Tourism is a main economic sector in the municipality and the region is visited all year round. A sought a destination among lovers of rural tourism, the city includes part of the national ski resort Pamporovo.
Smolyan has serious challenges in terms of economic development, principally due to its mountainous border geography. The leading sector in the local economy are services, followed by industry and agricultural sector. Local industries are focused on tool manufacture, polymer products, outdoor furniture, cables and wire production, engineering, textiles and clothing, logging and wood processing, construction, transport and the food industry. The city is home the branches of Plovdiv University and Varna Free University.
Telecommunication services more than half of the settlements in the municipality have an internet connection. Smoylan is part of a national programme for e-Services to deliver all services online by 2020.
The vision is to become an attractive place to live and work, providing a good living environment, retaining the population, with a competitive, diversified local economy, supported by a socially responsible and competent local administration. The Integrated Plan for Urban Regeneration and Development of Smolyan 2014-2020 identifies issues and priorities. The vision outlines the use of internal and external resources, combined with support to restructure the economy.