Smart city as a hub for talent and innovative companies: Exploring the (dis) advantages of digital technology implementation in cities

Abstract

The number of smart city initiatives is growing worldwide at an incredible pace. Their ambition is to add to the competitiveness of local communities through innovation while increasing and attracting users, financial capital and talent by offering an environment suited to current needs. Digital implementation plays a key role in this evolution, facilitating cities' ability to offer and advanced urban environment tailored for its users and stakeholders. In this paper, we examine how digital technology implementation affects the attractiveness of cities in terms of intra- and international talent flows and the creation of innovative companies. Our analysis is based on a dataset of 20 Italian cities over an 11-year period. We use the GLS (Generalized Least Square) panel data estimation method, considering both direct and u-shaped effects to evidence the relationship between digital technology implementation and the attractiveness of cities for intra- and international talents, and to explore an advancing urban environment conducive to innovation and entrepreneurship. Based on empirical outcomes, this study offers valuable insights for both academics and policymakers in understanding and balancing the current interplay between digital implementation, innovative companies, and talents in contemporary cities.