Global Smart Cities Market Overview
Smart Cities Market Size Was Valued at USD 743. 30 Billion in 2023 and is Projected to Reach USD 2859. 81 Billion by 2032, Growing at a CAGR of 16.15% From 2024-2032
The concept of smart cities can be dated back to the 1960s and 1970s when the U.S. Community Analysis Bureau began collecting data by utilizing databases, aerial photography, and cluster analysis to monitor resources, issue reports to direct services, minimize disasters, and reduce poverty. As a result of this initiative, the first generation of smart cities was born. The smart city employs information and communication technology (ICT) to streamline operations, improve government service, enhance citizen welfare, and help the government share data with the public. Technologies such as the Internet of Things (IoT), cloud computing, cognitive computing, big data analytics, and open data are used to optimize city functions and stimulate economic growth while simultaneously enhancing residents' quality of life. Furthermore, cities currently house 54 % of the world's population, which is predicted to increase to 66 % by 2050, resulting in an additional 2.5 billion people joining the urban population in the following three decades. With the anticipated increase in population, there will be a need to manage resource sustainability on an environmental, social, and economic level. Citizens and government entities can collaborate to launch initiatives and employ advanced technologies to manage assets and resources in the fast-growing urban environment thus, fueling the growth of the smart cities market during the analysis period.
Market Dynamics and Key Factors in Smart Cities:
Drivers:
Integration of automation, machine learning, and IoT has paved the way for the development of smart cities. Boosting economic growth and providing citizens with a high quality of life are the essential components offered by a smart city. It entails providing citizens with a standardized set of services while lowering infrastructure expenses. It is especially crucial given, the projected population expansion in metropolitan areas, which will demand more effective usage of infrastructure and assets. These enhancements will be possible due to smart city services and solutions, resulting in an improved quality of life for citizens. Smart city enhancements also add value to existing infrastructure by generating new revenue sources and improving operational efficiencies, which save money for both governments and citizens.
Cities have several environmental benefits, such as smaller geographic footprints, but they also have certain drawbacks, such as the consumption of fossil fuels to power them. Smart solutions, such as the development of an electric transportation system to cut emissions, could help minimize these detrimental effects. While not in use, electric vehicles may serve to manage the frequency of the electric grid. As a result of such sustainable transportation options, the number of cars in metropolitan areas should decrease, as autonomous vehicles are predicted to reduce the necessity for car ownership among the population. Developing such sustainable solutions has the potential to provide environmental and societal benefits, hence driving the growth of the smart cities market over the forecast period.
Governments have played a significant role in the smart city market across the world through initiatives and programs aimed at deploying smart services as a vital component of their infrastructure. The General Services Administration's (GSA) Smart Buildings program, began in May 2012 to reduce costs and provide smart services. One notable initiative in recent years was the modernization of federal government buildings, which was accomplished through the usage of linked technology. Similarly, due to its focus on energy and climate goals, the smart cities market in Europe is predicted to develop at a high rate. Smart parking solutions can help drivers find a parking space and also enable digital payment thus, strengthening the development of the smart cities market over the projected period.
Restraints:
The introduction of surveillance cameras and sophisticated systems networked to monitor areas makes maintaining anonymity more challenging. Face recognition technology, for instance, has fundamentally altered the concept of personal privacy. Moreover, the capacity to track and centralize data provides the person in charge of it a lot of power. Whoever has access to citizens' data, whether it is a government or a corporate entity, can control, frighten, and try to manipulate public opinion. Furthermore, cities that rely almost exclusively on electronics and networks lose decision-making autonomy and may become unable to react in the event where these tools are unavailable. If the power sources are non-renewable, the constant use of power supplies for the functioning of sensors and cameras installed in smart cities might raise the carbon footprint thus, hampering the expansion of the smart cities market in the forecast period.
