Innovation Loop in the Smart City: Synergies Between Talent, Urban and Economic Environment

Attracting and retaining talent plays a pivotal and transformative role in driving the advancement of smart city initiatives. These initiatives, boosted by talent acquisition and incoming knowledge flow, are crucial in elevating urban innovations and a forward-looking innovative economic environment. The interplay between these factors remains the subject of ongoing scholarly discourse. This study investigates the intricate relationship between urban innovation, innovative economic growth, and talent attraction within smart cities. Focusing on the Italian context —a nation at the forefront of European smart city policies—we employ a spatial panel data approach that encompasses 30 Italian cities over 13 years (2009–2021). Our results indicate the essence of an ‘innovation loop’ that drives and catalyzes contemporary smart cities. The originality of this study lies in its pioneering nature, yielding tangible insights into the intricate relationship between innovation and smart city development. It offers novel implications for various stakeholders, including policymakers, urban planners, and entrepreneurs, supported by empirical evidence.