Purpose – The purpose of this paper is conceptualise a city as a Smart Local Service System (SLSS) whose competitiveness depends on sharing strategies and processes of cohesion for value co-creation and equifinality for stakeholder. Design/Methodology/approach – Our methodology integrates Service Science Management and Engineering+Design (SSME+D) and Viable Systems Approach. Empirical research adopts a qualitative case study based on in depth interviews and document and action research on using services co-design methods and tools. Findings – Theoretical and empirical research suggests that collaboration and participation in decision making (co-design), particularly by local residents, is critical for successful plan development and project implementation. In addition, a key element in improving local capacity to develop, implement and manage initiatives is a support network of organizations that have specific knowledge and expertise. Research limitations/implications – The major limitations depend on a statistical impossibility to extend the findings, having pursued explorative objectives; anyway, given the theoretical scenario of reference, the proposed methodology can be a valid and reliable path for further studies. Practical implications – The practical consequences of the research affect above all local actors, who must commit to protecting/enhancing the growth and sustainable development of local Area. Originality/value – The research stimulates new perspectives of analysis on the local governance issue based on the processes of value co-creation in a context of open innovation.