Technology ≠ Happiness? IMD Smart City Rankings Released: Hard Tech Can't Support a Sense of Happiness, China's Second-Tier Cities Start to Surge | European Journal

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By | the “Europe Notes” column—Hao Qian, reporting from Geneva, Switzerland

On March 30 local time, the IMD business school in Lausanne, Switzerland, released its “Smart City Index 2026.” Zurich once again ranked first. Oslo and Geneva took second and third place, respectively. London and Copenhagen rose to fourth and fifth.

Among 148 smart cities, this year Beijing ranked 16th globally and Shanghai 20th. Since 2024, both Beijing and Shanghai have remained in the top 20 of the smart city rankings; Beijing ranked 12th in 2023, and Shanghai ranked 15th in 2025.

The most eye-catching results were Tianjin and Zhuhai. Tianjin was ranked 67th in 2023 and is now 36th. Zhuhai also rose steadily from 60th in 2023 to 40th today. The rankings for Nanjing and Hangzhou also improved. Nanjing rose from last year’s 58th to 56th, while Hangzhou moved up from 70th in 2023 to 62nd this year. Hangzhou had the best performance last year, reaching as high as 54th at one point—and even overtaking Nanjing.

Guangzhou’s ranking has improved quickly and steadily, rising from 71st in 2023 to 51st this year.

One unique feature of the index is that it intentionally downplays hard data and emphasizes the “people” dimension of city life—by calculating the results of surveys of about 400 residents in each city to produce a ranking that is more like smart city “livability.”

“Ultimately, the index is still a snapshot of residents’ ‘perceptions,’ not a final judgment of technological capability. In other words, you can have the world’s most advanced technology, but residents may not necessarily feel that their quality of life has truly improved,” IMD’s World Competitiveness Center research expert Fabian Grimm (Fabian Grimm) explained to “Europe Notes.”

“Smart city rankings aren’t only about infrastructure or innovation capability— they’re also about residents’ confidence, comfort, and trust in the city.” Grimm said plainly.

A surge in rankings for China’s second-tier cities

In this year’s rankings, Tianjin and Zhuhai placed 36th and 40th, respectively. Shenzhen ranked 68th, surpassing Paris’s 71st. In other words, the “livability feel” of these smart cities is rising.

IMD World Competitiveness Center Chief Economist, economics professor Christos Cabolis

In an exclusive interview with “Europe Notes,” he clearly stated that, based on the ranking performance of Chinese cities within this index, it is evident that China is at the forefront of technological development. Large cities such as Shanghai and Beijing have already established their international standing through a high degree of smart development.

Looking at the details, Beijing ranked 16th globally this year and Shanghai ranked 20th. Guangzhou’s ranking improvement has been very fast, moving from 71st in 2023 to 51st this year.

“Meanwhile, the development speed of China’s second-tier cities is astonishing. For example, Tianjin’s ranking was 67th in 2023, rose to 54th in 2024, and is 36th this year. Zhuhai moved from 60th in 2023 to 40th today,” Professor Cabolis analyzed to “Europe Notes.”

“Cities with the most advanced infrastructure and the highest levels of residents’ happiness are not necessarily those best known for futuristic skylines, visible sensor networks, or pure technological complexity. Instead, what sets them apart is their ability to coordinate governance structures, sustainable development, public investment decision-making, and residents’ trust.” Professor Arturo Bris (Arturo Bris) of the IMD World Competitiveness Center stated clearly.

Smart cities focus on residents’ ‘experience’

Fabian Grimm (Fabian Grimm), a research expert at the IMD World Competitiveness Center, said in an interview with “Europe Notes” that many rankings of “smart cities” rely on infrastructure indicators, such as network connectivity, levels of digitization, or transportation systems. But this ranking is intended to capture residents’ actual lived experience of the city.

“ This ranking is mainly based on survey feedback from about 400 residents in each city, covering perceptions of public services, governance, commuting, safety, and technology applications. These subjective evaluations are combined with an objective structural indicator: the Human Development Index (HDI) from the United Nations Development Programme (UNDP),” Grimm said.

Therefore, the index forms a kind of hybrid model: residents’ intuitive perceptions form the core signal, while related HDI data serve as a stable anchor.

