Smart City Information And Communication Technologies (ICT) Infrastructure Market by Component, Application, and Geography - Forecast and Analysis 2023-2027

Smart City ICT Infrastructure Market Forecast 2023-2027

The Smart City Information And Communication Technologies (ICT) Infrastructure Market is estimated to increase by USD 98.9 billion, growing at a CAGR of 21.15% between 2022 and 2027. The market's expansion hinges on various factors, such as increased investments in smart cities, the imperative for energy preservation, and the uptick in IT consolidation and modernization efforts. However, challenges like technological adaptability, concerns regarding data privacy and cyber attacks, and the proliferation of advanced technologies impede its growth trajectory.

What will be the size of the Smart City ICT Infrastructure Market During the Forecast Period?

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Market Segmentation

This report extensively covers market segmentation by component (smart utilities, smart transport, smart home and building, and others), application (communication, transportation, express, government, and education), and geography (Europe, North America, APAC, Middle East and Africa, and South America). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.

Market Dynamics and Customer Landscape

The market experiences substantial momentum driven by the rapid evolution of smart cities worldwide. These cities leverage advanced technologies like sensors, processors, and actuators to enhance various aspects of urban living, from transportation and governance to energy management and infrastructure development. Moreover, initiatives led by organizations like the Consumer Technology Association fuel innovation and investment in smart city projects. As urban populations grow, the demand for efficient management of municipal infrastructure, including traffic flows, air and water quality, and waste management, propels the adoption of smart ICT solutions. This trend underscores a paradigm shift towards digitally connected and sustainable urban environments.

Additionally, the convergence of information and communication technology (ICT) with the Internet of Things (IoT) fuels the evolution of secure and interconnected systems within smart cities. This integration allows for the seamless monitoring and management of diverse assets, such as schools, hospitals, power plants, libraries, and transportation systems. As urban informatics becomes increasingly sophisticated, stakeholders prioritize the development of robust and scalable ICT infrastructure to support the complex network of interconnected services and applications essential for the functioning of smart cities. This trend underscores the growing importance of resilient and agile ICT frameworks in shaping the future of urban development and governance.

Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.

Key Smart City ICT Infrastructure Market Driver

The surge in IT consolidation and modernization is a pivotal driver propelling market growth. Businesses are increasingly recognizing the benefits of consolidating their IT infrastructure to enhance operational efficiency and achieve economies of scale. This trend has led C-suite executives to embrace advanced IT service delivery models like shared and managed IT services, especially with the growing consolidation of IT infrastructures such as data centers and networking systems. Moreover, the rapid advancement of technology and the imperative for IT modernization across various industry verticals, including manufacturing, BFSI, telecom, and healthcare, are further fueling the adoption of IT services and smart city projects. These endeavors aim to enhance connectivity and sustainability, driving the demand for smart city information and communication technologies infrastructure.

Additionally, the expansion of IT consolidation in the public sector is poised to boost demand for consolidated IT services. Governments worldwide are increasingly embracing IT services and implementing IT service policies to realize cost savings and align operational processes with IT and business strategies. This adoption is not only streamlining operations but also creating ample job opportunities for young professionals, driving talent migration. Furthermore, governments are prioritizing the development of smart cities to enhance surveillance and address urban overpopulation challenges. These collective efforts are expected to drive robust growth in the smart city information and communication technologies infrastructure market during the forecast period.

Significant Smart City ICT Infrastructure Market Trend

The rising adoption of smart healthcare is an emerging trend in the market.  Mobile devices like patient monitoring equipment, mobile phones, and personal digital assistants are used to deliver healthcare services under the umbrella of mobile health (mhealth). Real-time patient monitoring, the delivery of health information, and the gathering of clinical and community health data are some of the uses for mobile health. Due to the widespread use of mobile devices, mHealth is becoming more and more popular in the healthcare sector. 

