Sustainable Technology and Entrepreneurship 1 (2022) 100016

Sustainable Technology and

Entrepreneurship
h t tp s : // w w w .j ou r na l s . el s e v ie r . c o m /s us t ai na bl e - te c h no lo gy - a nd -e n tr ep r e ne ur s hi p

Full Length Article

Urban entrepreneurship and sustainable businesses in smart cities:

Exploring the role of digital technologies
Leo-Paul Danaa,*, Aidin Salamzadehb, Morteza Hadizadehc, Ghazaleh Heydarid,
Soroush Shamsoddine
a
Dalhousie University, Canada and IDRAC Business School, France
b
University of Tehran, Iran
c
Faculty of Management and Accounting, Shahid Beheshti University, Tehran, 1983969411, Iran
d
Faculty of Art and Architecture, University of Guilan, Guilan, 4199613776, Iran
e
Faculty of Management, University of Tehran, Tehran, 141556311, Iran

A R T I C L E I N F O A B S T R A C T

Article History: The entrance of sustainable and digital technologies into urban entrepreneurship is a new approach that pro-
Received 1 March 2022 vides a fertile ground for innovation in businesses. Hence, businesses use new models and methods of entre-
Accepted 9 May 2022 preneurship in the context of smart cities to increase their capability and become more sustainable, which
Keywords: leads to their development and expansion. This research aims to investigate the effects of urban entre-
Urban entrepreneur preneurship on sustainable businesses in smart cities considering the role of digital technologies. The statisti-
Sustainable business cal population of this study is all active technology-based firms located in Tehran in 2022. Then, according to
Smart city Cochran’s formula, 315 firms were selected randomly as the sample. This research is an applied and descrip-
Sustainable technology tive-survey research and is quantitative in terms of the type of collected data. The data were analysed using
Smart business Smart PLS 3 software, structural equation modelling (SEM), and the partial least squares methods. As a result,
research findings show that urban entrepreneurship creates and develops the studied firms in both quantita-
tive and qualitative aspects by using and benefiting from digital technologies considering the new needs of
cities and achieving business sustainability in smart cities.
© 2022 The Author(s). Published by Elsevier España, S.L.U. on behalf of Sustainable Technology and Entre-
preneurship. This is an open access article under the CC BY-NC-ND license
(http://creativecommons.org/licenses/by-nc-nd/4.0/)

Introduction (Paskaleva et al., 2017). Cities worldwide pursue the goal of becoming
smarter as a part of their strategic and innovative urban plans based
Given the sustainable development goals (SDGs) defined in the on addressing existing urban issues and threats (Chong et al., 2018).
2030 UN Agenda, sustainability studies have increasingly received Besides, researchers have argued that smart cities can initiate,
attention from the scientific and political communities and regional strengthen and activate innovation, provide solutions to urban prob-
decision-makers, which confirms that firms need to redefine new lems and meet the growing needs of citizens (Bakici et al., 2013).
urban needs (Wolifson & Drozdzewski, 2017) (Mu et al., 2022). Based Smart cities revolve at the centre of entrepreneurship and innova-
on this, and considering the importance of entrepreneurship, it is tion (Guzman & Stern, 2020). Also, realising the socio-economic and
possible to provide people’s latent capacities to turn ideas into action institutional dimensions of entrepreneurial ecosystems will pave the
and use entrepreneurship to identify opportunities with economic, way for the emergence of smart cities (Audretsch et al., 2015). Smart
social and environmental value creation potentials (Belz & cities generate millions of transactions and much information. This
Binder, 2014). Under these circumstances, entrepreneurship plays a generated data creates added value for governments and firms,
vital role in the emergence of sustainable firms in cities, and it is asso- encourages firms to use data-driven methods to improve their qual-
ciated with new models of making businesses smart (Audretsch & ity and efficiency in smart cities, and increases business interaction
Fritsch, 2002). The city is a dynamic concept, and today’s cities are and sustainability (Ji et al., 2021). Citizens, as individual entrepre-
rapidly expanding in various dimensions. Urbanisation and digitalisa- neurs, play an essential role in the development of smart cities by
tion concepts are at the forefront of these urban transformations exploiting new technologies. Therefore, new cities could be a suitable
environment for sustainable firms that rely on digital technologies
(Kummitha, 2018) (Szerb et al., 2013), which will realise the applica-
* Corresponding author.
tion of new forms of urban entrepreneurship (Barba-S
anchez et al.,
E-mail address: [email protected] (L.-P. Dana).

