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The global smart cities market size is expected to value USD 6,965.02 billion by 2030, exhibiting a CAGR of 24.2% from 2022 to 2030. Smart cities use advanced information and communication technologies to gain long-term economic developments, manage resources effectively, and offer their residents an enhanced quality of life. A smart city uses its advanced infrastructure to help local businesses, transport and mobility, environment, lifestyle, healthcare, and governance.
The popularity of smart cities is primarily due to growing urbanization globally and the need for a better lifestyle. The main objective of intelligent cities is to drive economic growth and enhance the quality of life of residents by empowering local area development and using high technology that offers smart results.
It is worth noting that smart city encourages the use of emerging technologies like IoT, AI, cloud storage technologies, data analytics, and big data to collect and analyze data and use key information to manage assets, services, and resources.
Private entities together with public authorities are undertaking initiatives to work on smart city projects in order to ensure economic growth. Many countries have passed laws that ensure that smarter technologies are being used in infrastructure development. This will not only prove to be safer for people but will also improve the look and feel of the living conditions. The aforementioned factors will positively influence the global smart cities market growth in the times to come.
Based on application insights, smart transportation led the industry to scale over the years. Rapid urbanization along with rising economic activities has led to an increase in traffic congestion. This has encouraged governments globally to adopt smart transportation solutions that help manage traffic thereby reducing travel time for people along with improving infrastructure. Another major factor supplementing growth in smart transportation is the growing concern regarding harmful carbon emission levels. The government in both developed, as well as developing countries, is striving hard to improve the condition by passing strict emission laws along with promoting the use of electric vehicles. The growing use of AI and IoT in the transportation sector to regulate factors like pollution levels, speed, etc, will continue to boost the demand for smart transportation services.
Smart governance is also expected to be one of the fastest-growing segments during the period in focus. The growing adoption of smart technologies by the government to enhance and promote transparency, accountability, security, and collaboration will continue to boost this segment. With the support of OEMs and distributors, the government is gradually deploying video surveillance solutions in order to ensure public safety and remove criminal activities.
On the basis of smart governance, city surveillance segment led the market share primarily due to the rising need to ensure public safety amidst the growing safety concerns with regard to theft, murders, etc. These situations have driven the need for effective video management solutions and IP cameras that enhance safety allowing police and other security personals to manage and monitor the area. City surveillance is an important parameter in developing a smart city to manage other facets of a city— for instance, monitoring and managing- public assets, civil bodies, transportation systems, as well as community services.
With regards to smart utilities, energy management led the segment over time. Urbanization has led to an increase in industries, MNCs, commercial establishments, and residential complexes- all of which have driven the energy demand. This demand has steered the use of virtual power plants, that operate on machine learning, AI, and IoT, to enhance security and offer superior efficiency. Notable market players are increasingly focusing on establishing a robust R&D infrastructure that drives the development and overview of advanced energy management solutions in order to combine emerging technologies like blockchain.
Regionally speaking, North America has emerged as a key revenue pocket for smart cities market with respect to revenue. This significant growth is mainly due to the substantial implementation of smart city solutions supported by increased investment from government organizations along with the high demand for connected devices in the region. Additionally, increased awareness among people regarding the need to reduce the carbon footprint has led to the increased adoption of smart transportation technologies like electric vehicles.
Although, Asia Pacific smart cities market is not far behind. It is projected to showcase the highest growth rate during the forecasted period owing to factors like a substantial rise in IT spending, supported by government efforts in developing economies like Singapore, China, India, and South Korea.
Research Support Specialist, USA