Smart City Market estimated to achieve USD 6782 Billion by 2032, North America to be in the lead | Report

The growth of the smart city market is attributed to various factors, such as the increased adoption of Internet of Things (IoT) technologies, a rising demand for environmentally friendly and energy-efficient solutions, and the expansion of the urban infrastructure industry.

New York, April 18, 2023 (GLOBE NEWSWIRE) -- The Global Smart City Market size is expected to be worth around USD 6782 Billion by 2032 from USD 880 Billion in 2023, growing at a CAGR of 23.3% during the forecast period from 2022 to 2032. Smart cities utilize advanced technology and data analytics to increase sustainability, enhance city operations, and improve citizens' quality of life. As cities search for solutions to issues caused by development such as air pollution, traffic congestion, and energy usage - the concept of "smart cities" has gained popularity in recent years.

The smart city market offers a vast array of goods and services, such as energy management systems for buildings and transportation management systems, etc. The rising availability of data and the development of sophisticated analytics tools that cities can use to make sense of it are two major forces driving the smart city market. Cities can gain insight into their systems' functioning and can identify opportunities for improvement by collecting and analyzing information from multiple sources such as sensors, cameras, and other devices. The demand for environmentally friendly and energy-saving solutions is another driving factor behind the market for smart cities.

Smart City Market

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Key Takeaway:

  • By application, in 2022, the smart utilities category dominated the smart city market with a 30% market share
  • By governance, city surveillance dominated the market for worldwide smart cities, holding with 31% market share.
  • By utility, the energy management segment dominated the smart city market with a 48% market share.
  • By Smart Transportation, the intelligent transportation system (ITS) segment dominates the market with a 45% market share
  • In 2022, North America dominated the market with the highest revenue share of 45%.
  • APAC is anticipated to have the highest CAGR among all the regions.
  • APAC is expected to grow in this region is marked by rapid urbanization and an expanding middle class which has fuelled demand for these technologies.

Factors affecting the growth of the smart city market

There are several factors that can have an impact on the growth of the smart city market. Some of these factors include:

  • Technical developments: As technology develops and improves, putting smart city concepts into practice is easier. Improvements in sensors, communication networks, and data analytics are part of this.
  • Government initiatives: Many governments are investing in smart city infrastructure as a strategy to improve their cities and attract investment. Project funding, laws that support innovation, and collaborations with businesses in the private sector are a few examples of this.
  • Growing urbanization: As more people settle in urban areas, there is a greater need for sustainable and efficient infrastructure. Smart city solutions can assist communities in managing resources, enhancing residents' quality of life, and enhancing mobility.
  • Environmental issues: There is an increasing emphasis on creating sustainable infrastructure as concerns over climate change also environmental damage grows. Smart city solutions can cut energy use, minimize waste, and enhance the quality of the air and water.
  • Economic benefits: Smart city solutions can also have a positive impact on the economy by boosting competitiveness, productivity, and employment.

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Market Growth

A number of factors, such as the increased use of Internet of Things (IoT) technologies, the increasing need for environmentally friendly and energy-efficient solutions, and the expansion of the urban infrastructure industry are all contributing to the growth of the smart city market. Several sectors, including transportation, energy management, public safety, waste management, as well as healthcare are using smart city technologies. The development of the smart city market is also being aided by government programs and investments. To raise the standard of living for their residents, numerous governments all over the world are launching smart city initiatives and making investments in infrastructure and technology.

Regional Analysis

The largest share in the market will be dominated by North America with 45% of the market share North America is one of the world's most technologically advanced regions and a pioneer in smart city development. There are numerous smart cities throughout North America that utilize cutting-edge technologies to improve their citizens' quality of life. North America's smart city market is being driven by several factors, such as the increasing need for sustainable infrastructure, demand for energy-efficient buildings, and efforts to reduce traffic congestion and enhance transportation. Furthermore, governments and private organizations in the region are investing heavily in smart city initiatives - further fuelling market growth. North America is seeing the development of smart city technologies at an unprecedented rate. Cities such as New York City, San Francisco, and Boston are leading the charge in this space by using advanced technologies for better transportation, energy efficiency, and public safety. Canada too boasts several smart cities such as Toronto, Vancouver, and Montreal which are using cutting-edge solutions for waste management and public safety initiatives.

The Asia Pacific region is a key market for smart cities, with countries such as China, Japan, and South Korea leading the charge. This region is marked by rapid urbanization and an expanding middle class which has fuelled demand for these technologies. Government initiatives and investments in infrastructure development are expected to fuel future growth within this region.

Europe is a leading market for smart cities, with countries such as the United Kingdom, France, Germany, and Spain at the forefront of adoption. This region of Europe boasts strong government involvement and investment with the European Union playing an integral role in funding and promoting smart city initiatives. Forecasts indicate that this market will grow significantly over the coming years due to an increasing focus on sustainability and energy efficiency initiatives.

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Scope of the Report

Report AttributeDetails
Market Value (2022)USD 880 Billion
Market Size (2032)USD 6782 Billion
CAGR (from 2023 to 2032)23.3%
North America Revenue Share45.0%
Historic Period2016 to 2022
Base Year2022
Forecast Year2023 to 2032

Market Drivers

More and more people are relocating to cities as the global population rises. Due to the burden this puts on the current infrastructure and services, we must develop new strategies for effectively managing resources and delivering services. There are more opportunities than ever to develop connected, data-driven, efficient "smart cities" because of the rapid advancements in technology, including the Internet of Things (IoT), cloud computing, and artificial intelligence (AI). Cities are under pressure to lower their carbon footprints and become more sustainable as climate change becomes an urgent issue. By maximizing energy utilization, reducing trash output, and enhancing transportation systems, smart city technologies can help achieve these goals.