https://doi.org/10.1016/j.stae.2022.100016
2773-0328/© 2022 The Author(s). Published by Elsevier España, S.L.U. on behalf of Sustainable Technology and Entrepreneurship. This is an open access article under the CC BY-NC-
ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
L.-P. Dana, A. Salamzadeh, M. Hadizadeh et al. Sustainable Technology and Entrepreneurship 1 (2022) 100016

2019). Besides, smart cities that are shaped based on a network of perspectives and social innovations to improve the public sector in
information and communication technologies help in the city’s social, developing countries (Ramadani, Anggadwita, Welsh, & Perm, 2020).
cultural, and urban development and open new market opportunities Then, entrepreneurship and innovation can be defined as synonyms
for entrepreneurs (Kummitha R. K., 2019). A smart city is an innova- (Ge€rguri
Rashiti, 2017). Today, the transformation of urban gover-
tive urban ecosystem in which knowledge is easily supported by nance processes has been optimised using digital technologies and
measured interaction and collaboration between different stakehold- the transformation of cities into digital geography, contributing to
ers to create wealth and by a flexible institutional structure and an capital accumulation for urban transformation. The shift to smart cit-
integrated participatory governance model (Camboim et al., 2019). ies, emphasising digital technology-based solutions, services, and
It is noteworthy that Tehran is Iran’s capital, the largest city, and infrastructure, has reinforced a dominant ideology that shapes new
the country’s centre of economic and technological growth. Iran is a urban decision-making, frameworks, and outcomes (Ziyae et al.,
country located in the Middle East. Its economy is the second-largest 2021). The adoption of the smart city agenda by urban administra-
economy in the region. Seven reasons reveal how Iran is becoming tions, in turn, is perceived as a technology-driven type of urban
an entrepreneurial location in the region: (i) the size of the economy entrepreneurship (Harvey, 1989) (Hollands, 2008), and it has made
and the lifting of global sanctions, (ii) a highly educated population, the definition of entrepreneurial ecosystems more prominent in gov-
(iii) extraordinary developments in terms of technology, (iv) close ernments. The entrepreneurship ecosystem is a social and economic
relationships between the entrepreneurial communities in Iran and environment that affects local or regional entrepreneurship and
other countries, (v) the modernised infrastructure of the country, (vi) expands its concept in different ways, using various governance
thriving pace of changes in the urban areas of the country, and (vii) mechanisms (Roundy et al., 2017). Managing these systems benefits
the developed start-up ecosystem, especially in urban areas from the broader and more efficient use of digital technology and
(Rezaei, Dana, & Ramadani, 2017; Salamzadeh & Dana, 2021; technological tools. In addition, it helps to strengthen the entrepre-
Dana, Tajpour, Salamzadeh, Hosseini, & Zolfaghari, 2021). neurial orientation of an ecosystem and find innovative new business
According to the extant literature, introducing sustainable and models (Bouncken & Kraus, 2021). Successful local economies are
digital technologies in urban entrepreneurship forms new business constantly evolving and transforming their knowledge base and tech-
models. These innovations ensure the sustainability of firms in smart nology frontiers to maintain their competitiveness over time (Buciuni
cities. Accordingly, it is essential to study the urban entrepreneurship & Pisano, 2018). In this regard, two beneficial dimensions in the ide-
and sustainable firm development models based on digital and sus- ology of urban governance technology to transform urban processes
tainable technologies in smart cities. This study is organised as fol- are (i) the priority of attracting industries with advanced technology
lows; After examining and recognising sustainable entrepreneurship as engines of urban economy and (ii) the tendency to map urban
and business models, structural equations in creating stability problems into technological problems. Both of these cases are consid-
between agents have been developed. The importance of sustainable ered technological solutions. Together, these mechanisms operate in