“Using the sub-national level Human Development Index (HDI) also brings certain structural limitations, especially in large countries. For example, in economies like China or India, the HDI is usually calculated at the provincial or regional level. This means that outstanding cities may be ‘diluted’ by surrounding areas with slower development.”

“Therefore, the HDI does not always fully reflect the real situation of an individual city,” Grimm said.

“Although many Chinese cities rank near the top globally in residents’ survey scores, the overall ranking is still constrained by this larger regional benchmark. However, as the overall level of development improves, this gap is expected to gradually narrow.”

For example, although cities like Mumbai, Bengaluru, and Hyderabad are important technology hubs and their residents’ technology scores rank among the top globally, these Indian cities overall still sit in the bottom third of the index. This is because their governance and public participation scores lag behind the development of the digital economy.

According to the IMD World Competitiveness Center definition, a “smart city” needs to achieve a good balance among economic vitality (such as employment and business activity), technology applications, environmental attention, and inclusiveness—creating cities that offer a high-quality life for residents.

From the 15 indicator categories used in the “smart city” survey, the most watched issues remain the practical problems of “housing affordability,” “healthcare,” “unemployment,” “public security,” “public transportation,” and so on.

Many big cities can’t escape the troubles of “affordable housing” and “traffic congestion,” which then affects residents’ perception of real comfort.

Professor Arturo Bris (Arturo Bris) of the IMD World Competitiveness Center analyzed to “Europe Notes” that their smart city index is not meant to measure the level of a city’s technology adoption, but rather the extent to which technology helps solve the most pressing issues that citizens actually care about. Many megacities are highly developed, but because of their massive scale, the impact of technological progress on residents cannot be the same, and many practical challenges are harder to solve—for example, affordable housing and urban traffic congestion. By comparison, cities in smaller developed regions are actually more likely to overcome these difficulties.

“In the rankings over the years—whether it’s smart city rankings or global competitiveness rankings—it can be seen that some small-scale developed economies in Switzerland and Northern Europe tend to perform better. This is a structural difference, not bias.

“Small economies have greater flexibility. The complexity of the problems that need solving differs from that faced by big countries, and communication efficiency may be higher. Cities are the same way,” Professor Bris said candidly.

The data also show that some cities, despite being wealthy and highly connected technologically, may still lack trust on the level that residents care about most. For example, Athens, ranked 139th, and Rome, ranked 143rd—citizen participation scores are even lower than those of many cities in sub-Saharan Africa.

How should we view the competitiveness of Gulf cities?

In this year’s smart city index rankings, big cities across the Gulf countries still remain near the top. For example, Dubai and Abu Dhabi, which were affected by the Middle East crisis, still achieved high rankings of sixth and tenth, respectively.

Fabian Grimm, a research expert at the IMD World Competitiveness Center, confirmed to “Europe Notes” that this reflects both the resilience of these cities and also exposes the limitations of a global ranking system based on “perceptions.” Because “the survey was conducted between early January and the end of February. If the survey period were extended further, the results might reflect more concerns.”

He also observed that even though in this year’s rankings Dubai fell by 2 places and Abu Dhabi fell by 5, for cities that were already at the top, such changes are considered significant, indicating that residents’ evaluations of the urban environment have indeed declined.

IMD World Competitiveness Center Chief Economist and economics professor Cabolis explained to “Europe Notes” that “the Middle East crisis is a major event. It affects not only the Middle East, but also Asia and Latin America, and even creates tremors globally. Meanwhile, while the Middle East crisis may seem shocking at the moment, in terms of time, over the past few years and across different regions, we’ve encountered similar conflicts more than once.”

“As a staged event, geopolitical conflicts may influence people’s perceptions. But what the smart city index aims to show is, at a given stage, residents’ real lived experience in their local city—whether technology can be translated into improvements in actual quality of life.”

“What we are measuring is not the city’s competitiveness and the hard metrics of intelligence, but a kind of ‘structural experience’ formed on the basis of ‘trust.’ This trust takes time to build and doesn’t change immediately.”

Professor Cabolis also added: “At this point, what needs to be considered is whether the crisis will continue until it impacts the quality of services provided by smart cities. At least for now, we still believe that the data show that major cities in the Gulf region performed strongly in this report, and that behind it, many fundamental elements have not changed.”

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