Smart Cities Industry Overview The global smart cities market size was valued at USD 1,090.64 billion in 2021 and is expected to reach USD 6,965.02 billion by 2030, registering a CAGR of 24.2% over the forecast period. 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 55.7% 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.
Gather more insights about the market drivers, restrains and growth of the Global 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.
Though smart city projects require the use of a diverse set of technologies, such as IoT, artificial intelligence, and intelligent sensors, to monitor city infrastructures, the application areas vary across projects and from community to community or city to city. The need for improving resilient cities, reducing energy, and concern over the proliferation of environmental wastes are the major driving factors for adopting smart city solutions. Furthermore, the vendors invest significant resources toward Research & Development (R&D) activities to establish new technologies and systems for connected infrastructure to be used across smart cities projects. The leading technology companies, such as Siemens AG, Cisco Systems, and International Business Machines Corporation, are vigorously investing in R&D activities related to connected infrastructure in smart city development worldwide.
The increasing penetration of artificial intelligence, machine learning, big data, and blockchain is creating potential growth opportunities for the market and has enabled innovation by integrating the internet across routine human functions. These advanced technologies facilitate enhanced security, efficient resource management, and timely intervention during emergencies. In the upcoming years, advancements in artificial intelligence are expected to lay the foundation for the further development of disruptive technologies, which would eventually enhance the human lifestyle to a significant extent globally. Moreover, the innovations such as electric vehicles (EV) and renewable energy are expected to contribute significantly to the market growth. Thus, over the forecast period, technology proliferation is likely to boost the smart city infrastructure growth prospects.
Smart Cities Market Segmentation
Based on the Application Insights, the market is segmented into Smart Governance, Smart Building, Environmental Solution, Smart Utilities, Smart Transportation, and Smart Healthcare.
Based on the Smart Governance Insights, the market is segmented into City Surveillance, CCS, E-governance, Smart Lighting, and Smart Infrastructure.
Based on the Smart Utilities Insights, the market is segmented into Energy Management, Water Management, and Waste Management.
Based on the Smart Transportation Insights, the market is segmented into Intelligent Transportation System, Parking Management, and Smart Ticketing & Travel Assistance.
Based on the Smart Cities Regional Insights, the market is segmented into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa
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The industry is expected to witness a rise in small companies that address the niche markets and provide customized solutions with limited scope. However, the marketplace will still be dominated by large technology corporations.
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