During the projected period, the size of the global Smart Cities Market will increase from $1125 billion in 2021 to $6050 billion in 2028, at a Compound Annual Growth Rate (CAGR) of 26%. In this report, we will cover the full overview, growth drivers, and opportunities of the market from 2022- 2028
Smart City Market
The global smart city market was worth around $1125 billion in 2021 and is predicted to grow to around $6050 billion by 2028 at a CAGR rate of over 26% over the forecast period. In this report, we will cover the full overview, growth drivers, opportunities, and obstacles of the smart city market from 2022 -to 2028
The smart city is a modern zone that leverages different sensors to automate actions. It is a concept that works with the integration of information and communication technology combined with several physical devices connected to the Internet of Things networks to ease the operations and services of a particular field.
It basically gathers data from across the city to activate data-driven validations, traffic safety, and swift responsive models. Multiple fields can be configured with smart city sensors for execution and the security system is intact and perfect to the core. Applications such as gunshot detection, smart surveillance, home security systems, and law enforcement protocols can also be pre-configured into the system to automate its execution.
Smart living as an option has been gaining traction in recent times. It eases and automates people’s lives in many different dimensions and completely reduces man's efforts to a large extent. It uses all advanced technology combined with artificial intelligence, the Internet of Things (IoT), big data, data analytics, and cloud storage technologies.
Every minute actions and responses are integrated into the system linking through various domains digitally. It is completely automated and once the execution starts, every different channel of domains coordinates and completes the action giving the response without any additional configuration from the users.
The outbreak of Covid-19 had a neutral effect on the global smart city market. Various countries had strict lockdowns, curfews, and travel bans reducing the manpower effects to the minimum. Many high-profile software companies were shut down with their operations coming to closure. This affected the need for smart city applications with lesser strategic management and the Government’s abandonment of innovation plans in that arena. This affected the growth of the market while the reliability of those industries turned towards technologies like AI and IoT to overcome the pressures of pandemics. E-health and e-government service applications were used extensively for the lack of real services and online education became the norm. This in turn increased the values of the smart city market to a large extent.
The increasing awareness and focus on a healthy environment with minimal energy consumption drives market growth rapidly. There is also an extra concern over the proliferation of environmentally disposable wastes and eventual global warming which drives increased leverage of digital applications that indirectly augments growth for the global market.
The implementation of smart systems and automation mechanisms reduces power consumption along with lowering carbon emission and optimizing operations which increases the leverage and demand for digital products. Rapid urbanization and the rising need for sustainable infrastructures contribute to the growth of the market excessively. The smart city initiatives in the field of utility management, mobility, and safety are helping to ease people’s lives and their efforts in multiple ways which spike up its demand. Moreover, government initiatives including funding & financing models, infrastructure development, and improving governance systems fuel the growth of the smart city market.
The leverage of new technologies like nanotechnology, artificial intelligence, machine learning, IoT, cloud computing, cognitive computing, big data analytics, and open data are the growth drivers of the global market. In addition, increasing focus on the need for public safety and security also drives growth. Apart from all this, the smart energy segment is amplifying its leverage and has gained a lot of traction with IoT-powered applications that augment market growth globally.
Security concerns coupled with a lack of funding & adequate infrastructure limit the growth of this market.
Developing nations on a tight budget cannot afford smart city solutions due to the expense they would incur. This factor impedes market growth to some extent. Apart from this, these kinds of digital platforms are prone to security violations and data thefts which also restricts the global smart city market growth considerably.
The emergence of 5G coupled with AI and IoT provides excellent opportunities for the market
The emergence of AI in smart city solutions coupled with IoT market and augmented reality mechanisms provide numerous lucrative opportunities for market expansion. The different public-private partnerships principles such as Organizational Behavior Management (OBM), Build, Own Operate (BOO), Build-Operate-Transfer (BOT), and BOM have been validated through smart city solutions which provide rampant opportunity. Moreover, the emergence of 5G has enabled smooth communication and faster data reach through smart city systems which induce a great opportunity for market growth further.
Lack of awareness and knowledge about smart city solutions poses a challenge to the market
Smart city solutions are still emerging in many developing countries and hence very small part of the world population is aware of this. This decelerates the market growth to a considerable extent by bringing down the force of the government to implement any smart solutions in the aid of the people. This ignorance about smart city solutions is a big challenge for the growth of the market globally.
High cost of funding and financing infrastructures to implement smart city solutions is a challenge for the market
Many developing nations are lagging behind in the effective leverage of smart city solutions because of the lack of infrastructure and poor funding initiatives from the government. The infrastructures and facilities to use smart city solutions come at a higher expense which poses a challenge to the market.
The global smart city market in this research analysis is divided into components, application areas, and regions. The component is classified by hardware, software, and services. The application area is divided based on infrastructure, smart governance, smart education, transportation, construction, power management, water & waste management, healthcare, and others.
In October 2021, Hitachi with Bao Viet Insurance brought innovations in the insurance business using AI and medical big data.
In February 2020, Cisco and Connexin with Quantela to launch smart cities in the UK with IoT based applications.
North America dominates the market as the highest revenue-sharer and consumer
North America leads as the highest revenue-sharer of the global smart city market. Verticals such as telecom, retail, and banking have undergone a digital transformation which triggers market growth in this region. The well-developed ICT infrastructure, budding start-ups, and presence of prominent technology vendors are factors driving growth in this region. Asia-Pacific is expected to become the second-largest fast-growing market due to increased focus on the development of digital infrastructure here. Rampant urbanization along with increasing disposable income are expected to propel the market here in the future. Organizations in this region are largely focusing on cloud-based benefits which trigger massive leverage of smart transportation, smart governance, smart building, etc.
The key players in the global smart city market are Siemens, Cisco, Hitachi, IBM, Microsoft, Schneider Electric, Intel, NEC, ABB, AGT International, AVEVA Group plc, Ericsson, Honeywell International Inc, Itron Inc, KAPSCH Group, Microsoft Corporation, Huawei Technologies co. ltd., Oracle Corporation, Osram GmbH, SAP SE, Siemens AG, Telensa, Verizon, and Vodafone Group plc.
Global smart city market segmentation follows
The increasing awareness and focus on a healthy environment with minimal energy consumption drives market growth rapidly. There is also an extra concern over the proliferation of environmental disposable wastes and eventual global warming which drives increased leverage of digital applications that indirectly augments growth for the global market.
According to the report by Zion Market Research, The global smart city market was worth around $630 billion in 2021 and is predicted to grow to around $6050 billion by 2028 at a CAGR rate of over 26% over the forecast period
North America leads as the highest revenue-sharer of the global smart city market. verticals such as telecom, retail, and banking have undergone a digital transformation which triggers market growth in this region.
The key players in the global smart city market are Siemens, Cisco, Hitachi, IBM, Microsoft, Schneider Electric, Intel, NEC, ABB, AGT International, AVEVA Group plc, Ericsson, Honeywell International Inc, Itron Inc, KAPSCH Group, Microsoft Corporation, Huawei Technologies co. ltd., Oracle Corporation, Osram GmbH, SAP SE, Siemens AG, Telensa, Verizon, and Vodafone Group plc