Evaluation of Smart City Masterplan Investment Using Information Economics and Alignment with Sustainable Development Goals: A Case Study on Local Government

¹ Department of Information Systems, Faculty of Engineering, Universitas Negeri Surabaya, 60231 Surabaya, Indonesia
² Department of Information Technology Education, Faculty of Engineering, Universitas Negeri Surabaya, 60231 Surabaya, Indonesia
³ Department of Computer and Systems Sciences, Stockholm University, 10691 Stockholm, Sweden
⁴ Department of Information Systems, Faculty of Industrial Engineering, Telkom University, 40257 Bandung, Indonesia

^* Corresponding author: This email address is being protected from spambots. You need JavaScript enabled to view it.

Abstract

Urbanization and technological advancement have driven local governments to adopt Smart City masterplan as strategic responses to complex urban challenges. This study investigates the evaluation of feasibility of Smart City masterplan investments initiated by local governments in Indonesia through the application of the Information Economics (IE) method, while concurrently examining their alignment with SDG 11: Sustainable Cities and Communities. Using a mix methods case study methodology, the research integrates document analysis, interviews, and focus group discussions with local government X. The result of the evaluation using the Information Economics method with a score 76, indicating that the Smart City masterplan is feasible for implementation. This demonstrates that the project’s strategic and operational values significantly outweigh the identified risks. The project aligns with local government policies, driving competitive advantage, and supports data-driven decision-making with adequate technological infrastructure. The mapping of IE dimensions to SDG 11 shows direct relevance, especially to targets 11.3, 11.6, and 11.b, affirming the role of digital infrastructure in fostering inclusive, resilient, and sustainable urban development. Overall, the study concludes that the Smart City masterplan is both economically feasible and strategically aligned with sustainability goals, providing a robust framework for digital investment evaluation.