Opportunities:
The rise in the urban population is creating a tremendous strain on non-renewable sources. To tackle the challenges faced by the growing population, governments are partnering with service providers to develop smart solutions that will tackle the problems such as the surge in the number of automobiles, that results in traffic congestion. Moreover, with the growing population, there is a need to provide healthcare facilities to every individual thus, the integration of modern technologies such as IoT, Artificial Intelligence, big data analytics, and 5G can be employed to develop smart hospitals. The 5G technology has made robust changes in cloud computing solutions. 5G enables the quick transfer of data while the usage of AI in data analytics automatically analyses the data, and uncovers hidden trends, patterns, and insights that can be utilized by governments to make better decisions. Infrastructures such as old buildings, roads, and bridges require high investments throughout their life for maintenance and repair. The usage of smart technology can provide early information to cities to manage the infrastructure failure before it occurs, thus the wide applications of smart technologies in the development of smart cities are creating a profitable opportunity for the market players involved in the smart cities market.
Challenges:
Smart city projects must be open to the public and accessible through an open data site or mobile app. It allows residents to interact with the data and fulfill personal duties such as paying bills and choosing efficient transportation options. All this requires a reliable and secure, data collecting and storage system to prevent hacking or misuse of the data. The data collected and generated by smart cities also need to be anonymized to avoid privacy concerns. Moreover, the biggest challenge is quite probably that of connectivity. Millions of IoT devices are connected to function efficiently, small errors can affect the functioning of the overall system.
Market Segmentation
Depending on the component, the software segment is forecasted to have the highest share of the smart cities market. The software allows seamless and smooth interaction of AI, IoT, sensors, and data analytics. With this integration service providers can offer real-time solutions for traffic management, industrial utility management, and the healthcare sector. The software provides advanced platforms that offer a cohesive and connected experience that elevates the functioning of the smart city. Furthermore, the software allows data collection that is hardware-independent and easily transfers data from one location to another via the cloud. The software allows calculations and estimations that are based on historical data, and real-time data thus, supporting the expansion of the software segment during the forecast period.
Depending on the application, the smart transportation system is anticipated to dominate the smart cities market during the projected period attributed to the rise in the vehicle-bearing population. Connected transport systems offer the greatest potentials to significantly improve efficiency throughout the city. From improved traffic management to the capability of tracking buses and train locations, smart technologies enable cities to better serve citizens even though populations are growing exponentially. Smart transportation makes better use of available resources, lowering costs through preventative maintenance, reduced energy usage, and less expenditure on accidents. Individuals can save money when public transportation is affordable and efficient enough to compete with private vehicle ownership. According to Texas A&M Transportation Institute, traffic congestion in the United States costs a total of US$ 179 billion each year to the United States economy. This cost can be significantly reduced by the utilization of smart technologies thus, strengthening the expansion of the smart transportation segment during the analysis period.
Players Covered in Smart Cities market are :
- Cisco Systems (US)
- IBM (US)
- Siemens AG (Germany)
- Schneider Electric (France)
- Ericsson (Sweden)
- Vodafone (UK)
- Itron Inc. (US)
- Verizon (US)
- Telensa (England)
- ABB (Switzerland)
- Honeywell International Inc. (US)
- SAP SE (Germany)
- KAPSCH Group (Austria)
- and AGT International (Switzerland) and Other Major Players.
Regional Analysis of Smart Cities Market:
North America region is expected to dominate the smart cities market in the forecast period attributed to the presence of major service providers in this region. The increase in government fundings to propel the adoption rate of smart technologies in the U.S. and Canada are driving the growth of the smart cities market in this region. The growing awareness about the advantages of smart solutions in managing populated areas, transportation, and the demand for smart buildings to lower the strain on natural resources consolidates the demand for smart cities. The industrial sector in this region is highly developed and to lower the carbon footprint industries in this region have partnered with services providers, to incorporate smart technologies that will help in managing available resources efficiently. The ready 5G infrastructure is expected to fuel the development of the smart cities market in this region.
