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The Smart City Market size is estimated to grow by USD 288.7 billion between 2022 and 2027, at a CAGR of 24.53% during the forecast period. The market's growth rate is influenced by several key factors. One such factor is the increasing demand for metal machining within the oil and gas sector, driven by the need for precision components in drilling and extraction processes. Additionally, the expansion of production facilities dedicated to metal machining contributes to market growth, enabling manufacturers to meet the rising demand effectively. Moreover, increased investments in infrastructure projects, such as construction and transportation, further propel the market forward. These elements collectively indicate a positive growth trajectory for the market, highlighting the crucial role played by metal machining in various industrial applications, including automotive, aerospace, and energy sectors.
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This 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.
The market is driven by a surge in demand for energy-efficient systems and innovative IoT solutions like PoE (Power over Ethernet), enhancing Smart Buildings with advanced energy management and reducing greenhouse gas emissions. The integration of 5G technology in Commercial buildings is a notable trend, facilitating robust Security & emergency management and efficient Building infrastructure management. Challenges include ensuring seamless integration of AI, Internet-of-Things (IoT), and Virtual Reality (VR) technologies, and addressing complexities in data analytics and cloud computing for optimal waste management and energy consumption control.
The increase in IT consolidation and modernization is the key factor driving the global 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.
Moreover, 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 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.
Moreover, 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 market growth. The high cost of upgrading smart grids is expected to hinder the growth of the global 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 market in the future.
The market is transforming urban environments with a focus on energy-efficient systems and reducing energy consumption. Leveraging Internet of Things (IoT) technologies, cities are implementing Power over Ethernet (PoE) solutions for efficient power delivery, particularly in Smart Buildings solutions and services. These initiatives aim to optimize buildings for sustainability, lower greenhouse gas emissions, and enhance Building management systems to track and manage energy usage effectively. Emerging technologies like 5G technology are driving advancements in Commercial buildings, enabling sophisticated Energy management and robust Security & emergency management solutions. The integration of Artificial Intelligence (AI), Internet-of-Things (IoT), and Virtual Reality (VR) technologies is reshaping Building infrastructure management and enhancing Commercial Real Estate (CRE) operations through Business Information Modeling (BIM).
The 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 companies 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 companies in the region, such as BT, Vodafone, and Deutsche Telekom, are competing to release their smart technology products and corresponding package services.
The 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.
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 smart cities market.
ABB Ltd.- 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 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 research report forecasts market growth by revenue at global, regional & country levels and provides a market growth analysis of the latest trends and growth opportunities from 2017 to 2027.
The market is evolving rapidly, driven by imperatives such as environmental sustainability, efficient resource management, and advanced environmental monitoring technologies. Innovations like real-time license plate tracking and facial recognition enhance public safety and surveillance, benefiting urban sources and traffic safety. Data-driven approaches, such as data-driven policing and optimized emergency response protocols, bolster crime-fighting capabilities and empower first responders. Leveraging big data analytics and AI, cities optimize traffic signal management and emergency vehicle deployment, thereby reducing crime rates and improving response times.
Moreover, smart technologies extend to energy savings through intelligent surveillance and home security systems, curbing operational costs and maintenance costs. Despite tight budgets, cities prioritize cost-effective systems with long-term cost savings, leveraging existing infrastructure and making large-scale investments with government backing in cities like Amsterdam and Chengdu. This transformative potential spans sectors like public safety, healthcare, and utilities, fostering innovative business models and enabling modern healthcare landscapes with smart healthcare solutions. Additionally, the integration of Internet of Things (IoT) devices and smart metering data facilitates consumer engagement and enhances revenue assurance in utilities, thus driving the market forward.
Furthermore, the market is revolutionizing urban management by leveraging cutting-edge technologies to enhance citizens' lives. Through software integration and the expertise of software and hardware engineers, cities navigate integration complexities to deploy solutions like gunshot detection sensors and rapid video analytics, empowering public safety officials and law enforcement responses. Key stakeholders such as city managers, building owners, and facility managers drive smart city initiatives forward, optimizing vehicle traffic, electrical grids, and commute times. The emphasis on smart grid efficiency and digital era solutions ensures cybersecurity and effective data stewardship while promoting interoperability and cross-border portability.
Market Scope |
|
Report Coverage |
Details |
Page number |
183 |
Base year |
2022 |
Historic period |
2017-2021 |
Market Forecast Period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 24.53% |
Market growth 2023-2027 |
USD 288.7 billion |
Market structure |
Fragmented |
YoY growth (%) |
17.79 |
Regional analysis |
Europe, North America, APAC, South America, and Middle East and Africa |
Performing market contribution |
Europe at 37% |
Key countries |
US, Japan, UK, Germany, and Spain |
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, Sierra Wireless Inc., and Signify NV |
Market dynamics |
Parent market analysis, Market forecasting, 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. |
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
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