Smart Cities Market Size (2024 – 2030)

The global smart cities market was valued at USD 772 billion and is projected to reach a market size of USD 3849.30 billion by the end of 2030. Over the forecast period of 2024–2030, the market is projected to grow at a CAGR of 25.8%.

The concept of smart cities started gaining recognition in the early 2000s due to factors like economic stability, technological advancements, and an increased focus on R&D projects. Presently, with global adoption, a rising middle class, and sustainable initiatives, this market is expanding tremendously. In the future, with a focus on worldwide expansion, economic growth, and security, this market is set to witness a good elevation.

Key Market Insights:

India's share of the global smart city market is predicted to increase significantly. According to projections, this market segment's revenue is expected to reach US$1.91 billion by 2023.

According to Cisco, in 20 years, information-driven cities can achieve a 30% increase in energy efficiency.

In 2023, it is anticipated that the global market for smart city technology, goods, and services will generate 89 billion dollars in sales.

Global technology investment in smart city efforts is expected to increase from 81 billion US dollars in 2018 to 189.5 billion dollars in 2023, a more than twofold increase.

Financial institutions are identified as important stakeholders in just 38.4% of cities. To address this, awareness campaigns, meetings, incentives, and other solutions are being implemented.

Smart Cities Market Drivers:

Urbanization and population growth are helping with the market expansion.

The total estimated population is around 8 billion. Over the years, significant changes have been observed concerning lifestyle and consumer preferences. Factors like the rising middle class and increasing disposable income have played a crucial role in this. Economic growth has raised the standard of living. A greater percentage of people are moving to cities owing to better employment opportunities and standards of living. People can afford a luxurious life. Smart cities are increasing in demand because of their advantages like resource utilization, optimization, transportation, sustainability, and other creative solutions. Besides this, governmental bodies have played a huge role in the implementation of solutions through various investments, projects, campaigns, and other initiatives. Furthermore, rising adoption by people and collaborations between various prestigious organizations have been fueling the growth.

Technological advancements are paving the way for market success.

Various fields like artificial intelligence, machine learning, data analytics, the Internet of Things (IoT), etc., have helped in the running of systems by enhancing the decision-making process, energy management, and quality of life by gathering massive amounts of data. Implementation of these aids includes traffic management, connectivity, smart grid developments, medical monitoring, property management, edge computing, and many more.  The data that is received helps with driving data insights and predictive analysis. Moreover, 5G technology has great promise for improving public safety and security in smart cities. Smart city systems may use the quick and responsive 5G network to collect and analyze large amounts of data from many sources, such as intelligent traffic lights, video surveillance cameras, and other IoT devices. Apart from this, several research activities are being conducted to further broaden human understanding.

Smart Cities Market Restraints and Challenges:

Financial issues, data privacy, infrastructure limitations, and lack of a trained workforce are the main concerns that the market is currently experiencing.

One of the biggest barriers in the market is the budget. Implementation and integration with various technologies are very expensive. Additionally, maintenance charges add up. This can be difficult in underdeveloped and remote areas. Secondly, data security can hinder market growth. Ecosystem, Information about the entire ecosystem if leaked or misused can be a threat to the citizens and the country. Thirdly, certain regions may find difficulty with access to various technologies and other resources. Furthermore, a lack of skilled professionals can hamper the growth rate. Designing, implementation, and maintenance can be compromised by this.

Smart Cities Market Opportunities:

Smart infrastructure development has been providing the market with an ample number of possibilities. This involves minimal utilization and wastage of available resources, thereby promoting the idea of sustainability. Other benefits from technology include centralized control, automation, recycling, maximum usage of renewable resources, and real-time data collection. Sustainable, smart cities are being prioritized. It makes sure that it satisfies the economic, social, environmental, and cultural needs of both the present and future generations while utilizing ICTs to enhance people's quality of life, increase the efficiency of urban operations and services, and increase its competitiveness.

SMART CITIES MARKET REPORT COVERAGE:

Smart Cities Market Segmentation: By Component

• Hardware

• Software

• Services

The hardware segment accounted for the most dominant component segment, holding a share of around 39% in 2023. This category comprises the solutions and components that are crucial for the functioning of smart cities. Some examples include sensors, IoT devices, drones, lighting systems, cameras, surveillance systems, and other communication systems. These devices aid with data connectivity, analysis, and interpretation, thereby making decisions based on this. The services segment is the fastest-growing category. This helps with consultation, customization, innovation, upgrades, performance, and the implementation of other holistic services.

Smart Cities Market Segmentation: By Technology

• IoT (Internet of Things)

• Artificial Intelligence

• Cloud Computing

• Machine Learning

• Machine-to-Machine Communication

• Others

IoT (Internet of Things) is one of the largest technologies in this market owing to data collection, real-time monitoring, resource management, optimization, functionality, traffic management, public safety, and predictive maintenance. The field of artificial intelligence is also rapidly emerging. AI technology gives planners the power to extract valuable information from current monitoring networks, enabling optimal city design that benefits the general public's welfare. Cloud computing is one of the fastest-growing due to its advantages like scalability, flexibility, versatility, reliability, security, authenticity, disaster recovery management, encryption, etc.