The smart cities market in the Asia-Pacific region is anticipated to develop at the highest growth rate over the analysis period. The countries in this region are observing a tremendous flow of population from rural areas to urban areas. Moreover, to provide healthcare, transportation, and electricity facilities to the rising urban population more efficiently, governments in this region are collaborating with service providers. For instance, the government of India has planned to develop 4,000 smart cities by the end of 2023, and for this, the government of India has invested US$ 6.5 billion. With this initiative, the Indian government hopes to provide citizens with a decent standard of living, and a clean & sustainable environment. Furthermore, China has invested heavily in the smart city programs and is on track to spend US$ 39 billion on smart cities by 2023 through its smart city program and has over 500 smart cities in various developmental stages. All these essential steps taken by several governments in this region are strengthening the expansion of the smart cities market in this region.
The smart cities market in the European region is anticipated to have a significant growth rate over the projected period. The UK, Italy, Portugal, Bulgaria, and Poland are the major countries in this region promoting the expansion of the smart cities market. According to Cities Today, the European smart cities program has reached a record of US$ 302.8 million in investment. This program was launched in the year 2016 and brings together 34 partners from across government, and industry to evaluate the scalability of smart technology to address urban challenges and support the government initiative of 'net zero' by 2050. Burgas, a city in Bulgaria, has received the largest investment of US$ 197 million. The European Union has targeted to reach US$ 564 million by the end of 2021 thus, such huge investments are strengthening the expansion of the smart cities market in this region.
COVID-19 Impact on Smart Cities Market:
Long before the pandemic, there was a growing interest and significant progress in adopting smart solutions, enabled by ICTs and big data analytics, to improve the efficiency and efficacy of urban operations while also improving quality of life. COVID-19 has provided a vital opportunity to evaluate the capabilities of smart solutions to solve essential socioeconomic concerns as it unfolds amid these rapid improvements. It has also given smart city development a boost, as seen by the rising use of teleworking, telemedicine, monitoring systems, and online commerce and education. As a result, it is predicted that COVID-19 will bolster smart city initiatives. Smart technology-assisted governments in minimizing human-to-human contact, identifying infected individuals, predicting diffusion patterns, and facilitating quarantine procedures during the pandemic period. The platform's live data feeds were repurposed in response to the COVID-19 crisis to create a data dashboard that notified local authorities of changes in social behaviors and enabled them to make data-driven and evidence-based adaptive decisions. To summarize, the COVID-19 pandemic has stimulated the adoption rate of smart cities thus, driving the growth of the market.
Recent Developments in Smart Cities Market:
- In November 2021, Schneider Electric, a global leader in energy management and automation, launched Green Yodha, a sustainability engagement program in India, to encourage and enable businesses, industries, and individuals to collaborate and take tangible climate action. This urgent call to action aims to support the Indian government's robust commitment expressed at COP26.
- In August 2021, ABB India collaborated with the Indore Smart City Development Limited to deploy next-generation digital technology that will provide continuous electricity supply to homes and industries in Indore. In the first phase of the deployment, the technology utilized in this partnership has achieved 24/7 electricity supply to more than 2300 connections with an efficient automatic response system (ARS) in case of power outages or disruption.
