IMD Smart City Index 2025: Global Urban Technology Rankings and Key Findings

Understanding the Smart City Index 2025 Framework

The Smart City Index 2025 published by the IMD World Competitiveness Center represents the most comprehensive assessment of urban technology and infrastructure performance available today. Now in its seventh edition, the index ranks 146 cities worldwide — up from 142 in 2024 — evaluating how effectively urban technologies and physical infrastructure serve residents across five key areas: health and safety, mobility, activities, opportunities, and governance.

What distinguishes the IMD Smart City Index from other urban rankings is its resident-centric methodology. Rather than relying solely on top-down data collection, the index incorporates direct survey responses from city residents, capturing how people actually experience their city’s technological infrastructure. To ensure accuracy and mitigate the influence of potential outliers, IMD employs a three-year moving average of residents’ perceptions along the different issues considered. This longitudinal approach provides a more stable and reliable picture than single-year snapshots.

The 2025 edition introduces six new cities — AlUla, Astana (formerly Nur-Sultan), Caracas, Kuwait City, Manama, and San Juan — while Tianjin and Zhuhai were excluded due to insufficient data. This expansion reflects the growing global interest in smart city benchmarking and the recognition that urban technology adoption is no longer confined to traditional economic powerhouses. For organizations navigating the intersection of technology trends and urban transformation, the Smart City Index provides an essential analytical foundation.

The calibration mechanism deserves particular attention. To enable comparability across vastly different environments, survey responses are adjusted using the city-level Subnational Human Development Index (SHDI) from the Global Data Lab. This means a city in a developing economy is evaluated against context-appropriate benchmarks rather than being compared directly against cities with fundamentally different resource bases.

Smart City Index 2025 Rankings: Zurich Leads Again

Zurich holds onto the top spot in the Smart City Index 2025 for another consecutive year, continuing the remarkable trend of strong performances by Swiss cities across all dimensions the index evaluates. The complete top 20 reveals fascinating patterns about what makes a city genuinely “smart” in 2025:

The rankings remain remarkably stable at the top, with minimal shifts among the leading cities. The most significant movements include Taipei City sliding from 16th to 23rd and Ljubljana making a dramatic leap from 32nd to 16th. The European dominance of the top 20 — with 12 European cities — underscores the continent’s sustained investment in urban technology infrastructure and citizen-centered governance models.

Swiss excellence is particularly noteworthy: three cities in the top 10 (Zurich, Geneva, Lausanne) speaks to a national ecosystem that fosters smart city development through coordinated federal and cantonal policy, strong public-private partnerships, and a cultural emphasis on precision and quality in public services. According to the OECD’s urban policy framework, this type of multi-level governance coordination is a critical success factor for smart city implementation.

Structures vs Technology: The Dual-Pillar Assessment

At the heart of the Smart City Index 2025 methodology lies a fundamental distinction between two assessment dimensions: Structures, which covers the existing physical infrastructure in a city, and Technology, which focuses on digital services and technological accessibility available to residents. This dual-pillar approach captures both the hardware and software of urban life.

The Structures pillar evaluates tangible infrastructure elements — road quality, public transport networks, green spaces, healthcare facilities, educational institutions, and basic sanitation systems. Cities scoring well on this dimension typically have decades of sustained investment in physical infrastructure, combined with effective maintenance and upgrade programs.

The Technology pillar, by contrast, assesses how effectively digital solutions enhance residents’ daily experiences. This includes online government services, traffic management applications, digital healthcare appointment systems, e-commerce platforms, cashless payment adoption, and the quality of internet connectivity. The proportion of day-to-day payment transactions that are non-cash serves as one proxy indicator for digital maturity.

What makes the Smart City Index 2025 particularly revealing is how these pillars interact. A city may have excellent physical infrastructure but poor digital overlay (common in older European cities with legacy systems), or impressive digital services built atop inadequate physical foundations (seen in some rapidly developing Asian cities). The highest-ranked cities — Zurich, Oslo, Geneva — excel across both dimensions simultaneously, creating an integrated urban experience where physical and digital infrastructure reinforce each other. Understanding how AI and technology are transforming enterprise strategy also provides insight into how cities can accelerate their digital transformation journeys.