and digital technologies in the field has been explored, and a set of relation to technological needs, capacities, and priorities in urban
executive suggestions have been developed. Hence, this study aims governance and largely contribute to people and problems beyond
to achieve sustainability in technology businesses in Tehran by exam- the realm of technology. These changes exacerbate the ongoing
ining the role of sustainable technologies. transformation of cities (and places in general) into digitised spaces
for capital accumulation in the context of digital and regulatory capi-
Review of the literature talism (Leo
n & Rosen, 2020). Accordingly, data plans have been rede-
signed to give entrepreneurs and businesses greater access to
Urban entrepreneurship information about the local government area, cost decisions, govern-
ment services, transportation, crime, and other location-specific data
Cities play a pivotal role in the strategic sustainable development held by city officials (Barns, 2016).
of the regions and countries. This is clearly reflected in the Sustain-
able Development Goals (SDGs) of the United Nations 2030 Agenda Digital technologies
for Sustainable Development, which, for example, emphasises the
need to make cities more sustainable and resilient. As an effective Today, in developing countries, firms are recognised as the back-
and entrepreneurial concept, sustainable developments are recog- bone of the economy because they play a significant role in employ-
nised as the main channel of sustainable products and processes ment, economic growth, and the mobilisation of innovation and
(Hall et al., 2010). Besides, “Urban Entrepreneurship”, “The Entrepre- creativity. Nevertheless, most of these firms have little viability, espe-
neurial City”, and “Entrepreneurial Governance” were highlighted in cially in the early stages of their life cycle (Siddiquie, 2018), and face a
the 1980s by David Harvey (Peck, 2014). Due to the high concentra- rapidly changing world. The increasing use of digital technologies
tion of people in urban areas, individuals who act entrepreneurially and reliance on them has brought about significant changes in busi-
in such areas can be called “urban entrepreneurs” (Ziyae et al., 2021). ness and society. It is noteworthy that the concept of digital transfor-
Hence, entrepreneurship includes the activities of the individuals mation was introduced in 2000. There has been a substantial focus
associated with creating new organisations (Ge €rguri
Rashiti, 2017). on enterprise information systems in recent years. This special atten-
Urban entrepreneurship provides a fertile ground for solving unem- tion arises from the need to better integrate new technologies (both
ployment and its problems for cities. Thus, recent discussions of eco- hardware and software) with the business processes. Business pro-
nomic geography have increasingly focused on urban creativity and cesses are more dependent on technology than anything else because
the importance of creativity in achieving economic growth (Yu et al., technology directly impacts business processes and changes the way
2020) (Crittenden et al., 2019). they are done, thus influencing how software systems are designed
Smart city governance is primarily related to the entrepreneurial by analysts (Martinez et al., 2017). Information technology is recog-
form of urban governance (Grossi & Pianezzi, 2017). Also, successful nised as a critical factor in competing to implement a strategic plan
smart city governance is closely related to our understanding and use and supporting core competencies (Oh & Pinsonneault, 2007). Thus,
of technology throughout the city. Meaning that the use of technol- managers have significantly increased their investment in IT over
ogy to strengthen urban governance in the realm of smart cities can time (Devaraj & Kohli, 2003) because digital technologies accelerate
only be increased by studying the interaction between urban tech- business model innovation by creating value and attracting and uti-
nology innovations and governance processes in specific urban con- lising resources, and reforming the principles of the economic cycle
texts (Meijer, 2016). In other words, one could apply new in the industry (Ranta et al., 2021).
2
L.-P. Dana, A. Salamzadeh, M. Hadizadeh et al. Sustainable Technology and Entrepreneurship 1 (2022) 100016

