Article

Social Science Computer Review

2016, Vol. 34(6) 657-672
ª The Author(s) 2015
Do Smart Cities Invest Reprints and permission:
sagepub.com/journalsPermissions.nav
in Smarter Policies? Learning DOI: 10.1177/0894439315610843
ssc.sagepub.com
From the Past, Planning
for the Future

Andrea Caragliu1 and Chiara F. Del Bo2

Abstract
Research on Smart Cities has come of age. Intense discussion on this topic has been ongoing for
years, and the academic prominence of this concept has also engendered several policy initiatives
inspired by this label at different administrative levels. However, to date, no large-scale evaluation of
the relationship between urban smartness and smart urban policies has been attempted. This article
aims at filling this gap. By building on a solid definition of Smart Cities, the article tests the empirical
relationship between urban smartness and the intensity of Smart City policies. A novel data set on
four different types of policies and smart urban characteristics is assembled for 314 European Union
cities. Empirical results suggest that Smart City policies are more likely to be designed and imple-
mented in cities that are already endowed with smart characteristics. Our findings also point to a
higher probability that Smart City policies are implemented in denser and wealthier urban areas.
These empirical results call for further research on the real effects of actual implemented Smart City
policies, with the aim to verify the potential of this policy concept as an overall urban development
model encompassing the main drivers of endogenous urban growth.

Keywords
smart city, urban smartness, smart city policy, policy evaluation, policy intensity, policy determinants

Introduction
Research on Smart Cities has come of age. After years of much buzz without much content, whereas
academics have partly caused an overflow of articles without concrete policy implications, which, in
turn, private companies have benefitted from in terms of service contracts under the Smart City
umbrella, it is now high time to stop and reflect on where we stand.
Much like previous successful labels, the notion of Smart City has attracted the attention of policy
makers in search for new ways to stimulate growth in their gasping urban economies. And yet,

1
Politecnico di Milano, Milan, Italy
2
Università degli Studi di Milano, Milan, Italy

Corresponding Author:
Andrea Caragliu, ABC Department, Politecnico di Milano, Piazza Leonardo da Vinci 32—BLD 5, Milan 20133, Italy.
Email: andrea.caragliu@polimi.it

Downloaded from ssc.sagepub.com at KoBSON on November 10, 2016

658 Social Science Computer Review 34(6)

despite the remarkable efforts in this respect (such as the European Innovation Partnership on Smart
Cities and Communities, which was alone financed with 365 million Euros1), to date, no quantitative
assessment of the link between smart urban characteristics and Smart City policies (and projects) can
be found.
Partly, the lack of empirical assessments of this crucial relationship can be related to the per-
ceived absence of a commonly held definition of the concept of Smart Cities, possibly fraught with
an underlying attempt of major corporations to create a buzzword stimulating municipalities to
invest in urban information and communications technologies (ICTs).2 And yet, as the second sec-
tion briefly demonstrates, if anything, the existing literature provides perhaps too many definitions,
thus creating noise around this concept, which at times makes it difficult to grasp its innovativeness
with respect to previous notions.
A second explanation may be due to the scattered geography of Smart City policies across different
countries. Despite the concept’s initial link with ICTs, the above-mentioned lack of a commonly held
definition has caused divergence in policy objectives—in fact, such aims range from traffic and waste
management to physical and digital infrastructure, to big data collection and elaboration. Moreover,
relatively few European Union (EU)-wide policy actions have been undertaken, which makes it even
more difficult to collect data that are realiable and comparable across countries.
The aim of this article is to enter this debate by providing a first empirical assessment of the
policy-smartness relationship. More precisely, our research question reads as follows:

Research Question: Are Smart City policies more likely to be implemented in cities with sig-
nificant degrees of Smart City characteristics?

In other words, what are the urban and regional preconditions for Smart City policies?
Although potentially equally interesting, in fact, at the present stage of research, it seems too
early to offer a sound empirical assessment of whether Smart City policies are indeed growth enhan-
cing. On the one hand, such policies have been only recently carried out, and this implies that a rea-
sonably long time span of data on urban economic performance will need to be collected in the near
future in order for this evaluation to be made possible. On the other hand, following the initial
absence of a commonly held definition of what a Smart City is (see also the second section subse-
quently), a clear definition of Smart City policies does not exist to date. In this sense, this article aims
at providing a first attempt to narrow down the scope of Smart City policies, which will be likely
followed by more precise evaluations.
In order to answer the article’s research question, in the second section, we first briefly review
some salient points within the existing literature on Smart Cities and on the associated policies.
Next, the third section describes our empirical approach, while in the fourth section, we describe the
data set assembled for the empirical analyses. In the fifth section, the results of this exercise are pre-
sented. Finally, the sixth section concludes.

Smart Cities: Definition and Policies

Smart City: A Definition
Recently, the concept of Smart Cities has attracted much interest, spurred both by academics as well
as by private companies seeking to provide e-solutions to a remarkable array of urban problems. As a
result, after a first period of inconsistent and elusive definitions of this concept, with the famous call
discussed in Hollands (2008) to have the real Smart Cities stand up and introduce themselves, sev-
eral attempts have been made to make this concept clear. In fact, given the abundance of attempts to
narrow down the scope of this concept, any claim (still widely held) that no commonly held defini-
tion of a Smart City exists should be taken with skepticism.