Global Smart Cities Market |
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Base Year: |
2023 |
Forecast Period: |
2024-2032 |
Historical Data : |
2017 to 2023 |
Market Size in 2023: |
USD 743. 30 Bn. |
Forecast Period 2022-28 CAGR: |
16.15% |
Market Size in 2032: |
USD 2859. 81 Bn. |
Segments Covered: |
By Type |
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By Component |
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By Region |
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Key Market Drivers: |
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Key Market Restraints: |
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Key Opportunities: |
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Companies Covered in the report: |
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Chapter 1: Introduction
ā1.1 Research Objectives
ā1.2 Research Methodology
ā1.3 Research Process
ā1.4 Scope and Coverage
āā1.4.1 Market Definition
āā1.4.2 Key Questions Answered
ā1.5 Market Segmentation
Chapter 2:Executive Summary
Chapter 3:Growth Opportunities By Segment
ā3.1 By Type
ā3.2 By Component
Chapter 4: Market Landscape
ā4.1 Porter's Five Forces Analysis
āā4.1.1 Bargaining Power of Supplier
āā4.1.2 Threat of New Entrants
āā4.1.3 Threat of Substitutes
āā4.1.4 Competitive Rivalry
āā4.1.5 Bargaining Power Among Buyers
ā4.2 Industry Value Chain Analysis
ā4.3 Market Dynamics
āā3.5.1 Drivers
āā3.5.2 Restraints
āā3.5.3 Opportunities
āā3.5.4 Challenges
ā4.4 Pestle Analysis
ā4.5 Technological Roadmap
ā4.6 Regulatory Landscape
ā4.7 SWOT Analysis
ā4.8 Price Trend Analysis
ā4.9 Patent Analysis
ā4.10 Analysis of the Impact of Covid-19
āā4.10.1 Impact on the Overall Market
āā4.10.2 Impact on the Supply Chain
āā4.10.3 Impact on the Key Manufacturers
āā4.10.4 Impact on the Pricing
Chapter 4: Smart Cities Market by Type
ā4.1 Smart Cities Market Overview Snapshot and Growth Engine
ā4.2 Smart Cities Market Overview
ā4.3 Smart Governance
āā4.3.1 Introduction and Market Overview
āā4.3.2 Historic and Forecasted Market Size (2016-2028F)
āā4.3.3 Key Market Trends, Growth Factors and Opportunities
āā4.3.4 Smart Governance: Grographic Segmentation
ā4.4 Smart Building
āā4.4.1 Introduction and Market Overview
āā4.4.2 Historic and Forecasted Market Size (2016-2028F)
āā4.4.3 Key Market Trends, Growth Factors and Opportunities
āā4.4.4 Smart Building: Grographic Segmentation
ā4.5 Environmental Solution
āā4.5.1 Introduction and Market Overview
āā4.5.2 Historic and Forecasted Market Size (2016-2028F)
āā4.5.3 Key Market Trends, Growth Factors and Opportunities
āā4.5.4 Environmental Solution: Grographic Segmentation
ā4.6 Smart Utilities
āā4.6.1 Introduction and Market Overview
āā4.6.2 Historic and Forecasted Market Size (2016-2028F)
āā4.6.3 Key Market Trends, Growth Factors and Opportunities
āā4.6.4 Smart Utilities: Grographic Segmentation
ā4.7 Smart Transportation
āā4.7.1 Introduction and Market Overview
āā4.7.2 Historic and Forecasted Market Size (2016-2028F)
āā4.7.3 Key Market Trends, Growth Factors and Opportunities
āā4.7.4 Smart Transportation: Grographic Segmentation
ā4.8 Smart Healthcare
āā4.8.1 Introduction and Market Overview
āā4.8.2 Historic and Forecasted Market Size (2016-2028F)
āā4.8.3 Key Market Trends, Growth Factors and Opportunities