In industrial firms, digital technologies are considered a part of increases the sustainability of an economy through the development
the fourth industrial revolution called Industry 4.0 or Industrial Inter- of new technologies and innovations. Therefore, it can be concluded
net (Lieder & Rashid, 2016). These terms refer to the industrial trans- that the role of various technologies in the development of smart cit-
formation in which data collection and storage transform products ies is critical to establishing a comprehensive environment that is
into value-creating systems (Rajala et al., 2018) that are connected transparent, automated, inclusive, scalable, secure, flexible and easily
networks of people, products and systems (Kang et al., 2016). The use manageable (Ahad et al., 2020). The concept of “smart city” creates
of new technologies could guarantee the survival of businesses. With new horizons for cities to offer their challenging services in an
the advent of new technologies in production and communications, informed and competitive environment; thus, they promote creativ-
there have been changes in the methods of production, distribution, ity, innovation, and smart and sustainable solutions that are pro-
and the organisational structure of the firms (Alderete, 2019; moted through service platforms (Anttiroiko et al., 2013). In fact, in
Dana, Salamzadeh, Mortazavi, & Hadizadeh, Investigating the Impact smart cities, increasing economic growth and social development are
of International Markets and New Digital Technologies on Business pursued through technological innovation (Sarma & Sunny, 2017)
Innovation in Emerging Markets, 2022). For example, the develop- and with the constant change in technology and society, smart cities
ment of digital technologies has led to an increase in online consumer offer ideas for urban construction and future development paths
reviews (OCRs), which means real-time customer evaluations of (Jiang et al., 2020). In interacting with the smart city, businesses must
products, services, and brands. E-commerce platforms are increas- change the way values are created, presented and absorbed in envi-
ingly using these OCRs to gain insight into customer feedback, which ronmental, social and economic perspectives (Shakeel et al., 2020).
ensures both the survival and development of businesses (Mariani & Thus, participation in sustainable development processes can
Wamba, 2020). improve business performance and create shared-value concepts
Spreading and deploying innovation-based technologies, pro- (Morioka et al., 2022). In order to move towards a sustainable busi-
cesses, and models increasingly serve as the backbone of innovative ness model, innovative activities are essential to creating sustainable
entrepreneurial firms (Etemad, Wilkinson, & Dana, 2010). Digital values (Goni et al., 2021).
technologies enable companies to improve resource flow, value crea- Sustainable business model innovation can create a new business
tion and capital attraction in real environments, thus enabling busi- model, update an old business model, or configure and integrate mul-
ness model innovation. Advances in digital technology would allow tiple business models. As a result, innovation presents a different
companies to optimise and improve their processes, for example, value proposition to consumers and forms a new value framework
through efficient inventory management and material processing that supports the organisation’s sustainable development (He &
(Dana, Salamzadeh, Mortazavi, Hadizadeh, & Zolfaghari, 2021). In Ortiz, 2021). Thus, all members of the smart city structure are poten-
addition, digital technologies enable firms to innovate the way sup- tial developers of services and drivers of innovation (Díaz-Díaz et al.,
pliers and customers communicate. For example, it could be done by 2017). As a result, smart cities are centres of technology, centres of
increasing customer knowledge and tracking materials (Ranta et al., human capital, and an organic combination of the two (Papa et al.,
2021). Some researchers categorise digital technologies based on per- 2013).
formance into data collection, data integration, and data analysis. With the advent of smart cities, smart technologies, including big
Data collection technologies include sensors (for example, radio fre- data and the Internet of Things, which optimise the business environ-
quency identification, RFID) and devices that connect products and ment in the context of smart cities, were emphasised. As a result, the
users to the Internet (such as the Internet of Things, IoT). Data inte- business environment is an important embodiment of the soft eco-
gration technologies store and format data and enable the use of data nomic power of a country or region and international competition.
analysis technologies that generate and develop information Creating a good business environment is essential for building a mod-
(Pagoropoulos et al., 2017). ern economic system and promoting high-quality development.
(Jiang et al., 2020). In other words, the smartening approach in sus-
Sustainable businesses in smart cities tainable urban development is strongly related to innovation, tech-
nology and economic entrepreneurship; As a result, smart city
Today, there is a growing need to develop new ways of looking at strategies are significantly driven to urban development by an
the city of the future and thinking of structured approaches to answer entrepreneurial approach (Haarstad, 2016). Integrating economic
the diverse and complex questions that cities face (Meijer et al., and entrepreneurial strategies and business models with IT services,
2016). The smart city concept is created from the convergence of the processes, and platforms can facilitate innovation in contemporary
two concepts of technology and the city. This concept effectively digital technologies (Turetken et al., 2019). Firms also invest in smart
addresses the challenges facing urbanisation in the present age and is platforms using innovative technologies (Ramadani, Amir, & Saiti-
an effective solution to achieving a sustainable urban future Demiri, 2014). With increasing technological advances and commu-
(Yigitcanlar et al., 2018). Smart cities are multidimensional systems nity acceptance, new business models are rapidly feeding on techno-
(Albino et al., 2015) made up of various infrastructures and services. logical advances. The digitalisation of businesses in the context of
In fact, the smart city is more than just a network of objects con- smart cities as a tool for innovation in entrepreneurial ecosystems
nected to the Internet; it can bring technology, government and soci- can have a potentially positive impact (Valter et al., 2020). These new
ety together (Bruneo et al., 2019). business models are, in fact, a decision-making method and economic
Generally, the smart city includes combining the three elements planning tool that can help urban management in complex decision-
of smart people, smart technology and smart collaboration. In this making processes in smart cities. Thereby, urban management organ-
sense, the level of “intelligence” of a city is to the extent that it can ises its services in a way that is economically viable, socially inclusive,
attract and mobilise human capital through the use of information and environmentally sustainable (Timeus et al., 2020) Table 1.
and communication technologies (Meijer & Bolívar-Rodríguez, 2016). A literature review conducted in the field of business sustainabil-
In other words, smart cities are shaped mainly based on their human, ity in smart cities has formed the conceptual framework of the
social and information capital, and they use information technology research and indicates that in creating business sustainability in
and big data sources, all of which are highly effective in increasing smart cities, there is a possibility of a significant direct relationship
efficiency and urban economic development (De Guimar~ aes et al., between the components of urban entrepreneurship and also digital
2020). Information and communication technologies in the economic technologies can be defined by the mediating relationship. Identify-
processes move toward strengthening the economy through technol- ing the contribution of each component and item in shaping the sus-
ogy improvement and innovation (Ge €rguri
Rashiti, 2017). It tainability of businesses in smart cities can help market stakeholders,
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L.-P. Dana, A. Salamzadeh, M. Hadizadeh et al. Sustainable Technology and Entrepreneurship 1 (2022) 100016

