5. Discussion
The empirical results provide robust evidence that digital infrastructure exerts a significant positive influence on smart city performance, particularly during the early stages of digital adoption. This finding reinforces the prevailing view in the literature that investments in ICT infrastructure—such as broadband connectivity, digital platforms, and smart public services—play a central role in enhancing urban efficiency, governance, and livability [
1,
2,
3]. For cities in the initial phases of digital transformation, targeted expansions in technological capacity can yield disproportionate benefits across multiple domains, including mobility, governance, and service delivery.
Nonetheless, the analysis also identifies a non-linear dynamic with potential of diminishing returns to digitalization at higher levels of digital maturity. This suggests that the marginal impact of further investment in ICT infrastructure declines as cities move beyond foundational digital thresholds. Such dynamics are consistent with the theoretical predictions of threshold-based development models and the inverted-U pattern frequently observed in innovation economics [
8,
13,
14]. In the urban context, this implies that digital infrastructure, while essential, becomes insufficient as a sole driver of performance beyond a certain saturation point. However, this requires more samples to draw conclusions as it may be due to noise.
The experience of Wang Chan Valley (WCV) exemplifies this trajectory. As a flagship innovation zone in Thailand's Eastern Economic Corridor, WCV demonstrated rapid gains in smart service deployment following early investments in 5G networks, sensor grids, and data platforms. These technological upgrades enabled the provision of integrated services such as e-government portals, telehealth systems, and intelligent energy management. However, further progress required not just the expansion of digital hardware, but also the alignment of institutional capacity, human capital, and multi-actor governance mechanisms. Local initiatives—such as resident energy awareness programmes and the establishment of digital training centres—illustrate the necessity of complementing infrastructure with social and institutional development.
Such a transition aligns closely with the Quadruple Helix (QH) model of innovation, which emphasises the co-evolutionary interaction between government, industry, academia, and civil society [
6,
7]. According to this framework, digital infrastructure alone cannot sustain innovation unless embedded within inclusive, participatory, and coordinated governance systems. In WCV, the creation of collaborative platforms, public-private partnerships, and participatory planning mechanisms supports the view that long-term urban transformation is contingent on institutional as much as technological readiness.
A further dimension of significance concerns the potential for innovation zones like WCV to generate spillover effects beyond their immediate geographic boundaries. Although not directly estimated in the panel model, WCV was designed with the strategic intent to act as a regional catalyst for knowledge transfer, workforce development, and innovation-led growth. Evidence from analogous contexts suggests that such externalities—ranging from supply chain stimulation to inter-firm collaboration—can emerge under conditions of spatial connectivity and institutional openness [
9,
10]. However, absent deliberate policy frameworks and cross-jurisdictional governance, smart zones may instead become spatial enclaves, delivering concentrated benefits without broader regional integration.
The institutional and socio-economic constraints frequently encountered in emerging economy contexts must also be acknowledged. Limited fiscal space, regulatory inertia, and skills shortages often undermine the scaling of smart city projects beyond pilot initiatives [
16]. While WCV benefited from substantial public and corporate investment, the replication of such models elsewhere will depend on adaptive governance, decentralised capacity-building, and sustained political support. The risk of deepening digital divides—wherein access to infrastructure and digital services remains uneven—also underscores the importance of civic inclusion as a foundational design principle.
The QH framework thus offers not only a conceptual model but also a practical governance ethos. By facilitating interaction among public institutions, private sector actors, academic organisations, and local communities, this approach provides the structural flexibility needed to translate technological potential into sustainable urban development outcomes.
Our econometric findings are confirmed by interviews with key stakeholders in Thailand's smart city programs. A senior official from the Eastern Economic Corridor Office verified the non-linear relationship we found, explaining that initial digital systems in Wang Chan Valley quickly improved traffic management and energy efficiency, but later additions produced smaller gains. This confirms our results showing diminishing returns at higher digital maturity levels and highlights the shift from technology-focused to governance-focused development in mature smart cities.
A municipal coordinator from the broader EEC region described how neighboring municipalities replicated WCV's approach through knowledge transfer workshops and regional coordination meetings. Cities adopted both digital infrastructure and stakeholder engagement protocols, creating a replication model for other regions. However, both respondents identified capacity gaps that prevent successful scaling: smaller municipalities lack dedicated digital teams, have limited budgets for cross-sector collaboration, and struggle across departments.
This suggests cities should prioritize building governance capacity before major technology investments. Policy recommendations would include establishing regional coordination hubs, creating standardized stakeholder frameworks, and developing tiered implementation strategies that match technology deployment to local institutional capacity.