Enjoy complimentary customisation on priority with our Enterprise License!
The smart city market size is forecast to increase by USD 345.8 billion at a CAGR of 24.81% between 2023 and 2028. The market's growth rate is influenced by several key factors driven by advancements in IoT, AI, and big data technologies. Key trends include the integration of smart grids, power grids, intelligent transportation systems, and energy-efficient infrastructure. Increased investments in 5G networks and urban sustainability initiatives are further accelerating market expansion. Governments and private sectors are collaborating to enhance public safety, reduce carbon footprints, and improve urban living standards. The rise of autonomous vehicles and smart buildings is also shaping the future of smart city developments.
To learn more about this smart city market report, View Report Sample
The smart city market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.
The market is undergoing a transformation, with a strong emphasis on energy-efficient systems and reducing energy consumption. Cities are harnessing Internet of Things (IoT) technologies to implement power over ethernet (PoE) solutions for efficient power delivery, primarily in the context of smart buildings. This trend is aimed at optimizing buildings for sustainability, reducing greenhouse gas emissions, and improving building management systems to effectively track and manage energy usage. Advancements in technologies such as 5G are revolutionizing commercial buildings, enabling sophisticated energy management and security & emergency management solutions. The integration of artificial intelligence (AI), IoT, and virtual reality (VR) is redefining building infrastructure management and enhancing commercial real estate (CRE) operations through business information modeling (BIM).
The growth of the smart infrastructure segment is expected to be substantial during the forecast period. Smart infrastructure refers to the digitalization of energy systems, buildings, and industries to enhance the way people live and work by improving efficiency and sustainability. Smart buildings feature advanced installation and technology systems such as smart city platforms that automate numerous internal processes, including heating, ventilation, lighting, security, and other systems within the building.
Get a glance at the market contribution of various segments. View the PDF Sample
The smart infrastructure segment was valued at USD 33.40 billion in 2018. Smart infrastructures are built upon their physical components, including cabling and sensors, and are founded on four key principles: data collection and management, analytical processing, real-time feedback, and adaptability. The continuous expansion of industrialization, commercialization, and the growing recognition of energy conservation and building optimization are major catalysts fueling the adoption of smart infrastructure. By merging the real and digital realms in energy systems, buildings, and industries, smart infrastructure significantly enhances the way people live and work while substantially improving efficiency and sustainability. These factors will have a positive impact on the growth of the smart infrastructure market during the forecast period.
For more smart city market growth analysis by region, Download PDF Sample now!
APAC is estimated to contribute 32% to the growth of the global market during the forecast period. Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. Smart city markets are experiencing substantial growth due to urban development and the demand for sustainable solutions. Integral to this ecosystem are smart city platforms, which offer integrated technologies that optimize city operations, enhance citizen services, and promote efficiency in urban management. These platforms act as centralized hubs, enabling data-driven decision-making, facilitating IoT connectivity, and supporting various applications, including transportation and energy management. As a result, cities become more connected, resilient, and habitable.
Europe is witnessing a digital transformation, with initiatives revolutionizing urban landscapes through advanced technologies. Key components include video surveillance cameras for public safety, gunshot detection sensors for quick response times, and AI capabilities for swift video analysis. Drones and optimized traffic signals help alleviate congestion, while extensive data supports informed decision-making for city officials, building owners, and facility managers. Cost savings are achieved through network efficiencies in managing traffic and electrical grids. Telecom companies are spearheading the market's growth. However, challenges, including cybersecurity, data stewardship, interoperability, and cross-border data portability, must be addressed. Innovations in healthcare, such as AI-assisted patient care delivery, further underscore the market's potential. Business leaders are embracing innovative business models and digitalization to enhance connectivity and modernize cityscapes.
The market is experiencing a rise in the need for energy-efficient technologies and IoT innovations such as PoE, which improve energy management in buildings and decrease greenhouse gas emissions. A significant trend in commercial buildings is the implementation of 5G technology, enabling enhanced security and emergency management, as well as efficient infrastructure management. However, integrating AI, IoT, and VR technologies seamlessly poses a challenge, as does managing the complexities of data analytics and cloud computing for optimal waste management and energy consumption control. Our team conducted an in-depth analysis of market research and growth data, using 2023 as the foundation year. Understanding the primary drivers will enable businesses to tailor their marketing strategies, securing a competitive edge.
The trend toward IT consolidation and modernization is fueling the expansion of the global smart city market. Consolidating IT structures, such as data centers and networking systems, within organizations enhances operational efficiency and offers cost savings. This consolidation is compelling C-level executives to adopt advanced IT service delivery models, like shared and managed services.
Technological advancements and the requirement for IT modernization across various industries, including manufacturing, finance, telecommunications, and healthcare sectors, are major factors propelling the adoption of IT services and the implementation of projects aimed at enhancing connectivity and sustainability. The growing popularity of social media and mobile devices, along with organizations' efforts to upgrade their IT infrastructure, are additional factors fueling market growth during the forecast period. Furthermore, the growth in US commercial construction market is also boosting demand for IT services, as businesses within this sector invest in digital transformation and infrastructure enhancements to boost operational efficiency and cater to contemporary market requirements.
The expansion of smart city initiatives in developing economies represents a significant trend in the international market. While North America and Europe have been pioneering smart city development for over a decade, the Asia Pacific region is experiencing the most rapid growth in terms of smart city technologies. The region's urban population is expanding at an unprecedented rate due to mass migration to cities, necessitating the construction of new infrastructure, particularly in emerging Asian countries. India and China are among the economies in this category, with many pilot projects currently underway. In addition, smart cities are increasingly turning to solid oxide fuel cells to provide energy solutions that are both efficient and sustainable, thereby enhancing urban infrastructure and reducing carbon emissions.
