sharing economy, flexibility in the labor market, intelligently managed infrastructure, smart construction, etc.	building management—intelligent measurement systems and smart grids allow for economical and sustainable energy consumption in city-owned and private buildings, as well as for intelligent water consumption management smart homes—intelligent energy meters, with incentives provided for those who actively reduce energy consumption multifunctional intelligently managed infrastructure business incubators and innovation hubs investments enhancing the attractiveness of city life increasing the effectiveness of protecting cultural heritage in both its material and non-material dimensions integration of digitization efforts within the city application of universal design principles in urban planning broader range of e-services
Smart people	Education (digital and other aspects), ICT skills (supporting opportunities for skill enhancement), flexible labor market, life-long learning, citizen engagement in social life, etc.	sharing resources of local government communication systems with residents knowledge management systems/knowledge platforms
Smart governance	E-governance, e-democracy and participatory democracy, co-management of the city by citizens, public services and pro-citizen policy, sustainable management multi-level city management system, local development strategies, spatially related investments, e-services and e-administration, open data networks, tools for city promotion and information, open information policy ensuring communication and transparency, etc.	participation of local authorities and citizens, for example, through the use of e-services, consideration of participatory budgeting, construction of pro-citizen infrastructure, or open digital data networks education—providing conditions for learning identification of best practices cooperation with educational institutions, universities, businesses, cultural institutions, non-governmental organizations, and business environment institutions CityApp, providing users access to all mobile services virtual public office enabling intelligent administrative processes and e-participation of citizens systems for tracking services provided by the city administration visualization of urban spatial development plans using ICT solutions such as geosurveys or geodesy

Own elaboration based on: [45,46,47,48,49,50,51,52,53,54,55,56,57,58,59,60,61,62,63,64,65,66,67,68,69,70].

).

3.4. Business Models Implemented in Smart Cities

Business models employed in the implementation of smart cities represent an important aspect of urban development strategies [102,103,104,123,124,125], encapsulating the diverse approaches and partnerships necessary to realize the vision of technologically advanced [125,126,127,134,135,136], sustainable [105,106,107,108,137,138,139], and inclusive urban environments [109,110,111,112,113,114]. These models encompass a spectrum of arrangements that leverage collaboration between public and private sector entities, innovative financing mechanisms, and community engagement initiatives to drive the deployment of smart city solutions [115,116,117,118].

Public–private partnerships (PPP) stand as a cornerstone of smart city development, forging alliances between governmental bodies and private enterprises to leverage respective strengths in infrastructure development, technology deployment, and service provision [119]. By sharing risks, resources, and expertise, PPPs facilitate the efficient delivery of smart city projects while capitalizing on private sector innovation and investment to address complex urban challenges [140]. Another prevalent model is the build–operate–transfer (BOT) framework, which involves private sector entities designing, constructing, and operating infrastructure projects under a concession agreement before eventually transferring ownership to the public sector [140,141,142]. BOT arrangements enable governments to access private capital and expertise for infrastructure development while shifting operational risks to private sector partners, ultimately ensuring the delivery of essential services to urban residents [143].

Performance-based contracts represent a nuanced approach to incentivizing project delivery and outcomes, whereby contractors are remunerated based on predefined performance metrics or service levels. By aligning financial incentives with project objectives and outcomes, performance-based contracts foster accountability, efficiency, and innovation among service providers, thereby ensuring the effective implementation of smart city initiatives [144]. Community-centric models prioritize the active involvement of local communities in the design, planning, and governance of smart city projects, recognizing the intrinsic value of grassroots engagement in shaping urban development [145]. By soliciting input, feedback, and collaboration from diverse stakeholders, community-centric models foster the social cohesion, inclusivity, and ownership of smart city solutions, thereby ensuring that initiatives resonate with the unique needs and aspirations of urban residents [146].

Innovation hubs and incubators serve as catalysts for entrepreneurship and technological innovation within smart city ecosystems, providing a fertile ground for startups, researchers, and stakeholders to ideate, prototype, and scale innovative solutions [147]. By fostering collaboration, knowledge exchange, and access to resources, innovation hubs stimulate the development and deployment of cutting-edge technologies and business models that drive urban transformation [148]. Revenue-sharing models offer a sustainable financing mechanism for smart city projects by distributing revenue generated from services, assets, or via investments between public and private sector partners. These models align financial interests, incentivize private sector investment, and ensure ongoing funding for the maintenance and expansion of smart city infrastructure and services, thereby facilitating the long-term sustainability and resilience of urban environments [149].

Outcome-based financing structures tie project financing to the achievement of measurable outcomes or performance metrics, thereby aligning financial incentives with project success and efficiency [250]. By linking payment to demonstrable results, outcome-based financing models mitigate risk, encourage innovation, and ensure accountability in project delivery, ultimately driving the realization of desired urban outcomes [151]. Asset monetization strategies unlock the value of underutilized public assets, such as land, infrastructure, or data, to generate revenue for smart city projects [152]. By leveraging these assets through leasing, concession agreements, or public–private partnerships, governments can finance urban development initiatives, stimulate economic growth, and optimize resource utilization, thereby maximizing the return on public investments in smart city infrastructure and services [133]. Supporting innovation is R&D. Activity in this field transfers to new products and new solutions [154].

Business models used in the implementation of smart cities reflect the multifaceted nature of urban development, embodying the principles of collaboration, innovation, sustainability, and inclusivity necessary to create vibrant, resilient, and equitable cities for future generations. By embracing diverse approaches and partnerships, cities can harness the transformative power of technology and collective action to address the complex challenges and opportunities of the urban landscape. In

Table 4. Business models implemented in smart cities.

