Importance This research focuses on management relationships as part of priority innovative projects. The article analyzes how external and internal factors influence the effectiveness of the innovation project management system, while the concept for sustainable economic development of the city is implemented.
Objectives We prepare and justify the business model for implementing the Smart City concept and evaluate how certain factors influence the effectiveness of the innovative project management system.
Methods The research involves general scientific methods, including comprehensive factor analysis, correlation analysis, and methods of expert assessment and consistency of expert judgments.
Results We determined which internal and external factors have an impact the project management system, devised the scale for gauging its effectiveness, matrix of external and internal factors influencing management systems. We formulated and substantiated the business model for effective management of innovative projects as part of the Smart City concept.
Conclusions and Relevance Making appropriate managerial decisions require a theoretical and comprehensive analysis of the external environment and internal constituents in line with knowledge, expertise, logic and intuition of smart managers. If aspects of the Smart City are implemented, this will make cities much more comfortable for living. The findings may be useful for authorities and business, which deal with the urban space management, and managerial personnel, who implement large innovative projects.