Downloaded from ssc.sagepub.com at KoBSON on November 10, 2016

Caragliu and Del Bo 659

Previous research on Smart Cities has initially developed around the need for ICT infrastructure
as the main way to foster urban development. Along these lines, previous work also produced the
notion of ‘‘wired city’’ (Dutton, Blumler, & Kraemer, 1987), stressing the role of networks, and the
concept of ‘‘intelligent city’’ (Komninos, 2002, 2009), which starts from the notion of the wired city
and adds the cognitive sphere. Over time, theoretical approaches have evolved toward a more bot-
tom–up approach to urban development. As a result, recent definitions of a Smart City added to ear-
lier work the role of e-government technologies, thus merging technological and governance issues
(Deakin, Lombardi, & Cooper, 2011). Increased attention to the use of digital technologies for
enhancing urban quality of life crucially depends on the unprecedented pace with which such new
technologies have been appearing on the market, making it difficult to fully foresee their best exploi-
tation (Eghbal-Azar & Widlok, 2013; Leung & Lee, 2012).
A further dimension later added to this concept is that of environmental sustainability. This issue,
also related to the goals of the EU2020 agenda, links the notion of Smart City with the concept of
‘‘resilient city’’ (Newman, Beatley, & Boyer, 2009). This dimension also conceptually encompasses
research on topics such as energy creation and consumption, with engineering-based studies on the
impact of devices such as smart meters and smart grids onto urban energy efficiency (Clastres, 2011).
From the perspective adopted in this article, a major advancement in the understanding of the
Smart City concept beyond pure technological contents has been made, following the seminal
research report summarized in Giffinger et al. (2007), with the inclusion of the human capital com-
ponent in the Smart Cities literature. Human capital thus becomes a crucial factor in order for tech-
nological infrastructure to achieve maximum returns. This stream of studies starts from relevant
work in urban economics, highlighting the role of human capital as a critical factor of success (and
determinant of convergence/divergence) of cities (Berry & Glaeser, 2005; Shapiro, 2008; Winters,
2011).
On the basis of the work by Giffinger et al. (2007), therefore, a comprehensive definition of Smart
Cities encompassing technological (ICT related), governance, and context growth-enhancing
factors has been provided:
A city is smart if ‘‘investments in human and social capital and traditional (transport) and modern
(ICT) communication infrastructure fuel sustainable economic growth and a high quality of life,
with a wise management of natural resources, through participatory governance’’ (Caragliu, Del
Bo, & Nijkamp, 2011, p. 70).
To the best of our knowledge, this definition represents the first attempt to provide a comprehen-
sive, while also operational, approach to the concept of Smart City. The definition suggests, within a
classical urban production function framework, a role for urban smartness as a precondition for
urban economic performance. Besides, the definition breaks down what is ‘‘smart’’ in cities along
six dimensions, each being amenable to measurement and, thus, linkable to a measure of economic
performance.
After this first wave of academic research, interest has also remarkably grown in the policy and
business arena, spurring a range of Smart Cities projects all around the world. Such projects brought
together urban public boards seeking new ways to foster economic development with companies
willing to provide advanced solutions for such needs. This last development is in turn particularly
important, since to date no empirical analysis has been carried out on the empirical link between
smart urban characteristics and smart policies, carried out by public and/or private actors.
This article aims at filling this gap by empirically estimating the relationship between smart pol-
icies from multiple actors—both public and private—and smart urban characteristics. Given the
large number of projects with a smart label recently launched, a commonly held definition of smart
policies, and consequently, a comprehensive database of such policies, represents a possible future
development of this line of research.
In the next section, a critical review of the existing smart urban policies is thus provided.

Downloaded from ssc.sagepub.com at KoBSON on November 10, 2016

660 Social Science Computer Review 34(6)

Smart City Policies

The Smart City concept and its translation in actual urban policies is not without critics. A recent con-
tribution, in particular, stresses the interplay with political economy and ecology, highlighting the risk
of depoliticizing urban development policies by using the Smart City label as an ambiguous concept
without solid underpinnings and citizens’ participation (March & Ribera-Fumaz, 2014). This negative
view is shared by Vanolo (2014), who suggests that the Smart City concept and narrative, while poten-
tially suggestive, may give rise to urban governance guided more by the private technological sector
rather than by urban politics proper. Along the same lines, Kitchin (2014) warns against the risks
related to the (mis)use of Big Data gathered within the boundaries of Smart City applications, the cor-
poratization of governance due to the influence of private enteprises in the implementation of Smart
City initiatives, and the overall pitfalls of a technocratic and depoliticized view of smart urban policies.
Despite these critical perspectives, since actual Smart City policy initiatives are still in their infancy
and, in most cases, ongoing, there is yet no recognized framework for formal policy evaluations. Thus,
while the literature on the Smart City concept is burgeoning, assessments and evaluation of actual pol-
icy initiatives are still not widespread, although some interesting contributions have emerged.
Within this strand of literature, Nam and Pardo (2011) stress the innovative aspect of Smart City
policies, by framing these initiatives within urban development strategies. The authors suggest that
Smart City policies and initiatives can be evaluated by considering three key factors for success: policy
integration, a clear branding strategy, and a mainly demand-driven approach. Shelton, Zook, and Wiig
(2014) propose the case study of two Smart City policy initiatives in the United States (Louisville and
Philadelphia) to better understand the actual impact of these policies. Their analysis suggests that there
is a wedge between the official rhetoric on Smart Cities and their actual implementation, with urban
initiatives presenting both positive and negative aspects related to their local idiosyncracies.
Along these lines, Angelidou (2014) offers a critical perspective on the strategic planning of
Smart Cities and proposes a set of recommendations for the development of related policies. First,
cities should build on existing capabilities and strengths and, in an era of scarce public resources,
focus on a subset of core areas of intervention. Coordination between different departments is also
considered a key to success, and stakeholder involvement is equally important. The author also sug-
gests moving forward from the initial fix on technological aspects and suggests combining digital
improvements with physical and institutional changes. Finally, and related to the previous points,
small-scale integrated projects are seen as the most easily viable and likely to succeed.
The main messages put forward in these contributions represent the basis for the model of Smart
City policy evaluation proposed in the following section.

The Empirical Approach: Policy Evaluation and the Empirical Model

A Proposal for Smart City Policy Evaluation
The exploration of the correlation, if any, between the design and implementation of Smart City pol-
icies and smart characteristics, implies the need for both a descriptive appraisal of urban policy
initiatives and an indicator measuring how smart the urban environment is. In this section, we thus
propose a simple conceptual model and its empirical translation to first, measure the two aspects,
and then link them together.
Although a full-fledged policy evaluation exercise is beyond the scope of the article and is left for
future research, a framework for the appraisal of an overall Smart City project at the urban level is
here proposed. Within the context of public policy appraisal, an intersting persepective, amenable
of emprical verification, is represented by the Public Sector Performance Management Cycle
(McDavid, Huse, & Hawthorne, 2013). Poister (2010) argues in fact that strategic planning in the
public sector should move toward a strategic management approach, involving managing the overall

