Getting smart or going green? Quantifying the Smart City Industry's economic impact and potential for sustainable growth

Abstract

This study identifies the key components and estimates the economic and environmental impact of the Smart City Industry (SCI) in Greece. The main goal is to explore whether smart cities, conceptualized and proxied as an agglomeration of economic activities (industry), can be a force for sustainable growth in the Greek economy. We use an input-output framework to develop a composite industry – the SCI – and estimate its impact on four economic indicators (GDP, production output, employment, and capital formation) and a widely used environmental indicator, greenhouse gas emissions (GHG) in CO2-eq. We further identify the most impacted sectors through the analysis of the SCI's linkage effects and develop a sectoral classification based on their economic importance and GHG footprint. The results highlight the SCI's growth potential as a leading sector in the Greek economy, but these benefits come at an emissions-heavy cost that needs to be considered and properly addressed.