Table 1
literature review table

Reference Research Title Findings

Gregori & Holzmann, 2020 Digital sustainable entrepreneurship: A business model perspec- Digital technologies enable new configurations of components of
tive on embedding digital technologies for social and environ- a sustainable business model. Urban entrepreneurship can use
mental value creation digital technologies to develop sustainable values.
Elia, Margherita, & Passiante, 2020 Digital entrepreneurship ecosystem: How digital technologies and Digital technologies significantly impact how new business ven-
collective intelligence are reshaping the entrepreneurial tures are conceived and created. The emerging technology par-
process adigm uses the potential for collaboration and collective
intelligence to design and launch stronger and more sustainable
entrepreneurial initiatives. Thus, a new paradigm of digital
entrepreneurship has emerged.
Bican & Brem, 2020 Digital Business Model, Digital Transformation, Digital Entre- Digitalisation plays an important role in helping the United
preneurship: Is There A Sustainable “Digital”? Nations Sustainable Development Goals. Digital transformation
encompasses all relationships in the digital context, so digital
business models in a digital transformation process provide
sustainability.
Satalkina & Steiner, 2020 Digital Entrepreneurship and its Role in Innovation Systems: A Digital entrepreneurship is a fundamental driver in modern busi-
Systematic Literature Review as a Basis for Future Research ness systems that influences the entire business system's struc-
Avenues for Sustainable Transitions ture, goals, and networking mechanisms. Digital technologies
provide new business opportunities by making inevitable
changes in modern entrepreneurial systems.
Ziyae et al., 2021 A framework of urban entrepreneurship for women breadwinners The main dimensions of the urban entrepreneurship model are
causal factors, intervening factors and contextual conditions.
Urban entrepreneurship promotes cultural, social and economic
development through policy-making and training programs,
women’s empowerment courses, identifying opportunities, for-
mulating support criteria, and creating support units for
development.
Kummitha, 2019 Smart cities and entrepreneurship: An agenda for future research Entrepreneurship plays a very important role in promoting and
expanding digital technologies. With the development and
expansion of technology in urban infrastructure, huge amounts
of data are collected that are useful for use as a product line
upgrade. Therefore, the smart city is an entrepreneurial city.
Gorelova et al., 2021 Antecedents and Consequences of Digital Entrepreneurial Ecosys- The nature of entrepreneurship and its development paths in the
tems in the Interaction Process with Smart City Development urban environment is important. Today, the concept of digital
entrepreneurship is considered as part of the digital entre-
preneurship ecosystem (DEE), which provides an environment
for effective entrepreneurial activities.
Vidmar et al., 2021 Information Technology for Business Sustainability: A Literature Information technology can be used to achieve sustainability
Review with Automated Content Analysis goals. The results indicate that positive economic, social and
environmental changes can be achieved through the use of
information technology, because IT, in combination with the
goals of sustainability, offers a wide range of opportunities for
positive change.
Al-Baghdadi et al., 2021 Sustainable Business Model and Corporate Performance: The This study concludes that new business models provide innova-
Mediating Role of Sustainable Orientation and Management tions to gain sustainability, and by that, the key goals can be
Accounting Control in the United Arab Emirates achieved.
Choongo, 2019 The Evolution of Urban Entrepreneurship in Zambia Evolving urban entrepreneurship in different parts of cities should
be able to provide overall satisfaction and comfort to entrepre-
neurs by establishing businesses in the vicinity of their homes.
Khan et al., 2021 Digital technology and circular economy practices: A strategy to Advanced technologies are changing the economics of common
improve organisational performance business models. Thus, simultaneous achievement of financial
and sustainable goals through the integration of digital technol-
ogies in businesses improves the economic performance of
effective business models.

