6. Conclusions
Are Smart City policies the new direction for urban initiatives? Are they conducive to sustainability, livability and economic growth? While these questions are still unanswered (and will probably be so for quite a while), in this paper we have added to our understanding of the mechanisms through which Smart City policies foster urban economic performance by investigating their impact through urban innovation. Our empirical findings, based on PSM, allow us to conclude that SC policies do have a non-negligible positive impact on urban innovation measured through patenting activity, especially in high-tech classes. Results are robust to a number of consistency checks, both in terms of the way Smart City policies are identified, as well as the way Smart City-related technologies are measured (i.e., which IPC classes are used to calculate Smart City technology intensity).
Results also suggest that SC policies indeed stimulate innovation that increases a city's stock of knowledge, one of the main recognized drivers of economic growth. Our findings are based on the analysis of 309 EU cities and exploit the differences in the intensity of SC policy adoption. Cities that engage in SC policy above the EU average tend to innovate more. The propensity to innovate is measured by the number of patents filed in four alternative technology class definitions (total patent applications, high tech patent applications, ICT patent applications and SC patent applications). A relevant commitment to SC policy initiatives is in particular positively associated to higher overall innovation rates, as well as innovation rates in high tech, ICT, and SC (IoT) patents. The use of a PSM procedure also allows to safely infer that reverse causality is not an issue and that this positive association can be interpreted in a causal sense.