The latest IMD Smart City Index has revealed that Europe has the smartest cities, holding seven out of ten positions. North American cities, once dominant in such rankings, have fallen again and they been in decline since 2021.
In terms of technologies driving those areas showing a rise in smart city capability, one stand out one is photonics. This is because many smart city developments depend on the science of light–a field that enables environmental monitoring, security systems, traffic management, and even autonomous driving. North American cities could leverage these technologies to take the lead.
The new standings revealed show Zurich taking the lead. In comparison, North American cities are absent from the top 20, maintaining the same declining trend since 2021.
“We often don’t realize what’s behind most of the tech that powers smart cities. Temperature sensors, air quality, traffic management, security–it’s all powered by photonics. It really is the backbone of smart cities,” Antanas Laurutis, CEO of Altechna, a global company focusing on custom photonics solutions, explains to Digital Journal.
Smart cities use digital technologies that improve daily human life, affecting logistics, traffic management, digital communication, environmental monitoring, and other areas.
The importance of smart city initiatives continues to grow due to the transition from Industry 4.0 to 5.0. Industry 4.0 was a process that represented global changes leading to the integration of digital technologies into manufacturing and industrial processes. It marked the age of automation.
Industry 5.0?
Industry 4.0 proclaims transition to digitalization and automation of processes while emerging Industry 5.0 emphasizes human centricity.
According to the study, a shift to Industry 5.0 can be explained by the challenges societies had to face recently, such as global climate change, pandemics, warfare, refugee crises, and others, all impact daily human lives. All previously achieved technological automations have to shift to human-centrism and primarily help improve life quality of individuals.
Humanity first
“This human-first approach in European cities has often been observed even before smart cities were a hot topic. Europe was historically successful in adapting these human-centric approaches, however, we now observe Asian cities rise due to the same reason. These positions shouldn’t be taken for granted as competitiveness is increasing globally,” Laurutis continues.
While Europe remains competitive in many areas crucial to smart cities, the latest World Economic Forum report, published in January 2025, indicates potential areas where Europe might fall behind, giving up some positions to the U.S. and Asia.
Environment and mobility
According to Laurutis, mobility and environmental technologies are the ones to watch.
“Environmental mapping technologies are advancing fast, faster than cities adopt them. Soon, we will have drones flying around, continuously surveying landscapes, observing biodiversity, and identifying changes in precise parts of cities,” he says.
“Another area that will determine which cities will be considered smart is mobility, including autonomous driving, powered by LiDAR systems. This is something where the U.S. is expected to take the lead.”
Autonomous vehicles rely on photonics-powered LiDAR (light detection and ranging) systems. They navigate much like a person walking through a dark room with a flashlight. By sending out rapid laser pulses and measuring their reflections, these vehicles create a detailed 3D map of their surroundings in real time. This “digital vision” allows them to detect obstacles, pedestrians, and other vehicles with precision, ensuring safe and efficient movement on the road.
LiDAR technology has made sensors more affordable and expanded their use. Currently, U.S. companies are developing low-cost 4D LiDAR sensors to enhance performance in harsh conditions, such as dust, fog, rain, snow, and sunlight interference.
