San Francisco, 25 April 2024: The Report Smart Cities Market Size, Share & Trends Analysis Report By Application, By Smart Governance, By Smart Utilities, By Smart Transportation, By Smart Healthcare, By Region, And Segment Forecasts, 2024 - 2030

The global smart cities market size is expected to reach USD 3,728.3 billion by 2030, registering a CAGR of 25.8% from 2023 to 2030, according to a new report by Grand View Research, Inc. The market growth can be attributed to rapid favorable government initiatives worldwide and emerging technologies, such as Artificial Intelligence (AI), cybersecurity, big data analytics, and the Internet of Things (IoT). This has encouraged several countries to invest in smart city projects to manage infrastructure and assets. Further, the increasing adoption of Electric Vehicles (EVs) has also created a demand for the development of charging infrastructure in cities globally. Due to this, it provides energy storage and creates new revenue streams from EV batteries. These benefits will further boost the smart cities market's growth during the forecast period.

The smart cities market is witnessing a high investment in smart security, smart metering for utilities, integrated traffic management systems, and smart mobility. Several technologically innovative cities use IoT platforms to monitor their infrastructure, manage traffic flows, water management, parking, and air quality, and use the generated smart data to handle longer-term decisions for environmental sustainability. Market players are establishing strategic partnerships with technology providers to improve their smart cities portfolio. For instance, in February 2022, an electric utility company, E.ON SE, partnered with telecom company Vodafone Group plc to develop smart water, gas, and electricity meters, accrelating the smart cities market growth.

Various country governments, such as India, Germany, Canada, Japan, and Australia, are launching smart city-based projects to improve citizens' lifestyles and create safer communities, propelling smart cities market expansion. Government-authorized associations & organizations are collaborating with market players to develop smart city solutions to assist the government in planning smart city strategies. For instance, in October 2022, the non-profit organization, Accelerator for America partnered with Honeywell International Inc. and launched the Smart City Accelerator Program to help smart city developers define priorities, align key stakeholders, and improve service delivery & operational efficiency of smart cities projects.

The increasing urbanization, the need for efficient management of resource utilization, public safety concerns, and increasing demand for an environment with efficient energy utilization are the major driving factors for the market growth. Due to the COVID-19 pandemic, countries followed strict lockdowns and mobility constraints to avoid the spread of the virus. During the pandemic, the dependence of global economies on urban areas and the importance of public healthcare in smart city initiatives have been brought to light. However, organizations are trying to implement emerging technologies such as the Internet of Things (IoT) and Artificial Intelligence (A.I.) to overcome the challenges faced during the pandemic.

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The need for sustainable structure due to the growing population and urbanization has become significant for market growth. Several regional governments are trying to handle these problems via smart city initiatives across serviceable segments, such as mobility, utility, safety, and management. The local governments have also been at the forefront of stimulating organizational and institutional changes, enabling steady investments, and creating a consortium for bringing diverse businesses together. The emergence of a new genre of public-private partnerships is also a particular development attributable to the smart city’s developments. Further, infrastructure development financing and funding models and governance systems are playing a major role in fueling the market.

Smart Cities Market Report Highlights

• The environmental solution segment is expected to witness a considerable CAGR of 28.8% over the forecast period. Shifting various government focus towards reducing Greenhouse Gases (GHGs) and preservation and promotion of biodiversity is propelling the segment growth globally
• The smart lighting segment is anticipated to register a CAGR of 25.8% over the forecast period. The substantial demand for IoT-enabled lighting fixtures, increasing infrastructure developments, and end-user preference for energy-efficient lighting are propelling the adoption of smart lighting in residential, commercial, and industrial sectors
• The waste management segment is expected to witness a significant CAGR of 27.0% over the forecast period. Numerous waste management companies are installing sensors, data visualization platforms, and network infrastructure to generate actionable insights and make informed decisions. Adopting these smart technologies in waste management will supplement the segment's growth during the forecast period
• The intelligent transportation system segment is expected to witness a significant CAGR of 26.7% over the forecast period. The rising public and private investments in the transport sector, government initiatives to curb traffic congestion & enhance public safety, and advancements in video surveillance & analytics system is expected to accelerate the segment growth notably through 2030
•  In Asia Pacific, the market is anticipated to register a significant CAGR of 29.2% during the forecast period. The regional growth can be attributed to rapid economic developments, digitalization, globalization, and the rising proliferation of smartphones 

The smart cities market growth can be attributed to the growing adoption of nanotechnology, Artificial Learning (A.I.), Machine Learning (ML), cloud computing, IoT, cognitive computing, big data analytics, and open data. Moreover, the increasing implementation of Build-Own-Operate (B.O.O.), Build-Operate-Transfer (B.O.T.), Original Brand Manufacturer (O.B.M.), and Bill of Material (B.O.M.) business models is also driving the successful project execution of smart cities. Asian countries have been pursuing numerous initiatives to encourage the adoption of digital technologies for smart cities while seeking to maintain consumer data privacy. Moreover, several government initiatives worldwide are anticipated to drive market growth further.

Though smart city projects need a diverse set of technologies, such as IoT, A.I., and smart sensors, to monitor city infrastructure, their application varies across projects and from city to city. The key driving factors for implementing smart city solutions are the need to improve resilient cities, reduce energy, and concern over the increase of environmental waste. Additionally, the vendors invest in Research & Development (R&D) to establish new systems and technologies for connected infrastructure across smart city projects. The key players in the market, such as Cisco Systems, Siemens AG, and IBM Corporation, are actively investing in R&D activities related to connected infrastructure in smart city development worldwide.

Smart Cities Market Report Scope

The smart cities concept has been gaining traction in recent years owing to numerous novel advantages smart cities can provide. However, several barriers are affecting the growth of the market. The high initial costs that are the prerequisite for the upheaval of the existing infrastructure of cities may restrain the growth of the market. The sheer number of financial commitments needed for the projects has been an important factor in slowing down market developments. However, the current scenario is expected to change in the coming years as there have been many other investment techniques that are gaining popularity, such as Build Transfer (B.T.), Build Operate Transfer (B.O.T.), Build Own Operate (B.O.O.), and public-private partnerships.

List of Key Players of the Smart Cities Market

• 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