Smart cities, social goods and demand side outcomes in a regional policy perspective

In our lifetime the greater share of the world GDP is created within the boundaries of large towns and metropolitan areas. This share will very likely increase in the future through a particularly dynamic and competitive processes. Although variety in spatial location is a common feature for economic development, this implies that the main challenge for local and global development will be played in this kind of spatial setting, which turned out to be more able in fostering internationalization processes and more capable in breeding and attracting investments in human, real and financial capital. For this reason, especially countries whose spatial location of economic activities has traditionally taken place following decentralized patterns have to take stock of their historical production paths and adapt them to the new and less new global trends. What is more, we leave in a world strongly affected by the global crisis from which we are still suffering and, also before the crisis, repeated evidences where keeping showing that profound changes in the economic and social structure should take place in order to satisfy minimal requirements of economic, environmental and social sustainability. The creeping perception that negative congestion, pollution and other externalities can transform services in disservices and goods in bads has grown more and more together with the evidence on high social costs imposed by the assortment of market and government failures. In parallel to the materialization of new preferences, feed also by the unboundling of supply chains in markets and societies, this has encouraged the search for new ways to increasing prosperity while reducing its dependence on natural and environmental resources and energy. In the meantime also the fundamentally social and economic origins of many environmental issues is being recognized and, in this perspective, suggestions have emerged to pay attention to the principles of the circular economy and sharing economy. In order to cope with a so quick structural and social change strategic actions are required by well equipped (smart) governments, firms and households. Therefore, the capability of a country or region of taking stock of its ‘deviant’ production paths, which in certain instances has been persistent over centuries , depends heavily on their ability to mobilize both the demand and the supply potential of its economy and society in support of the new strategies.