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2021

Saudi Arabia Smart Cities Market

Saudi Arabia Smart Cities Market Size, Share, Competitive Landscape and Trend Analysis Report by Functional Area : Saudi Arabia Opportunity Analysis and Industry Forecast, 2020-2027

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Author's: Vishwa Gaul | Onkar Sumant
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Saudi Arabia Smart Cities Market Statistics: 2027 

The Saudi Arabia smart cities market size was valued at $3,552.1 million in 2019, and is projected to reach $14,745.2 million by 2027, growing at a CAGR of 19.6% from 2020 to 2027. Smart cities encourage sustainable economic development and high quality of life to address growing urbanization challenges through the use of Information and Communication Technologies (ICTs) in various areas, including economy, environment, mobility, health, living, and governance. The main objective of the smart city mission is to stimulate economic growth and improve the quality of life of individuals by enabling local development and harnessing technology, particularly the technology leading to smarter results.

Smart cities comprise several constituents, including smart buildings, smart transport systems, smart security & safety services, parks fitted with smart communication systems (Wi-Fi), smart rain & floods drainage networks, smart street lighting systems, fast emergency response system, and smart economy supportive of SMEs and large companies. 

Saudi-Arabia-Smart-Cities-Market-2020-2027

By functional area, the smart infrastructure segment dominated the Saudi Arabia smart cities market share in 2019, and is expected to continue its dominance in the coming years, owing to increase in trends of IoT device adoption across the Kingdom of Saudi Arabia (KSA). Smart transportation under the solution sub-segment held the largest smart cities market share, owing to its energy-efficiency and cost-effectiveness. Therefore, there is a need for smart transportation solutions, with the increase in the number of smart city plans across the kingdom. Smart transportation solutions help to save on high energy consumption and promote the sustainability of a smart city while providing residents a fast and reliable mode for their commute. 

By functional area, the smart energy segment is expected to exhibit the highest CAGR during the forecast period, owing to effective distribution, production, and management of energy resources. Furthermore, the smart grid segment is anticipated to maintain a large market share, owing to the various efforts and practices adopted by the government to minimize the usage and wastage of energy across the KSA. Smart grid solutions are gaining ground in the country due to their energy-efficient and cost-saving features.

Saudi Arabia Smart Cities Market
By Functional Area
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Smart Energy segment is projected as one of the most lucrative segments during the forecast period.

The smart cities market prospered in the Saudi Arabian region in 2019, owing to great investments on smart cities projects and technological advancements pertaining to the market. In line with the Saudi Vision 2030 objectives, Saudi authorities have planned to start the implementation of the smart city project in 10 cities across the kingdom. Primarily, this initiative is expected to target five Saudi cities, Makkah, Riyadh, Jeddah, Al-Madinah, and Al-Ahsa, respectively. Rapid urbanization also boosts the market growth particularly in metropolitan areas such as Riyadh, Dammam, Jeddah, and Makkah. Moreover, leadership in the region is focusing more on the implementation of technologically advanced, cost-effective, and environment-friendly living solutions. For instance, in January 2021, Saudi Arabian Crown Prince announced plans to build ‘The Line’ project - a 170km belt of hyper-connected future communities, without cars, streets & no carbon emissions & having smart infrastructure. These factors are expected to drive the Saudi Arabia smart cities market growth of the during the forecast period.

The report focuses on Saudi Arabia smart cities market trends, growth prospects, and restraints. Moreover, the study includes Porter’s five forces analysis of the industry to understand the impact of various factors such as bargaining power of suppliers, competitive intensity of competitors, threat of new entrants, threat of substitutes, and bargaining power of buyers on the growth of the given market.

Segment Review

The Saudi Arabia smart cities market is segmented on the basis of functional area including smart infrastructure, smart governance, and smart education, smart energy, smart mobility, smart healthcare, smart buildings, and others.

The key players operating in the Saudi Arabia smart cities market analysis AT&T, Inc., Cisco Systems Inc., Ericsson, General Electric, Hitachi Ltd., Huawei Technologies Co., Ltd., IBM Corporation, Intel Corporation, Microsoft Corporation, and Schneider Electric SE.

Top Impacting Factors

The rise in demand for sustainable and eco-friendly cities, government initiatives for smart cities, infrastructural development in the regions, and development of new economic sectors to reduce the country’s dependence on oil and petroleum sectors drive the growth of Saudi Arabia smart cities market. However, data safety & privacy concerns and higher investment costs for the development of smart cities are expected to hamper the market growth during the forecast period. Furthermore, green initiatives and developments in the field of the Internet of Things (IoT) and cloud-applications are anticipated to provide lucrative opportunities for the market growth.