Many apps that track heart and pulse rates, as well as body calorie levels, are offered on the market, including Health Mate, DailyBurn, Pocket Yoga, Argus, Beddit, Fjuul, and Strava Running. The cost of IoT devices has decreased in North America and Western Europe as the demand for smart wearables has multiplied over the past three years. Mobile devices and wearable technology can be synchronized to enable users to track their sleep patterns and receive calendar alerts about their medical activity. Moreover, to develop wearable device technology, telecommunications service providers are collaborating with smart wearable device suppliers. Thus, these factors will drive the growth of the smart city information and communication technologies infrastructure market during the forecast period.

Major Smart City ICT Infrastructure Market Challenge

The growing advanced technologies is a major challenge impeding the market growth. Smart city initiatives use cutting-edge technologies, which come with significant initial costs. These technologies are relatively new and developing quickly. Despite significant financial investments in technology, there is a good chance that these systems will become rapidly obsolete. Users may consequently experience problems caused by the lack of equipment or spare parts. As a result, smart networks demand sizable financial outlays and regular system upgrades.

Ensuring that such advanced technologies are safe and will also respect a resident's privacy is a challenge associated with the development of advanced technologies. Large data collection and storage can result in vulnerabilities that cybercriminals can take advantage of, resulting in data breaches and other security risks. Challenges with regulations and policies may also slow the adoption of these cutting-edge technologies. For example, laws governing data protection may restrict the gathering and use of specific types of data, while laws governing infrastructure and public services may be slow to change.  Hence, factors like these can affect the growth of the smart city information and communication technologies infrastructure market during the forecast period.

Key Market Customer Landscape

The 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 report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.

Global Market Customer Landscape

Who are the Major Smart City ICT Infrastructure Market Companies?

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.

China Mobile Ltd. - The company is mainly engaged in telecommunications and related businesses. The key offerings of the company include smart city ICT infrastructure through connected smart cities, real-time response systems, and smart applications.

The report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:

• ABB Ltd.
• Accenture Plc
• AT and T Inc.
• Cisco Systems Inc.
• Deutsche Telekom AG
• Hitachi Ltd.
• Honeywell International Inc.
• Huawei Technologies Co. Ltd.
• International Business Machines Corp.
• Microsoft Corp.
• Nokia Corp.
• Oracle Corp.
• Schneider Electric SE
• Siemens AG
• Telefonaktiebolaget LM Ericsson

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.

By Component

The market share growth by the smart utilities segment will be significant during the forecast period. This segment includes technological products and services that improve the effectiveness and efficiency of municipal waste, water, and energy management systems.

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The smart utilities segment was valued at USD 16.08 billion in 2017 and continued to grow until 2021.  Some of the sub-segments of smart utilities in the smart city ICT market include smart energy management, smart water management, smart waste management, and others. These are solutions that help cities monitor and control their energy production and consumption. Cities can improve their energy efficiency, cut down on energy waste, and lessen their carbon footprint with the aid of smart energy management solutions. It includes tools and techniques that let municipalities run their water supply and distribution networks more effectively. Cities can reduce water waste, stop leaks, and guarantee the quality and safety of their water supply with the aid of smart water management solutions. It also makes easier for cities to manage their waste collection, processing, and disposal systems are included in this. Cities can lessen their environmental impact, reduce waste volumes, and increase recycling rates with the aid of smart waste management solutions.  Hence, the smart utilities segment of the market is expected to grow during the forecast period.

By Region

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Europe is estimated to contribute 40% 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.

The demand for IT services in Europe's smart cities is rising rapidly. The smart city agenda for European cities have been established by the smart city and community initiatives of the European Commission. Strategies for the enduring development of smart cities in Europe are on the agenda. A press release from November 2021 states that the European Commission contributed USD 2.27 billion to the Digital Europe Program. As of 2022, the program would invest in quantum communication infrastructure, artificial intelligence (AI), cloud and data spaces, advanced digital skills, and widespread adoption of digital technologies in all spheres of society and the economy. The project's primary goals are to accelerate the creation of novel solutions and establish uniform standards for EU nations.

