In search of a business model approach for smart cities

The European Commission has stated that cities need business models to meet the challenges
brought by globalization and digitalization. Until this date, it is unclear what the business model could mean in the smart city context. Most of the smart city research is technically oriented which means that smart city development has been led by technology and not by the city representatives. Hence, there is a need for qualitative research in the smart city context that aims to understand and explain the phenomena.

This is what Sari Perätalo argues in her research. According to her, seeing the business model as an approach enables a broader examination of smart cities and helps cities develop replicable, scalable, and sustainable digital solutions. The business model approach helps to break the siloed organizational structures of cities and serves as a boundary-spanning analysis tool in the digital smart city ecosystem. This is one of the most important findings of the study. The approach emphasizes the importance of cooperation and communication in the urban context, and it considers the needs of city residents, the city organization, and the city ecosystem. This doctoral research increases the understanding of what the business model is and how it could be used as a tool for urban development.

The doctoral research is contextually connected to the current discussion about the digitalization of city services. The digital services offered by cities must be user-friendly, economically and technically feasible, scalable, and sustainable.

This study expands the narrow understanding of smart city business models. The research helps researchers, but also city representatives to utilize both the opportunities brought by digitalization and to solve the challenges it brings by adopting a business model approach.