The creative city and the creative sector are terms that are increasingly encountered today, but still unknown to the general public. The creative industry is new area of economy, so it becomes one of contemporary indicators of the economic growth. Framework of the paper is built by researching and analyzing existing information from scientific articles, research papers, literary works and other sources covering the topic of the creative city and the creative industry. The aim of this paper is to show development of the creative city and to explore importance of the creative industry in today's dynamic economy. Creative cities stimulate innovations, development of new technologies, encourage the economy and retain financial resources, enhancing the progress of the city and the wider region. The paper is consisted of four parts. The first part is an introduction to the topic, with the defined terms of the city, creative city, smart city and creative classes, and is giving a brief overview of the historical development of cities, followed by a description of the elements of creative and cultural development of the cities, the creative industry and its sectors. The second part of the paper is showing the results of previous research and it is a base for further discussion. The third part of the paper describes the network of creative cities, and its covered sectors and institutions, explaining why the creative industry is important for economic development and better life for citizens, and the relationship between projects, creative cities and development of the city network. Also, includes an example of an analysis of the project of the University Library of the city of Osijek and the connection between the project and the development of the city. This is followed by a synthesis of the previous parts of the paper, as fourth part of the paper which is the review of previous parts of the paper and the conclusion on the topic. Cities that recognize their cultural wealth and manage to specialize and brand themselves, they can build their economic and cultural future. The process in which creative individuals generate creative spaces, but vice versa, a process in which creative spaces multiply creative individuals, the development of creative industries ensures the growth of the creative city.