Business Model	Description
Public–Private Partnerships (PPP) [206,207,208,209]	PPPs involve collaboration between government entities and private sector organizations to finance, develop, and operate smart city projects. Through PPPs, governments can leverage private sector expertise, funding, and innovation while sharing risks and responsibilities.
Build–Operate–Transfer (BOT) [210]	BOT arrangements involve private sector entities designing, constructing, and operating infrastructure projects for a specified period before transferring ownership to the public sector. This model enables governments to access private sector capital and expertise while ensuring eventual public ownership.
Performance-Based Contracts [211]	Performance-based contracts establish specific performance metrics or outcomes that contractors must achieve, tying payment to successful project delivery. By incentivizing efficiency and accountability, these contracts promote the effective implementation of smart city initiatives.
Community-Centric Models [212,213]	Community-centric models prioritize the engagement and involvement of local communities in the design, implementation, and governance of smart city projects. By fostering inclusivity and co-creation, these models ensure that initiatives address the diverse needs and preferences of urban residents.
Innovation Hubs and Incubators [214,215]	Innovation hubs and incubators serve as ecosystems for startups, entrepreneurs, and researchers to develop and scale innovative solutions for smart cities. These entities provide resources, mentorship, and networking opportunities, fostering entrepreneurship and technological advancement.
Revenue-Sharing Models [216]	Revenue-sharing models involve sharing revenue generated from smart city projects or services between public and private sector partners. This incentivizes private sector investment and innovation while providing governments with sustainable funding sources for ongoing maintenance and development.
Outcome-Based Financing [217,218]	Outcome-based financing structures tie repayment of project costs to the achievement of predefined outcomes or performance metrics. This aligns incentives between project stakeholders and encourages the delivery of measurable benefits, such as energy savings or reduced congestion.
Asset Monetization [219,220]	Asset monetization involves leveraging underutilized public assets, such as land or infrastructure, to generate revenue for smart city projects. By unlocking the value of these assets through leases, concessions, or public offerings, governments can fund urban development initiatives without relying solely on taxpayer funding.

Source: Author’s own work on basis of: [102,103,104,105,106,107,108,109,110,111,112,113,114,115,116,117,118,119,120,121,122,123,124,125,126,127,128,129,130,131,132,133,134,135,136,137,138,139,140,141,142,143,144,145,146,147,148,149,150,151,152,153].

, there is a description of the business models implemented in smart cities.

Implementing business models in smart cities offers various advantages and disadvantages that shape the trajectory of urban development. Public–private partnerships (PPPs) foster collaboration between governments and private entities, leveraging diverse expertise, resources, and funding streams to accelerate project delivery and innovation. However, complex governance structures and potential conflicts of interest may lead to delays and disputes, risking cost overruns and performance shortcomings. Build–operate–transfer (BOT) arrangements enable governments to access private capital and expertise for infrastructure development while transferring operational risks to private sector partners. Yet, high upfront costs and challenges in defining contract terms may hinder successful implementation and ownership transfer. Performance-based contracts incentivize efficiency and innovation by aligning contractor remuneration with predefined performance metrics. However, complexities in measuring and enforcing performance targets may lead to disputes and contractual issues.

Community-centric models prioritize community engagement and empowerment in smart city projects, fostering social cohesion and ownership among residents. Nonetheless, resource-intensive community involvement processes and potential conflicts among stakeholders may impede scalability and project outcomes. Innovation hubs and incubators drive entrepreneurship and technological advancement in smart cities, fostering collaboration and knowledge exchange. Nevertheless, sustaining funding and addressing intellectual property concerns pose challenges to long-term viability and scalability. Revenue-sharing models and outcome-based financing align financial interests with project success, encouraging private sector investment and accountability. However, negotiating revenue-sharing agreements and defining outcome metrics objectively may introduce complexity and disputes. Asset monetization strategies unlock the value of underutilized public assets, providing revenue streams for urban development. Nevertheless, risks associated with long-term agreements and public backlash over privatization may jeopardize project viability and community support. In

Table 5. Advantages and disadvantages of business models implemented in smart cities.

Business Model	Advantages	Disadvantages
Public–Private Partnerships (PPP)	- Access to private sector expertise, innovation, and funding. - Shared risk and responsibility between government and private entities. - Accelerated project delivery through streamlined procurement processes. - Potential for long-term revenue generation for private sector partners.	- Complex governance and contractual arrangements may lead to delays and disputes. - Risk of cost overruns or failure to meet performance targets. - Potential for conflicts of interest between public and private sector objectives.
Build–Operate–Transfer (BOT)	- Access to private sector capital for infrastructure development. - Transfer of operational risk to private sector during concession period. - Efficiency gains through private sector management and innovation. - Eventual ownership transfer to public sector after concession period.	- High upfront costs for governments to secure private investment. - Risk of revenue shortfalls or insufficient returns for private investors. - Challenges in defining and enforcing contract terms, especially during transfer phase.
Performance-Based Contracts	- Clear alignment of incentives between contractors and project objectives. - Encourages innovation and efficiency in project delivery. - Flexibility to adapt to changing project requirements or performance metrics. - Potential for cost savings through improved project management and outcomes.	- Complexity in defining and measuring performance metrics objectively. - Challenges in monitoring and enforcing contract compliance. - Potential for disputes over performance targets or interpretation of contract terms.
Community-Centric Models	- Enhances community engagement and trust in smart city initiatives. - Incorporates local knowledge and preferences into project design and implementation. - Fosters social cohesion and empowerment within communities. - Reduces risk of opposition or resistance to projects through participatory processes.	- Time-consuming and resource-intensive to facilitate community involvement. - Potential for conflicts or disagreements among diverse community stakeholders. - Difficulty in scaling community-centric approaches to larger urban populations.
Innovation Hubs and Incubators	- Catalyzes entrepreneurship and innovation in smart city development. - Provides resources, mentorship, and networking opportunities for startups. - Fosters collaboration and knowledge sharing among diverse stakeholders. - Accelerates the pace of technological advancement and solution deployment.	- Limited scalability of solutions developed within innovation hubs. - Challenges in sustaining funding and support for long-term operation. - Risk of intellectual property theft or competition among startups and stakeholders.
Revenue-Sharing Models	- Provides sustainable funding for ongoing maintenance and development of smart city projects. - Aligns financial interests between public and private sector partners. - Encourages private sector investment and innovation in revenue-generating projects. - Enhances financial transparency and accountability through revenue-sharing agreements.	- Complexity in negotiating revenue-sharing arrangements and determining fair distribution. - Potential for revenue volatility or uncertainty due to market fluctuations. - Risk of conflicts or disputes over revenue allocation and distribution.
Outcome-Based Financing	- Aligns project financing with achievement of measurable outcomes or performance metrics. - Shifts risk of project failure or underperformance to project stakeholders. - Encourages innovation and efficiency in achieving desired project results. - Improves accountability and transparency in project management and delivery.	- Challenges in defining and quantifying outcome metrics objectively. - Complexity in structuring financing agreements and determining repayment terms. - Potential for disputes over attribution of outcomes or measurement methodologies.
Asset Monetization	- Generates revenue for smart city projects without additional taxpayer funding. - Maximizes value of underutilized public assets for urban development. - Provides ongoing funding source for maintenance and improvement of assets. - Stimulates economic growth and investment through asset utilization and development.	- Risks associated with long-term lease or concession agreements, such as revenue shortfalls or disputes. - Potential backlash from community or stakeholders over privatization of public assets. - Challenges in valuing and monetizing diverse types of public assets effectively.