Market Restraints

Significant infrastructure, technological, and human resource investments are necessary to build a smart city. This can be a huge barrier for many communities, especially those in underdeveloped nations that do not have the financial means to support such initiatives. The gathering and processing of vast volumes of data, particularly sensitive personal data, is a prerequisite for smart city technology. This prompts worries about data security and privacy, which could seriously impede the adoption of these creative solutions. It can be difficult to combine various systems and tools because smart city technologies lack standards and compatibility. Regulatory barriers, such as those relating to public space use or the deployment of new technologies, must be removed before smart city ideas may be put into action.

Market Opportunities

Businesses and governments both have a huge amount of opportunities in the market for smart cities. Growth opportunities in a variety of areas, such as the development of smart infrastructure, the provision of services to support smart city initiatives, and the development of novel technologies created especially to accomplish these goals, are some of the key prospects for businesses in the smart city market. Companies can develop intelligent waste management, intelligent transportation, and intelligent energy management systems. Governments can also profit from the market for smart cities. By investing in smart city initiatives, governments may enhance citizen quality of life, reduce environmental impact and boost economic growth.

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Report Segmentation of the Smart City Market

Application Insight

The smart utilities category dominated the smart city market with a 30% market share. An essential part of the municipal infrastructure is the smart utility segment, which includes a variety of fields such as water treatment, integrated data management, energy distribution, as good administration of civil distribution infrastructure. The creation of smart grids is a significant factor affecting the adoption of smart utilities. smart governance segment is anticipated in the market, due to developing the fastest. The expansion of this market is being driven by the government's increasing adoption of smart technologies to enhance and promote accountability, security, and collaboration.

Governance Insight

City surveillance dominated the market for worldwide smart cities, holding with 31% market share. City surveillance is crucial for managing and regulating public resources, civil services, transportation systems, and community services methods to diagnose cancer mutations may further augment the market's growth. Smart infrastructure also anticipated the smart city market. Refers to the application of advanced technologies like IoT sensors, data analytics, and AI to optimize critical infrastructure such as transportation systems, water and waste management systems, and energy grids.

Utility Insight

the energy management segment dominated the Smart City Market with a 48% market share.  An energy management service for the smart city market would be a platform that facilitates efficient management and optimization of energy consumption in cities. It utilizes cutting-edge technologies such as IoT sensors to collect real-time data on energy consumption across different buildings and public spaces. The market for waste management services in smart cities is expanding rapidly, driven by a need to manage waste efficiently, sustainably, and environment-friendly. Waste management services for smart cities typically incorporate advanced technologies, such as sensors, data analytics, and automation, to optimize waste collection, transportation, and disposal.

Smart Transportation Insight

The intelligent transportation system (ITS) segment dominates the market with a 45% market share. Smart cities are a rapidly developing market. ITS utilizes cutting-edge technologies such as sensors, communication networks, and data analytics to enhance the efficiency, safety, and sustainability of transportation systems. The parking management segment is growing rapidly. This segment is an integral component of the smart city market. As cities expand and more people move into urban areas, efficient and effective management of parking becomes even more crucial. Smart parking solutions can reduce traffic congestion, improve air quality, and make parking more accessible and convenient for residents and visitors alike. One of the key advantages of smart parking solutions is their capacity to reduce time spent searching for a parking spot.

Recent Development of the Smart City Market

  • In December 2021- G.E. announced a partnership with U.K. Power Networks to start a smart substantiation project that will maximize the distribution network's use to support the generation of renewable energy across the U.K.
  • In October 2021-In order to include BrainBox A.I.'s self-adaptive and predictive artificial intelligence with its current Ability portfolio for smart buildings, ABB Ltd announced investing in the Montreal-based start-up.

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Market Segmentation

Based on Application 

  • Smart Governance
  • Smart Building
  • Environmental Solution
  • Smart Utilities
  • Smart Transportation
  • Smart Healthcare
  • Other Application

Based on the Governance

  • City Surveillance
  • C.S.
  • E-governance
  • Smart Lighting
  • Smart Infrastructure

Based on Utility

  • Water Management
  • Waste Management
  • Energy Management

Based on Smart Transportation

  • Intelligent Transportation System
  • Parking Management
  • Smart Ticketing & Travel Assistance

By Geography

  • North America
    • The US
    • Canada
    • Mexico
  • Western Europe
    • Germany
    • France
    • The UK
    • Spain
    • Italy
    • Portugal
    • Ireland
    • Austria
    • Switzerland
    • Benelux
    • Nordic
    • Rest of Western Europe
  • Eastern Europe
    • Russia
    • Poland
    • The Czech Republic
    • Greece
    • Rest of Eastern Europe
  • APAC
    • China
    • Japan
    • South Korea
    • India
    • Australia & New Zealand
    • Indonesia
    • Malaysia
    • Philippines
    • Singapore
    • Thailand
    • Vietnam
    • Rest of APAC
  • Latin America
    • Brazil
    • Colombia
    • Chile
    • Argentina
    • Costa Rica
    • Rest of Latin America
  • Middle East & Africa
    • Algeria
    • Egypt
    • Israel
    • Kuwait
    • Nigeria
    • Saudi Arabia
    • South Africa
    • Turkey
    • United Arab Emirates
    • Rest of MEA

Competitive Landscape 

Market players have been observed investing resources into research and development activities to fuel growth, enhance internal business operations, and engage in mergers & acquisitions or partnerships to further upgrade their products and gain a competitive edge on the market. Companies are efficiently working on new product development as well as improving existing ones to attract new customers and gain greater market shares.

Some of the major players include:

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