The global Smart Cities market gathered revenue around USD 1,090.69 billion in 2021 and market is set to grow USD 6,965.12 billion by the end of 2030 and is estimated to expand at a modest CAGR of 24.2% during the prediction period 2022 to 2030.
Growth Factors:
The growing urbanization, need for efficient management and utilization of resources, public safety concerns, and increasing demand for a healthy environment with efficient energy consumption are anticipated to be the key driving factors for the growth. Owing to the outbreak of the COVID-19 pandemic, several countries followed strict lockdowns, shutdowns, and mobility restrictions to avoid spreading the virus. The dependence of the global economy on urban areas and the oversight in keeping public healthcare a priority in smart city visions have been brought to light during the pandemic. Moreover, COVID-19 has affected the healthcare and energy industries worldwide. However, these industries are trying to adopt emerging technologies such as artificial intelligence and the Internet of Things (IoT) to overcome the challenges faced due to the pandemic.
As per the “2019 World Urbanization Prospects” report published by the UN Department of Economic and Social Affairs (UN DESA), the present urban population of 55.8% is anticipated to increase to 68.4% in 2050 globally. The need for sustainable infrastructure due to increasing population and urbanization has become a prime driver for the growth of the market. Governments worldwide are trying to tackle these growing population and rapid urbanization problems through smart city initiatives across functional segments such as utility management, mobility, and safety. Moreover, the initiatives by the governments have provided momentum to smart city projects across several regions. Further, financing and funding models, infrastructure development, and governance systems are also playing a key role in fueling the growth of the smart cities market.
The market growth can be attributed to the growing adoption of nanotechnology, artificial intelligence, machine learning, IoT, cloud computing, cognitive computing, big data analytics, and open data. Moreover, the growing implementation of different Public-Private Partnership (PPP) models such as Organizational Behavior Management (OBM), Build, Own, Operate (BOO), Build-operate-transfer (BOT), and Bill of Materials (BOM) is driving the successful execution of smart cities projects. Moreover, several government initiatives worldwide are anticipated to further drive market growth. For instance, in December 2021, the UAE government has achieved a 100% paperless government transformation under the Smart Dubai Plan 2021.
Report Coverage
| Report Scope | Details |
| Market Size | USD 6,965.12 billion by 2030 |
| Growth Rate | CAGR of 24.2% From 2022 to 2030 |
| Base Year | 2021 |
| Forecast Period | 2022 to 2030 |
| Report coverage | Growth Factors, Revenue Status, Competitive Landscape, and Future Trends |
| Segments Covered | Application, smart governance, smart utilities, smart transportation, Region |
| Regional Scope | North America, Europe, Asia Pacific, Latin America, Middle East & Africa (MEA) |
| Companies Mentioned |
ABB Limited; AGT International; AVEVA Group plc.; Cisco Systems, Inc.; Ericsson; General Electric; Honeywell International Inc.; International Business Machines Corporation; Itron Inc.; KAPSCH Group; Huawei Technologies Co., Ltd.; Microsoft Corporation; Oracle Corporation; Osram GmbH; SAP SE; Schneider Electric SE; Siemens AG; Telensa; Verizon; Vodafone Group plc. |
Application Insights
The smart transportation segment accounted for a market share of over 20.2% in 2021. With the rising traffic congestion due to rapid urbanization, the need to manage infrastructure and assets is prompting countries worldwide to invest in smart transportation solutions. The increasing adoption of IoT and artificial intelligence in the field of transportation has also empowered authorities by offering efficient traffic management in cities. Moreover, the growing adoption of on-demand ridesharing and electric vehicles is anticipated to propel the demand for smart transportation solutions over the forecast period.
The smart governance segment is expected to witness significant growth over the forecast period. The market takes into account the smart technologies adopted and deployed by the government sector to improve transparency, accountability, collaboration, security, and citizens' participation in the overall governance process by creating a progressive government-public partnership. With the help of system integrators, OEMs, and distributors, several governments are implementing video surveillance systems in various cities to detect and prevent criminal activities and improve smart governance. For instance, in March 2021, Dahua Technology introduced intelligent residential solutions, which has artificial intelligence offerings panoramic camera, fish-eye camera, and other advanced equipment to provide targeted security monitoring for different locations in residential areas.
Smart Governance Insights
The city surveillance segment accounted for a revenue share of over 20% in 2021. City surveillance is a critical parameter in developing a smart city mission for monitoring and managing public assets, transportation systems, citizens, civil bodies, and other community services. The growing public safety and security concerns are encouraging the usage of video management systems and IP cameras around the world, and are propelling the city surveillance market. Furthermore, the reduced IP camera prices and rising technological advancements in software and analytics are the main factors driving the growth of the city surveillance segment.
The Command and Control Center (CCC) segment is anticipated to witness significant growth with a CAGR of 21.4% over the forecast period. All the smart city applications and systems, including city surveillance, Intelligent Traffic Management System (ITMS), smart lighting, smart parking, energy management, and waste management solutions, are accessed and monitored from the CCC center. The CCC is envisioned as the brain for the operation of the smart cities, which includes handling deviations & disaster management. The CCC solution providers are increasingly expanding their network and association with partners, resellers, and distributors to enter high potential markets. For instance, in September 2021, an Integrated CCC was established in Jammu city under the Smart Cities Mission to create an IT-based monitoring system to bring several smart services and solutions under one umbrella.
