engleski

The financing incentives for smart cities and importance for local government

Nowadays, the processes of globalisation and digitalisation have deliver rapid and profound development of the cities and local governments around the world, including, the European Union member states. This has led to consider a new concept to navigate and manage urban expansion in local government units. Therefore, the concept of smart cities offers huge economic and financial potential. In addition, the importance of smart cities is to enhance the quality of life, stimulate economic growth, sustain local government budget, and create new value for both investors and local population. To maintain all above mentioned and make it sustainable in the future, the main obstacle is to find appropriate financial resources. The aim of this paper is to present the main financial incentives for smart cities and importance for local government within European Union member states. Moreover, the paper provides the analysis of capacity of governments and public financial institutions to promote smart cities innovative solutions. The results of analysis showed that some countries have fiscal rules within local government budget that limit the ability of cities to take on additional debt to fund some new projects or programmes. To solve this problem, local government need to find a new way of financing the concept of smart cities.

smart cities ; local government ; budget ; financial incentives

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