Downloaded from ssc.sagepub.com at KoBSON on November 10, 2016

Caragliu and Del Bo 661

policy agenda and verifying the effective implementation of strategies. Focusing in particular on the
Public Sector Performance Management Cycle’s preliminary stages, thus excluding performance
measurement proper, a smart urban program can be examined by considering whether it

 has clear objectives;

 is implemented by means of effective strategies.3

The first aspect to be considered is thus whether the local government, in this case a municipality,
has clear and well-defined strategic objectives for urban policies within the framework of the Smart
City concept. Jung (2014) suggests in fact that goal ambiguity, thus the lack of clear and coherent
objectives, is negatively related to the performance of public policies, providing empirical evidence
in favor of this approach to the appraisal of urban smart policies. This can be translated in the exis-
tence of an overall Smart City vision and a comprehensive strategy encompassing all relevant
departments of the local government.
The second, related, aspect pertains instead to the design of the appropriate programs to achieve the
policy’s main objectives and to the availability of adequate funding resources. Does the municipality
have a clear and valid program for achieveing the general policy objectives? Does it have an effective
strategy to do so? Have funding sources been selected and secured? While this dimension is multifaceted
and would require a more in depth analysis of the revenue and expenditure side of the municipality, we
simplify matters and consider only aspects related to the availability of funding, both from public and
private resources, for the Smart City initiatives as the indicator used in the empirical analysis.

The Empirical Model

The rationale of the empirical model tested in this article is based on the relationship between smart
urban characteristics, seen as a context condition or a ‘‘community attribute’’ as suggested in Kwon,
Berry, and Feiock (2009), and the implementation and adoption of smart urban policies. Community
attributes at the urban scale, in this case the multifaceted measure of urban smartness, are suggested
to act as contributors for the adoption of policies aimed at encouraging economic development, such
as Smart City policies.
It can be argued, however, that other local characteristics, beyond those encompassed in the
smartness indicator, are also important in shaping the decision to adopt Smart City policies. In fact,
as suggested by Shelton et al. (2014), urban planning will be influenced by space-specific attributes,
and this applies to the implemetation of Smart City policies as well. To this end, a set of regional
control factors are added to the model to further corroborate the findings related to the existing rela-
tionship between smart characteristics and policies.
More formally, this conceptual framework translates into a testable reduced form as Equation 1
subsequently:
policy scorei ¼ a þ bsmartnessi þ gZi þ ei ; ð1Þ
where index i indicates cities, smartness is a score of how smart (in the sense of the definition dis-
cussed in the second section) cities are, while Z is a matrix of relevant controls. The dependent vari-
able, policy_score, is a continuous variable reflecting the implementation and intensity of Smart
policies (see A measure of Policy Intensity section for further details).
The first aim of this basic model is to verify whether those cities that proactively engage in Smart
City-related projects, along the lines of what discussed in Smart City Policies section and The
Empirical Model section, also score high on a smartness indicator capturing the six dimensions iden-
tified in the literature.
Also, we aim at testing whether this relationship holds also after controlling for other growth-
enhancing characteristics that may correlate in their turn with urban smartness. If this were the case,

Downloaded from ssc.sagepub.com at KoBSON on November 10, 2016

662 Social Science Computer Review 34(6)

weak or no evidence of a significant and positive relationship between smartness and engagement in
related policies, once relevant controls are taken into account, could be interpreted as suggesting that
urban smartness is nothing but a different way to conceptualize and summarize urban development
processes. If, on the contrary, a positive and significant relationship is still valid even after taking all
relevant controls into account, while evidence would not be conclusive, it would certainly point to the
existence of distinctive features associated to urban smartness that make this concept original and new.
As for the Z matrix, we opted to include four controls aimed at capturing a city’s level of devel-
opment, measured by gross domestic product (GDP) of the NUTS2 region where the city is located;
a density effect, captured by the metro area’s population density; the impact of innovative activities
on city’s policy effectiveness, measured by research and development (R&D) expentidure/GDP
again at NUTS2 level; and the quality of regional institutions that, in a context of generally high
levels of economic development such as the EU, could make a further difference in terms of prob-
ability to engage in Smart City policies.
As for the former control, clearly, policy effectiveness may be a function of the stage of devel-
opment of each city (Jantz, Goetz, & Shelley, 2003). Cities that are more developed may tend to set
advanced policies as priority targets, while less advanced urban areas may be more concerned with
less advanced, and more practical, issues.
A density control is also added to the Z matrix in order to proxy for urbanization economies that emerge
from the colocation of individuals and firms in the urban areas (Camagni, Capello, & Caragliu, 2015;
Ciccone & Hall, 1996). Urbanization economies are in fact what makes cities structurally different from
pure concentrations of firms and can in the long run determine urban economic performance (Fujita, 2015).
Finally, we also control for the intensity of R&D expenditure in order to capture the effort of cit-
ies in our sample to gain competitive advantage in the knowledge economy. Once again, cities in
areas that spend a relevant share of their budgets in innovation activities are also expected to commit
to more advanced policies (Oughton, Landabaso, & Morgan, 2002), and this may in turn offer a
blurred picture of the estimates of the pure smartness effect, which is our main variable of interest.

Data and Indicators

A Measure of Policy Intensity
In order to empirically verify Equation 1, a novel data set has been assembled, with data pertaining
to two main domains: smart urban policies and socioeconomic characteristics of European cities.
Following up on the discussion of Smart City policy evaluations, data have been gathered from
different of sources, in order to account for the dimensions set out in the third section. In particular,
in order to assess the presence of an overall, unified, Smart City policy orientation, four main data
sources on policy intensity have been considered: cities which implemented smart policies as sur-
veyed by a recent report (European Parliament, 2014), cities belonging to the Eurocities network,4
cities participating in Framework Program 7 (henceforth, FP7) Smart City initiatives, and finally,
cities actively engaged in cooperation projects with a major multinational company offering Smart
City-related services. Each of these sources is described in detail subsequently.
European Parliament (2014) examines cities which have implemented or proposed Smart City
initiatives, selecting those for which these endeavors have been successful. Success in this context
is defined in terms of alignment between city-level policy objectives and the EU2020 goals. In our
sample, we identify these cities with an indicator variable, which takes on value 1 if cities have been
selected as implementing (or planning) succesful smart city policies and 0 otherwise.
The Eurocities network has been initiated in 1986 by 11 European cities, with the aim of connect-
ing noncapital cities. This network now encompasses 103 full members, organized in forums, work-
ing goups, and projects. The main aim of the network is to highlight the central role that cities, as

