The article describes the application of the Smart City concept and the economic opportunities it creates, infrastructure and services, and opportunities to improve governance. The main features of the Smart City concept, development directions and evolution, standards and solutions, and factors and obstacles to its implementation have been analyzed by the author. The experience of different countries in the application of digital technologies is discussed. The article provides the scope and structure of the "smart" market, application stages, and scenarios The international experience in this direction was widely analyzed and examples were shown. The article talks about smart cities, the construction of which has already begun in Azerbaijan. The application of the smart city concept in Azerbaijan has been studied. It is stressed that the spread of digital technologies for the construction of a smart city in Azerbaijan is a prerequisite. The Network Readiness Index (NRI) identifies the indicators that are holding back Azerbaijan in the ranking for 2021.