Smart Building Market Size, Share & Trends Analysis Report By Solution (Safety & Security Management, Energy Management, Building Infrastructure Management), By Service, By End-use, By Region, And Segment Forecasts, 2022 - 2030

Report Overview

The global smart building market was valued at USD 82.77 billion in 2021 and is expected to grow at a compound annual growth rate (CAGR) of 25.3% from 2022 to 2030. The current growth of the market can be attributed to the rise in technological advancements in the construction industry, increasing investments in smart city projects, and growing industry standards and regulations. The outbreak of the COVID-19  had a moderate impact on the market . Advances in the latest technologies, such as IoT, digital twins, and Artificial Intelligence (AI), would play a vital role in shaping the post-pandemic market as building owners would be more anxious to assess the security, efficacy, and financial ramifications of policy changes before they are broadly implemented. Given the growing adoption of digital infrastructure solutions, companies are more likely to prefer intelligent software over conventional building methodologies during the post-pandemic era.

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. Several vendors have introduced innovative hardware and software solutions that help reduce the time of completing smart building projects.

For instance, Priva BV, a Dutch technology company, provides cloud-based building management solutions and services that are easy to operate in a single unit, from any location, and at any time. Such advances in technologies can help project designers and builders in gaining a 360-degree view of the project, thereby driving the growth of the market.

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. Additionally, 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. Artificial Intelligence (AI) and Machine Learning (ML) 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 organizations' objectives in the current unpredictable and fast-changing environment.

Governments worldwide are making significant investments in smart city initiatives, propelling the adoption of smart buildings in different regions. The governing bodies are predicted to be the strongest promoters of smart and cutting-edge solutions that facilitate adaptive regulations and enable disruptive entries, safeguarding the interests of the public and the city. For instance, in July 2019, Empire State Development Authority (ESD) announced the Smart Cities Innovation Partnership program with the collaboration of the Israel Innovation Authority. The partnership would design five smart cities to connect with emerging technologies and improve government services, and residents’ quality of life. Smart city technology has the potential to make rapidly expanding urban spaces more efficient and productive over the upcoming years. These advancements are expected to further boost the market 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 are creating policies that define 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.

Solution Insights

The safety & security management segment accounted for the largest market share of 35.3% in 2021. Through proper planning, security management systems can easily integrate with smart buildings and help keep the building and people inside safe. Smart buildings are often equipped with Internet Protocol (IP)-enabled safety and security devices that provide facilities managers with a raft of new capabilities. These include data collection and analysis, integration with other in-house systems, and consolidated administration.

Further, for safety and security, several smart buildings are incorporated with fire 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 during the forecast period.

The energy segment is expected to grow at a CAGR of 26.5% during the forecast period. The segment growth can be attributed to the growing awareness of the benefits of implementing Energy Management Systems (EMS) across industrial, commercial, and residential properties. Further, an increase in the number of government initiatives aimed at reducing energy consumption is one of the key factors driving the growth of the market.

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.

Service Insights

The implementation segment accounted for the largest market share of 39.6% in 2021. The segment growth is attributed to the 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, ensuring constant comfort, security, energy efficiency, low operating costs, and convenience. Further, it also optimizes the use of available space and reduces the impact of buildings on the environment. These benefits offered by implementation services will enhance the segment growth.

The support and maintenance segment are expected to grow at a CAGR of 28.6% during 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. Further, 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. For instance, predictive building maintenance lowers the cost of handling real estate assets in a smart building and enhances the tenant experience, and stops malfunctions and minor issues from escalating to major difficulties. These capabilities will supplement the growth of the segment during the forecast period.

End-use Insights

The commercial segment held a market share of 53.1% in 2021 and is expected to dominate the market by 2030. 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. Moreover, building operators can use this data to enhance building controls and automate crucial building-management duties, such as heat and lighting, and discover operational inefficiencies in their construction. 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. These benefits associated with advanced technologies in commercial buildings will further drive the demand for smart buildings during the forecast period.

The residential segment is expected to grow at a CAGR of 25.1% during the forecast period. The segment growth can be attributed to the rise in demand for smart home lighting, HVAC management, smart door lock security systems, and smart meters to manage and monitor the building's mechanical and electrical systems. For instance, in September 2020, technology giants such as Amazon, Apple, and Google joined the Zigbee Alliance to create a single, open-source smart home platform. With security as one of its key design elements, the project intends to develop and foster the adoption of a new, royalty-free networking standard to improve compatibility across smart home products. The robust demand for these technologies in residential buildings will stimulate the growth of the market during the forecast period.

Regional Insights

The North America regional market dominated the market in 2021 and accounted for a market share of 33.3%. The regional growth can be attributed to the increasing public and private investments and growing digitalization. Furthermore, in the U.S., various end-use industries are focusing on converting their existing offices into smart offices. For instance, in April 2022, JPMorgan Chase announced establishing a new smart headquarters with all-electric operation systems in New York. The company planned to use renewable power generated by a hydroelectric plant in New York state, controlled by energy management systems and equipped with Artificial Intelligence (AI) and Machine Learning (ML). With this initiative, it is expected to boost the market growth, and subsequently increase the demand for smart buildings in the region.

The Asia Pacific is anticipated to rise as the fastest developing regional market at a CAGR of 27.3% due to increasing internet penetration, high urbanization, and shifting consumer focus toward remote management services through IoT technology. Further, shifting the focus of consumers toward converting their existing buildings into smart buildings is boosting the 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.

Key Companies & Market Share Insights

Market players are observed to invest resources in research & development activities to support growth and enhance their internal business operations. 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 December 2021, Siemens expanded its product portfolio by acquiring digital twin software provider Ecodomus in the U.S. Siemens integrated this digital twin software into its Building Information Modeling (BIM) platforms, allowing its clients to create a digital map of smart buildings. This helped the company to increase its brand identity for digital win software in the smart building market.Some prominent players operating in the global 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

Smart Building Market Report Scope

Global Smart Building Market Segmentation

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2030. For this study, Grand View Research has segmented the smart building market based on solution, services, end-use, and region:

• Solution Outlook (Revenue, USD Billion, 2017 - 2030)

  • Safety & Security Management

    • Access Control System

    • Video Surveillance System

    • Fire And Life Safety System

  • Energy Management

    • HVAC Control System

    • Lighting Management System

    • Others (Data Management, Asset Performance Optimization, And Application Platform)

  • Building Infrastructure Management

    • Parking Management System

    • Water Management System

    • Others (Elevators And Escalators Management And Waste Management)

  • Others (Network Management And Workplace Management)

• Service Outlook (Revenue, USD Billion, 2017 - 2030)

  • Consulting

  • Implementation

  • Support & Maintenance

• End-use Outlook (Revenue, USD Billion, 2017 - 2030)

  • Residential

  • Commercial

    • Healthcare

    • Retail

    • Academic

    • Others (Hotels, Public Infrastructure, And Transport)

  • Industrial

• Regional Outlook (Revenue, USD Billion, 2017 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Germany

  • Asia Pacific

    • China

    • India

    • Japan

  • Latin America

    • Brazil

  • Middle East & Africa