strategists and researchers in analysing the conditions and require- entrepreneurship in the present and in the future, and also the
ments for the development and sustainability of markets. Further- impact of sustainability of markets created in smart cities, no rela-
more, by reviewing the literature in order to identify the theoretical tionship between these two components with the mediating impact
gap, it was found that due to the importance of urban of digital technologies has been seen. Therefore, the present study
seeks to investigate the impact of urban entrepreneurship on sustain-
able businesses in the smart city by considering the role of digital
technologies. Fig. 1

Methodology and findings

Sampling and data collection techniques

This research is applied in terms of aim and according to the type

of collected data is quantitative and based on data collection method
is descriptive-survey. The present study examines the impact of
urban entrepreneurship on sustainable businesses in the smart city
Fig. 1. Research framework based on research literature by considering the role of digital technologies. Initially, the required
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L.-P. Dana, A. Salamzadeh, M. Hadizadeh et al. Sustainable Technology and Entrepreneurship 1 (2022) 100016

data was collected through library methods and documentary and Research hypotheses
survey studies (questionnaires). Then, the structural equation model
method with the Partial Least Squares method using Smart PLS3 soft- In the light of the research discussed above, our core model was
ware was used to analyse the data. The hypotheses were developed developed by categorising urban entrepreneurship, digital technolo-
based on an inductive approach, which is achieved with the help of gies, and business sustainability in the smart city. Therefore, the
qualitative methods. The use of inductive and non-quantitative hypotheses of the present study are as follows:
research is also helpful in adopting strategies used for research on
small businesses and entrepreneurship (Dana & Dana, 2005). Hypothesis 1 (H1): Urban entrepreneurship has a positive relation-
The urban entrepreneurship variable as an independent variable ship with sustainable businesses in the smart city.
was measured using the standard questionnaire of Choongo et al. Hypothesis 2 (H2): Urban entrepreneurship has a positive relation-
(2020) (Choongo et al., 2020) with seven questions. Digital technolo- ship with sustainable technologies.
gies variable as a mediator variable was measured based on the stan- Hypothesis 3 (H3): Sustainable technologies have a positive relation-
dard questionnaire of Khan et al. (2021) (Khan et al., 2021) with five ship with sustainable businesses in the smart city.
questions. Also, sustainable businesses in the smart city as a dependent Hypothesis 4 (H4): Urban entrepreneurship has an indirect impact
variable were measured by the standard questionnaire of (Al- on sustainable businesses in the smart city through the mediator
Baghdadi et al., 2021) and the standard questionnaire of variable of sustainable technologies.
(Kusumastuti et al., 2022) with six questions.
Selecting the appropriate respondents is essential for obtaining
accurate data to test the specific relationships between all relevant Data analysis
variables of the research model. Accordingly, the statistical popula-
tion of the research includes all creative and innovative companies in This study uses the partial least squares structural equation model
Iran, which according to the official statistics available on the website (PLS-SEM) to predict and evaluate measurement and structural mod-
of the Vice Presidency for Science and Technology of Iran in 2022, els (Henseler, Ringle, & Sarstedt, 2015). To evaluate the reliability of
they are 1442 companies. To access the statistical sample, in 2022, the questionnaire, the criteria of the partial least squares method
the researcher collected the data electronically through an online were used. In this method, reliability is measured by two criteria: (i)
questionnaire. According to Cochran’s formula with a 5% error, the Cronbach’s alpha, and (ii) Composite reliability (CR). Cronbach’s alpha
statistical sample is 304 companies, so a questionnaire was sent to coefficient indicates the ability of the questions to properly explain
330 companies to be answered by senior managers of these compa- the relevant dimensions. Cronbach’s alpha coefficient indicates the
nies, and finally, 315 analysable data were collected and used for the ability of the questions to properly explain the relevant dimensions.
analysis. A simple (convenience) random sampling method was used The composite reliability coefficient determines the degree of corre-
for the present study. Constructs were measured using a seven-point lation between one dimension’s questions to another to adequately
Likert scale, which from “1” indicates “strongly disagree” to “7” indi- fit the measurement models (Fornell & Larcker, 1981). The results of
cates “strongly agree”. Table 2 below shows the demographic infor- the reliability of the research questionnaire by the two criteria men-
mation of companies and respondents. tioned above are shown in Table 3.