Moreover, Cambodia, Phnom Penh, Battambang, and Siem Reap have been chosen to participate in the Association of Southeast Asian Nations (ASEAN) Smart Cities Network, which aims to develop smart, sustainable urban development in 26 cities across the region by 2025. The rapid pace of urbanization in countries like India is also driving the implementation of these projects, as they enable service providers in sectors such as government, healthcare, and transportation to respond more effectively to the challenges posed by urbanization.
The significant expense associated with modernizing electricity grids poses a substantial obstacle to the expansion of the global smart city market. During the forecast period, this expense is predicted to impede the market's growth. The expenses related to modernizing electricity grids encompass increased investments in distribution networks, the replacement of transmission lines, power delivery systems, substation digitalization, and digital controls. As a result, both power utilities and independent power producers are confronted with substantial upfront capital investments.
The outdated power infrastructure of these utilities and their expanding requirement to integrate renewable energy sources into their grids will lead to increased renovation budgets in the coming years. This development stems from the near-term cost avoidance by utilities, which acts as a hindrance to the adoption of smart grid data management solutions. Power utility providers are hesitant to upgrade their power grids to align with smart city information and communication technologies (ICT) infrastructure, such as advanced metering infrastructure (AMI) and distributed energy resources (DER) management systems, due to the substantial costs involved. This reluctance is anticipated to have a substantial impact on the market's growth in the future.
The smart city market forecasting report includes the adoption lifecycle of the market, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the smart city market analysis report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth and forecasting strategies.
Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
ABB Ltd.- The company offers smart city solutions such as smart buildings, e-mobility, energy management, and data centres.
The smart city market research report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market is experiencing significant growth, fueled by pressing needs such as environmental stewardship, resource conservation, and advanced environmental monitoring technologies. Innovations, like real-time license plate recognition and facial recognition, enhance public safety and surveillance in urban areas and traffic management. Data-driven methods, including data-driven policing and optimized emergency response protocols, bolster law enforcement capabilities and empower first responders. By utilizing big data and artificial intelligence, cities optimize traffic signal management and emergency vehicle deployment, leading to decreased crime rates and improved response times.
Furthermore, smart technologies contribute to energy savings through intelligent surveillance and home security systems, reducing operational and maintenance costs. Despite budget constraints, cities prioritize cost-effective systems with long-term cost savings, utilizing existing infrastructure and making substantial investments, supported by government backing in cities such as Amsterdam and Chengdu. This transformative potential encompasses sectors like public safety, healthcare, and utilities, fostering innovative business models and creating modern healthcare landscapes with smart healthcare solutions. Moreover, the integration of Internet of Things (IoT) devices and smart metering data fosters consumer engagement and revenue assurance in utilities, propelling the market forward.
In today's world, urban management is being transformed through the implementation of advanced technologies. By integrating software and collaborating with software and hardware engineers, cities are able to overcome the challenges of implementing complex solutions. These innovations include gunshot detection sensors and rapid video analytics, which enable public safety officials and law enforcement to respond effectively. City administrators, building owners, and facility managers are the primary drivers of smart city initiatives, focusing on optimizing traffic flow, electrical grids, and commute times. The prioritization of smart grid efficiency and digital solutions ensures both cybersecurity and responsible data management. Additionally, interoperability and cross-border portability are promoted to ensure seamless integration and collaboration.
|
Industry Scope |
|
|
Report Coverage |
Details |
|
Page number |
193 |
|
Base year |
2023 |
|
Historic period |
2018 - 2022 |
|
Forecast period |
2024-2028 |
|
Growth momentum & CAGR |
Accelerate at a CAGR of 24.81% |
|
Market growth 2024-2028 |
USD 345.8 billion |
|
Market structure |
Fragmented |
|
YoY growth 2023-2024(%) |
19.53 |
|
Regional analysis |
Europe, North America, APAC, South America, and Middle East and Africa |
|
Performing market contribution |
APAC at 32% |
|
Key countries |
US, UK, Germany, Spain, and Japan |
|
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
|
Key companies profiled |
ABB Ltd., Accenture Plc, Aeris Communications Inc., Alphabet Inc., Cisco Systems Inc., General Electric Co., Hewlett Packard Enterprise Co., Hitachi Ltd., Honeywell International Inc., Huawei Technologies Co. Ltd., International Business Machines Corp., Itron Inc., LG Electronics Inc., Microsoft Corp., Oracle Corp., SAP SE, Schneider Electric SE, Siemens AG, Semtech Corp., and Signify NV |
|
Market dynamics |
Parent market analysis, Smart city market forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Smart city market worth and condition analysis for market forecast period |
|
Customization purview |
If our smart city market research report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this smart city market research and growth report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Application
7 Market Segmentation by Component
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
Get the report (PDF) sent to your email within minutes.
Get lifetime access to our
Technavio Insights
Quick Report Overview:
Cookie Policy
The Site uses cookies to record users' preferences in relation to the functionality of accessibility. We, our Affiliates, and our Vendors may store and access cookies on a device, and process personal data including unique identifiers sent by a device, to personalise content, tailor, and report on advertising and to analyse our traffic. By clicking “I’m fine with this”, you are allowing the use of these cookies. Please refer to the help guide of your browser for further information on cookies, including how to disable them. Review our Privacy & Cookie Notice.