Downloaded from ssc.sagepub.com at KoBSON on November 10, 2016

Caragliu and Del Bo 663

engines of growth, can play in the EU to help achieve the goal of smart and sustainable growth. The
current focus is thus explicitly on Smart City policies, as exemplified by the network’s major work-
ing group on Smart Cities.5 We thus identify members to this network by assigning value 1 to a sec-
ond indicator variable and 0 otherwise.
With respect to public involvment and funding, information on the participation of the municipal
offices to FP7 European projects is gathered from the European Commission’s Digital Agenda and,
more specifically, from the factsheets on Smart City Projects6 and the European Commission’s
Smart Cities and Communities web page.7 Participation in actually funded projects, however, may
provide only a partial representation of the implementation of Smart City policies. To gather a
clearer picture, information on commitments at the city level is thus added by codifying city-
level involvement.8 While nonbinding, commitments are voluntary expressions of interest of public
and private partners9 to support, by means of concrete and measurable actions, the overall objectives
of the European Innovation Partnership on Smart Cities and Communities. It should be noted that
official FP7 projects are mainly in the field of energy efficiency, mirroring the prevaling reading
of Smart Cities at EU level as related to environmental sustainability and energy efficiency (Cri-
vello, 2015). Commitments are instead centered around more diverse aspects, touching on the six
axes of our Smart City definition (Smart City: A Definition section). As cities can participate in
more than one EU-funded project (EU_FP and EU_SCC, respectively) or commitment (EU_com-
mitt), the variables accounting for these aspects are count measures of participation. Each variable
is then standardized on a 0–1 scale, with 0 indicating cities with no participation to any of these
initiatives and 1 assigned to cities that present the highest degree of participation.
Finally, as highlighted in the previous sections, a peculiarity of the Smart City development is the
explicit involvement of private actors, alongside municipalities and other public subjects, in the
implementation of Smart City policies, especially with respect to technological applications. In
order to provide a preliminary evaluation of this phenomenon, a major private player, IBM, with
stakes in several Smart City initiatives worldwide, was selected. While the focus on one specific
private actor may be a limitation, this choice was motivated by the fact that this firm maintains a
dedicated website10 for its Smart City initiatives, with a list of the ongoing projects. Further research
is needed to include other private actors and to verify whether results for this variable are dependent
on the selected firm. The variable private takes on value 1 if the city has teamed up with the private
firm to implement its Smart City policies and 0 otherwise.

An Urban Smartness Indicator

The urban smartness indicator used in these analyses is based on Caragliu and Del Bo (2015). In that
work, the six axes of the definition of a Smart City provided in A Proposal for Smart City Policy
Evaluation section above have been measured with Urban Audit data via a principal components
analysis (hcenceforth, PCA) approach. In particular, multiple indicators for each axis of the defini-
tion (as shown in Table 1) have been reduced first to a single principal component, then aggregated
to obtain a single principal component measuring overall urban smartness.
The urban smartness indicator here adopted is calculated for 314 EU cities, on the basis of
EUROSTAT’s Urban Audit data for the following six dimensions:

1. human capital,
2. social capital,
3. transport infrastructure,
4. ICTs,
5. natural resources, and
6. E-government.

Downloaded from ssc.sagepub.com at KoBSON on November 10, 2016

664 Social Science Computer Review 34(6)

Table 1. Indicators for the Six Axes of the Smart City Definition (Caragliu and Del Bo, 2015).

Urban
Smartness Axis Raw Data

1. Human capital Proportion of population aged 15–64 years qualified at tertiary level (ISCED 5–6) living
in urban audit cities—Percentage
Students in tertiary education (ISCED 5–6) living in urban audit cities—number of
students per 1000 inhabitants
Proportion of employment in financial intermediation business activities
Proportion of employment public administration health education
Number of companies with headquarters in the city quoted on the national stock market
2. Social capital Car thefts per 1,000 population
Burglaries per 1,000 population
Crimes per 1,000 population
Number of elected city representatives
3. Transport Length of public transport network per inhabitant
infrastructure Share of restricted bus lanes from public transport network
Number of buses (or bus equivalents) operating in the public transport per 1,000 population
Number of stops of public transport per 1,000 population
4. ICT infrastructure Percentage of families with Internet access at home
Number of local units producing ICT products
Number of local units producing ICT-related services
Number of local units producing web content
5. Natural resources Proportion of solid waste arising within the boundary processed by recycling
Proportion of the area in green space
Green space (in m2) to which the public has access, per capita
Annual average concentration of PM10
Annual average concentration of NO2
6. E-government Percentage of Internet users who interacted via Internet with the public authorities in
the last 12 months (Country data)
Percentage of Internet users who sent filled forms to public authorities in the last
12 months (Country data)
Number of administrative forms available for download from official website
Number of administrative forms which can be submitted electronically
Note. ISCED ¼ International Standard Classification of Education; ICT ¼ information and communications technology.

For each axis of the definition, four individual indicators have been used and next further reduced
by means of PCA. This produces six indicators, one for each of the six axes. Table 1 summarizes the
variables used in the calculation of axis-specific indicators.11
The final aggregate measure is the unweighted average of the six principal components thus
obtained. This unweighted average represents the final urban smartness indicator. In order to increase
data availability, we have considered the mean value for the period 2008–2012, thus making use of
three waves of data of the Urban Audit collection. We dealt with missing data by linear interpolation.
Starting from human capital, we follow the general definition provided in Caragliu, Del Bo, and
Nijkamp (2012), which encompasses formal education (students enrolled in tertiary education per
1,000 inhabitants), a functional/industrial component (share of employment in skill-intensive indus-
tries), and the position of the city within the urban hierarchy (number of listed companies with head-
quarters in the city). The resulting human capital indicator is aimed at better reflecting the complex
characteristics within the notion of urban human capital.
Social capital is instead measured following some of the standard references in the sociology lit-
erature, starting from Putnam, Robert, and Nanetti (1993), which refers to the political action com-
ponent of this concept (here captured with the number of elected representatives), while also taking