Source: Author’s own work on basis of: [102,103,104,105,106,107,108,109,110,111,112,113,114,115,116,117,118,119,120,121,122,123,124,125,126,127,128,129,130,131,132,133,134,135,136,137,138,139,140,141,142,143,144,145,146,147,148,149,150,151,152,153].

, there is an analysis of the advantages and disadvantages of implementation of particular business models in smart cities.

4. Case Studies Analysis

In this chapter, we have used the concept of business models mostly used in smart cities described in the previous chapter to analyze their realization in selected case studies of smart cities. According to ProptechOS [154], the three European cities best prepared for implementation for smart city’ future are London, Amsterdam, and Berlin. On the basis of extensive literature analysis, we analyzed the implementation of mentioned business models in those cities.

4.1. London

London stands at the forefront of implementing smart city business models that blend public and private sector collaboration, technological innovation, and community engagement. At the heart of these endeavors lie diverse strategies aimed at optimizing resource utilization, enhancing service delivery, and fostering sustainable growth.

Public–private partnerships (PPPs) serve as linchpins in London’s smart city initiatives, facilitating the implementation of large-scale infrastructure projects. Through collaborative efforts between government entities and private sector stakeholders, PPPs have enabled the development of critical urban infrastructure such as transportation systems and sustainable energy solutions [155,289]. By leveraging the expertise and resources of both sectors, London ensures the efficient delivery and long-term operation of smart city infrastructure.

Build–operate–transfer (BOT) arrangements have also played a pivotal role in realizing London’s smart city vision. Projects ranging from transportation networks to renewable energy installations have benefited from BOT models, where private consortiums finance, construct, and operate essential facilities before transferring ownership back to public authorities [157]. This approach not only accelerates the deployment of innovative solutions but also mitigates financial risks for the public sector. Performance-based contracts form another cornerstone of London’s smart city ecosystem, driving efficiency and accountability in service delivery [158,290,291]. Through rigorous performance metrics and incentives, private companies are tasked with optimizing the performance of urban services such as waste management and transportation. By linking contract payments to measurable outcomes, London ensures the effective utilization of resources while meeting the evolving needs of its citizens [154].

Community-centric models underpin London’s commitment to inclusive and sustainable urban development. Initiatives such as community land trusts (CLTs) and cooperative housing projects empower local communities by providing affordable housing options and fostering social cohesion. By actively involving residents in decision-making processes, London ensures that smart city solutions are tailored to the unique needs and aspirations of its diverse population [160,292]. Innovation hubs and incubators play a vital role in nurturing London’s vibrant ecosystem of technological innovation and entrepreneurship. Locations like Tech City (Silicon Roundabout) serve as catalysts for collaboration and knowledge exchange among startups, established companies, and academic institutions. Through access to mentorship, funding, and networking opportunities, these hubs drive forward transformative technologies and solutions that address urban challenges [161,293,294,295].

Revenue-sharing models are instrumental in optimizing the operation and maintenance of smart city infrastructure in London. Private operators of public services such as transportation and utilities enter into agreements with government agencies, where revenues are shared based on performance metrics [162]. This incentivizes operators to maximize efficiency and customer satisfaction while aligning financial incentives with the public interest. Outcome-based financing mechanisms further drive innovation and social impact in London’s smart city initiatives [163]. Social impact bonds and similar instruments mobilize private capital towards addressing pressing urban challenges such as homelessness, education, and healthcare. By tying financial returns to measurable social outcomes, London ensures that investments yield tangible benefits for its residents and communities [164].

Asset monetization strategies unlock the value of public assets and stimulate economic growth in London’s smart city landscape. Through mechanisms such as the sale or lease of real estate and infrastructure assets, the city generates revenue to fund further development initiatives. This approach facilitates private sector investment in smart city projects while optimizing the utilization of public resources [165]. The descriptions of how particular smart city business models are realized in London are juxtaposed in

Table 6. Business models implementation in London.

Business Model	Description of Implementation
Public–Private Partnerships (PPP)	PPPs in London are commonly used for infrastructure projects such as transportation systems, water treatment facilities, and public buildings. For instance, the construction and operation of the Thames Tideway Tunnel involved a PPP between the government and private sector entities.
Build–Operate–Transfer (BOT)	BOT arrangements have been employed in London for various projects like toll roads, bridges, and airports. One notable example is the Heathrow Airport Terminal 5, where a private consortium financed, built, and operated the terminal before transferring ownership to Heathrow Airport Holdings.
Performance-Based Contracts	Performance-based contracts are utilized in London for services like waste management, where private companies are contracted based on their ability to achieve specified performance targets such as recycling rates or waste diversion goals.
Community-Centric Models	Community-centric models are implemented in various sectors in London, including housing and urban regeneration projects. Community land trusts (CLTs) and cooperatives often play a significant role in providing affordable housing and fostering community involvement in development initiatives.
Innovation Hubs and Incubators	London hosts numerous innovation hubs and incubators supporting startups and fostering entrepreneurship. Locations like Tech City (also known as Silicon Roundabout) and accelerators like Techstars provide spaces and resources for startups to grow and collaborate with investors and mentors.
Revenue-Sharing Models	Revenue-sharing models are seen in London’s transportation system, where private companies operate services like buses and trains under contracts that include revenue-sharing arrangements with Transport for London (TfL). This incentivizes operators to maximize ridership and efficiency while sharing revenues with the public sector.
Outcome-Based Financing	Outcome-based financing mechanisms are employed in various social impact projects in London, particularly in sectors like healthcare and education. For instance, social impact bonds have been used to fund programs aimed at reducing homelessness and improving educational outcomes for disadvantaged youth.
Asset Monetization	Asset monetization strategies are applied in London through initiatives such as the sale or lease of public assets like real estate and land parcels. This can generate revenue for the government while also facilitating private sector investment in urban development and infrastructure projects.