In order to boost economic growth, smart city initiatives in Central and Eastern Europe place a greater emphasis on cutting-edge technologies and infrastructure improvements. During the forecast period, it is anticipated that cities in the region, including London, Paris, Madrid, Moscow, Barcelona, Luxembourg, Vienna, and Berlin, will become mega- or smart cities. To support the growing city base, this will call for the adoption of sustainable ICT infrastructure. Smart infrastructure, which offers not only sustainable infrastructure but also the capability to monitor the use of public facilities and provision for upgrades as necessary, is expected to support such growth in these cities. Better surveillance and effective local government policy implementation are other goals of smart city infrastructure. Hence, such factors will fuel the smart city information and communication technologies (ICT) infrastructure market growth in Europe during the forecast period. 

Segment Overview

The 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. 

• Component Outlook
  • Smart utilities
  • Smart transport
  • Smart home and buildings
  • Others
• Application Outlook 
  • Communication
  • Transportation
  • Express
  • Government
  • Education
• Region Outlook 
  • North America
    • The U.S.
    • Canada
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa
  • South America
    • Chile
    • Brazil
    • Argentina

Market Analyst Overview

The market is witnessing remarkable growth driven by the increasing adoption of smart technologies across various sectors such as smart buildings, transportation, and governance. Smart cities leverage advanced hardware and software components integrated with Internet of Things (IoT) technology to enhance the efficiency of services and improve the quality of life for residents. These cities utilize innovative solutions to optimize manufacturing operations, streamline brick-and-mortar stores, and deliver e-health services to citizens.

Urbanization trends have led to the emergence of smart grids, smart water networks, and smart education initiatives aimed at enhancing sustainability and resource management. Moreover, smart security systems and law enforcement technologies contribute to creating safer environments for people and communities. Despite the numerous benefits of smart cities, challenges such as the lack of awareness regarding these technologies persist.

However, ongoing development projects focus on establishing secure systems and robust infrastructure to address these challenges and capitalize on the advantages of smart cities. As governments and municipalities prioritize investments in smart city initiatives, the global Smart City ICT Infrastructure Market is poised for significant expansion, offering promising opportunities for stakeholders to innovate and transform urban landscapes for the betterment of society.

Smart City ICT Infrastructure Market Scope
Report Coverage	Details
Page number	188
Base year	2022
Historic period	2017-2021
Forecast period	2023-2027
Growth momentum & CAGR	Accelerate at a CAGR of 21.15%
Market growth 2023-2027	USD 98.9 billion
Market structure	Fragmented
YoY growth 2022-2023(%)	18.61
Regional analysis	Europe, North America, APAC, Middle East and Africa, and South America
Performing market contribution	Europe at 40%
Key countries	US, Japan, UK, Germany, and Spain
Competitive landscape	Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks
Key companies profiled	ABB Ltd., Accenture Plc, AT and T Inc., Cisco Systems Inc., Deutsche Telekom AG, Hitachi Ltd., Honeywell International Inc., Huawei Technologies Co. Ltd., International Business Machines Corp., Microsoft Corp., Nokia Corp., Oracle Corp., Schneider Electric SE, Siemens AG, Telefonaktiebolaget LM Ericsson, Telefonica SA, Verizon Communications Inc., Vodafone Group Plc, China Mobile Ltd., and NTT Communications Corp.
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 market research 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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What are the Key Data Covered in this Market Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market growth and forecasting of the market between 2023 and 2027
• Precise estimation of the size of the market size and its contribution to the parent market
• Accurate predictions about upcoming market trends and analysis and changes in consumer behavior
• Growth of the market industry across Europe, North America, APAC, South America, and Middle East and Africa
• Thorough market growth analysis of the market’s competitive landscape and detailed information about vendors
• Comprehensive market analysis and report on the factors that will challenge the market research and growth of market companies

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