Downloaded from ssc.sagepub.com at KoBSON on November 10, 2016

Caragliu and Del Bo 665

account of more recent contributions (see, among many, Akçomak & ter Weel, 2012), suggesting
that cities and countries with lower crime rates also tend to display higher levels of social capital.
In the present article, this component is measured with the number of car thefts, burglaries, and
crimes per 1,000 inhabitants.12
The density of urban transport infrastructure is measured with the length of the public transport
network and the size of the urban fleet of public vehicles, and the network quality is instead proxied
with the proportion of restricted bus lanes over the total street lanes and the number of stops per
1,000 inhabitants (Geurs & van Wee, 2004).
In a seminal Organization for Economic Cooperation and Development (OECD, 2005) report,
ICTs have been described as encompassing both a demand and a supply side. We follow their
approach and capture the demand side of ICTs with a measure of household Internet access, while,
for the supply side, the production of ICT products, services, and web contents is used.
As for the natural resources component, we measure the quality of management of solid urban
waste (percentage of waste that is disposed of by recycling), the amount of public green space in
the cities (as a share of total available space), and the intensity of pollution (annual average concen-
tration of PM10 and NO2), as suggested in Tajima (2003).
Finally, e-government is proxied by the percentage of Internet users who interacted with, and
downloaded documents from, public authorities and the number of administrative forms that can
be submitted and downloaded electronically (Welch, Hinnant, & Jae Moon, 2005). Unfortunately,
such data are only available at the country level.
The multiple indicators for each axis of the Smart City definition is thus reduced to a single axis
indicator via PCA, selecting only those components which are associated to eigenvalues larger than
one in modulus (Kaiser, 1961) and for which factor loadings are conceptually reasonable (Dunte-
man, 1989). The six principal components are finally aggregated, by simply unweighted averageing
the indicator, to finally obtain an aggregate indicator of urban smartness.13

Empirical Results
This section shows the results of emirically testing Equation 1 with heteroskedastic-robust ordinary
least squares estimates based on the data described in the previous section. Across different columns,
models change by including additional controls to the standard univariate regression of the policy
intensity measure described in A Measure of Policy Intensity section.
The first result emerging from Table 2 is the positive and statistically significant estimate of the
urban smartness parameter. In column 1, this estimate equals 0.03—when read in elasticity terms,
this means that cities scoring higher by one unit in terms of smartness tend to be 3 per cent more
likely to engage in smart urban policies. Urban smart characteristics, as summarized by the aggre-
gate smartness indicator described in An Urban Smartness Indicator section, are thus a positive pre-
condition for the implementation of smart urban policies.
Since arguably this result may be biased because of the omission of relevant controls, columns
2–5 include an increasingly larger number of control variables, ranging from the quality of regional
institutions to the level of regional development (measured by regional GDP), from population den-
sity to the R&D effort of the region where each city is located. The use of the additional explanatory
variables controlling for other factors that are usually associated to urban economic performance
allows to better isolate the relationship between urban smartness and the probability of a city to
engage in smart urban policies, net of other characteristics that arguably make a city smarter. This
makes the fact that the main result for the urban smartness indicator holds even after controlling for
the above-mentioned regional characteristics more solid. Thus, this result suggests the robustness of
the estimated relationship with Smart City policy intensity.

Downloaded from ssc.sagepub.com at KoBSON on November 10, 2016

666 Social Science Computer Review 34(6)

Table 2. Ordinary least squares Estimates of Equation 1: Relationship Between Smart City Policy Intensity and
Urban Smartness, Holding Control Variables Constant.

Smart City Policy Intensity

Model (1) (2) (3) (4) (5)

Constant term 0.10*** (0.01) 0.09*** (0.01) 0.03 (0.05) 0.09 (0.06) 0.13 (0.12)
Urban smartness 0.03*** (0.00) 0.02*** (0.00) 0.02** (0.01) 0.02* (0.01) 0.01* (0.00)
Regional institutions — 0.02 (0.01) 0.02 (0.02) 0.01 (0.02) 0.02 (0.02)
Regional level of development — — 0.05* (0.02) 0.03* (0.02) 0.04** (0.02)
(GDP)
Population density — — — 0.02** (0.01) 0.02** (0.01)
Research and development — — — — 0.05** (0.02)
R2 .06 .06 .08 .10 .13
Joint F-test 18.02*** 10.95*** 9.97*** 7.92*** 7.01***
Number of observations 314 314 296 294 294
Note. Standard errors in parenthesis. GDP ¼ gross domestic product.
*, **, and *** indicate significance at the 90%, 95%, and 99%, respectively.
Heteroskedasticity-robust standard errors in brackets.

One additional feature that emerges from Table 2 is the relevant share of the total model variance
that is explained by urban smartness alone. Although in fact registered R2 are not exceedingly high,
the value of this statistic in the univariate case (column 1) is roughly equal to half its value for the
most general model (column 5).
Although causation links are not formally taken into account in these estimates, endogeneity
issues should be minimized since the dependent variable is measured for the last 2 years, when smart
city policies have been first formally carried out at local and EU level, while urban and regional
explanatory variables are all measured for time-lagged periods. In order to minimize cyclical issues
in these variables, long-run time lags are also calculated and averaged out, so that variables on the
right-hand side of Equation 1 are calculated for as far back in time as possible, given data availabil-
ity. In addition, because smart city policies have been only relatively recent carried out, in the close
future, one may expect that natural experiments will be performed in this sense and thus empirical
evaluation exercises will be able to assess causation issues more seriously.
As for the controls included in columns 2–5, all turn out to be significantly associated to Smart
City policy intensity but for the regional institutions case. Thus, it appears that Smart City policies
are more likely to be implemented in urban areas that are denser (thus benefitting from agglomera-
tion economies), wealthier (and, therefore, at a more mature stage of development), and investing
more in R&D activities (thus being more innovative).
As for the quality of regional institutions, in column 2, when this last control is first included, its
estimated parameter is marginally insignificant (p value equal to .13); however, as additional con-
trols enter the picture (columns 3–5), the significance of this parameter decreases significantly, per-
haps suggesting that regional institutions are correlated with several other control variables (its most
intense correlation arguably being with the level of development measured by GDP).

