The global smart building market size was valued at USD 93.93 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 26.8% from 2023 to 2030. The growing adoption of the Internet of Things (IoT), Artificial Intelligence (AI), Virtual Reality (VR), and Business Information Modeling (BIM) in the new Building Management System (BMS) is expected to play a key role in driving the growth of the market. The outbreak of the COVID-19 pandemic had a moderate impact on this market. Advances in the latest technologies, such as IoT, digital twins, and AI, would play a vital role in shaping the post-pandemic smart building market as building owners would be more anxious to assess the security, efficacy, and financial ramifications of policy changes before they are broadly implemented.
The market is expanding primarily due to smart cities expansion and the increased need for energy-efficient structures. The demand for smart buildings is also growing as IoT-based remote monitoring devices become more widely used. The market is expanding further due to the rising popularity of building automation systems for security, entertainment, telecommunications, and facility management. The industry is also being driven by rapid urbanization and an increase in government attempts to build smart infrastructure in both developed and developing countries. Buildings can now be monitored and controlled in a far more effective way than in the past owing to developments in digital technology, sensors, and telecommunications.
In addition, buildings have more opportunities to play a major role in self-generation or grid-supplied energy, increasing the demand for non-carbon or low-carbon solutions for managing building energy. Machine Learning (ML) and AI can provide ways to examine building data to enhance the effectiveness of numerous building operations as well as the building’s capacity for revenue generation. These systems can gather the required data, transform it into useful information, and use the new knowledge for the purpose of organizations’ objectives in the current unpredictable and fast-changing environment.The proliferation of technology plays a crucial role in driving the growth of the market.
Companies offer maintenance and support for upgrading solutions to improve the management and performance of smart buildings. Furthermore, businesses are conducting routine solution evaluations to make specialized technological changes and procedure improvements for performance optimization. For instance, in December 2020, Hitachi Ltd. launched an IoT platform to enhance building operations. In addition, the platform also offered a better user experience and high management efficiency. These developments would further drive the market growth during the forecast period.Smart buildings depend on several IoT sensors and computer networks to automate solutions, such as managing lighting, heating, and elevators, fire detection, video surveillance, and badge access.
Building Automation System (BAS) and these sensors work together to deliver a multitude of insightful and helpful information about the safety and performance of buildings. However, BAS and IoT sensors are vulnerable to cyberattacks because they frequently lack fundamental cybersecurity capabilities. Most cyberattacks on smart buildings result from malicious hackers trying to access the BAS control systems. To strengthen the IoT update process, market players create policies defining procedures for various upgrades, including bug patches, new releases, and emergency updates. For instance, the building industry is taking measures to secure building networks with BACnet Secure Connect (BACnet/SC), which interfaces seamlessly with the IT architecture and uses best practices and methodologies in IT.
The safety & security management segment accounted for the largest revenue share of 35.34% in 2022. Safety & security include data collection and analysis, integration with other in-house systems, and consolidated administration. Furthermore, for safety and security, several smart buildings are incorporated with advanced fire systems, by which managers can overview the health and performance of their buildings and fire systems remotely through their laptops, desktops, and smartphones. These benefits associated with advanced safety & security management systems are expected to drive the growth of the segment over the forecast period. The energy management segment is expected to grow at a CAGR of 28.0% during the forecast period.
The segment growth can be attributed to the growing awareness about the benefits of implementing Energy Management Systems (EMS) across industrial, commercial, and residential properties. An increase in the number of government initiatives aimed at reducing energy consumption is one of the key factors driving the growth of the segment. For instance, the government of India developed the Energy Conservation Building Code (ECBC) in May 2007 to set minimum requirements for the design and construction of energy-efficient buildings and systems. In October 2021, the U.S. Department of Energy (DOE) invested USD 61 million in smart building projects, promoting the adoption of renewable energy sources and using technology to transform homes and offices into energy-efficient buildings.
The implementation segment accounted for the largest revenue share of 34.98% in 2022. The segment growth is attributed to a rise in the adoption of smart building services and software across various business sectors. Advanced building technology systems are installed and used as part of the service of smart buildings. Smart buildings use a range of actuators, sensors, and microchips to gather data and manage based on a business's activities and services. This infrastructure offers owners, operators, and facility managers the chance to enhance their assets' dependability and performance. These benefits offered by implementation services will boost segment growth.
