Bridging Digital Gaps in Smart City Governance: The Mediating Role of Managerial Digital Readiness and the Moderating Role of Digital Leadership

Highlights: What are the main findings? Despite robust IT infrastructure and skilled civil servants, public sector performance in Surabaya significantly improves only when government managerial staff exhibit strong digital readiness. Digital leadership plays a decisive role in amplifying the effect of both technology and digital skills—turning potential into measurable impact across smart city governance. What is the implication of the main finding? Theoretically, the study advances Dynamic Capability Theory and Upper Echelon Theory by demonstrating how managerial cognition and leadership behavior translate digital investments into public value. Practically, the study offers a scalable model for city governments, emphasizing leadership-based interventions to enhance managerial readiness and optimize e-government outcomes. Indonesia’s commitment to digital transformation is exemplified by the Gerakan 100 Smart City program, aiming to enhance public sector performance through technology integration. This study examines how information technology capability and 21st century digital skills influence public sector performance, mediated by managerial digital readiness and moderated by digital leadership. Grounded in Dynamic Capability Theory and Upper Echelon Theory, data from 1380 civil servants were analyzed using PLS-SEM via SmartPLS 4.1.0.9. Results show that both IT capability and digital skills significantly improve managerial digital readiness, which in turn positively impacts public sector performance. Managerial readiness mediates the effect of both predictors on performance, while digital leadership strengthens these relationships. Theoretically, this study frames managerial digital readiness as a dynamic capability shaped by leadership cognition. Practically, it highlights the importance of aligning infrastructure, skills, and leadership development to advance digital governance. Future research should consider longitudinal, multilevel, and qualitative designs to deepen insights.