Conclusions
Smart Cities, both as a theoretical construct and as an existing urban model, have gained significant
attention in the academic literature and in the policy debate in recent years. Scholars in different dis-
ciplines, including various social sciences and engineering, have analyzed the Smart City concept the-
oretically and empirically. Local governments and institutions at higher tiers, such as the European

Downloaded from ssc.sagepub.com at KoBSON on November 10, 2016

Caragliu and Del Bo 667

Commission in the EU, have initiated and, respectively, funded several projects aimed at making cities
smarter, alongside the involvement of private actors, most notably private firms in the IT sector.
Despite the interest in the Smart City concept and the relevant amount of private and public funding,
however, few evaluation exercises of Smart City policies are available. This article has provided an
initial step forward in this direction, by providing a framework for the assessment and evaluation of
actual Smart City policy programs at the urban level with a sample of 314 European cities. While fur-
ther work is needed to provide a full picture of the overall effects of Smart City policies, the empirical
results presented in the previous sections already suggest a rich set of interesting implications.
First, our findings suggest that Smart City policies are more likely to be designed and implemen-
ted in cities which are already endowed with smart characteristics. Following previous research,
smart urban attributes are measured along six axes, including human and social capital, traditional
and ICT infrastructure, quality of the environment, and citizens’ participation. The positive correla-
tion between smart characteristics and smart urban policies suggests that the Smart City model can
be viewed as a model of urban development, with different cities at different points along the path.
In this sense, Smart City indices should not be seen as rankings that point to a winner but as an
indication of the each city’s position along a development path. The index of urban smartness used in
this article, based on six axes, could thus be used to understand cities’ strengths and weaknesses,
suggesting possible areas for policy intervention with the overall aim of enhancing urban well-
being, while accounting for local characteristics and preferences.
Smart City policies also appear to be implemented more in denser and wealthier areas. This result
is in line with expectations, as denser and better-endowed areas, investing more in R&D and with a
more diverse populations and workforces, will have more funds for Smart City policies, having
already put in place more basic, essential, and urban policies. An additional implication may be that
cities in smaller and less endowed areas could be the target of future Smart City policy initiatives.
These results have relevant policy implications. If urban smartness significantly predicts the
probability to engage in smart urban policies, this should be reflected in real-world smart urban
policies being adopted by cities scoring high in urban smartness, according to the definition pro-
vided in this article. Indeed, many of the cities that perform well along the urban smartness dimen-
sion also provide excellent case studies for the adoption of Smart City policies. Evidence can be
provided, among many examples, for the cities of Lodz (ranking second in terms of urban smart-
ness), which engaged in Smart City policies for smart street lighting control (Municipality of
Lodz, 2011); Aarhus (ranking third) with the Smart Aarhus partnership (Smart Aarhus, 2015), ini-
tiated with agreements among the Municipality, the Central Denmark Region, Aarhus University,
the Alexandra Institute, VIA University College, the Danish Technological Institute, and Sys-
tematic; and Arnhem (ranking fourth), which has been focusing on providing green energy for its
inhabitants (Municipality of Arnhem, 2013).14,15
This evidence becomes particularly relevant in light of the increased role of public authorities as
actors possibly capable of steering decision making toward brave new solutions to problems that the
recent crisis has made more apparent than ever before. In this sense, Landabaso (2014) has argued
for public authorities to be actors of ‘‘public entrepreneurship.’’ The empirical results presented in
this article could thus be seen as the basis for further research on the real effects of actual implemen-
ted Smart City policies, with the aim of verifying the potential of this policy concept as an overall
urban development model encompassing the main drivers of endogenous urban growth.

Appendix. Examples of Smart City Projects in ‘‘Smart Cities’’

Table A1 shows the list of the top 10 cities according to their urban smartness scores (see An Urban
Smartness Indicator section for details). Table A1 clearly suggests the existence of a remarkable
interest in cities that score high in ‘‘smart’’ characteristics in engaging in policies that can be defined

Downloaded from ssc.sagepub.com at KoBSON on November 10, 2016

668 Social Science Computer Review 34(6)

as smart following the discussion in the Smart City Policies section. This qualitative evidence,
although not conclusive, strengthens the case for the results discussed in the fifth section above,
in particular highlighting how a specific set of structural characteristics can be conceived of as con-
ducive to more commitment to smart policies.
Table A1. Smart City Projects in Cities Scoring High Along the Urban Smartness Indicator.

Urban
Smartness
City Name Country Score Ranking Smart City Projects Sources of Information

London United Kingdom 11.7 1 Smart London http://www.london.gov.uk/

vision priorities/business-economy/
vision-and-strategy/smart-
london
Lodz Poland 4.52 2 Smart street http://en.greensys.pl/news/smart-
lighting control cities-the-present-and-the-
future/
Aarhus Denmark 3.44 3 Smart Aarhus http://www.smartaarhus.eu/about-
smart-aarhus/partnerships-and-
principles/
Arnhem The Netherlands 3.43 4 GREEN DEAL http://www.arnhem.nl/
smart energy Ondernemen/Energie_
cities Made_in_Arnhem/
Deelname_green_deal_
Smart_Energy_Cities
Manchester United Kingdom 3.03 5 MDDA’S http://www.manchesterdda.
‘‘Manchester com/smartcity/
smart city’’
Aberdeen United Kingdom 2.86 6 Aberdeen https://www.aberdeencity.
municipality’s gov.uk/web/files/
‘‘Aberdeen CouncilHousing/
smarter city’’ LHSAppendix2.pdf
Cambridge United Kingdom 2.84 7 Could Cambridge http://www.cambridge
be a smart city? shireinsight.org.uk/what-smart-
city
Innsbruck Austria 2.59 8 Active Innsbruck http://www.smartcities.at/city-
projects/smart-cities-en-us/
active-innsbruck-en-us/
Krakow Poland 2.52 9 Inteligentne miasta http://krakow.pl/aktualnosci/
w Małopolsce 124221,30, komunikat,
krakow_bedzie_smart_
city_.html
Aalborg Denmark 2.5 10 Smart cities and https://eu-smartcities.eu/place/
communities: aalborg
Allborg
Note. MDDA ¼ Manchester Digital Development Agency.

Declaration of Conflicting Interests

The authors declared no potential conflicts of interest with respect to the research, authorship, and/or
publication of this article.

Funding
The authors received no financial support for the research, authorship, and/or publication of this article.

