Abstract:

The paper discusses the smart economy as a type of local economy dependence on national economy. The modern national economies are knowledge-based economies with sophisticated knowledge infrastructure. This knowledge structure is shared with local economic entities. The volume and quality of knowledge and institutional framework of national economy determinate the environment for economy of smart cities. Secondly the knowledge is not standard economic commodity, its special attributes result in not diminishing return, insignificant costs of trading and reproduction etc. The knowledge is a positive externality with all typical consequences. At the beginning of 21st century the knowledge-based economy slowly transforms to network economy with qualitatively different impacts to local economic entities of smart cites.