Smart Cities Market by Component (Hardware, Software, and Service) and Functional Area (Smart Infrastructure, Smart Governance and Smart Education, Smart Energy, Smart Mobility, Smart Healthcare, Smart Buildings, and Others): Global Opportunity Analysis and Industry Forecast, 2021-2030

Smart Cities Market Statistics: 2030

The global smart cities market size was valued at $648.36 billion in 2020, and is projected to reach $6,061.00 billion by 2030, growing at a CAGR of 25.2% from 2021 to 2030. Smart cities utilize information and communication technologies to achieve long-term economic development, efficient management of resources, and provide a higher quality of life for their residents. A smart city may use its advanced infrastructure to aid the local businesses, environment, transport & mobility, healthcare, lifestyle, and governance. The adoption of smart cities solutions is being driven by rise in urbanization trends across the world, and a desire for a higher quality of life. The key objective of intelligent cities is to create economic growth and improve people's quality of life by empowering local area development and utilizing technology that leads to smart results.

During the forecast period, the outbreak of COVID-19 is expected to provide some lucrative opportunities for the growth of global smart cities industry. This is due to an increase in the digital transformation trends in many parts of the world during the period. Furthermore, various countries across the globe are more likely to focus on solutions that can assist in improving efficiency during the post-pandemic period. As a result, governments are expected to make significant investments in smart cities solutions in the coming years.

The surge in adoption of smart cities in multiple regions is driven by various government digital cites initiatives and rise in the need for better natural resource management in urban environments. In addition, the growth in need for public safety and security fuel the growth of the smart cities market. However, security concerns associated with smart cities and lack of funding & adequate infrastructure limit the growth of this market. Conversely, the emergence of artificial intelligence in smart cities and the rise in the IoT market & its application in digital cities are anticipated to provide numerous opportunities for the expansion of the market during the forecast period.

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Depending on functional area, the smart infrastructure segment dominated the smart cities market share in 2020, and is expected to continue this trend during the forecast period. The growth in digital disruption in people's everyday lifestyles contributes to the growth in demand for smart infrastructure solutions. Moreover, the severe supply chain disruption during the pandemic has further empowered the growth of the segment as businesses rely on smart infrastructure solutions for efficient management of their resources. However, the smart energy segment is expected to witness the highest growth in the upcoming years, as the demand for IoT powered energy applications such as smart energy grids and smart meters are on a rise. Furthermore, numerous government initiates that support the implementation of smart energy solutions are expected to drive the smart energy market segment.

Region wise, the smart cities market was dominated by North America in 2020 and is expected to retain its position during the forecast period, owing to the presence of a highly developed ICT sector and high spending that aid the growth of the smart cities market. However, Asia-Pacific is expected to witness significant growth during the forecast period, owing to various government initiatives and digital transformation trends within the region, which is
expected to fuel the market growth in this region.

The report focuses on growth prospects, restraints, and analysis of the global smart cities market trend. The study provides Porter’s five forces analysis 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 global smart cities market share.

Segment Review

The global smart cities market is segmented into component, functional area, and region. Based on component, the market is divided into hardware, software, and service. Depending on the functional area, the market is fragmented into smart infrastructure, smart governance and smart education, smart energy, smart mobility, smart healthcare, smart buildings, and others. Region wise, it is analyzed across North America, Europe, Asia-Pacific, and LAMEA. The global smart cities market is dominated by key players such as AT&T Intellectual Property, Cisco Systems, Inc., Ericsson, General Electric, Hitachi, Ltd, Huawei Technologies Co. Ltd., IBM Corporation, Intel Corporation, Microsoft Corporation, and Schneider Electric. These players have adopted various strategies to increase their market penetration and strengthen their position in the industry.

Covid-19 Impact Analysis

Owing to the COVID-19 outbreak, numerous governments and local authorities have implemented stringent lockdowns, movement restrictions, and closure of local brick & mortar shops in order to prevent the spread of COVID-19 virus, which resulted in limited workforce availability, impacting the government's and other stakeholders' ability to fulfil the demands of intelligent city’ planning and initiatives. Moreover, the COVID-19 pandemic  had a severe impact on the manufacturing and healthcare sectors all around the world. However, in order to tackle the problems posed by the pandemic, many businesses have attempted to integrate emerging technologies such as AI and IoT. Adoption of e-health and e-government services, as well as trends such as online education & remote working and adoption of modern technology in the everyday lifestyle of an average citizen are anticipated to aid in the adoption of digital cities in the coming years.

Top Impacting Factors

Government Smart City Initiatives

Globally, governments have been playing a major role in the smart cities industry through their regulations and initiatives focused on the deployment of smart services as a major part of their infrastructure. For instance, General Services Administration’s (GSA) Smart Buildings initiative, started in May 2012, was aimed to reduce costs and promote smart services with modernized federal government buildings in large part through connected technologies. Similarly, the European smart cities industry is expected to grow at a significant rate due to its focus on energy and climate objectives. Therefore, the government is focused on the distribution of energy with efficient models and strategies for progressing toward a low carbon future in this region. Moreover, governments in emerging economies such as China, South Korea, Dubai, India, Singapore, and Japan, are aimed for the smart development of their economies. Further, China has announced 500 digital cities pilot projects, which is again a huge investment by the government in the region. Moreover, Dubai’s goal to achieve the objective of the Smart Dubai Plan 2021 for transforming their country into a 100% paperless government has fueled the adoption of smart services in the country that drives the growth of the smart cities market.

Rise In Need Of Better Natural Resource Management

The global population has urbanized and increased at a rapid pace. According to a research, it is estimated that around two-third of the world population is expected to live in cities or urban centers by 2050, which is anticipated to be a major factor leading to resource scarcity in the upcoming years. Moreover, as cities drive the economic growth in most of the countries, urbanization is projected to surge further in the near future. To cope with rise in urbanization and climate change issues, innovation & digital technology must be leveraged to minimize energy consumption and improve quality of life. In addition, innovation must be combined with energy, digital technology, and information & communications technology to address urbanization challenges and ensure sustainability, which is expected to drive the growth of the market in near future. Furthermore, solar energy needs to be encouraged. The government has started taking initiative for adoption of solar energy. However, use of gas along with solar and wind energy is less than 2% at present, which is very crucial.

Key Benefits For Stakeholders     

• The study provides an in-depth analysis of the global smart cities market forecast along with current & future trends to explain the imminent investment pockets.
• Information about key drivers, restraints, & opportunities and their impact analysis on global smart cities market trend is provided in the report.
• Porter’s five forces analysis illustrates the potency of the buyers and suppliers operating in the industry.
• The quantitative analysis of the market from 2021 to 2030 is provided to determine the market potential.

 Key Market Segments & Key Market Players