Bridging Innovation and Privacy: A Collaborative Governance Framework for Smart Cities in Malaysia

Malaysia's smart-city agenda under My DIGITAL and the Twelfth Malaysia Plan is accelerating the deployment of data-driven urban systems. Yet the same data flows that power innovation can affect citizens' privacy and trust if not governed well. This paper proposes a two-part framework for Malaysian local authorities: a collaborative governance architecture that formalises multi‑stakeholder roles, and a Dynamic Privacy Impact Assessment (DPIA) cycle that manages privacy risk across the lifecycle of smart-city systems. This study using mixed methods (interviews, document analysis, survey), by test three hypotheses across multiple Malaysian cities and find that (i) formalised councils and clear accountability correlate with faster innovation and fewer privacy incidents; (ii) DPIA maturity is positively associated with citizen trust and earlier risk mitigation; and (iii) effects are moderated by city digital readiness and institutional capacity. It had been conclude with a practical blueprint to operationalise privacy‑by‑design without delay the urban innovation. [1], [3], [8], [12], [13], [18].