Each pillar is further divided across the five key areas — health and safety, mobility, activities, opportunities, and governance — creating a matrix of 10 evaluation categories. Cities receive ratings ranging from AAA to D in each area, enabling granular comparison and identification of specific strengths and weaknesses.

Housing Affordability: The Defining Challenge

The 2025 edition of the Smart City Index surfaces housing affordability as the single most pressing concern across global cities. The data is stark: making housing more affordable is the top priority for respondents in 110 out of 146 cities surveyed, with at least half of respondents in those cities identifying it as critical. This represents a near-universal urban challenge that transcends geography, economic development level, and governance model.

The severity varies dramatically by city. In Dublin and Vancouver, approximately 90% of IMD Smart City Survey respondents expressed concern over housing affordability. Middle Eastern cities are not immune — about 80% of respondents from AlUla or Dubai identify affordable housing as a priority area despite the region’s massive real estate investment programs.

According to IMF data, housing is currently less affordable globally than during the house price bubble that preceded the 2007–08 global financial crisis. This finding is reflected directly in the survey data: in cities as geographically dispersed as Lisbon, Vancouver, Dublin, and Reykjavik, approximately nine in ten respondents report difficulties finding housing that costs less than a third of their income.

The drivers are multifaceted. Rising interest rates, persistent inflation, and elevated energy costs have priced large segments of populations out of both homeownership and rental markets. Restrictive zoning laws and regulatory barriers contribute to high housing costs — over 70% of respondents from American or British cities list housing as a priority area. About eight in ten respondents in San Francisco, Denver, Seattle, Boston, Cardiff, or Glasgow report that finding affordable housing is problematic.

Conversely, Chinese cities present a different picture. In Guangzhou, Hangzhou, and Chongqing, just three in ten respondents report affordability difficulties — though this must be viewed in the context of China’s ongoing real estate downturn following the introduction of measures to curb excessive leverage in 2020, which led to defaults by major developers like Evergrande and Country Garden.

The immigration dimension adds further complexity. Empirical evidence cited in the report shows that a 1% increase in international immigration translates into a 1% increase in flat rental prices. In talent-importing cities such as Zurich, Geneva, and Dubai, the inflow of foreign professionals has contributed to rising rental costs. In Dubai alone, over 40% of all residential property value is held by foreign nationals, representing a 20% increase between 2020 and 2022.

Middle Eastern Cities Surge in 2025 Rankings

One of the most notable trends in the Smart City Index 2025 is the remarkable ascent of Middle Eastern cities. Dubai climbed from 12th to 4th position, while Abu Dhabi rose from 10th to 5th — both entering the top five for the first time. This represents the most significant regional movement in the 2025 rankings and signals a fundamental shift in how the Middle East approaches urban technology and governance.

The UAE’s success is not accidental. As part of UAE Vision 2030, significant efforts have been directed toward economic diversification and real estate sector development. Large-scale residential investments facilitated by government-backed initiatives and partnerships with private developers have transformed the urban landscape. Dubai’s housing boom, specifically, is driven by favorable taxation and ownership regimes combined with extensive urban planning efforts.

The addition of new Middle Eastern cities to the index — including AlUla and Manama — further demonstrates the region’s commitment to smart city development. Manama’s entry reflects expansion in Bahrain’s real estate sector driven by incentives for foreign investors, mirroring elements of Dubai’s successful model. The diversification strategies being pursued across the Gulf Cooperation Council nations are creating new urban technology ecosystems that rival established European and Asian smart cities.

However, the Middle East’s smart city development faces unique tensions. While digital infrastructure and government services score highly, housing affordability concerns persist despite — or perhaps because of — massive real estate investment. The model of attracting foreign investment and talent creates economic dynamism but also drives up living costs, creating a sustainability challenge that the Smart City Index 2025 data clearly captures.

Smart Mobility and Transportation Infrastructure

Transportation infrastructure and smart mobility solutions feature prominently in the Smart City Index 2025 evaluation framework. The mobility pillar captures how effectively cities manage traffic congestion, public transportation quality, cycling infrastructure, car-sharing platforms, and the integration of digital tools into transportation systems.

The data reveals a tight connection between housing affordability and transportation. Expanding access to affordable housing can be achieved by increasing housing density and improving public transport networks — a relationship the report emphasizes with specific examples. London and Brussels, where congestion costs commuters over 110 hours per year according to the TomTom Traffic Index, illustrate how transportation failures cascade into broader quality-of-life impacts.