Smart Cities Market Segmentation: By Application

• Smart Building

• Environmental Solution

• Smart Utilities

• Smart Transportation

• Smart Healthcare

In smart transportation, Intelligent Smart Transportation (IST) is the largest segment based on applications, holding a share of around 47% in 2023. To offer cutting-edge services related to various forms of transportation and traffic control, an intelligent smart transportation system is a sophisticated program that empowers users to make more informed decisions and utilize transportation networks in a safer, more coordinated, and more intelligent manner. Traffic may be dynamically rerouted by smart traffic systems to avoid emergency vehicles that are attempting to escape crowded locations. By using digital signage, these same technologies may notify drivers of new dangers and modify speed restrictions under certain circumstances. Parking management system is a subcategory under the smart transportation segment growing at the fastest rate. Parking management systems provide simple and clever answers to the problems that modern parking lots face. By using technology, they improve and streamline parking, contributing to both environmental preservation and public safety. Research indicates that individuals may locate a parking spot in a car park using a navigation system up to 45% quicker. Smart utilities are the fastest-growing application segment. The electric, gas, and water industries are examples of smart utilities. They use networked sensors across their systems to monitor and assess their operations and provide services more effectively. Quantification and monitoring are enabled by the usage of the monitoring system. Utility bills can be reduced with the use of monitoring and control. Savings in water use can be enormous.

Smart Cities Market Segmentation: By Smart Governance

• City Surveillance

• C.C.S.

• E-governance

• Smart Lighting

• Smart Infrastructure

Based on smart governance, smart infrastructure is the largest segment of the market, with a share of around 29% in 2023. Planning, maintenance, operations, and power supply are all areas where smart infrastructure may be enhanced. Via internet-enabled trash collection, dumpsters, and fleet management systems, smart city efforts may also be utilized to tackle air pollution, climate change, waste management, and sanitation. Smart lighting is the fastest-growing segment. Smart lights are lightbulbs and lighting fixtures with built-in sensors that can perceive and communicate with their surroundings, users, and other smart devices automatically. In contrast to conventional light bulbs that need to be changed by hand, smart lights may be managed remotely or by using voice commands. This offers the advantages of being eco-friendly, having a longer life, and helping with energy saving.

Smart Cities Market Segmentation: Regional Analysis

• North America

• Asia-Pacific

• Europe

• South America

• Middle East and Africa

Based on region, North America is the largest segment, holding a rough share of 31%. This is due to several reasons which include developed economy, investments, technological advancements, infrastructure availability, standard of living, presence of key companies, awareness, and demand. The United States and Canada lead the way. However, Asia-Pacific is considered to be the fastest-growing segment owing to emerging players, governmental initiatives, rising funds, economic improvements, urbanization, globalization, digitalization, cost-effectiveness, changing preferences, construction projects, cloud-based solutions, and an increasing need. Countries like China, Japan, Singapore, and India are the notable ones. This region holds an approximate share of 24%. Europe, with countries like the United Kingdom, Germany, and Italy, has been seeing significant improvements owing to R&D activities and advancements in AI and ML fields.

COVID-19 Impact Analysis on the Global Smart Cities Market:

The outbreak of the virus had a positive impact on the market. The new norm was lockdowns, social isolation, and movement restrictions. This caused a shift towards digitalization and remote work. Many factories and manufacturing units had to be shut down to prevent the spreading of the virus. This caused a shift towards virtual mode. All planning, meetings, and other operations had to be carried out through online mode. Additionally, schools and universities were closed as per the guidelines and rules. Distance learning garnered attention. Secondly, there was a demand for online consultations and checkups in the healthcare sector. Telemedicine gained significant prominence as people were afraid to step in. As per a report by the National Institute of Health, the number of telemedicine encounters jumped by 766% in the first three months of the pandemic, from 0.3% of all interactions in March to June 2019 to 23.6% of all interactions in the same period, according to a national survey including 36 million working-age persons with private insurance claims data. Thirdly, the pandemic heightened awareness of sustainability. Green building projects were prioritized to ensure resource optimization. Post-pandemic, the market has continued to see a constant upsurge.  

Latest Trends/ Developments:

The companies in this market are motivated to achieve a higher market share by implementing different strategies, such as acquisitions, partnerships, and investments. Companies are also spending heavily to improve existing creations while maintaining competitive pricing. This has further resulted in increased enlargement.

Increasing community collaboration, access to healthcare and education, and citizen participation are the main goals of the digital citizen trend. Equal rights are granted to employment possibilities and civic engagement through inclusive services. Local connection platforms, for example, offer remote engagement with officials and online voting.

Key Players:

1. IBM Corporation

2. Siemens AG

3. Cisco Systems, Inc.

4. Schneider Electric

5. Huawei Technologies Co., Ltd.

6. Microsoft Corporation

7. Oracle Corporation

8. ABB Ltd

9. Ericsson AB

10. AT&T Inc.

• In February 2022, the European Society of Radiology (ESR) and GE HealthCare announced the extension of their partnership. GE HealthCare aims to provide more accurate, connected, and compassionate care.

• In May 2021, in collaboration with Intel Corp., L&T Technology Services Ltd. created an outdoor smart parking solution that uses Intel Distribution's OpenVINO Toolkit to execute AI inferencing models on Intel Movidius VPUs and Intel Xeon scalable CPUs. The solution seeks to reinvent outdoor smart parking in public spaces worldwide with its edge AI capabilities.

• In March 2021, the ambitious US-India Artificial Intelligence (USIAI) flagship effort was introduced by the binational Indo-U.S. Science and Technology Forum (IUSSTF). To build synergies that address possibilities and challenges at the nexus of science, technology, and society, the activity will take advantage of IUSSTF's exceptional capacity to bring together important players from India and the USA.