Sydney could be wealthier, more liveable and rejuvenate local democracy if it embraces the digital transformation reshaping cities across the world.

But advocacy group the Committee for Sydney says the city risks lagging behind unless it learns from the high-tech strategies being implemented by international peers.

"The best and most successful global cities are becoming data- and tech-driven and combine smart governance with smart city technologies," a report by the committee said. "Sydney needs to follow suit or fall behind."

Smart cities are changing how they engage with residents, how they design and deliver services and how they create economic opportunities for local businesses in the digital era.

The committee estimates Sydney's digital economy is already worth more than $27.65 billion, or nearly 2 per cent of gross national product. Sydney dominates the nation's information and creative digital industries. But the report claims better governance is required for Sydney to make the most of the digital opportunities on offer.

"While there are some examples of best practice in councils and public services in NSW, the fractured governance and silos of Sydney is impeding progress," it said.

"A bigger, more co-ordinated cross-government effort is required if Sydney is to be truly 'smart'."

The committee's chief executive, Dr Tim Williams, said the "digital agenda" should be a top priority for the new Greater Sydney Commission. The amalgamation of Sydney councils could also provide the resources necessary to use of technology better in local democracy.

"Internationally, it seems a bigger scale of government is enabling a bigger scale of public engagement online," he said.

Here are six smart city examples that Sydney could learn from:

Chicago's Open 311 system

The Open 311 project and its website, Chicagoworksforyou.com, allows residents to make and track a wide range of service requests, such as road damage, faulty lighting or abandoned vehicles. The online system encourages residents to share ideas for service improvements and helps them collaborate with neighbours to take action to improve their communities. It has also provided local authorities with data to help them respond better to community needs. Chicago, a world leader in urban digital governance, has also created an Open Data Portal with user-friendly access to more than 600 data sets. It has been used by local tech developers to create helpful civic applications.

Boston Mayor's Office of New Urban Mechanics

The Mayor's Office of New Urban Mechanics (MONUM) pilots experiments to improve the quality of city services, especially in education, civic engagement, the streetscape and economic development. Current projects include a platform to celebrate business startups and an app to encourage local shopping. It is also facilitating new designs for public spaces – everything from new public benches to public art and new methods to engage artists. Boston, named America's top digital city in 2013, also hosts the Tech Goes Home project, which provides under-served residents the education and opportunities to access 21st century skills development.

Seoul's Sharing Hub

Seoul's online Sharing Hub shows local enterprises and organisations that offer sharing services. The hub aims to make it quicker and easier for citizens to accessing information about sharing. The metropolitan government will also incubate around 20 sharing startups with office space, consultation, and subsidies. Seoul, which is recognised a leader in "e-governance", has an Open Data Plaza that allows access to city data to help create business opportunities and to support local technology industries. Seoul aims to provide free WiFi across every public place in the city and to build a social network that enables better two-way communication between the government and citizens.

New York's ChangebyUS NYC

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ChangebyUS NYC allows individuals to either create or join a city project. It offers hundreds of diverse projects ranging from food and community gardening to bike lanes and urban design. More than 120 resources are available through the website, including OASIS, an open community mapping site, the city council's community clean-up program and Green City Force, which prepares young people for job opportunities in the clean energy economy. New York Mayor's Office of Dada Analytics (MODA) aggregates and analyses data from across city agencies, to more effectively address crime, public safety, and quality of life issues. The office uses analytics tools to "deliver services more efficiently, enforce laws more effectively and increase transparency".

Amsterdam's Smart Traffic Management

In Amsterdam, local government, businesses, research institutions and citizens are collaborating to create a smart city. One innovation has been a joint local and national government scheme to optimise traffic management. The collaboration, called TrafficLink SCM, uses 2400 vehicle detector stations and 60 number plate recognition cameras. The self-regulating system has made it possible for road managers to improve the traffic flow in the region. So far, there has been a 10 per cent decrease in time spent in congestion – an enormous saving in time and cost. Authorities in Amsterdam also uses public data - including parking availability, taxi stand use and cycle paths - to improve movement around the city and to assist with infrastructure planning.

Paris: Madame Mayor, I have an idea

Paris has launched an innovative citizen dialogue called "Madame Mayor, I have an idea". It is a crowdsourcing and participatory budgeting process that lets citizens propose and vote on ideas for projects in the city. The project has earmarked €500 million ($750 million) to be allocated between 2014 and 2020. The city government has already decided to invest €2 million in vertical garden projects after citizen feedback via the online platform.