In Brussels, traffic congestion is perceived as problematic by at least three in four respondents, with about two in five lamenting inadequate public transportation. Only about half of respondents in both London and Brussels find bike-hiring or car-sharing apps effective at reducing congestion, and a similar proportion agrees that parking-guidance apps have reduced journey times. These lukewarm assessments suggest that smart mobility technology alone cannot solve deeply structural transportation challenges.

Top-performing cities in the mobility dimension — including Zurich, Singapore, and Copenhagen — share common characteristics: integrated multi-modal transport systems, extensive cycling infrastructure, real-time digital information platforms, and coordinated urban planning that reduces the need for private vehicle ownership. These cities demonstrate that effective smart mobility requires simultaneous investment in physical infrastructure and digital overlay, echoing the Structures-Technology dual pillar framework. For deeper insight into how software innovation is reshaping industries, the parallels to urban technology transformation are striking.

Digital Governance and Citizen Engagement

The governance pillar in the Smart City Index 2025 evaluates how transparently and effectively city governments operate, how accessible public information is, and how meaningfully residents can participate in decision-making processes. This dimension captures the democratic technology layer that distinguishes truly smart cities from those that merely deploy technology without citizen engagement.

Key governance indicators include whether information on local government decisions is easily accessible, whether corruption of city officials is perceived as a concern, whether residents can contribute to local government decision-making, and whether online platforms enable meaningful civic participation. The survey also assesses whether online voting systems have increased participation and whether digital identification processing has reduced administrative waiting times.

Cities scoring highest on digital governance — notably the Nordic capitals and Swiss cities — share characteristics of high institutional trust, transparent government operations, and robust digital public services. These cities have invested heavily in e-government platforms that go beyond simple digitization to create genuinely participatory governance models where residents can propose ideas, provide feedback on projects, and access financial transparency tools.

The challenge for many cities lies in bridging the gap between deploying governance technology and achieving meaningful citizen engagement. Simply creating an online platform does not guarantee participation; the most successful cities combine digital tools with cultural and institutional frameworks that encourage and value citizen input. The data suggests that resident willingness to concede personal data for improved services (such as traffic management) varies significantly across cultures, creating different trajectories for smart governance adoption. Understanding risk modeling frameworks is essential for cities balancing data collection benefits against privacy concerns.

Climate Resilience and Sustainable Urban Planning

Climate change adds another layer of complexity to smart city development, and the Smart City Index 2025 incorporates sustainability considerations across multiple evaluation dimensions. The intersection of climate resilience, housing affordability, and urban technology creates compounding challenges that the report documents with striking data.

In the United States, homeowners’ insurance premiums increased by 13% in real terms between 2020 and 2023, with some insurance companies no longer writing policies in certain high-risk areas. Climate change is directly driving these increases through the heightened frequency and intensity of natural disasters, creating a feedback loop where insurance costs further reduce housing affordability in vulnerable areas.

Rising sea levels, extreme weather events, and natural disasters increasingly influence housing location choices and long-term urban sustainability. The report cites research showing that government interventions such as constructing sea walls or flood defenses may unintentionally encourage development in high-risk areas, creating moral hazard at an urban planning scale. However, increasing transparency over climate-related risks can positively shape buyer behavior — when homebuyers have access to flood risk data, they tend to favor safer locations and adjust their willingness to pay accordingly.

China’s experience with green building information provides an instructive example. Research suggests that simply providing buyers with an information card detailing the benefits of green buildings significantly increases their willingness to invest in sustainable housing. This finding underscores the potential of targeted information campaigns to drive environmentally responsible development without excessive costs — a principle that could be applied across the 146 cities in the index.

Smart cities leading on climate resilience — including Copenhagen, Singapore, and Amsterdam — integrate climate data into urban planning decisions, use sensor networks to monitor environmental conditions in real-time, and deploy AI-driven systems to optimize energy consumption across building portfolios. These cities demonstrate that climate resilience and smart city development are not competing priorities but complementary dimensions of effective urban governance.