Proactive Government Smart Cities Initiatives and Investments

The Kingship of Saudi Arabia is strongly committed toward building modern smart cities and intelligent homes for Saudi people and in recent years several new smart-city initiatives have been proposed to boost the quality of living of Saudi Arabia's residents, as well as to modern cities and towns. On April 25, 2016, Mohammad bin Salman, Crown Prince of Saudi Arabia, launched a highly ambitious "Saudi Vision 2030" project to reduce the reliance on a single revenue source, oil that contributes more than 30% to the country's total GDP. The authority plans to invest on Saudi 2030 under the National Transformation Program, entertainment, and tourism industries. In connection with this initiative, the KSA collaborated with several international companies to build world-class smart cities, primarily aiming to provide more than 84% of Saudi people living in urban environments with new, smart housing.

Need to Develop Environmental and Eco-friendliness of Smart Cities

Smart city is a greener and environmentally sustainable initiative that allows the country to seamlessly and efficiently reduce its carbon footprint and handle pollution levels. Smart city technology offers new opportunities, improved interactivity and interactions for residents. Smart cities encourage improved living conditions in an environmentally sustainable, flexible and dynamic place. Smart systems help to forecast future needs, save power, predict, identify and prevent problems, improve operational efficiency, create new ways of interacting with the environment designed and with its users.

Smart city initiatives, such as NEOM which were funded by the KSA, are expected to provide an energy-efficient system designed to minimize electricity usage without compromising or minimizing any functional features of the system. Thus, such initiatives to support eco-friendly environment is anticipated to provide lucrative opportunities for smart cities market in Saudi Arabia.

Key Benefits for Stakeholders

  • This study includes the analytical depiction of the Saudi Arabia smart cities market forecast and trends to determine the imminent investment pockets.
  • The report presents information related to key drivers, restraints, and Saudi Arabia smart cities market opportunity.
  • The current market size is quantitatively analyzed from 2019 to 2027 to highlight the financial competency of the Saudi Arabia smart cities industry.
  • Porter’s five forces analysis illustrates the potency of buyers & suppliers in the Saudi Arabia smart cities market.

Saudi Arabia Smart Cities Market Report Highlights

Aspects Details
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By Functional Area
  • SMART INFRASTRUCTURE
  • SMART GOVERNANCE AND SMART EDUCATION
  • SMART ENERGY
  • SMART MOBILITY
  • SMART HEALTHCARE
  • SMART BUILDINGS
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Key Market Players

Microsoft Corporation, Ericsson, IBM Corporation, General Electric, Huawei Technologies Co., Ltd., Intel Corporation, Cisco Systems Inc., AT&T, Inc., Hitachi Ltd.

Analyst Review

Rise in adoption of Internet of Things (IoT) and cloud-based applications have impacted the growth of the smart city market in the KSA. IoT devices are responsible for providing tools to help monitoring of traffic, noise levels, air quality levels, emission levels from vehicles and various industries. In addition to these IoT, industries have helped to improve healthcare sectors, manufacturing industries, city-wide transportation, and mobility. 

For instance, the KSA gave a contract to Telvent (a subsidiary of Schneider electric) to implement a Smart Mobility Road Suites in Riyadh. King Abdullah Road in Riyadh was chosen for this program. The smart mobility program was funded under smart city plans that the Kingship announced for upgrading Riyadh to be a smart city. This was the first smart mobility project in the kingdom, under which the inter-urban traffic on king Abdullah road and four tunnels were controlled by a single central administration, adding toward security and enhancing the safety of the citizens whilst improving the infrastructure of the city.

Furthermore, Saudi Arabia announced plans for their Saudi vison 2030, a plan to reduce the dependence of Saudi Arabia on oil, to diversify its economy and to build public services. Plans require robots to perform security functions, logistics, home delivery and care and to supply wind and solar power to the region. Under the Saudi vision 2030 initiative, the KSA plans to develop 16 smart cities by the year 2030. This transformational program covers re-development and construction of new smart cities across various territories of the kingdom. These smart city programs promise to give citizens of Saudi Arabia an upper standard of living, with state of the art transport, healthcare, and smart governance facilities. The line is a smart city proposed in Neom in Saudi Arabia, Tabuk which will not have any vehicles, streets, and hence minimal carbon emission. KSA plans to invest $200 billion USD in the development of The Line.
 

Author Name(s) : Vishwa Gaul | Onkar Sumant

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Saudi Arabia Smart Cities Market