Table 2
Respondents’ and companies’ background

Male Female 30-37 37-44 44-51 51-58

Gender f 237 57 Age f 43 116 107 49

% 75% 25% % 13.5% 37% 34% 15.5%
Master PhD. 5-10 10-15 15-20 20-25
Education f 206 109 Work Experience f 78 119 110 8
% 65% 35% % 24% 38% 35% 2.5%

Table 3
Internal consistency of variables (convergent validity and composite reliability)

Component Item Factor Load T Statistic Cronbach's Alpha (>0.7) Composite Reliability (CR>0.7) Average Variance Extracted

Urban Entrepreneurship UE1 0.712 7.64 0.813 0.761 0.564

UE2 0.651 8.91
UE3 0.537 12.14
UE4 0.803 6.11
UE5 0.817 6.03
UE6 0.511 13.07
UE7 0.691 9.01
Digital Technologies DT1 0.571 10.05 0.821 0.812 0.573
DT2 0.682 9.14
DT3 0.514 .12.06
DT4 0.762 8.012
DT5 0.781 8.06
Sustainable Businesses in Smart City SBSC1 0.615 9.07 0.804 0.798 0.593
SBSC2 0.714 8.01
SBSC3 0.638 9.15
SBSC4 0.562 13.04
SBSC5 0.847 5.14
SBSC6 0.739 8.11

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L.-P. Dana, A. Salamzadeh, M. Hadizadeh et al. Sustainable Technology and Entrepreneurship 1 (2022) 100016

Table 4
Divergent validity matrix

Component Urban Entrepreneurship Digital Technologies Sustainable Businesses In Smart Cities

Urban Entrepreneurship 0.750

Digital Technologies 0.731 0.756
Sustainable Businesses In Smart Cities 0.727 0.743 0.770

