THE FUTURE OF SMART CITY AND THE ROLE OF AI IN CREATINGINNOVATIVE AND SUSTAINABLE BUSINESS ECOSYSTEMS

Abstract

This article analyzes the strategic role of Artificial Intelligence (AI) beyond operational efficiency, focusing on its function as an architect and catalyst in shaping an innovative and sustainable business
ecosystem in the context of smart cities. Using a mixed-methods approach in North Sumatra Province integrating a quantitative survey (N=228) and an in-depth qualitative case study, this study found a significant gap between the high perceived importance of AI (89%) and the low actual implementation rate (34%). Empirically, the findings suggest AI serves as an ecosystem catalyst by creating a new mobility data market in Medan, a feedback mechanism for sustainable tourism in Lake Toba, and stimulating Agri-Tech industry symbiosis in Sei Mangkei SEZ. This study contributes by providing
practical evidence on the architectural role of AI and offers strategic implications for stakeholders in building AI-based economic ecosystems