Amsterdam has been chosen as European capital of innovation in the annual iCapital competition organised by the European Commission.

Dutch News reported on Friday that the city won the E.C.’s annual iCapital competition, whose prize is €950,000 ($1.082 million) to be used on further boosting innovation. Berlin, Paris, Milan and Eindhoven were among the other eight finalists.

Amsterdam was recognized for its good start-up climate and its sharing economy, as well as the way city officials approach innovation issues.

Amsterdam, which is the home of the Netherlands EU Presidency, was nominated for its approach to smart growth, start-ups, liveability and digital social innovation. Two years ago Barcelona was proclaimed the very first ‘iCapital’.

Commissioner Moedas said that Amsterdam deserved the title because of its ‘holistic vision of the city’. Robert-Jan Smits, who manages the department of the European Commission that created the prize, congratulated the Dutch capital.

The city facilitates innovation in numerous ways, with an emphasis on openness, creativity, pragmatism and cooperation. This can be seen in the large number of start-ups, high-tech firms, the city’s two renowned universities and the NEMO science centre.

Amsterdam first appointed a chief technology officer in 2014 to help coordinate citywide innovation projects, and its Smart City initiative is an ambitious plan to reinvent public services.

For example, the Dutch capital relies heavily on innovations in parking, and recently contracted with firm SKIDATA to develop and implement a high-tech e-parking system. The city’s end goal is for customers to be able to choose between parking on the street or in garages and then conveniently pay the entire parking fee via their mobile device.

The city is home to over 2,500 international businesses, and is known as a startup hub. A recent national regulation allows ambitious entrepreneurs to apply for temporary residence permits to launch innovative new businesses in the Netherlands, and Amsterdam is the most obvious location