Funding and Financing Options of Smart City Exemplars: A Model for Upcoming Smart Cities

Smart city initiatives are fast becoming popular around the world due to the need to cater for the increasing population in many cities. One of the innovative means of developing smart city is the utilisation of information and communication technology (ICT) to promote inter-operability of systems, better life for the residents, effective transportation, security, sustainability of resources, energy supply services, healthcare and so on. Some countries have been utilising ICT to sustain smart city development initiative, while others are still at proposal stage. The Institute for Management Development (IMD) index reveals in 2023 that Zurich in Switzerland, Oslo in Norway, Canberra in Australia, Copenhagen in Denmark, Lausanne in Switzerland and London in England are the top six smartest cities in the world. Smart city initiatives in these countries were funded and financed from different sources. Despite the advantages of smart city initiatives, the attempts to develop new smart cities across the world have been hampered by financial constraints. This study, therefore, explores the funding and financing paradigm of the top six smart city exemplars in the world in building an adaptable model for upcoming smart cities. The findings reveal that public–private partnerships (PPPs) account for the majority (52%) of funding for smart city projects in the examined top six smart cities. Government funding at various levels makes up 42% of the total funding while private financing contributes only 6% to smart city projects in these exemplary cities. These findings suggest that the success of these cities in becoming global smart city leaders can be attributed to the strong collaboration between the public and private sectors. Therefore, this study recommends that upcoming smart cities should seek more public–private partnership to implement smart city initiatives.