Smart Utilities Insights
The energy management segment dominated the smart utilities segment in 2021 and accounted for a revenue share of over 55%. The increasing energy demand has sparked the adoption of virtual power plants, which operate on artificial intelligence, machine learning, and IoT to provide high security and efficiency. Market players are focusing on establishing a strong research and development infrastructure to drive the development and introduction of advanced energy management systems and design analytics solutions, and integrate emerging technologies such as Blockchain into the same. For instance, in October 2020, Nevada utility partnered with Las Vegas-based Blockchain LLC and Switzerland-based nonprofit Energy Web Foundation introduced blockchain-enabled smart meters, which will track energy produced and turned into energy portfolio credits (a specified percentage of the electricity utility sale comes from renewable resources).
The water management segment is anticipated to witness significant growth over the forecast period. The rising concerns for sustainable living led to the introduction of regulations and laws by several governments across the globe to implement water management solutions in their cities with system integrators and OEMs. With the advancements in technology, water utilities are adopting smart solutions, such as IoT-enabled Advanced Metering Infrastructure (ATM) smart water meters, to accelerate various business processes and allow the user to gather actionable information and make informed decisions about optimized water distribution and usage. During the forecast period, the adoption of these smart solutions is expected to surge due to the rising awareness about the quality of water, scarcity of natural freshwater resources, rising consumer demands, and technological advancements.
Smart Transportation Insights
The Intelligent Transportation System (ITS) segment accounted for the largest share of over 45.2% in 2021. The need for presenting real-time traffic information to drivers and passengers is one of the key factors driving the demand for ITS. These systems use advanced information and communication technologies applied to vehicles and transport infrastructure to help improve traffic management, minimize congestion, improve safety, reduce the impact of maintenance activities, and ultimately provide a more intelligent use of transport networks. The growth of the segment is attributed to the government initiatives towards reducing greenhouse gas emissions, rising urbanization, increasing demand for efficient transportation, and technological advancements to enhance customer experience.
The parking management segment is expected to witness a significant CAGR of 24.8% over the forecast period. The growing number of vehicles in cities makes it difficult for traffic departments to manage traffic congestion problems. As a result, the smart cities initiatives adopted by governments worldwide are now focusing on the effective utilization of available parking spaces to enhance customer experience and reduce pollution and traffic jams.
Regional Insights
North America held the major share of over 30.2% of the global smart cities market in 2021. The growth can be attributed to the continuous digital transformation across various industry verticals such as telecom, retail, and banking. The region has a well-developed Information and Communication Technology (ICT) infrastructure, the collaboration of federal and local governments with ICT vendors and start-ups, and the presence of prominent technology vendors. These service providers and other local authorities are widely deploying parts of the civic connectivity infrastructure that will lead to the planning for construction for smart cities in the region. Moreover, the presence of various international councils is boosting the regional market growth. For instance, The Smart Cities Council and the U.S. Department of Transportation promote the concept of smart cities in the region by organizing networking events.
Asia Pacific is expected to witness a significant CAGR of 27.7% over the forecast period. The region’s growth can be attributed to the increased focus on developing digital infrastructure. Moreover, growing urbanization, economic developments, globalization, and a rise in disposable income are further expected to propel the regional market growth over the forecast period. The investments by the government are aimed at sprucing up various departments of a country, such as transportation, energy, public security, etc., to build smart cities in various regions, which will boost the regional market in the forecast period. Moreover, smart city applications such as smart grids and buildings, air and water monitoring, smart transportation, smart waste collection, and disaster response are helping APAC cities manage their growth more efficiently, sustainably, and resiliently.
Competitive Rivalry
Foremost players in the market are attentive on adopting corporation strategies to enhance their market share. Some of the prominent tactics undertaken by leading market participants in order to sustain the fierce market completion include collaborations, acquisitions, substantial spending in R&D and the improvement of new-fangled products or reforms among others.
Major manufacturers & their revenues, percentage splits, market shares, growth rates and breakdowns of the product markets are determined through secondary sources and verified through the primary sources.
Some of the prominent players in the Smart Cities Market include:
Segments Covered in the Report
This research report offers market revenue, sales volume, production assessment and prognoses by classifying it on the basis of various aspects. Further, this research study investigates market size, production, consumption and its development trends at global, regional, and country level for the period of 2017 to 2030 and covers subsequent region in its scope:
By Geography
North America
Europe
Asia Pacific
Latin America
Middle East & Africa (MEA)
Research Methodology
In the study, a unique research methodology is utilized to conduct extensive research on the growth of the Smart Cities market, and reach conclusions on the future growth parameters of the market. This research methodology is a combination of primary and secondary research, which helps analysts ensure the accuracy and reliability of the conclusions.
Secondary resources referred to by analysts during the production of the Smart Cities market study are as follows - statistics from government organizations, trade journals, white papers, and internal and external proprietary databases. Analysts have also interviewed senior managers, product portfolio managers, CEOs, VPs, marketing/product managers, and market intelligence managers, all of whom have contributed to the development of this report as a primary resource.
Comprehensive information acquired from primary and secondary resources acts as a validation from companies in the market, and makes the projections on the growth prospects of the Smart Cities markets more accurate and reliable.
Secondary Research
It involves company databases such as Hoover's: This assists us recognize financial information, structure of the market participants and industry competitive landscape.
The secondary research sources referred in the process are as follows:
Primary Research
Primary research includes face-to face interviews, online surveys, and telephonic interviews.
Industry participants involved in this research study include:
Key Points Covered in Smart Cities Market Study:
Cross-segment Market Size and Analysis for Mentioned Segments
Additional Company Profiles
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Additional Countries (Apart
From Mentioned Countries)
Country/Region-specific Report
Go To Market Strategy
Region Specific Market DynamicsRegion Level Market Share Import Export AnalysisProduction AnalysisOthers