The support and maintenance segment is expected to grow at a CAGR of 30.2% over the forecast period. Smart building solutions are implemented with the assistance of support services. To enhance the management and performance of smart buildings, vendors provide ongoing support and maintenance for upgrading solutions. Furthermore, service providers for smart buildings assist in the implementation of intelligent automation and techniques for the cost-effective and efficient maintenance and operation of buildings. These capabilities will supplement the growth of the segment during the forecast period.
The commercial segment held a revenue share of 53.36% in 2022 and is expected to dominate the market even during the forecast years. In commercial buildings, advanced IoT sensors are installed in smart commercial buildings to gather data from various building systems and subsystems. The building operator can use this data to automate and improve building operations and maintenance. For instance, in June 2021, Endeavor Business Media, LLC launched Smart Buildings Technology, a new brand dedicated to incorporating integrated intelligence into new and existing commercial buildings. Advanced IoT sensors are installed in smart commercial buildings to gather data from various building systems and subsystems.
The residential segment is expected to grow at a CAGR of 26.6% over the forecast period. Amid the COVID-19 pandemic, people started using smart home technology that helped prevent the spread of the virus. Consumers employed advanced security cameras for safety, robotic vacuum cleaners to keep their houses clean, and video doorbells to ensure hands-free operation. Moreover, the segment is expected to benefit from the growth of the consumer electronics sector, improved power line communication, rising personal income in developing economies, and increased awareness about smart grids. These factors will supplement the demand for smart building solutions in the residential segment during the forecast period.
The North America region dominated the market in 2022 and accounted for a revenue share of 32.9%. The regional growth can be attributed to the Increasing public and private investments and growing digitalization. Furthermore, the rising government investments in digital infrastructure to accelerate the U.S. transition toward a digital economy are creating a positive outlook for smart buildings in the U.S. The U.S. government is focusing on digitizing commercial buildings to enhance citizens’ experiences and establish transparency in services. These key factors are creating demand for smart building solutions in the region.
The Asia Pacific region is anticipated to register the fastest CAGR of 28.9% due to increasing internet penetration, rapid urbanization, and shifting consumer focus toward remote management services through IoT technology. Furthermore,
the shifting focus of consumers toward converting their existing buildings into smart buildings is boosting regional market growth. For instance, in January 2022, Singtel, a telecommunication company, announced its collaboration with Lendlease, a real estate group, to convert its Comcentre headquarters in Singapore into a smart building with an investment of USD 2.21 billion. These key factors are creating demand for smart buildings in the region.
Industry players are observed to invest resources in research & development activities to support growth and enhance their internal business operations. The report will include company analysis based on their financial performances, product benchmarking, key business strategies, and recent strategic alliances. Companies can be seen engaging in mergers & acquisitions and partnerships to further upgrade their products and gain a competitive advantage in the market. They are effectively working on new product development, and enhancement of existing products to acquire new customers and capture more market shares.
For instance, in June 2022, Cisco Systems, Inc. introduced its new security solutions for hybrid cloud infrastructure. The company is developing Cisco Security Cloud to offer holistic security solutions for the entire IT infrastructure in various end-use sectors, including smart buildings. With secure access, the company unveiled different advanced functionalities of its new security solutions, such as session trust analysis, risk-based authentication, and continuous trusted access. This is expected to enable Cisco Systems, Inc. to increase its brand representation for infrastructure security software.Prominent players in the global smart building market include:
ABB Ltd.
BOSCH
Cisco Systems Inc.
Emerson Electric Co.
Hitachi, Ltd.
Honeywell International Inc.
INTEL Corp.
Johnson Controls
KMC Controls
LG Electronics Inc.