Source: Author’s own work on basis of: [155,156,157,158,159,160,161,162,163,164,165,289,290,291,292,293,294,295].

.

4.2. Amsterdam

In Amsterdam, the realization of smart city business models reflects a strategic blend of public and private sector collaboration, innovation, and community engagement aimed at fostering sustainable urban development and enhancing the quality of life for residents. Public–private partnerships (PPPs) serve as integral mechanisms for driving forward large-scale infrastructure projects [166,296]. Across the city, PPPs have been instrumental in initiatives such as the Zuidas development, a mixed-use business district integrating sustainable infrastructure and public amenities [167,297]. By leveraging the expertise and resources of both sectors, Amsterdam ensures efficient project delivery and long-term operation of vital urban infrastructure [168,298].

Build–operate–transfer (BOT) arrangements have also played a significant role in realizing Amsterdam’s smart city vision [169]. Infrastructure projects like the North/South metro line have benefited from BOT models, where private consortia finance, build, and operate essential facilities before transferring ownership back to the government. This approach accelerates the deployment of innovative solutions while mitigating the financial risks for the public sector [170]. Performance-based contracts form another cornerstone of Amsterdam’s smart city ecosystem, driving efficiency and accountability in service delivery. Private companies are contracted based on their ability to meet predefined performance metrics, particularly in areas like waste management [171,299]. By incentivizing companies to optimize their operations and achieve environmental targets, Amsterdam ensures the effective utilization of resources while advancing its sustainability goals [172].

Community-centric models underscore Amsterdam’s commitment to inclusive and sustainable urban development. Initiatives such as community land trusts (CLTs) and co-housing projects promote social cohesion and affordable living options in neighborhoods like Buiksloterham [173]. By actively involving residents in decision-making processes, Amsterdam ensures that smart city solutions are tailored to the unique needs and aspirations of its diverse population [174].

Innovation hubs and incubators play a vital role in nurturing Amsterdam’s vibrant ecosystem of technological innovation and entrepreneurship. Locations like the Amsterdam Science Park and Startup Village provide spaces and resources for startups and entrepreneurs to collaborate, innovate, and access mentorship and funding opportunities [175]. These hubs drive forward transformative technologies and solutions that address urban challenges. Revenue-sharing models are instrumental in optimizing the operation and maintenance of smart city infrastructure in Amsterdam. Private operators of public services such as ferries and bicycle rental schemes enter into agreements with the city government, including revenue-sharing arrangements. This incentivizes operators to maximize efficiency and customer satisfaction while aligning financial incentives with the public interest [176].

Outcome-based financing mechanisms further drive innovation and social impact in Amsterdam’s smart city initiatives [177,300,301,302]. Projects aimed at homelessness reduction, for example, involve collaborations between government agencies and investors to fund programs delivering measurable outcomes such as housing stability and employment. Asset monetization strategies unlock the value of public assets and stimulate economic growth in Amsterdam’s smart city landscape. Through initiatives such as the sale or lease of public properties and land parcels, the city generates revenue to fund further development initiatives. This approach facilitates private sector investment in smart city projects while optimizing the utilization of public resources [178]. The descriptions of how particular smart city business models are realized in Amsterdam are juxtaposed in

Table 7. Business models implementation in Amsterdam.

Business Model	Description of Implementation
Public–Private Partnerships (PPP)	PPPs in Amsterdam are frequently employed in urban redevelopment projects, such as the Zuidas development, where public and private entities collaborate to create a mixed-use business district integrating sustainable infrastructure and public amenities.
Build–Operate–Transfer (BOT)	BOT arrangements have been utilized in Amsterdam for infrastructure projects like the construction and operation of the North/South metro line. Private consortia finance, build, and operate the infrastructure before transferring ownership back to the government.
Performance-Based Contracts	Performance-based contracts are commonly used in Amsterdam for services like waste management, where private companies are contracted based on their ability to meet environmental targets such as recycling rates and waste reduction goals.
Community-Centric Models	Community-centric models are evident in Amsterdam’s approach to urban planning and housing, with initiatives like community land trusts (CLTs) and co-housing projects fostering social cohesion and affordable living options in neighborhoods such as Buiksloterham.
Innovation Hubs and Incubators	Amsterdam hosts numerous innovation hubs and incubators like the Amsterdam Science Park and Startup Village, which provide spaces and resources for startups and entrepreneurs to collaborate, innovate, and access mentorship and funding opportunities.
Revenue-Sharing Models	Revenue-sharing models are utilized in Amsterdam’s transportation system, where private companies operate services such as ferries and bicycle rental schemes under contracts that include revenue-sharing agreements with the city government.
Outcome-Based Financing	Outcome-based financing mechanisms are applied in Amsterdam for social impact projects like homelessness reduction initiatives, where government agencies collaborate with investors to fund programs that deliver measurable outcomes such as housing stability and employment.
Asset Monetization	Asset monetization strategies in Amsterdam involve initiatives such as the sale or lease of public properties and land parcels, generating revenue for the city while facilitating private sector investment in urban development projects like the transformation of former industrial areas into vibrant mixed-use districts such as the Houthavens.

Source: Author’s own work on basis of: [166,167,168,169,170,171,172,173,174,175,176,177,178,296,297,298,299,300,301,302].

.

