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Creative Capital, Information and Communication Technologies, and Economic Growth in Smart Cities

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  • Batabyal, Amitrajeet
  • Nijkamp, Peter
Abstract
We study aspects of economic growth in a stylized smart city with two distinct features. First, the modeled inhabitants of this city are smart because they possess skills. Using the language of Richard Florida, these inhabitants comprise the city’s creative class and hence they possess creative capital. Second, the city is smart because it uses information and communication technologies (ICTs) and we model one specific kind of ICT use. In this setting, we first derive expressions for three growth related metrics. Second, we use these metrics to show that the economy of smart city A converges to a balanced growth path (BGP). Third, we compute the growth rate of output per effective creative capital unit on this BGP. Fourth, we study how heterogeneity in initial conditions affects outcomes on the BGP by introducing a second smart city B into the analysis. At time t=0, two key savings rates in city A are twice as large as in city B. We compute the ratio of the BGP value of income per effective creative capital unit in city A to its value in city B. Finally, we compute the ratio of the BGP value of skills per effective creative capital unit in city A to its value in city B.

Suggested Citation

  • Batabyal, Amitrajeet & Nijkamp, Peter, 2018. "Creative Capital, Information and Communication Technologies, and Economic Growth in Smart Cities," MPRA Paper 83952, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:83952
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    References listed on IDEAS

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    Cited by:

    1. Amitrajeet A. Batabyal & Peter Nijkamp, 2019. "The magnification of a lagging region’s initial economic disadvantages on the balanced growth path," Asia-Pacific Journal of Regional Science, Springer, vol. 3(3), pages 719-730, October.
    2. Amitrajeet A. Batabyal & Peter Nijkamp, 2022. "Interregional Competition for Mobile Creative Capital with and Without Physical Capital Mobility," International Regional Science Review, , vol. 45(1), pages 58-73, January.
    3. Batabyal, Amitrajeet A. & Beladi, Hamid, 2019. "The optimal provision of information and communication technologies in smart cities," Technological Forecasting and Social Change, Elsevier, vol. 147(C), pages 216-220.
    4. Marchesani, Filippo & Masciarelli, Francesca & Bikfalvi, Andrea, 2023. "Smart city as a hub for talent and innovative companies: Exploring the (dis) advantages of digital technology implementation in cities," Technological Forecasting and Social Change, Elsevier, vol. 193(C).

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    More about this item

    Keywords

    Creative Capital; Creative Class; Economic Growth; Skills; Smart City;
    All these keywords.

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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