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Smart City Market size is estimated to grow by USD 288.7 billion between 2022 and 2027 accelerating at a CAGR of 24.53% during the forecast period. The market's growth relies on various factors, such as the rise in IT consolidation and modernization, improved global broadband connectivity, and increased investment in smart cities. Smart cities are characterized by the integration of smart technologies and intelligent solutions, aimed at enhancing the quality of life in a sustainable manner. These cities utilize data captured from connected infrastructure, individuals, and vehicles to generate valuable insights and patterns.
This smart city report extensively covers market segmentation by application (smart infrastructure, smart energy, smart mobility, smart security, and others), component (hardware, software, and services), and geography (Europe, North America, APAC, South America, and Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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The increase in IT consolidation and modernization is the key factor driving the global smart city market growth. IT consolidations in organizations help improve operational efficiency and achieve economies of scale. The ever-increasing consolidation of IT infrastructures such as data centers and networking systems in organizations is forcing C-suite executives to implement advanced IT service delivery models like shared and managed IT services.
The continual change in technology and the need for IT modernization in numerous industry verticals, such as the manufacturing, BFSI, telecom, and healthcare sectors, are the key factors driving the adoption of IT services and the deployment of smart city projects for providing better connectivity and sustainability. The growing popularity of social media and mobile devices and organizations' focus on modernizing their IT infrastructure are the other factors driving the smart cities market during the forecast period.
The proliferation of smart city projects in emerging economies is the primary trend in the global smart city market. Developed economies in North America and Europe have been working on developing smart cities for a decade and have already implemented many projects. APAC is the fastest-growing region in terms of smart city technologies. Rapid urban growth, fueled by mass migration to the cities, is increasing the urban population in Asia, which is leading to the development of infrastructure in cities, particularly in emerging countries in Asia. Emerging economies like India and China are still in the planning phase and are launching many pilot projects.
Cambodia, Phnom Penh, Battambang, and Siem Reap have been selected to take part in the Association of Southeast Asian Nations (ASEAN's) Smart Cities Network, which is working on developing smart, sustainable urban development in 26 cities around the region by 2025. The rapid rate of urbanization in countries like India is also a major factor responsible for the roll-out of smart city projects, as smart city infrastructure help end-users (such as government agencies, healthcare, and transportation service providers) respond faster to the challenges being faced by urban settlements.
The high cost of upgrading smart grids is a major challenge to the global smart city market growth. The high cost of upgrading smart grids is expected to hinder the growth of the global smart city market during the forecast period. The costs involved in upgrading smart grids include additional investments in distribution systems, replacement of transmission lines, power delivering systems, substation digitalization, and digital controls. Consequently, power utilities and independent power producers face the prospect of huge initial capital investment.
The aging power infrastructure of these utilities and their growing need for renewable power grid integration will increase their grid renovation budgets in the coming years. This is the consequence of the near-term cost evasion by utilities, and it acts as a barrier to the adoption of smart grid data management solutions. The power utility providers are reluctant to upgrade their power grids to make them compatible with smart grid data management solutions because of the high costs involved. This is expected to have a significant impact on the growth of the global smart city market in the future.
The smart city market share growth by the smart infrastructure segment will be significant during the forecast period. Smart infrastructure involves digitalization in energy systems, buildings, and industries to enhance the way people live and work by improving efficiency and sustainability. Smart buildings have advanced installation and technology systems that allow the automation of numerous internal processes, such as heating, ventilation, lighting, security, and other systems in the building.
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The smart infrastructure segment was valued at USD 28.67 billion in 2017 and continue to grow by 2021. Smart infrastructures are based on their physical structure (cabling, sensors, etc.) and are based on four principles: data, analytics, feedback, and adaptability. Increasing industrial development, commercialization, and awareness of effective utilization of energy and building optimization will drive the adoption of smart infrastructures. Smart infrastructure combines the real and digital worlds in energy systems, buildings, and industries, enhancing the way people live and work and significantly improving efficiency and sustainability. These factors will positively impact the growth of the smart cities market in focus during the forecast period.
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Europe is projected to contribute 37% by 2027. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the smart cities market during the forecast period. The industrial sector in Europe is well-developed, with a well-settled end-user market base. Europe is well equipped with the latest technologies to lead the development of smart cities. With the presence of some of the most advanced economies in the world, there is a high concentration of top vendors in the region. Advanced economies like Germany and France are the major contributors to the smart cities market in Europe. The market is driven by the availability of high-speed wireless networks and increased connected devices such as smartphones and IoT penetration. Telecom vendors in the region, such as BT, Vodafone, and Deutsche Telekom, are competing to release their smart technology products and corresponding package services.
This report forecasts the contribution of all the segments to the growth of the market. In addition, we have included the COVID-19 impact and the recovery strategies for each segment. COVID-19 led to an upsurge in the demand for Europe. In 2020, There was a huge demand for IoT technology in the healthcare industry in 2020. IoT technology helped to track the spread of the disease and control the spread in real time. In April 2020, Germany's public health authority launched a smartwatch app known as Corona-Datenspende, in partnership with Thryve, a health tech startup, to help monitor the spread of the disease and analyze whether measures to contain COVID-19 are working. The app gathered the vital signs of volunteers wearing the smartwatch and analyzed whether they had flu-like symptoms. The results were further represented in an interactive online map for the review of health authorities. Therefore, the launch of such products, which use IoT technology, is expected to positively impact the growth of the smart city market growth in Europe during the forecast period.
The smart city report includes the adoption lifecycle of the smart cities 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 report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Smart City Market Customer Landscape
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the smart cities market.
Abb - The company offers smart city solutions such as smart buildings, e-mobility, energy management, and data centres.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:
Qualitative and quantitative analysis of vendors 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 vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The smart city market research report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027.
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Smart City Market Scope |
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Report Coverage |
Details |
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Page number |
183 |
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Base year |
2022 |
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Historic period |
2017-2021 |
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Smart City Market Forecast Period |
2023-2027 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 24.53% |
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Market growth 2023-2027 |
USD 288.7 billion |
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Market structure |
Fragmented |
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YoY growth (%) |
17.79 |
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Regional analysis |
Europe, North America, APAC, South America, and Middle East and Africa |
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Performing market contribution |
Europe at 37% |
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Key countries |
US, Japan, UK, Germany, and Spain |
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Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
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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, Sierra Wireless Inc., and Signify NV |
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Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
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Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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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 Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
Research Framework
Technavio presents a detailed picture of the market by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key industry influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.
INFORMATION SOURCES
Primary sources
Secondary sources
DATA ANALYSIS
Data Synthesis
Data Validation
REPORT WRITING
Qualitative
Quantitative
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