How Smart Cities Blend Cutting-Edge Technology, Superior Services, Rich Cultural Experiences to attract Digital Nomads
In the modern age of remote work, digital nomadism has emerged as a significant trend, with professionals choosing to work from various global destinations. As this lifestyle gains popularity, cities worldwide recognize the importance of creating environments conducive to digital nomads. But while visa applications are usually managed by national governments, the decision of where to live is often influenced by the unique offerings of specific cities. Smart cities, with their cutting-edge technologies, provide a conducive environment for remote work, boasting high-speed internet, efficient public transportation, and sustainable living practices.
The term “smart city” is often attributed to IBM, which popularized the concept around 2008 as part of its Smarter Cities campaign. IBM’s initiative aimed to integrate information and communication technology (ICT) and the Internet of Things (IoT) to optimize the efficiency of city operations and services and connect citizens more closely with their urban environment. While the ideas underlying smart cities had been discussed in various forms prior to this, IBM’s campaign played a significant role in coining and popularizing the specific term “smart city”.
A smart city uses digital technology to improve performance, well-being, and reduce costs and resource consumption. It encompasses various domains such as transport, energy, health care, water, and waste management and relates to six main dimensions such as: Smart Environment, Smart Economy, Smart Governance, Smart Mobility, Smart Living and Smart People.
The integration of ICT and IoT solutions enables cities to interact directly with the community and city infrastructure, monitoring what is happening in the city and how it is evolving. Key components of a smart city include digital infrastructure, smart governance, sustainable development, and community engagement.
A recent study published in the Journal of Destination Marketing & Management11 Zhou, L., Buhalis, D., Fan, D. X. F., Ladkin, A., & Lian, X. (2024). Attracting digital nomads: Smart destination strategies, innovation and competitiveness. Journal of Destination Marketing & Management, 31, 100850. https://doi.org/10.1016/j.jdmm.2023.100850 found that the main factors attracting digital nomads to a city include:
- Culture and History, with attractions such as historical sites, architecture, and local culture;
- Nature and Climate, featuring favorable weather, natural landscapes, and outdoor activities;
- Infrastructure, characterized by reliable internet, co-working spaces, and public transport;
- Service Amenities, such as accommodation, dining options, and recreational facilities;
- Economic and Financial Aspects, including an affordable cost of living and favorable taxation policies; and
- Social/Political Aspects, like safety, political stability, and inclusiveness.
The study emphasizes that cities implementing innovative strategies, such as Structural Innovations (digital nomad visas and tax policies) and Agency-based Innovations (development of co-working spaces, marketing campaigns, and community-building efforts), are more likely to attract this demographic.
In sum, cities attract digital nomads by providing essential amenities such as high-speed internet, reliable public transportation, and a variety of coworking and coliving spaces, all of which are crucial for remote workers. Additionally, smart cities often implement innovative policies and supportive governance that facilitate seamless integration for digital nomads, including streamlined visa processes and favorable tax regimes. The Global Digital Nomad Report highlights top destinations for digital nomads to work and live, using indicators that also consider technology, innovation, and quality of life—key factors that align with the smart cities’ framework.
In our research, we identified the best destinations for digital nomads and highlighted several noteworthy cities that exemplify successful smart city initiatives. Lisbon and Tallinn stand out as prime examples of cities embracing digital nomads (Portugal and Estonia ranked 4th and 17th respectively in the Global Digital Nomad Index). Lisbon, renowned for its D8 Visa, offers a vibrant cultural scene, affordable living costs, and a welcoming community for remote workers. The government has implemented policies that support innovation and provide excellent digital infrastructure. For instance, Lisbon’s use of data-driven approaches in managing traffic and energy showcases its commitment to becoming a smarter, more sustainable city. These initiatives not only improve the quality of life for residents but also make the city more attractive to digital nomads seeking a well-connected and efficiently managed urban environment.
On the picturesque island of Madeira, the Digital Nomad Village in Ponta do Sol offers a unique coliving and coworking experience, making it an attractive destination for digital nomads seeking both productivity and relaxation. The island has significantly improved its digital infrastructure, offering high-speed internet crucial for remote work. Sustainable energy practices are prioritized with the integration of wind and solar power. Madeira’s smart transportation systems provide real-time information, making public transit more efficient. The island also employs smart waste management and water monitoring systems to optimize resource use. E-government services and advanced surveillance enhance public safety and convenience. According to Madeira Start Up, to date, Digital Nomads Madeira Islands has recorded 19,800 registrations from 141 countries, with monthly estimates of 500 to 1,000 digital nomads and remote workers on the islands.