4.3. Berlin

In Berlin, the execution of smart city business models reflects a comprehensive approach aimed at leveraging collaboration between public and private sectors, innovation, and community involvement to foster sustainable urban development and enhance residents’ overall quality of life. Public–private partnerships (PPPs) play a pivotal role in facilitating large-scale infrastructure projects, which are vital for the city’s growth and modernization. An example is the BER Airport project, illustrating how PPPs unite government entities and private investors to fund, construct, and manage essential infrastructure, ensuring efficient project completion and long-term sustainability [179].

Build–operate–transfer (BOT) agreements are integral to advancing Berlin’s smart city objectives, particularly within transportation. The city employs BOT models for its extensive S-Bahn and U-Bahn networks, wherein private entities finance, construct, and operate transportation infrastructure under long-term contracts before transferring ownership back to the city [180,303]. This strategy expedites the implementation of innovative transportation solutions while distributing financial risks between the public and private sectors. Performance-based contracts form a cornerstone of Berlin’s smart city framework, fostering efficiency and accountability across various sectors. These contracts, notably utilized in waste management, hold private companies accountable for meeting specific performance metrics, such as waste reduction and recycling rates. By tying contract payments to measurable outcomes, Berlin ensures optimal resource utilization and the attainment of sustainability objectives [181,304,305,306].

Community-centric models underlie Berlin’s dedication to inclusive and sustainable urban development. Initiatives like Baugruppen encourage collaboration among individuals to design and develop housing projects tailored to their preferences, fostering social cohesion and diverse, lively neighborhoods [182]. Through active community participation in decision-making processes, Berlin ensures that smart city initiatives address the diverse needs and aspirations of its population. Berlin’s vibrant ecosystem of innovation hubs and incubators plays a crucial role in driving technological innovation and entrepreneurship [183]. Locations such as Factory Berlin and the Berlin Technology Park provide spaces and resources for startups and entrepreneurs to collaborate, innovate, and access mentorship and funding opportunities. These hubs act as catalysts for economic growth and technological advancement, positioning Berlin as a global leader in smart city initiatives [184,207,208,209,210,211,212,213,214,215,216,217,218,219,220,221,222,223,224,225,226,227,228,229,230,231,232,233,234,235,236,237,238,239,240,241,242,243,244,245,246,247,248,249,250,251,252,253,254,255,256,257,258,259,260,261,262,263,264,265,266,267,268,269,270,271,272,273,274,275,276,277,278,279,280,281,282,283,284,285,286,287,288,289,290,291,292,293,294,295,296,297,298,299,300,301,302,303,304,305,306,307,308,309,310].

Revenue-sharing models are utilized in Berlin to optimize the operation and maintenance of smart city infrastructure [185]. For instance, revenue-sharing agreements are integrated into bike-sharing programs, where private companies operate services under contracts that include revenue-sharing arrangements with the city government. This incentivizes private operators to expand sustainable transportation options while generating revenue for public coffers [186]. Outcome-based financing mechanisms further drive innovation and social impact in Berlin’s smart city projects. Investments in affordable housing initiatives, for example, are contingent upon measurable outcomes like tenant satisfaction and community integration, ensuring that investments align with social goals and deliver tangible benefits to residents [187,188].

Asset monetization strategies unlock the value of public assets and stimulate economic growth in Berlin’s smart city landscape. Initiatives such as the sale or lease of public properties generate revenue to fund further development endeavors. This approach encourages private sector investment in smart city projects while optimizing the utilization of public resources and promoting sustainable urban regeneration [189]. The descriptions of how particular smart city business models are realized in Berlin are juxtaposed in

Table 8. Business models implementation in Berlin.

Business Model	Description of Implementation
Public–Private Partnerships (PPP)	PPPs in Berlin are evident in infrastructure projects like the BER Airport, where the government collaborates with private entities to finance, build, and operate essential infrastructure. Additionally, PPPs are utilized for the development of urban regeneration projects such as the Berlin TXL—The Urban Tech Republic, transforming former airport sites into sustainable urban districts.
Build–Operate–Transfer (BOT)	Berlin has employed BOT models for transportation projects like the operation of the city’s S-Bahn and U-Bahn networks. Private companies finance, construct, and operate the transportation infrastructure under long-term contracts before transferring ownership back to the city.
Performance-Based Contracts	Performance-based contracts are utilized in Berlin for services such as waste management, where private companies are contracted based on their ability to achieve specific waste reduction and recycling targets, promoting sustainability and efficiency in waste disposal practices.
Community-Centric Models	Berlin embraces community-centric models in urban development projects, exemplified by initiatives like Baugruppen, where groups of individuals collaborate to design and develop housing projects tailored to their needs, fostering community engagement and promoting diverse and inclusive neighborhoods.
Innovation Hubs and Incubators	Berlin is renowned for its vibrant innovation ecosystem, with numerous innovation hubs and incubators like Factory Berlin and the Berlin Technology Park providing spaces and resources for startups and entrepreneurs to collaborate, innovate, and access mentorship and funding opportunities.
Revenue-Sharing Models	Revenue-sharing models are employed in Berlin’s bike-sharing programs, where private companies operate bike-sharing services under contracts that include revenue-sharing arrangements with the city, encouraging the expansion of sustainable transportation options while generating revenue for public coffers.
Outcome-Based Financing	Outcome-based financing mechanisms are applied in Berlin for social impact projects such as affordable housing initiatives, where investors fund housing projects with returns tied to outcomes such as tenant satisfaction and community integration, ensuring investments align with social objectives and deliver tangible benefits to residents.
Asset Monetization	Asset monetization strategies in Berlin involve initiatives such as the sale or lease of public properties and land parcels, generating revenue for the city while facilitating private sector investment in urban development projects such as the redevelopment of former industrial sites like the Tempelhofer Feld into mixed-use urban spaces.

Source: Author’s own work on basis of: [179,180,181,182,183,184,185,186,187,188,189,303,304,305,306,307,308,309,310].

.

