This paper introduces the Smart Village concept, highlighting the benefits of addressing social challenges through digital technology from the perspective of small communities. While smart city initiatives have predominantly targeted large urban areas, rural regions have been largely overlooked despite facing unique social challenges and opportunities for innovation. Making villages smarter not only benefits rural areas but also contributes to solving urban issues, such as curbing urban expansion. Implementing ICT in urban areas is complex, involving numerous stakeholders and substantial costs. Additionally, the dominance of capitalist values and a technocentric approach often lead to resistance and challenges in social acceptance. In contrast, smaller scales like villages offer significant benefits for ICT utilization due to closer human relationships and community bonds. This paper discusses the advantages of smart solutions from the village perspective, introducing the concept of “Smart Villages” and exploring their potential for both villages and cities. Using case studies from Sweden and Japan, the paper highlights five advantageous perspectives, arguing that starting with Smart Villages as living labs for cities ensures solid initial steps, leading to significant urban changes. The contributions of this research include a focus on human relationships, often overlooked in current smart city research, and presenting a novel perspective of developing smart solutions in villages and scaling them to cities. Future research directions include evaluating the long-term impacts of Smart Villages as living labs and exploring methods to enhance resident participation and engagement. The goal is to further develop the Smart Village concept and establish practical models applicable to more regions and communities.