Downloaded from ssc.sagepub.com at KoBSON on November 10, 2016

Caragliu and Del Bo 669

Notes
1. Source: http://eu-smartcities.eu/faqs
2. See Söderström et al. (2014) among many possible examples.
3. The full-fledged evaluation model includes three other phases, which are not considered in the present
analysis: Alignment of management systems/performance measurement and reporting/evaluation of real
consequences. (McDavid et al., 2013).
4. http://www.eurocities.eu/
5. http://www.eurocities.eu/eurocities/activities/working_groups/Smart-Cities&tpl¼home
6. http://ec.europa.eu/digital-agenda/en/node/72869
7. http://ec.europa.eu/eip/smartcities/index_en.htm
8. http://ec.europa.eu/eip/smartcities/files/ifc-faq_en.pdf
9. Among the Commitments presented in 2014, 36% of lead organizations are public authorities, 26% busi-
nesses, and 16% academic institutions.
10. http://smartercitieschallenge.org/smarter-cities.html
11. Raw data are in general obtained from Urban Audit, but additional sources also include ESPON FOCI data
(Lennert et al., 2011) and EUROSTAT data at NUTS2 level.
12. The causal relationship between social capital and civic participation, including involvement in local elec-
tions, has been extensively analyzed starting from the seminal work of Coleman (1988).
13. The interested reader is referred to Caragliu and Del Bo (2015) for more details on this urban smartness
measure, where it has been first shown.
14. A more extensive analysis suggests that in fact all top 10 cities in this specific ranking are engaged in some
form of smart policy. The full list of these projects for the top 10 smart cities is provided in Table A1 in the
appendix.
15. The city ranking first according to the urban smartness indicator calculated for our empirical analyses is
London. It goes without saying that this city has committed funds and policies to achieving ‘‘smart urban
goals.’’ London’s objectives are summarized within a ‘‘Smart London vision,’’ discussed in Greater Lon-
don Authority (2015).

References
Akçomak, S., & ter Weel, B. (2012). The impact of social capital on crime: Evidence from the Netherlands.
Regional Science and Urban Economics, 42, 323–340.
Angelidou, M. (2014). Smart city policies: A spatial approach. Cities, 41, S3–S11.
Berry, C. R., & Glaeser, E. L. (2005). The divergence of human capital levels across cities. Papers in Regional
Science, 84, 407–444.
Camagni, R., Capello, R., & Caragliu, A. (2015). The rise of second-rank cities: What role for agglomeration
economies? European Planning Studies, 23(6), 1069–1089.
Caragliu, A., & Del Bo, C. (2015). Smart specialization strategies and smart cities: An evidence-based assess-
ment of EU policies. In K. Kourtit, P. Nijkamp, & R. Stough (Eds.), The rise of the city (pp. 55–84).
Cheltenham, England: Edward Elgar.
Caragliu, A., Del Bo, C., & Nijkamp, P. (2011). Smart cities in Europe. Journal of Urban Technology, 18,
65–82.
Caragliu, A., Del Bo, C., & Nijkamp, P. (2012). A map of human capital in European cities. In M. Van Geen-
huizen (Ed.), Creative knowledge cities: Myths, visions and realities (pp. 213–250). London, England:
Edward Elgar.
Ciccone, A., & Hall, R. E. (1996). Productivity and the density of economic activity. American Economic
Review, 86, 54–70.
Clastres, C. (2011). Smart grids: Another step towards competition, energy security and climate change objec-
tives. Energy Policy, 39, 5399–5408.

Downloaded from ssc.sagepub.com at KoBSON on November 10, 2016

670 Social Science Computer Review 34(6)

Coleman, J. S. (1988). Social capital in the creation of human capital. The American Journal of Sociology, 94,
S95–S120.
Crivello, S. (2015). Urban policy mobilities: The case of Turin as a smart city. European Planning Studies, 23,
909–921.
Deakin, M., Lombardi, P., & Cooper, I. (2011). The IntelCities community of practice: The capacity-
building, co-design, evaluation and monitoring of eGov services. Journal of Urban Technology, 18,
13–38.
Dunteman, G. (1989). Principal components analysis. Thousand Oaks, CA: Sage.
Dutton, W. H., Blumler, J. G., & Kraemer, K. L. (1987). Wired cities: Shaping the future of communications.
Washington, DC: Annenberg School of Communications.
Eghbal-Azar, K., & Widlok, T. (2013). Potentials and limitations of mobile eye tracking in visitor studies:
Evidence from field research at two museum exhibitions in Germany. Social Science Computer Review,
31, 103–118.
European Parliament. (2014). Mapping smart cities in the E. Directorate general for internal policies, policy
department A: Economic and scientific policy. Retrieved December 21, 2014, from http://www.europarl.
europa.eu/studies
Fujita, M. (2015). Diversity and culture in knowledge creation in cities. Scienze Regionali—The Italian Journal
of Regional Science, 14, 101–104.
Geurs, K. T., & van Wee, B. (2004). Accessibility evaluation of land-use and transport strategies: Review and
research directions. Journal of Transport Geography, 12, 127–140.
Giffinger, R., Fertner, C., Kramar, H., Kalasek, R., Pichler-Milanović, N., & Meijers, E. (2007). Smart cities.
Ranking of European medium-sized cities. Centre of Regional Science of Vienna. Retrieved December 21,
2014, from www.smart-cities.eu
Greater London Authority. (2015). Smart London vision. Retrieved May 8, 2015, from http://www.london.gov.
uk/priorities/business-economy/vision-and-strategy/smart-london
Hollands, R. G. (2008). Will the real smart city please stand up? City, 12, 303–320.
Jantz, C. A., Goetz, S. J., & Shelley, M. A. (2003). ‘‘Using the SLEUTH urban growth model to simulate
the impacts of future policy scenarios on urban land use in the Baltimore–Washington metropolitan area.
Environment and Planning, B, 31, 251–271.
Jung, C. S. (2014). Extending the theory of goal ambiguity to programs: Examining the relationship between
goal ambiguity and performance. Public Administration Review, 74, 205–219.
Kaiser, H. F. (1961). A note on Guttman’s lower bound for the number of common factors. British Journal of
Mathematical and Statistical Psychology, 33, 233–236.
Kitchin, R. (2014). The real-time city? Big data and smart urbanism. GeoJournal, 79, 1–14.
Komninos, N. (2002). Intelligent cities: Innovation, knowledge systems and digital spaces. London, England:
Routledge.
Komninos, N. (2009). Intelligent cities: Towards interactive and global innovation environments. International
Journal of Innovation and Regional Development, 1, 337–355.
Kwon, M., Berry, F. S., & Feiock, R. C. (2009). Understanding the adoption and timing of economic develop-
ment strategies in US cities using innovation and institutional analysis. Journal of Public Administration
Research and Theory, 19, 967–988.
Landabaso, M. (2014). Time for the real economy: The need for new forms of public entrepreneurship. Scienze
Regionali—The Italian Journal of Regional Science, 13, 127–140.
Lennert, M., Van Hamme, G., Patris, C., Smȩtkowski, M., Płoszaj, A., Gorzelak, G., . . . Ludlow, D. (2011).
FOCI (Future Orientations for CIties): Final report. Luxembourg, ESPON. Retrieved from http://www.
espon.eu/export/sites/default/Documents/Projects/AppliedResearch/FOCI/FOCI_final_report_20110111.
pdf
Leung, L., & Lee, P. S. N. (2012). Impact of internet literacy, internet addiction symptoms, and internet activ-
ities on academic performance. Social Science Computer Review, 30, 403–418.