5. Discussion—Comparison of the Case Studies

The implementation of various business models in the smart city contexts of London, Amsterdam, and Berlin offers unique advantages tailored to the specific needs and priorities of each city. Public–private partnerships (PPPs) serve as versatile frameworks for collaboration between government entities and private sector organizations, facilitating the efficient delivery of large-scale infrastructure projects while sharing financial risks. In London, PPPs are frequently utilized for vital infrastructure endeavors such as transportation systems and public buildings, whereas in Amsterdam, they play a significant role in urban redevelopment projects like the Zuidas development. Meanwhile, in Berlin, PPPs are crucial for the development of essential infrastructure like airports, ensuring efficient project delivery and long-term viability.

Build–operate–transfer (BOT) arrangements provide accelerated deployment of transportation solutions and infrastructure development, with ownership transferring back to the city after the contract term. While London leverages BOT models for projects like toll roads and airports, Amsterdam and Berlin utilize them extensively for their extensive transportation networks, ensuring efficient operation and transferring ownership back to the city for long-term management and sustainability. Performance-based contracts offer mechanisms to drive efficiency and accountability in service delivery across various sectors. London and Amsterdam optimize waste management and resource utilization through measurable performance targets, ensuring effective service delivery and sustainability. Berlin, on the other hand, employs performance-based contracts to drive efficiency and accountability in service delivery across sectors, optimizing waste management and achieving sustainability goals.

Community-centric models prioritize inclusivity and community involvement in urban development projects, fostering social cohesion and creating diverse neighborhoods. London and Amsterdam promote community engagement through affordable housing initiatives and neighborhood development projects, whereas Berlin emphasizes inclusive and sustainable urban development through community-driven initiatives like Baugruppen. Innovation hubs and incubators play pivotal roles in driving technological advancement and entrepreneurship, stimulating economic growth and positioning cities as global innovation leaders. London, Amsterdam, and Berlin each host vibrant ecosystems of innovation hubs and incubators, providing spaces and resources for startups to collaborate, innovate, and access mentorship and funding opportunities.

Revenue-sharing models optimize the operation and maintenance of smart city infrastructure, incentivizing private operators to maximize efficiency while generating revenue for public coffers. While London and Amsterdam leverage revenue-sharing models in transportation systems, Berlin utilizes them for smart city infrastructure operation, optimizing efficiency and revenue generation. Outcome-based financing mechanisms drive innovation and social impact in smart city projects, ensuring investments deliver tangible benefits aligned with social objectives. London, Amsterdam, and Berlin each employ outcome-based financing to fund social impact projects like affordable housing initiatives, tying investments to measurable outcomes such as housing stability and community integration. Asset monetization strategies unlock the value of public assets, generating revenue for further development initiatives and stimulating economic growth. London, Amsterdam, and Berlin utilize asset monetization to facilitate private sector investment in smart city projects while optimizing the utilization of public resources and driving sustainable urban regeneration.

In the

Table 9. Comparing the advantages of implementing business bodels in London, Amsterdam, and Berlin.

Business Model	London	Amsterdam	Berlin
Public–Private Partnerships (PPP)	- Efficient delivery of large-scale infrastructure projects through collaboration between government and private sector entities. - Shared financial risks between public and private sectors. - Long-term viability of infrastructure projects ensured through private sector involvement.	-Facilitates urban redevelopment projects, fostering sustainable development. - Integration of public and private resources for mixed-use business districts. - Creation of essential infrastructure with government and private investors’ collaboration.	- Crucial for the development of essential infrastructure like airports. - Efficient project delivery and operation through government-private sector collaboration. - Ensures the long-term viability of infrastructure projects.
Build–Operate–Transfer (BOT)	- Accelerated deployment of transportation solutions through private sector investment. - Financial risks shared between private companies and the government. - Long-term ownership transferred back to the city after infrastructure development.	- Enables the operation of extensive transportation networks like metro lines. - Private companies finance, construct, and operate transportation infrastructure. - Transfers ownership back to the city after the contract term.	- Facilitates the operation of transportation networks like metro lines. - Accelerates the deployment of transportation solutions. - Transfers ownership back to the city after the contract term.
Performance-Based Contracts	- Promotes efficiency and accountability in service delivery across various sectors. - Waste management services optimized through measurable performance targets. - Ensures effective resource utilization and sustainability goals achievement.	- Waste management services optimized through specific performance targets. - Promotes resource efficiency and sustainability objectives. - Ensures effective utilization of resources.	- Drives efficiency and accountability in service delivery across various sectors. - Waste management services optimized through measurable performance targets. - Ensures the achievement of sustainability goals and effective resource utilization.
Community-Centric Models	- Fosters social cohesion and inclusivity in urban development projects. - Provides affordable housing options and engages residents in decision making. - Creates diverse and vibrant neighborhoods.	- Promotes social cohesion and inclusivity in urban planning and housing initiatives. - Provides affordable housing options and fosters community involvement. - Creates diverse and vibrant neighborhoods like Buiksloterham.	- Underpins inclusive and sustainable urban development. - Fosters social cohesion and creates diverse neighborhoods. - Engages residents in decision-making processes and promotes affordability in housing projects.
Innovation Hubs and Incubators	- Stimulates entrepreneurship and technological advancement. - Provides spaces and resources for startups to grow and collaborate. - Provides access to mentorship and funding opportunities.	- Drives technological innovation and entrepreneurship. - Provides spaces and resources for startups to collaborate and access mentorship. - Stimulates economic growth and positions the city as a global leader in innovation.	- Crucial for driving technological advancement and entrepreneurship. - Provides resources for startups to collaborate and access mentorship. - Stimulates economic growth and innovation leadership.
Revenue-Sharing Models	- Optimizes operation and maintenance of transportation systems. - Incentivizes private operators to maximize efficiency and ridership. - Generates revenue for public coffers.	- Encourages expansion of sustainable transportation options. - Generates revenue for public coffers. - Optimizes operation and maintenance of smart city infrastructure.	- Facilitates transportation systems’ operation, generating revenue and optimizing efficiency. - Encourages sustainable transportation options. - Generates revenue for public coffers, optimizing smart city infrastructure operation.
Outcome-Based Financing	- Mobilizes private capital for social impact projects. - Investments tied to measurable outcomes like homelessness reduction. - Aligns financial returns with social objectives.	- Ensures investments in social impact projects deliver tangible benefits. - Aligns financial returns with social objectives. - Mobilizes private capital for affordable housing initiatives.	- Drives innovation and social impact in smart city projects. - Investments tied to measurable outcomes like housing stability. - Aligns financial returns with social objectives and delivers tangible benefits to residents.
Asset Monetization	- Generates revenue for the government through the sale or lease of public assets. - Facilitates private sector investment in urban development projects. - Optimizes utilization of public resources.	- Generates revenue for the city through asset sale or lease. - Facilitates private sector investment in urban development projects. - Transforms former industrial areas into vibrant mixed-use districts.	- Stimulates economic growth through asset sale or lease. - Generates revenue for further development initiatives. - Facilitates private sector investment in smart city projects and drives sustainable urban regeneration.