Similarly, Tallinn is a pioneer in digital innovation with its e-residency program and digital nomad visa. By 2023, the e-Residency program had issued over 100,000 e-residencies to individuals from around the world, many of whom are digital nomads. The combined revenue of e-resident companies amounts to 12 billion euros, with over 25,000 companies established by e-residents across diverse sectors. The city provides excellent internet connectivity, a supportive business environment, and a high quality of life, making it a top choice for digital nomads.
Also in Eastern Europe, Romania (5th in Global Digital Nomad Index) the is emerging as an attractive destination for digital nomads due to its unique combination of affordability, vibrant tech scene, and rich cultural heritage. Cluj-Napoca, often referred to as the Silicon Valley of Eastern Europe, stands out in Romania’s smart city initiatives, making it a prime destination for digital nomads. The city’s smart city framework emphasizes smart education with digital classrooms and tech training programs, intelligent transport systems with real-time data management and eco-friendly bike-sharing schemes, and digital governance through e-government services and open data initiatives. Cluj-Napoca also hosts a vibrant tech community, with events like Techsylvania and Cluj TechFest, affordable living costs, and an increasing number of coworking spaces such as ClujHub and Impact Hub.
In Spain, the top ranked in the Global Digital Nomad Index, Barcelona is a pioneer in smart city initiatives, focusing on sustainability, urban mobility, and digital innovation. The city uses IoT sensors to manage traffic, energy usage, and waste management. It also has extensive public Wi-Fi coverage and numerous coworking spaces and a supportive environment for startups and freelancers. Gran Canaria’s Nomad City program also provides excellent facilities for digital nomads, including coworking and coliving spaces. The island offers a pleasant climate year-round and a supportive community for remote workers.
Canada ranked 8th in the Global Digital Nomad Index, making it the only non-European country to feature in the top 10. Toronto is a leader in smart city technology, with projects in digital governance, urban mobility, and sustainability. The city uses open data and IoT solutions to enhance urban living. Diverse and inclusive environment, strong tech ecosystem, excellent public services, and a high standard of living. Additionally, Mexico City (Mexico is ranked 3rd in Latin America in the Global Digital Nomad Index) is becoming increasingly popular among digital nomads due to its rich culture, affordable living costs, and strong digital infrastructure. The city offers numerous coworking spaces and a vibrant lifestyle.
As we suggested in our Global Digital Nomad Report, at Global Citizen Solutions’ Intelligence Unit, we believe the best locations for digital nomads are defined by a combination of public and private initiatives across four key pillars. From a public perspective, at the national level, it is essential to have a friendly immigration policy that welcomes digital nomads, beneficial tax and social security regimes that make living and working abroad financially viable, and access to reliable public healthcare systems to ensure well-being. Locally, cities must implement technology and innovation policies, provide efficient public transportation, and offer diverse leisure options, all within the framework of smart city initiatives and sustainability. On the private side, the industry should cater to digital nomads by offering tailored products and services, such as coliving and coworking spaces, as well as leisure, healthcare, and financial services that meet their unique needs. From the perspective of companies and employees, businesses must embrace flexible working hours, provide career development opportunities, and foster a community environment, regardless of the employee’s location.2We are already seeing a trend of companies replacing the full remote work with hybrid arrangements, however when it comes to international relocation and digital nomadism, hybrid arrangements are not feasible. By addressing these factors, we can identify and promote the most suitable destinations for digital nomads, ensuring they thrive both professionally and personally.
Local government engagement is crucial in developing the necessary tech and innovation frameworks to attract digital nomads. Cities that invest in high-speed internet, coworking spaces, affordable housing, and supportive policies create an environment that not only attracts but also retains digital nomads. It is also important to have national-level regulations that smooth immigration procedures for DNs by creating friendly visa and tax regulations. Additionally, the private sector can contribute to this industry by providing top-notch services for digital migrants that involve a 360-degree approach to their needs and desires when it comes to relocation.
These demonstrate that a combination of smart governance, sustainable development, and community engagement can significantly enhance a city’s appeal to remote workers. As digital nomadism continues to grow, cities that prioritize these elements will likely see substantial economic and cultural benefits, fostering a vibrant and dynamic community of global professionals.