Downloaded from ssc.sagepub.com at KoBSON on November 10, 2016

Caragliu and Del Bo 671

March, H., & Ribera-Fumaz, R. (2014). Smart contradictions: The politics of making Barcelona a self-sufficient
city. European Urban and Regional Studies, 1–15. doi:0969776414554488.
McDavid, J., Huse, I., & Hawthorne, L. (2013). In ACM (Association for Computing Machinery) (Ed.),
Program evaluation and performance measurement: An introduction to practice. New York, NY: Sage.
Municipality of Arnhem. (2013). GREEN DEAL smart energy cities. Retrieved May 8, 2015, from http://www.
arnhem.nl/Ondernemen/Energie_Made_in_Arnhem/Deelname_green_deal_Smart_Energy_Cities
Municipality of Lodz. (2011). Smart cities—The present and the future. Retrieved May 8, 2015, from http://en.
greensys.pl/news/smart-cities-the-present-and-the-future/
Nam, T., & Pardo, T. A. (2011). Smart city as urban innovation: Focusing on management, policy, and con-
text. In Proceedings of the 5th International Conference on Theory and Practice of Electronic Govern-
ance (pp. 185–194). New York, NY: ACM.
Newman, P., Beatley, T., & Boyer, H. (2009). Resilient cities: Responding to peak oil and climate change.
Washington, DC: Island Press.
Organization for Economic Cooperation and Development. (2005). Guide to measuring the information society.
Working Party on Indicators for the Information Society. Retrieved December 21, 2014, from www.oecd.
org/dataoecd/41/12/36177203.pdf
Oughton, C., Landabaso, M., & Morgan, K. (2002). The regional innovation paradox: Innovation policy and
industrial policy. The Journal of Technology Transfer, 27, 97–110.
Poister, T. H. (2010). The future of strategic planning in the public sector: Linking strategic management and
performance. Public Administration Review, 70, s246–s254.
Putnam, R. D., Robert, L., & Nanetti, R. (1993). Making democracy work: Civic traditions in modern Italy.
Princeton, NJ: Princeton University Press.
Shapiro, J. M. (2008). Smart cities: Quality of life, productivity, and the growth effects of human capital. The
Review of Economics and Statistics, 88, 324–335.
Shelton, T., Zook, M., & Wiig, A. (2014). The ‘actually existing smart city.’ Cambridge Journal of Regions,
Economy and Society. doi:10.1093/cjres/rsu026
Smart Aarhus. (2015). Partnerships and principles. Retrieved May 8, 2015, from http://www.smartaarhus.eu/
about-smart-aarhus/partnerships-and-principles/
Söderström, O., Paasche, T., & Klauser, F. (2014). Smart cities as corporate storytelling. City, 18, 307–320.
Tajima, K. (2003). New estimates of the demand for urban green space: Implications for valuing the environ-
mental benefits of Boston’s big dig project. Journal of Urban Affairs, 5, 641–655.
Vanolo, A. (2014). Smartmentality: The smart city as disciplinary strategy. Urban Studies, 51, 883–898.
Welch, E. W., Hinnant, C., & Jae Moon, M. (2005). Linking citizen satisfaction with e-government and trust in
government. Journal of Public Administration Research and Theory, 15, 371–391.
Winters, J. V. (2011). Why are smart cities growing? Who moves and who stays. Journal of Regional Science,
51, 253–270.

Author Biographies
Andrea Caragliu is an assistant professor of regional and urban economics at Politecnico di Milano. He holds a
PhD in management, economics and industrial engineering obtained at Politecnico di Milano in 2010 (The dis-
sertation has been awarded the Merit Prize of the EU Committee of the Regions Prize for the Best Doctoral
Dissertation and Diploma d’Onore AISRe for the best doctoral dissertation in Regional Science ‘‘Giorgio Leo-
nardi’’ 2010). Since 2013, he is a coeditor of the Newsletter of the Regional Science Association International.
For the period 2013–2016, he also serves as an auditor of the Italian Regional Science Association (AISRe). He
has published on various international refereed journals. E-mail: andrea.caragliu@polimi.it

Chiara F. Del Bo is an assistant professor of public economics at Università degli Studi di Milano. She holds a
PhD in economics from Università degli Studi di Milano, with the dissertation ‘‘Essays on Investment and
Growth in an International Setting.’’ She been a visiting researcher at the Department of Spatial Economics,

Downloaded from ssc.sagepub.com at KoBSON on November 10, 2016

672 Social Science Computer Review 34(6)

Vrije Universiteit, Amsterdam, and a visiting scholar at the Economics Department of Boston College, USA. In
2014, she co-organized the XIII Milan European Economy Workshop on ‘‘The Cost-Benefit Analysis of
Research Infrastructures.’’ Her research interests are in public and regional economics. Her research has been
published in refereed international journals. E-mail: chiara.delbo@unimi.it

Downloaded from ssc.sagepub.com at KoBSON on November 10, 2016