Source: Author’s own work on basis of: [156,157,158,159,160,161,162,163,164,165,166,167,168,169,170,171,172,173,174,175,176,177,178,179,180,181,182,183,184,185,186,187,188,189,289,290,291,292,293,294,295,296,297,298,299,300,301,302,303,304,305,306,307,308,309,310].

, we compare the advantages of implementing business models in London, Amsterdam, and Berlin.

The findings of the paper regarding the adoption of performance-based contracts in sectors like waste management resonate strongly with the principles of new public management (NPM) theory [198]. NPM, which emerged in the late 20th century, advocates for applying private sector management practices to the public sector to enhance efficiency and accountability [199]. In the context of waste management, the implementation of performance-based contracts aligns with NPM principles by introducing market-like mechanisms to public service delivery. By contracting private companies based on their ability to achieve specific performance metrics, such as recycling rates and waste reduction goals, cities like London, Amsterdam, and Berlin are effectively introducing competition and accountability into traditionally bureaucratic processes. Also, the use of performance-based contracts incentivizes private sector partners to optimize their operations and innovate in service delivery. This aligns with NPM’s emphasis on results-oriented management and the belief that competition and incentives can drive efficiency and effectiveness in the public sector [200,201,202,203].

The analysis of results from the implementation of public–private partnerships (PPPs) in the smart city contexts can be viewed from PPP theory point of view [204], which outlines the principles and benefits of collaboration between public and private sectors in delivering public services and infrastructure [205,206]. The study illustrates that PPPs are versatile frameworks for collaboration, facilitating the efficient delivery of large-scale infrastructure projects while sharing financial risks between government entities and private sector organizations. This aligns with PPP theory, which emphasizes the importance of leveraging the expertise and resources of both sectors to address complex urban challenges and achieve mutual benefits [207].

In the case of London, PPPs are frequently utilized for vital infrastructure endeavors such as transportation systems and public buildings. This reflects PPP theory’s emphasis on using private sector involvement to finance, build, and operate infrastructure projects, thereby leveraging private sector efficiency and innovation while transferring certain risks to private partners. Similarly, in Amsterdam and Berlin, PPPs play significant roles in urban redevelopment projects and the development of essential infrastructure like airports. This aligns with PPP theory’s recognition of the diverse applications of PPPs across different sectors and contexts, emphasizing their flexibility and adaptability to meet specific project needs and objectives [208,209].

The comparison between the results of the paper and the outcome-oriented governance theory reveals several key insights into how smart city initiatives are aligned with the principles of outcome-oriented governance. The findings of the paper highlight the importance of outcome-based financing mechanisms in driving innovation and social impact in smart city projects. This resonates with outcome-oriented governance theory, which emphasizes the need for public sector organizations to focus on achieving measurable outcomes and delivering value to citizens [210]. By tying investments to specific outcomes such as housing stability and community integration, cities can ensure that smart city initiatives are effectively addressing social needs and priorities. Also, the implementation of performance-based contracts in waste management and other sectors underscores the significance of accountability and efficiency in service delivery [211,212]. outcome-oriented governance theory advocates for a shift from input-based to outcome-based approaches, where the emphasis is placed on achieving desired results rather than simply delivering outputs [213]. Through performance-based contracts, cities can incentivize private sector partners to meet predefined performance metrics, thus ensuring the effective utilization of resources and the attainment of citywide goals.

It can be observed that the use of revenue-sharing models in transportation systems reflects a commitment to optimizing the operation of smart city infrastructure while generating revenue for public coffers. Outcome-oriented governance theory suggests that public sector organizations should seek to maximize the value generated from public assets and resources [214]. By implementing revenue-sharing arrangements with private operators, cities can align financial incentives with the public interest and promote the sustainable operation of transportation systems.

6. Conclusions

6.1. Main Results of the Study

This paper sheds light on the diverse array of business models implemented in smart cities and offers insights into their implementation in three of the most developed European smart cities: London, Amsterdam, and Berlin. Through a systematic literature review and comparative analysis, the study identifies various business models such as public–private partnerships (PPPs), Build–operate–transfer (BOT) arrangements, performance-based contracts, community-centric models, innovation hubs, revenue-sharing models, outcome-based financing, and asset monetization strategies.

The findings reveal that each city leverages a combination of these business models to address its unique urban challenges and priorities. For instance, London emphasizes PPPs for large-scale infrastructure projects like transportation systems, while Amsterdam utilizes them for urban redevelopment initiatives such as mixed-use business districts. Meanwhile, Berlin employs PPPs for essential infrastructure development like airports, ensuring efficient project delivery and long-term viability.

The advantages of implementing particular business models vary depending on the context and objectives of each city. PPPs facilitate collaboration between public and private sectors, sharing financial risks and ensuring efficient project delivery. BOT arrangements accelerate the deployment of transportation solutions while transferring ownership back to the city for long-term management. Performance-based contracts drive efficiency and accountability in service delivery, optimizing resource utilization and achieving sustainability goals. Community-centric models foster social cohesion and inclusivity in urban development, creating diverse and vibrant neighborhoods. Innovation hubs stimulate entrepreneurship and technological advancement, positioning cities as global leaders in innovation. Revenue-sharing models optimize the operation of smart city infrastructure, generating revenue for public coffers. Outcome-based financing mechanisms drive innovation and social impact, aligning investments with social objectives. Asset monetization strategies unlock the value of public assets, stimulating economic growth and facilitating private sector investment.

