Why cities need to become smarter
Cities and urban areas are the battlegrounds on which the victories for sustainability will be won or lost today and for the future. The megatrend of urbanization shows no signs of decline. Consequently, the pressure on cities’ energy systems, mobility, infrastructure, land use, logistics and public services is on the rise. Simultaneously, cities are expected to improve their economic competitiveness, resilience and quality of life. Talk about being between a rock and a hard place.
Such parallel demands explain why the ‘smart city concept’ has gained such strong traction and plays such a strong role in urban development. A smart city is not simply a technologically advanced city where advanced digitalization thrives and data flows like a river. Rather, this “smartness” combines holistic sustainable development, efficient use of resources, improved services, co-innovation, active participation by citizens and other stakeholders, as well as a wide range of smart solutions and emerging technologies (Kumar et al., 2020; Ntafalias et al., 2022; Paalosmaa & Shafie-khah, 2021).
Smartness beyond technology
Smart city development is commonly built upon six interconnected components: smart environment, mobility, living, economy, governance and people (Andone et al., 2014; Höjer & Wangel, 2015; Paalosmaa, 2025; Winkowska et al., 2019). In practice, these elements are visible in e.g., renewable energy sources (RES), smart and/or micro grids, low-emission mobility, data-supported planning, as well as resource-efficient infrastructure and novel digital services. Digital solutions and information and communication technologies (ICT) can improve monitoring, communication and decision-making whilst also enabling fresh forms of knowledge sharing, co-creation and innovation (Oliveira et al., 2020; Yigitcanlar et al., 2020).
People make cities smart
In addition, and importantly, this raises smartness in the human and economic dimensions to a new level. Improvements in energy, mobility or digital services should ultimately increase liveability, accessibility, safety and the attractiveness of the city for its residents, as well as for existing and new businesses and investment. Thus, stakeholder engagement, participation and inclusiveness are not just additional features of smart-city development but major practical extensions of its operating logic. Indeed, smart solutions need to reflect actual needs, and their implementation depends on acceptance, participation and orchestrated action (Albino et al., 2015; Castelnovo et al., 2016).
However, technology and cold hardware do not inject smartness into a city by themselves. This development should cut to the core of it, across organizational and sectoral boundaries. Municipal organizations, businesses, research and educational institutions, infrastructure operators, citizens and other stakeholders alike possess diverse knowledge, resources, capabilities and visions. Hence, the ability to engage all these actors to pull together to achieve development needs is as important as the technologies being implemented and set in motion (Leydesdorff & Deakin, 2011; Lombardi et al., 2012; Paalosmaa, 2025). Thereby, smartness is best described as a continuous, iterative capacity to develop, experiment, learn and adapt in collaboration rather than as a fixed, stable end state. A smart city is a living thing.
Port-City interdependence
For coastal and other waterway cities, the port plays a particularly important role in the wider urban stage. Ports are gateways for international trade and logistics, connecting regional industries and national economies to global supply chains. They enable imports and exports, mobility of goods and people, employment, industrial activity and the emergence of new businesses and partnerships (Cavalli et al., 2021). At regional level, port performance can directly influence industrial competitiveness, investment attractiveness, security of supply, and regional commercial appeal and growth.
The port is part of the city
The relationship between the city and its port is reciprocal. A port depends on the city and region for infrastructure, land use, energy systems, road and rail connections, workforce and services. Concurrently, port development has an impact on urban and regional logistics, traffic, environmental performance, energy demand and economic development. Make no mistake: a port is an ecosystem of its own within the wider city and regional ecosystem, connected to maritime, logistics and business networks extending far beyond the city itself (Fusco Girard, 2013; Lam & Yap, 2019).
Hence, a disruption of some sort, e.g., a capacity bottleneck or energy constraint at a port, can affect industrial production and supply chains far beyond the immediate port area. Investments in port capacity, intermodal transport, energy infrastructure and services, in turn, can strengthen regional business opportunities and resilience. Thus, the port-city relationship combines regional development with national and international flows of goods, energy, information and value.