The validity of the questionnaire was assessed by the convergent Conclusion

validity using the partial least squares method. Convergent validity
indicates the degree of ability of a dimension’s indices to explain that This study aims to investigate the impact of urban entrepreneur-
dimension. Convergent validity is checked by AVE (Average Variance ship on sustainable businesses in smart cities by considering the
Extracted), which if it is above 0.5, the convergent validity of the role of digital technologies. According to the results, urban entre-
measurement tool will be confirmed (Hulland, 1999). As shown in preneurship can create sustainability in urban firms by exploiting
Table (3), the factor load of all items was higher than 0.70. Likewise, digital technologies. The analysis of the first hypothesis shows the
the composite reliability of all constructs was higher than 0.70, while positive impact of urban entrepreneurship on sustainable businesses
the AVE values were greater than 0.50, as suggested. in the smart city. Due to new changes, innovations and creations
To test the model and hypotheses, the structural equation that create and enhance urban entrepreneurship can effectively
analysis method and Smart PLS software version 3 have been improve and enhance firms’ sustainability in the smart city. Urban
used. The results show that the mean-variance of all constructs is entrepreneurship is one of the main factors in creating the sustain-
higher than 0.5, and that confirms the validity of the constructs. ability of these businesses. There is a two-way relationship between
Cronbach’s alpha for constructs is higher than 0.7, and composite entrepreneurship and smart cities. First, entrepreneurs embark on
reliability is higher than 0.7 too. The reliability of the constructs technological interventions that help cities undergo social and tech-
is also confirmed. According to Table 3, divergent validity is con- nical transitions and become smart cities. Second, technologies used
firmed, and the following results show that the research tool has in cities generate data that then helps companies discover new
valid validity and reliability. opportunities. The results obtained from the confirmation of this
hypothesis are consistent with the results of Kummitha’s research
in 2019 (Kummitha R. K., 2019).
Confirmation of the second hypothesis in the research shows the
Structural model analysis positive relationship between urban entrepreneurship and digital
technologies. The utilisation of digital technologies in businesses is a
Model Fit: The general fit of the model was assessed using the new and innovative approach in the field of urban entrepreneurship,
Goodness of Fit Index (GoF), which was calculated using the two which can provide new opportunities and facilities for urban technol-
mean indices of Communality and R2. The goodness of fit in the equa- ogy businesses. Digital technologies have developed significantly in
tion is 0.51, which is higher than the acceptable minimum (0.36). recent years and have become an integral part of various areas of the
Therefore, the research model has a good fit. According to Table 7, all urban environment and contribute to the development of smart cit-
cases indicate a strong fit of the research model, and its numerical ies. Urban entrepreneurship strengthens the development of digital
value is more than 1.96. The results of path analysis to test the technologies and makes it one of the building blocks of the digital
research hypotheses are given below and indicate that smartification, entrepreneurship ecosystem (DEE). Thus, digital technology tools
digital literacy, online learning environment and entrepreneurial improve the performance of urban entrepreneurship by creating
education have a direct and significant effect on online entrepreneur- innovations and new ideas. Similar research (Gorelova et al., 2021)
ial education. Tables 4, 5, 6 has been conducted on the relationship between smart and sustain-
qffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffiffi able technologies and urban entrepreneurship. The results of those











GoF ¼ com  R2 ¼ 0:51 researches are in line with the present study results.

Table 5
Research model in the form of standard coefficients and significant numbers

6
L.-P. Dana, A. Salamzadeh, M. Hadizadeh et al. Sustainable Technology and Entrepreneurship 1 (2022) 100016

Table 6
Quantitative model fit evaluation

Structural path T-Value Path Coefficients Test Result

Hypothesis 1: Urban entrepreneurship has a positive relationship with sustainable busi- 6.47 0.59 Confirmed
nesses in the smart city
Hypothesis 2: Urban entrepreneurship has a positive relationship with sustainable 4.91 0.42 Confirmed
technologies
Hypothesis 3: Sustainable technologies have a positive relationship with sustainable busi- 3.86 0.401 Confirmed
nesses in the smart city
Hypothesis 4: Urban entrepreneurship has an indirect impact on sustainable businesses in - 0.76 Confirmed
the smart city through the mediator variable of sustainable technologies

Table 7
Communality and R2 values

Variable Urban Entrepreneurship Digital Technologies Sustainable Businesses In Smart Cities

Communality 0.554 0.568 0.572

R2 - 0.494 0.431

This study’s third hypothesis confirms the positive relationship user behavior in order to enhance the sustainability of businesses in
between digital technologies and creating business sustainability in smart cities.
the smart city. In this regard, a key factor in achieving business sus-
tainability is the interaction between digital technology tools and Limitations
businesses in the smart city. Sustainability management in a digital-
ised environment must be central to policymakers because informa- Since this study coincided with the coronavirus outbreak and due
tion technology offers a wide range of opportunities for positive to its novelty in a developing country, the researchers faced various
change in combination with sustainability goals. The results of similar limitations. These included but were not limited to access to relevant
studies, such as those of Vidmar et al. in 2021 (Vidmar et al., 2021), data and information on the current situation in the country, limited
are similar and consistent with the confirmation of the third hypoth- sources, and the selection and face-to-face access to related experts.
esis. Digital technologies are being injected into the smart city busi-
ness environment as a solution to create sustainability. The Declaration of Competing Interest
development and expansion of sustainable and digital technologies
positively impact the sustainable development of smart city busi- The authors declare that they have no known competing financial
nesses. interests or personal relationships that could have appeared to influ-
Regarding the mediator role of digital technologies in relation to ence the work reported in this paper.
urban entrepreneurship and business sustainability in smart cities, it
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