In addressing the research questions, the study provides a comprehensive understanding of the business models implemented in smart cities and their advantages in the analyzed urban contexts. By examining real-world examples from London, Amsterdam, and Berlin, the paper offers valuable insights for policymakers, urban planners, and researchers seeking to enhance the sustainability, efficiency, and livability of smart cities.

6.2. Main Scientific Value of the Study

The originality of the paper lies in its comprehensive analysis of smart city business model implementations in three major European cities: London, Amsterdam, and Berlin. While numerous studies have explored smart city initiatives in individual cities, this paper stands out by conducting a comparative analysis across multiple cities, each with its distinct historical, cultural, and economic context. By examining the various approaches taken by these cities to foster sustainable urban development and enhance residents’ quality of life, the paper provides a nuanced understanding of the diverse strategies employed in the smart city domain.

One of the key original contributions of the paper is its exploration of a wide range of business models and collaborative frameworks utilized in smart city development. From public–private partnerships (PPPs) to build–operate–transfer (BOT) arrangements, performance-based contracts, community-centric models, innovation hubs, revenue-sharing models, outcome-based financing, and asset monetization strategies, the paper offers a comprehensive overview of the complexities of urban governance and collaboration between public and private sectors. This breadth of analysis provides policymakers, urban planners, and researchers with a rich framework for evaluating and optimizing smart city initiatives in their respective cities and regions. Also, the paper delves into the advantages and limitations of each business model, highlighting the specific contexts in which they thrive and the challenges they may face. By comparing and contrasting the experiences of London, Amsterdam, and Berlin, the paper offers valuable insights into the factors that contribute to the success or failure of smart city projects in different urban environments. This comparative approach adds depth and richness to the analysis, enabling a more nuanced understanding of the complex dynamics at play in smart city development.

The paper identifies future research directions, including the long-term impacts of different business models on urban sustainability, the role of emerging technologies in shaping the future of smart cities, and the implications of radical policies towards zero greenhouse gas emissions. By outlining these avenues for further investigation, the paper not only contributes to the ongoing discourse on smart city development but also sets the stage for future research to advance our understanding of sustainable urban governance practices.

6.3. Limitations of the Study

One of the main limitations of this paper lies in its focus on only three cities: London, Amsterdam, and Berlin. While these cities offer valuable insights into smart city business model implementations, they represent only a fraction of the global landscape. The exclusion of other cities from different regions with diverse socioeconomic backgrounds, cultural contexts, and levels of technological advancement may limit the generalizability of the findings.

6.4. Future Research

Future research in the field of smart city development could explore several avenues to deepen our understanding and improve the implementation of smart city initiatives. One potential area of investigation could focus on the long-term impacts of different business models on urban sustainability, economic development, and social inclusion. By conducting longitudinal studies that track the outcomes of smart city projects over time, researchers could assess the effectiveness of various strategies in achieving their intended goals and identify factors that contribute to success or failure. Also, future research could explore the role of emerging technologies, such as artificial intelligence, blockchain, and the Internet of Things, in shaping the future of smart cities. There are many trends in economies transforming them toward an Industry 4.0 framework [190]. Investigating how these new technologies can be integrated into existing infrastructure and governance frameworks to enhance efficiency, transparency, and citizen engagement could provide valuable insights for policymakers and urban planners. And although the framework of Industry 4.0 is quite broad, and companies differ in the ways they implement new technologies, the conclusion is that new technologies are changing operational processes [191,192].

Moreover, radical policies towards zero greenhouse gas emissions (especially CO₂), such as deep decarbonization, will also change the business model in smart cities. Many industrial sectors have already developed strategies to move towards net zero [226]. This process of reducing greenhouse gas emissions must go hand in hand with investments in RES, because smart cities need more and more energy [193,194,195]. On the way to RES, countries face a lot of barriers, including economic, social, and administrative constraints [196] as well as the energy crisis [197]. Their elimination will make it easier for cities to build smart cities with smart energy systems.

In conclusion, our further research must take into account many new technological developments (based on AI) as well as the mandatory requirements of overarching policies in the field of sustainable development.

6.5. Theoretical Contribution

Theoretical contributions stem from the comprehensive analysis of business model implementations across London, Amsterdam, and Berlin, enriching the understanding of the complexities inherent in urban governance and collaboration. By integrating theories from multiple disciplines such as urban planning, economics, and public administration, the study offers a nuanced framework for examining the dynamics of smart city initiatives. This interdisciplinary approach not only deepens our theoretical understanding but also sets a precedent for future research endeavors in the field. Moreover, the study validates and refines existing theoretical constructs related to new public management, public–private partnerships, and outcome-oriented governance within the context of smart cities. By empirically demonstrating the efficacy of these constructs in real-world settings, the study enhances the credibility and applicability of theoretical frameworks, contributing to their further development and refinement.

6.6. Managerial Contribution

From a managerial point of view, the study offers actionable insights for urban policymakers, city planners, and public sector managers engaged in smart city initiatives. By providing comparative analyses of various business models, the study equips policymakers with evidence-based strategies for urban development. The emphasis on fostering collaboration between the public and private sectors entities underscores the pivotal role of partnership building in advancing smart city agendas. City managers can leverage these insights to cultivate strategic partnerships and harness resources and expertise for the implementation of urban development projects. Also, the study emphasizes the importance of establishing clear performance metrics to evaluate the success of smart city projects, thereby promoting accountability and transparency in resource allocation and project management. City managers can utilize these insights to design robust monitoring and evaluation frameworks that ensure the efficient utilization of resources and the attainment of predefined objectives.

The study presented in the paper underscores the significance of nurturing innovation ecosystems and supporting entrepreneurship in driving technological advancement and economic growth within smart cities. By crafting policies and initiatives that foster innovation and provide support to budding entrepreneurs, city managers can cultivate environments conducive to innovation and sustainable economic development.