Legrand
Schneider Electric SE
Siemens
Sierra Wireless
Telit
Report Attribute |
Details |
Market size value in 2023 |
USD 108.00 billion |
Revenue forecast in 2030 |
USD 570.02 billion |
Growth rate |
CAGR of 26.8% from 2023 to 2030 |
Base year for estimation |
2022 |
Historical data |
2018 - 2021 |
Forecast period |
2023 - 2030 |
Quantitative units |
Revenue in USD billion and CAGR from 2023 to 2030 |
Report coverage |
Revenue forecast, company market share, competitive landscape, growth factors, and trends |
Segments covered |
Solution, service, end-use, region |
Regional scope |
North America; Europe; Asia Pacific; Latin America; Middle East & Africa |
Country scope |
U.S.; Canada; UK; Germany; France; Italy; Spain; China; India; Japan; Australia; South Korea; Brazil; Mexico; Argentina; UAE; Saudi Arabia; South Africa |
Key companies profiled |
ABB Ltd.; BOSCH; Cisco Systems Inc.; Emerson Electric Co.; Hitachi, Ltd..; Honeywell International Inc.; INTEL Corp.; Johnson Controls; KMC Controls; LG Electronics; Legrand.; Schneider Electric SE; Siemens; Sierra Wireless; Telit |
Customization scope |
Free report customization (equivalent to up to 8 analysts working days) with purchase. Addition or alteration to country, regional & segment scope |
Pricing and purchase options |
Avail customized purchase options to meet your exact research needs. Explore purchase options |
This report forecasts revenue growth and provides an analysis of the latest trends in each of the sub-segments from 2018 to 2030. For this report, Grand View Research has segmented the smart building market based on solution, services, end-use, and region:
Solution Outlook (Revenue, USD Billion, 2018 - 2030)
Safety & Security Management
Access Control System
Video Surveillance System
Fire and Life Safety System
Energy Management
HVAC Control System
Lighting Management System
Others
Building Infrastructure Management
Parking Management System
Water Management System
Others
Others
Service Outlook (Revenue, USD Billion, 2018 - 2030)
Consulting
Implementation
Support & Maintenance
End-use Outlook (Revenue, USD Billion, 2018 - 2030)
Residential
Commercial
Healthcare
Retail
Academic
Others (Hotels, Public Infrastructure, and Transport)
Industrial
Regional Outlook (Revenue, USD Billion, 2018 - 2030)
North America
U.S.
Canada
Europe
UK
Germany
France
Italy
Spain
Asia Pacific
China
India
Japan
Australia
South Korea
Latin America
Brazil
Mexico
Argentina
Middle East & Africa
UAE
Saudi Arabia
South Africa
b. The global smart building market size was estimated at USD 93.93 billion in 2022 and is expected to reach USD 108.00 billion in 2023.
b. The global smart building market is expected to grow at a compound annual growth rate of 26.8% from 2023 to 2030 to reach USD 570.02 billion by 2030.
b. North America dominated the smart building market with a share of 32.90% in 2022. The regional growth can be attributed to the increasing public and private investments and growing digitalization that are driving the smart building market growth.
b. Some key players operating in the smart building market include ABB Ltd., Cisco Systems Inc., Emerson Electric Co., Hitachi, Ltd.., Honeywell International Inc., Johnson Controls, Legrand., Schneider Electric SE, Siemens; Telit, BOSCH, Intel Corporation, KMC Controls, LG Electronics Inc., and Sierra Wireless
b. The growing adoption of the Internet of Things (IoT), Artificial Intelligence (AI), Virtual Reality (VR), and Business Information Modeling (BIM) in new Building Management System (BMS) is expected to play a key role in driving the growth of the smart building market.
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Artificial Intelligence (AI), Virtual Reality (VR), and Augmented Reality (AR) solutions are anticipated to substantially contribute while responding to the COVID-19 pandemic and address continuously evolving challenges. The existing situation owing to the outbreak of the epidemic will inspire pharmaceutical vendors and healthcare establishments to improve their R&D investments in AI, acting as a core technology for enabling various initiatives. The insurance industry is expected to confront the pressure associated with cost-efficiency. Usage of AI can help in reducing operating costs, and at the same time, can increase customer satisfaction during the renewal process, claims, and other services. VR/AR can assist in e-learning, for which the demand will surge owing to the closure of many schools and universities. Further, VR/AR can also prove to be a valuable solution in providing remote assistance as it can support in avoiding unnecessary travel. The report will account for Covid19 as a key market contributor.
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