Pressure from every direction
This interdependence has become more significant as the maritime sector in general faces stricter sustainability and energy-transition requirements. The EU’s climate policies and international maritime regulations have increased demands to reduce greenhouse-gas emissions, improve energy efficiency and accelerate the use of alternative fuels and energy technologies in shipping and port operations. For ports, this calls for development related to the whole energy infrastructure, cleaner fuels, smart shore-side solutions, logistics, digital systems and more efficient vessel and cargo operations. Additionally, environmental performance has become ever more connected to competitiveness, service quality, reliability and value creation throughout complex maritime supply chains (Heilig & Voß, 2017; Parola et al., 2017, 2021). The message is clear: smart-city development cannot stop at the port gates, and smart-port development cannot proceed independently, detached from the surrounding city and region.
From conventional ports to smart ports
A smart port applies the same broad logic of continuous improvement found in smart-city development, but within the operational realities of maritime transport and logistics. Its smartness concerns terminals, warehousing, cargo flows, transport connections, equipment and machinery, energy, water and waste management, safety, communications, stakeholder interaction and development activities. Digitalization, automation and advanced ICT provide important enabling capabilities, but smart-port development also depends on sustainable infrastructure, efficient operations, resilience and the capacity to collaborate across organizational boundaries (Molavi et al., 2020; Othman et al., 2022; Yau et al., 2020).
Ports are evolving
The evolution toward so-called “fifth-generation ports” illustrates this widening scope. Whereas earlier port generations concentrated primarily on cargo handling, infrastructure and logistics efficiency, the smart ports of today and particularly those of the future tie together sustainability, state-of-the-art technologies, real-time data utilization, wide-ranging networking and robust interaction with stakeholders, cities and other ports (Lee et al., 2018; Molavi et al., 2020; Othman et al., 2022). Such a development leap requires investments in physical infrastructure, energy systems, digital capabilities and flexible but secure collaborative practices.
Data becomes infrastructure
Hence, the value and enabling power of digital data become vital. Data sourced from ships, cargo, transport systems, energy use, machinery, facilities, supply chains, crowd movements, as well as weather and the surrounding environment can support real-time monitoring, forecasting and optimization. Used effectively, digital technologies and data analytics can improve vessel visits, logistics, resource use, energy efficiency and operational decision-making while opening possibilities for more targeted services and business models (Arunachalam et al., 2018; Garrido Salsas et al., 2022; Yau et al., 2020).
Yet, as with cities, technology represents only one part of smartness. Ports are highly networked environments in which shipping companies, logistics operators, industries, energy providers, public actors and other stakeholders depend on each other. Developing a genuinely smart port therefore also requires information sharing, co-creation, innovation and trust between organizations (Carlan et al., 2017; Mendes Constante et al., 2023; Meyer et al., 2024). Just as there is no “I” in ‘team’, there is not one in ‘ecosystem’.
Innovation ecosystem as a driving force
It is here that smart-city and smart-port development converge particularly closely with the innovation ecosystem concept. All three emphasize interaction between heterogeneous actors, innovation, knowledge sharing, digitalization and the cocktail of complementary capabilities. However, these three concepts, although bearing kinship, are not identical. Smart city and smart port describe development contexts and various desired capabilities and attributes. An innovation ecosystem again provides a means of organizing and advancing the collaborative innovation through which many of those capabilities can be created. Thus, an innovation ecosystem is an enabler for advanced development.
An innovation ecosystem puts together private companies, public organizations, universities, research organizations and other actors around joint innovation objectives. Its strength lies in the ability to mix and match knowledge and resources that no individual organization possesses alone, and to transform these combinations into new viable solutions and shared value. In smart-city and smart-port contexts, this can mean co-created digital services, energy solutions, infrastructure, mobility concepts or new operating models.