āā4.8.4 Smart Healthcare: Grographic Segmentation
Chapter 5: Smart Cities Market by Component
ā5.1 Smart Cities Market Overview Snapshot and Growth Engine
ā5.2 Smart Cities Market Overview
ā5.3 Software
āā5.3.1 Introduction and Market Overview
āā5.3.2 Historic and Forecasted Market Size (2016-2028F)
āā5.3.3 Key Market Trends, Growth Factors and Opportunities
āā5.3.4 Software: Grographic Segmentation
ā5.4 Hardware
āā5.4.1 Introduction and Market Overview
āā5.4.2 Historic and Forecasted Market Size (2016-2028F)
āā5.4.3 Key Market Trends, Growth Factors and Opportunities
āā5.4.4 Hardware: Grographic Segmentation
Chapter 6: Company Profiles and Competitive Analysis
ā6.1 Competitive Landscape
āā6.1.1 Competitive Positioning
āā6.1.2 Smart Cities Sales and Market Share By Players
āā6.1.3 Industry BCG Matrix
āā6.1.4 Ansoff Matrix
āā6.1.5 Smart Cities Industry Concentration Ratio (CR5 and HHI)
āā6.1.6 Top 5 Smart Cities Players Market Share
āā6.1.7 Mergers and Acquisitions
āā6.1.8 Business Strategies By Top Players
ā6.2 CISCO SYSTEMS (US)
āā6.2.1 Company Overview
āā6.2.2 Key Executives
āā6.2.3 Company Snapshot
āā6.2.4 Operating Business Segments
āā6.2.5 Product Portfolio
āā6.2.6 Business Performance
āā6.2.7 Key Strategic Moves and Recent Developments
āā6.2.8 SWOT Analysis
ā6.3 IBM (US)
ā6.4 SIEMENS AG (GERMANY)
ā6.5 SCHNEIDER ELECTRIC (FRANCE)
ā6.6 ERICSSON (SWEDEN)
ā6.7 VODAFONE (UK)
ā6.8 ITRON INC. (US)
ā6.9 VERIZON (US)
ā6.10 TELENSA (ENGLAND)
ā6.11 ABB (SWITZERLAND)
ā6.12 HONEYWELL INTERNATIONAL INC. (US)
ā6.13 SAP SE (GERMANY)
ā6.14 KAPSCH GROUP (AUSTRIA)
ā6.15 AND AGT INTERNATIONAL (SWITZERLAND)
Chapter 7: Global Smart Cities Market Analysis, Insights and Forecast, 2016-2028
ā7.1 Market Overview
ā7.2 Historic and Forecasted Market Size By Type
āā7.2.1 Smart Governance
āā7.2.2 Smart Building
āā7.2.3 Environmental Solution
āā7.2.4 Smart Utilities
āā7.2.5 Smart Transportation
āā7.2.6 Smart Healthcare
ā7.3 Historic and Forecasted Market Size By Component
āā7.3.1 Software
āā7.3.2 Hardware
Chapter 8: North America Smart Cities Market Analysis, Insights and Forecast, 2016-2028
ā8.1 Key Market Trends, Growth Factors and Opportunities
ā8.2 Impact of Covid-19
ā8.3 Key Players
ā8.4 Key Market Trends, Growth Factors and Opportunities
ā8.4 Historic and Forecasted Market Size By Type
āā8.4.1 Smart Governance
āā8.4.2 Smart Building
āā8.4.3 Environmental Solution
āā8.4.4 Smart Utilities
āā8.4.5 Smart Transportation
āā8.4.6 Smart Healthcare
ā8.5 Historic and Forecasted Market Size By Component
āā8.5.1 Software
āā8.5.2 Hardware
ā8.6 Historic and Forecast Market Size by Country
āā8.6.1 U.S.
āā8.6.2 Canada
āā8.6.3 Mexico
Chapter 9: Europe Smart Cities Market Analysis, Insights and Forecast, 2016-2028
ā9.1 Key Market Trends, Growth Factors and Opportunities
ā9.2 Impact of Covid-19
ā9.3 Key Players
ā9.4 Key Market Trends, Growth Factors and Opportunities
ā9.4 Historic and Forecasted Market Size By Type
āā9.4.1 Smart Governance
āā9.4.2 Smart Building
āā9.4.3 Environmental Solution
āā9.4.4 Smart Utilities
āā9.4.5 Smart Transportation
āā9.4.6 Smart Healthcare
ā9.5 Historic and Forecasted Market Size By Component
āā9.5.1 Software
āā9.5.2 Hardware
ā9.6 Historic and Forecast Market Size by Country
āā9.6.1 Germany
āā9.6.2 U.K.
