Smart Cities: The Role of Digital Technologies in Sustainable Urban Development — Opportunities and Challenges

The concept of Smart Cities has become increasingly important in contemporary urban planning and sustainable development. Rapid urbanization, population growth, environmental degradation, traffic congestion, and increasing energy consumption have created significant challenges for modern cities. In this context, digital technologies offer innovative opportunities to improve urban infrastructure, public services, and administrative efficiency. This article examines the role of digital technologies in the development of smart cities, focusing on Artificial Intelligence (AI), the Internet of Things (IoT), Big Data, intelligent transportation systems, and digital governance. It also explores the relationship between technological innovation, environmental sustainability, social inclusion, and urban management. Particular attention is given to Hungary and Central European experiences, with reference to academic research on Budapest and other Hungarian cities. The study adopts a qualitative, literature-based research methodology, drawing on international academic publications and reports from the Organisation for Economic Co-operation and Development (OECD). The findings suggest that successful smart city development requires more than technological modernization. It also depends on effective governance, citizen participation, cybersecurity, institutional cooperation, and long-term environmental planning. The article concludes that an integrated approach combining technological, economic, social, and environmental dimensions is essential for building sustainable and resilient urban environments.