AlUla, Kuwait City, and Manama Rise as Emerging Smart City Contenders
The 2025 edition of the IMD Smart City Index has highlighted the rapid transformation of Middle Eastern cities into global leaders of urban innovation. Among the standout achievers are Dubai and Abu Dhabi, two UAE powerhouses that have secured top positions, reaffirming the country’s commitment to cutting-edge technology, sustainable infrastructure, and enhanced urban resilience.
Dubai and Abu Dhabi continue to defy global expectations, climbing steadily in the Smart City Index rankings. In 2025, Dubai advanced from its 12th place in 2024 to a stronger global position, while Abu Dhabi soared from 10th to an impressive 5th place — a clear indication of the UAE’s progressive urban strategies.
This rise reflects years of dedicated investment in digital governance, artificial intelligence, intelligent mobility systems, and resident-focused initiatives designed to improve quality of life. From autonomous public transport to blockchain-powered government services, both cities are delivering on the UAE’s smart city vision, where digital infrastructure and real-world services work seamlessly together for a smarter, more sustainable future.
Beyond the UAE, new names are rising on the smart city horizon. Saudi Arabia’s AlUla, Kuwait City, and Bahrain’s capital Manama have gained international attention for their ambitious urban transformations. These cities are embracing advanced urban planning principles, tech-driven infrastructure, and sustainability-focused initiatives to boost their livability and competitiveness in the global arena.
Their success highlights a regional trend: even traditionally smaller or less digitally mature cities are now integrating smart solutions, signaling a future where Gulf urban centers stand shoulder to shoulder with long-established global metropolises.
The 2025 Smart City Index introduced a timely and critical theme — housing affordability. This year’s report, titled “The Housing Affordability Challenge: A Growing Concern in Smart Cities”, expanded its reach to 146 cities worldwide, adding six newcomers: AlUla, Astana, Caracas, Kuwait City, Manama, and San Juan.
A core question shaped this year’s rankings:
“Is finding housing with rent equal to or less than 30% of the average monthly salary a problem in your city?”
The results exposed a growing tension between technological progress and the cost of living. Even as cities evolve with cutting-edge infrastructure and services, affordable housing remains out of reach for many residents, affecting both social stability and economic inclusivity.
Beyond local governance and urban design, the 2025 report also delved into global economic pressures — particularly the ripple effects of shifting trade policies. Rising U.S. tariffs on steel and timber are expected to increase construction costs worldwide, creating headwinds for housing development in even the most ambitious smart cities.
Arturo Bris, Director of the IMD World Competitiveness Center, summarized the challenge succinctly:
“While cities are engines of economic growth and attract significant talent, this very success often drives up living costs.”
The growing gap between rising demand and limited affordable housing supply — amplified by gentrification and speculative investment — remains one of the toughest hurdles for modern cities striving to be both smart and equitable.
While many of the world’s top 20 smart cities held onto their positions, the 2025 index brought a few notable changes:
Taipei City slipped from 16th to 23rd, highlighting shifting priorities in urban innovation.
Ljubljana surged from 32nd to 16th, illustrating how smaller European cities are closing the gap through strong environmental and tech policies.
Chinese cities Tianjin and Zhuhai were removed from the index due to insufficient data submissions this year.
These shifts reflect the competitive and evolving nature of smart city development worldwide.
According to the World Cities Council, a city earns the “smart” label when it balances:
Economic Development — job opportunities and housing availability
Technological Integration — digital services and AI-driven infrastructure
Environmental Sustainability — green spaces, clean energy, and climate resilience
Inclusivity — ensuring all residents benefit from the city’s progress
The end goal? To create urban environments where innovation serves people — enhancing their daily lives, not complicating them.
Dubai and Abu Dhabi’s ascent in the 2025 Smart City Index isn’t just a numbers game — it’s proof of visionary leadership, bold investment in digital ecosystems, and a genuine commitment to resident well-being. Simultaneously, emerging contenders like AlUla, Manama, and Kuwait City are reshaping expectations for what defines a modern smart city in the Gulf region.
As smart technologies evolve and cities adapt to global economic and social challenges, the future promises more intelligent, more inclusive, and more affordable urban living — turning the smart city concept from an aspiration into an everyday reality.
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