āā9.6.3 France
āā9.6.4 Italy
āā9.6.5 Russia
āā9.6.6 Spain
Chapter 10: Asia-Pacific Smart Cities Market Analysis, Insights and Forecast, 2016-2028
ā10.1 Key Market Trends, Growth Factors and Opportunities
ā10.2 Impact of Covid-19
ā10.3 Key Players
ā10.4 Key Market Trends, Growth Factors and Opportunities
ā10.4 Historic and Forecasted Market Size By Type
āā10.4.1 Smart Governance
āā10.4.2 Smart Building
āā10.4.3 Environmental Solution
āā10.4.4 Smart Utilities
āā10.4.5 Smart Transportation
āā10.4.6 Smart Healthcare
ā10.5 Historic and Forecasted Market Size By Component
āā10.5.1 Software
āā10.5.2 Hardware
ā10.6 Historic and Forecast Market Size by Country
āā10.6.1 China
āā10.6.2 India
āā10.6.3 Japan
āā10.6.4 Southeast Asia
Chapter 11: South America Smart Cities Market Analysis, Insights and Forecast, 2016-2028
ā11.1 Key Market Trends, Growth Factors and Opportunities
ā11.2 Impact of Covid-19
ā11.3 Key Players
ā11.4 Key Market Trends, Growth Factors and Opportunities
ā11.4 Historic and Forecasted Market Size By Type
āā11.4.1 Smart Governance
āā11.4.2 Smart Building
āā11.4.3 Environmental Solution
āā11.4.4 Smart Utilities
āā11.4.5 Smart Transportation
āā11.4.6 Smart Healthcare
ā11.5 Historic and Forecasted Market Size By Component
āā11.5.1 Software
āā11.5.2 Hardware
ā11.6 Historic and Forecast Market Size by Country
āā11.6.1 Brazil
āā11.6.2 Argentina
Chapter 12: Middle East & Africa Smart Cities Market Analysis, Insights and Forecast, 2016-2028
ā12.1 Key Market Trends, Growth Factors and Opportunities
ā12.2 Impact of Covid-19
ā12.3 Key Players
ā12.4 Key Market Trends, Growth Factors and Opportunities
ā12.4 Historic and Forecasted Market Size By Type
āā12.4.1 Smart Governance
āā12.4.2 Smart Building
āā12.4.3 Environmental Solution
āā12.4.4 Smart Utilities
āā12.4.5 Smart Transportation
āā12.4.6 Smart Healthcare
ā12.5 Historic and Forecasted Market Size By Component
āā12.5.1 Software
āā12.5.2 Hardware
ā12.6 Historic and Forecast Market Size by Country
āā12.6.1 Saudi Arabia
āā12.6.2 South Africa
Chapter 13 Investment Analysis
Chapter 14 Analyst Viewpoint and Conclusion
Global Smart Cities Market |
|||
Base Year: |
2023 |
Forecast Period: |
2024-2032 |
Historical Data : |
2017 to 2023 |
Market Size in 2023: |
USD 743. 30 Bn. |
Forecast Period 2022-28 CAGR: |
16.15% |
Market Size in 2032: |
USD 2859. 81 Bn. |
Segments Covered: |
By Type |
|
|
By Component |
|
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By Region |
|
||
Key Market Drivers: |
|
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Key Market Restraints: |
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Key Opportunities: |
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Companies Covered in the report: |
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Frequently Asked Questions :
The forecast period in the Smart Cities Market research report is 2022-2028.
Cisco Systems (US), IBM (US), Siemens AG (Germany), Schneider Electric (France), Vodafone (UK), Intron Inc. (US) and Other Major Players.
Smart Cities Market is segmented into Product Type, Component and region. By Type, the market is categorized into Smart Governance, Smart Building, Environmental Solution, Smart Utilities, Smart Transportation, and Smart Healthcare. By Component, the market is categorized into Software, Hardware. By region, it is analysed across North America (U.S.; Canada; Mexico), Europe (Germany; U.K.; France; Italy; Russia; Spain, etc.), Asia-Pacific (China; India; Japan; Southeast Asia, etc.), South America (Brazil; Argentina, etc.), Middle East & Africa (Saudi Arabia; South Africa, etc.).
The concept of smart cities can be dated back to the 1960s and 1970s when the U.S. Community Analysis Bureau began collecting data by utilizing databases, aerial photography, and cluster analysis to monitor resources, issue reports to direct services, minimize disasters, and reduce poverty.
Smart Cities Market Size Was Valued at USD 743. 30 Billion in 2023 and is Projected to Reach USD 2859. 81 Billion by 2032, Growing at a CAGR of 16.15% From 2024-2032