Tax cuts, access and quality of life shape startup-friendly smart cities

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Equivalent monetary value of indicators (JPY/tsubo/month). Credit: Smart Cities (2026). DOI: 10.3390/smartcities9040057

A research team has developed a quantitative policy evaluation framework for assessing how cities can attract startups while maintaining high living standards. In this study, the team evaluated the startup ecosystem in an air-front smart city using a model that integrates Quality of Life (QOL), Quality of Business (QOB), and accessibility from both digital and physical dimensions, and revealed that policy, accessibility, and QOL are the key determinants.

This research, led by the Urban and Transportation Systems Laboratory, Department of Architecture and Urban Systems, Toyohashi University of Technology, was conducted as part of the JST e-ASIA Joint Research Program, an international collaborative project involving Japan, Thailand, and the Philippines, and the findings are published in Smart Cities.

With the aim of addressing a critical gap in smart city research and startup policy evaluation in cities, the team developed a policy-oriented analytical framework to enable simultaneous assessment of both the business environment and the living environment. This provides policymakers with useful insights and tools for startup attraction and policy evaluation.

This study addresses a critical gap in smart city research and urban startup policy evaluation by moving beyond technology-centered approaches and developing a policy-oriented analytical framework that simultaneously evaluates business environments and living conditions. The study provides policymakers with insights into startup attraction and policy evaluation tools.

Result of QOL and QOB estimation in Aichi, Singapore, and Munich. Credit: Smart Cities (2026). DOI: 10.3390/smartcities9040057

The key findings of the study are as follows:

  1. Factors attracting startups: Corporate tax reduction policies have the greatest impact on the attractiveness of a location for startups and contribute to companies' location selection and relocation decisions.
  2. Structural foundation of smart cities: Accessibility through transportation and international aviation networks brings broad benefits not only to startups but also to business partners and residents.
  3. The role of digital services: While digital services enhance convenience and efficiency, they alone are insufficient and serve a complementary role to structural factors such as fiscal policy.
  4. Factors for startup location selection: Within the startup ecosystem, QOL factors such as safety, environmental quality, and daily life amenities have a significant influence on startup location choices.
  5. Need for an integrated approach: An integrated policy package that combines multiple measures will produce a higher effect than a single policy.
  6. International urban characteristics comparison: A comparative analysis of Aichi, Singapore, and Munich revealed that QOB is highest in Singapore, followed by Munich and then Aichi, while QOL is higher in Aichi than in the other two cities.

Dr. Mustafa Mutahari, the lead researcher of this study, stated, "Startup-related policies in smart cities should not be driven by technology alone. Our findings show that startups respond to a complex system in which institutional and regulatory conditions, accessibility, and QOL are closely interrelated. The most effective cities are those that strategically integrate these elements, balancing economic competitiveness with human well-being, rather than prioritizing one over the others."

The research team plans to develop a decision-support tool for policymakers that enables scenario simulation, policy evaluation, and optimization of the startup ecosystem, and aims to apply it to actual cities. This research seeks to contribute to the development of human-centered and sustainable smart cities, supporting policy design that integrates economic growth, quality of life, and environmental sustainability.

More information

Mustafa Mutahari et al, Startup-Driven Air-Front Smart City Policy Evaluation Using Integrated Accessibility Index: A Case Study of Aichi, Singapore, and Munich, Smart Cities (2026). DOI: 10.3390/smartcities9040057

Provided by Toyohashi University of Technology