A new ranking of AI-enabled urban development

London has been placed first in Boston Consulting Group’s inaugural Intelligent Cities Index, ahead of Dubai, New York City, Washington, DC, and Amsterdam. Published on July 27, 2026, the index examines 61 large cities in 39 countries and frames the competition less as a race for the most advanced technology than as a test of whether cities can convert digital capability into tangible benefits for residents and businesses.

That distinction is central to the report’s findings. BCG does not identify one city that excels in every part of intelligent-city development. Instead, its leaders occupy different positions: London leads in resident outcomes; Madrid in strategy; Dubai in adoption; New York City in ways of working; and Amsterdam in enabling conditions. The result is a more nuanced message than a conventional league table: urban AI leadership can be built through several routes, but technology alone is not enough.

What the index measures

The index assesses cities across five domains: outcomes, strategy, adoption, ways of working and enablers. Outcomes cover areas including quality of life, economic opportunity, social capital and engagement with government. Strategy considers the scope, specificity and currency of a city’s plans. Adoption looks at the use of AI and smart-city services, including digital public-service platforms and resident satisfaction.

The remaining two categories address the capacity to sustain progress. “Ways of working” includes institutional readiness for AI and public-private partnerships. “Enablers” span digital infrastructure, data, access to technology, talent, funding, startup ecosystems and real-world testing environments.

BCG says it selected cities partly on economic weight and intelligent-city relevance, then used 35 qualitative and quantitative indicators across 14 dimensions. It normalised six core indicators and grouped final results into four maturity levels: leading, accelerating, emerging and developing.

This breadth is a strength, because it moves beyond counting apps, sensors or internet connections. It also means that the ranking should be read as a structured assessment of city maturity rather than a definitive measure of urban wellbeing. Decisions about which cities enter the sample, which indicators receive more weight and how diverse urban systems are compared inevitably shape the result.

Why London came first

London’s leading position rests especially on resident outcomes. BCG found that the city scored highest for quality of life and economic opportunities associated with its use of technology. The ranking therefore rewards an ability to link digital systems to broader city experience, not merely the visibility of high-profile AI projects.

London’s position also illustrates the index’s preference for balance. A major global city can draw on extensive institutional capacity, a deep technology and finance ecosystem, established digital services and a large base of potential users. Yet BCG’s framework does not treat these advantages as sufficient in themselves. The city’s overall score depends on translating them into services and opportunities that residents can recognise and use.

Dubai, in second place overall, shows a different route. It leads the adoption category, with BCG highlighting high use of smart-city services and AI-enabled applications. The report groups Dubai with cities such as Mumbai, Manchester and Boston as places rolling out relatively large numbers of smart-city use cases. Its standing suggests that visible deployment and high uptake can be powerful drivers of maturity, provided they are supported by governance and longer-term capability.

Different strengths, different development paths

The domain leaders make the case against copying a single “smart city” template. Madrid’s strength in strategy reflects detailed, wide-ranging planning. Amsterdam’s lead in enablers reflects the combination of a startup ecosystem, venture funding and living labs—settings where technologies can be tested with users and stakeholders in real conditions.

New York City’s leadership in ways of working brings governance into focus. AI readiness, accountable institutions and partnerships can determine whether promising pilots become reliable public services. BCG’s analysis warns that readiness does not automatically translate into implementation: some well-prepared cities still deploy slowly, while others achieve meaningful results with less developed institutional foundations.

The report’s broader argument is that cities may be either “balanced builders”, progressing across several domains, or “focused specialists”, making rapid gains in a smaller number of areas. For city leaders with limited budgets, this is a useful corrective to the assumption that world-class infrastructure must come first. Expanding a useful digital service, improving a government platform or establishing clearer accountability can create momentum before a city has developed a mature innovation ecosystem.

Adoption matters, but trust and inclusion matter too

BCG finds that cities in the top third for AI adoption tend to show better resident outcomes, and that frequent smart-city app use is associated with greater satisfaction. It also reports particularly strong enthusiasm for generative AI in cities across Africa, Asia and the Middle East.

These are associations, not proof that deploying more AI directly causes better lives. Adoption may be higher where residents already have stronger digital access, younger populations, better services or greater confidence in institutions. The more important policy question is whether an AI system improves a real public task—such as navigating transport, accessing benefits, reporting a problem or receiving timely information—without excluding residents who lack devices, skills or trust in digital channels.

The OECD has made a similar point at government level: digital transformation must move beyond isolated projects and be embedded in everyday operations, guided by user needs, data governance and measurable outcomes. For cities, that means the quality of service design and accountability is as important as the sophistication of the underlying model.

How to read city rankings

The BCG index arrives in a crowded field of smart-city measurements. Its approach differs from the IMD Smart City Index, for example, which ranks 148 cities primarily through resident perceptions of infrastructure and technology across areas such as health, mobility, opportunities and governance. Different methodologies can therefore produce different rankings without necessarily being contradictory.

BCG’s contribution is its attempt to connect AI use, institutional capability, ecosystems and outcomes in a single framework. Its most valuable finding is not simply that London ranks first. It is that cities need an explicit theory of public value: which problems technology should solve, how services will be governed, who can use them, and how progress will be measured.

For residents, an intelligent city should not be defined by an invisible algorithm or a well-funded innovation district. It should be evident in public services that are easier to access, more responsive and fairer in practice. The real test for London and every city below it in the ranking will be whether the next generation of AI systems meets that standard.

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