Cities around the world are increasingly redefining how they are planned and operated as technology becomes a central tool in urban development. According to estimates by the OECD, more than 70% of the global population will live in urban areas by 2050, significantly increasing demand for modern infrastructure, energy systems, transport networks and public services.
At the same time, a study by the McKinsey Global Institute estimates that investments in urban infrastructure will need to exceed $3.7 trillion annually by 2035 in order to meet the needs of cities worldwide.
In this context, the concept of the smart city is evolving from a technological slogan into a concrete strategy for urban development. From Singapore and Barcelona to Helsinki and Amsterdam, cities are investing in digital infrastructure, data systems and new models of governance.
According to the IMD Smart City Index, as well as analyses by OECD Smart Cities and Inclusive Growth, modern metropolitan areas are increasingly using technology to improve quality of life and make urban systems more efficient and resilient. Reports from the World Economic Forum and the World Bank also highlight investments in digital and sustainable infrastructure as key drivers of urban economic growth in the coming years.
Technology at the core of modern urban planning
A smart city goes beyond digital services for citizens. It involves the broader redesign of infrastructure systems.
Transport networks capable of managing traffic in real time, energy systems that dynamically adapt to demand, water networks that detect leaks through sensors and public services operating through digital platforms are becoming part of a new urban model. Urban planning is increasingly turning into a complex process that combines engineering expertise, data and advanced technologies.
According to UN-Habitat and the Global Smart Cities Alliance, the integration of digital technologies into city planning is expected to become a defining feature of urban development in the coming decades.
European policies driving the transition
In Europe, this transition is reinforced by policies promoted by the European Commission, which support the digital and energy transformation of cities.
Initiatives such as the European mission “100 Climate-Neutral and Smart Cities”, along with funding instruments including Horizon Europe, InvestEU and financing from the European Investment Bank (EIB), are creating a new framework for urban infrastructure development.
Data from the EIB shows that investments in sustainable infrastructure and urban projects across European cities are steadily increasing, reflecting their importance within the EU’s broader development strategy. At the same time, Eurostat reports a significant rise in digital transformation programmes for cities, particularly in energy, transport and public services.
The role of data and artificial intelligence
Digital governance, data analytics and artificial intelligence are gradually becoming key tools for planning and managing urban infrastructure.
Studies by the McKinsey Global Institute and the International Data Corporation (IDC) suggest that data analytics technologies and AI applications can significantly reduce operational costs while improving the efficiency of municipal services.
Sensors and digital platforms allow authorities and infrastructure operators to monitor the performance of critical systems in real time. Artificial intelligence can also help anticipate potential risks, optimise processes and reduce the operational costs of infrastructure and public services.
However, technology alone is not sufficient. Designing modern infrastructure requires collaboration between governments, the engineering and scientific community, academic institutions and the private sector.
Urban transformation is therefore not simply a technological process but a broader ecosystem of planning, financing and governance. As highlighted in reports by the Global Infrastructure Hub and the International Transport Forum, modern infrastructure development requires coordinated policies, investment strategies and technological innovation working together.