Regional Patterns and Emerging Market Dynamics

The Smart City Index 2025 reveals distinct regional patterns that reflect different stages of smart city maturity, investment priorities, and governance philosophies. Understanding these patterns is essential for contextualizing individual city performances and identifying transferable strategies.

Europe continues to dominate the top positions, with 12 of the top 20 cities being European. The European model emphasizes balanced development across all five pillars, with particular strength in governance transparency, environmental sustainability, and public transportation. Swiss cities exemplify this approach, achieving top marks through coordinated multi-level governance and sustained long-term investment. Slovenia’s Ljubljana jumping from 32nd to 16th suggests that even smaller European cities can achieve rapid improvement with focused smart city strategies.

Asia-Pacific shows strong performances from established smart cities — Singapore (9th), Seoul (13th), Beijing (14th), Shanghai (15th), and Hong Kong (19th) — reflecting decades of technology infrastructure investment. Chinese cities have made significant progress in digital services and infrastructure, though they face different challenges around governance transparency and citizen participation metrics.

Middle East and North Africa is the most dynamic region in the 2025 rankings, with Gulf cities leveraging sovereign wealth and ambitious national visions to accelerate smart city development. The region’s willingness to invest at scale — both in physical infrastructure and digital transformation — creates rapid improvement trajectories that other regions struggle to match. For analysis of how monetary policy and credit markets influence urban investment dynamics, the financial underpinnings of smart city development become clearer.

The Americas present a mixed picture. North American cities like Canberra (8th — though technically Oceania), San Francisco, Boston, and Denver perform well on technology dimensions but face severe housing affordability challenges. Latin American cities are newer entrants to the smart city conversation, with Bogota, Medellin, and Santiago showing emerging potential but facing structural infrastructure gaps.

Africa remains underrepresented in the top rankings, though cities like Nairobi, Cape Town, Lagos, and Accra are included. The continent’s smart city development is often characterized by leapfrog innovation — mobile money platforms, solar microgrids, digital health services — that bypasses traditional infrastructure development stages. The SHDI calibration mechanism ensures these cities are assessed contextually rather than against unrealistic benchmarks.

Smart City Index 2025: Strategic Implications for Policy Leaders

The Smart City Index 2025 offers actionable insights for urban policy leaders, technology planners, and infrastructure investors. Several strategic themes emerge from the data that can inform policy decisions across different city contexts.

Integration beats fragmentation. The highest-ranked cities do not excel by deploying standalone technology solutions but by integrating digital services with physical infrastructure in ways that create compounding benefits. A parking-guidance app is marginally useful; the same app integrated with real-time public transport data, cycling route optimization, and congestion pricing creates transformative mobility improvements.

Housing affordability is a technology challenge. The data clearly shows that cities cannot be considered “smart” if their residents cannot afford to live in them. Technology solutions — from digital permitting systems that accelerate housing construction to platforms that increase market transparency — are essential tools for addressing the affordability crisis. The report’s finding that simply providing information about green buildings increases buyer willingness to invest in sustainability suggests that data transparency itself can be a powerful policy lever.

Resident perceptions matter as much as infrastructure quality. The survey-based methodology highlights that smart city success requires not just deploying technology but ensuring residents perceive genuine improvements in their daily lives. Cities like Brussels, with extensive infrastructure investments that residents still view skeptically, illustrate the gap between deployment and perceived impact. Closing this perception gap requires sustained communication, user-centered design, and continuous feedback mechanisms.

Climate resilience must be embedded, not added. The interaction between climate risks, insurance costs, housing affordability, and urban sustainability creates a complex system that requires integrated policy responses. Cities that treat climate resilience as a separate initiative rather than a core dimension of urban planning will face compounding challenges that undermine their smart city aspirations. The United Nations Sustainable Development Goal 11 provides a global framework for inclusive, safe, resilient, and sustainable city development that aligns with the Smart City Index’s evaluation approach.

Addressing the housing crisis ultimately requires what the report calls “a multipronged approach that integrates regulatory reforms, economic policy adjustments, and innovative urban planning.” Combining infrastructure investments, incentives, and institutional frameworks will help build more resilient and inclusive housing markets. While implementing such a broad range of interventions is challenging for advanced economies and even more so for emerging markets with limited implementation capacity, the payoff is substantial: more livable, more inclusive urban environments that deliver positive economic dividends simultaneously.