Innovation needs a stage
The relationship between the three concepts becomes visible through RDI and testing. Smart development rarely progresses through one large, predetermined solution. Technologies, user needs, business models, regulation and policies, and operating environments evolve continuously. Pilots and demonstrations allow actors to test solutions on a manageable scale, learn from implementation, combine technical and user knowledge and adapt the solution before wider deployment (Appio et al., 2019; Meyer et al., 2024). Innovation ecosystems provide a stage on which such iterative development can take place across organizational and sectoral boundaries.
Inclusiveness matters for the same reason. The actors affected by a smart solution may possess knowledge that technology providers or public organizations do not. Integrating these perspectives into the development can reveal functional constraints sooner, improve solution relevance and create stronger commitment to implementation. Thus, co-creation is not only participatory in character; it can and most likely will improve the quality and feasibility of innovation (Ketonen-Oksi & Valkokari, 2019; Paalosmaa, 2024).
Trust keeps it all together
This also applies to digitalization. Digital platforms, data and emerging technologies can build bridges between actors and enhance information flows. However, their true value depends on the willingness and ability of the actors involved to share relevant information. Hence, the relational side of ecosystem development becomes essential. Collaboration, openness, knowledge sharing and trust building foster joint innovation and value co-creation, whereas uncertainty regarding knowledge leakage, competing interests or unequal value capture threatens to restrict it (Ritala et al., 2013, 2015). Orchestration is therefore required to bring the relevant actors together and keep them together, clarify a shared vision and purpose, coordinate roles, activities and resources, and maintain interaction over time and over obstacles (Dhanaraj & Parkhe, 2006; Shen et al., 2024).
Smart port development in Vaasa
The Port of Vaasa presents an example of the presented interdependence. The port has an important role in the EnergyVaasa industry cluster’s international aspirations and functions as a western export gateway for regional companies. Its development is also tightly connected to the City of Vaasa’s wider smart-city and sustainability objectives. The port strives to push toward next-generation port capabilities through improvements in infrastructure, efficiency, sustainability, digitalization and collaboration.
Many actors, shared visions and ideas
The objectives clearly indicate why an ecosystem approach is relevant in this case. Port development involves actors representing the city, port organization, shipping, logistics, manufacturing industry, energy companies, regional development organizations, universities and other public and private stakeholders. A motley crew of valuable visions, needs and innovation ideas. Interests may differ, but many development needs can be shared. Research conducted among Port of Vaasa ecosystem actors identified broad interest in using innovation ecosystem activities to advance e.g., infrastructure and smart solutions and to create opportunities for energy-related pilots. Potential development areas extend from advanced digitalization and energy-consumption reduction to alternative fuels, smart charging infrastructure, battery energy storage solutions (BESS), and more efficient port operations.
From ambition to joint action
The ecosystem approach can also help connect regional RDI capabilities with tangible port needs, attract external funding and create new business opportunities. Additionally, the case illustrates that collaboration does not emerge automatically. Shared purpose, actor involvement, openness, resource commitment and an atmosphere of trust are necessary if heterogeneous organizations are to move from parallel interests toward joint development – to expand beyond the sheer vision of one and see the power in numbers.
Hence, the Port of Vaasa case vividly reflects a broader lesson for port cities. Smart-city and smart-port ambitions become reachable only if actors can translate their own objectives into coordinated and shared testing and piloting, investments and novel value-providing practices. The port’s own innovation ecosystem can provide an environment and regional motor to ignite this work by bringing together the city, port, industry, research actors and other stakeholders to see eye to eye on development needs, the potential for co-created value and shared victories.
Project information
- Project: Satama puhtaan siirtymän innovaatioalustana
- Duration: 1 February 2025–31 July 2027
- Lead organization: Vaasan Satamapalvelut Oy
- Project partners: Vaasa University of Applied Sciences (VAMK) and Vaasa Region Development Company VASEK
- Funding: Co-funded by the European Union
- Total budget: €244,489
