Smart Cities Market Analysis Report By Application (Governance, Buildings, Utilities, Transportation, Healthcare, Environmental Solution), By Region, And Segment Forecasts, 2019 - 2025

Industry Insights

The global smart cities market size was valued at USD 71.3 billion in 2018 and is expected to expand at a CAGR of 18.9% from 2019 to 2025. With growing awareness about ‘smart everything’, the smart cities concept has also been gathering increasing attention, which is essentially an end result of all the intermediary technologies.

A smart city can be defined in numerous ways but by default, it leverages available technologies and innovations to enhance living conditions of its residents. It necessarily focuses on integrating infrastructure, social and human capital, and disruptive technologies to build a sustainable economy and participatory governance.

Driven by recent technological advances in domains such as healthcare, transport, energy, governance, and intelligence gathering, the market is anticipated to grow at a healthy pace in the coming years. The market derives its strength from the growing adoption of technologies such as Internet of Things (IoT), cloud computing, big data, cognitive computing, and open data.

Though the industry makes use of a diverse set of technologies and sensors, the application areas differ from city to city or community to community. Need for developing resilient cities, saving energy, and building a shared economy are also acting as major forces to help the industry thrive.

High demand for efficient and sustainable infrastructure, propelled by growing population and rapid rate of urbanization, is driving the market across the globe. City governments are trying to tackle these problems through initiatives across domains such as mobility, utilities management, and safety. Furthermore, increase in traffic congestion and greenhouse gas emissions is resulting in adoption of smart mobility and efficient energy management applications.

Governance & Financial Funding Model

The adoption of governance and financial funding models has a direct impact on the design, development, and execution of projects. Project implementation and deployment timelines are majorly impacted by the governance and funding model. Smart cities encapsulate both technology and infrastructure and its convergence at different constructs of a city. As a result, different entities are involved in the planning, implementation, and operation of these projects. This complex structure has resulted in creation of a labyrinth of institutions that are involved in the governance of smart cities. However, certain frameworks have evolved for the implementation of these projects. These frameworks involve different levels of participation from state, local, and federal governments. In addition, the private sector has been taking up different roles as service providers, collaborators, and financiers, among others.

While there are traditional methods of financing projects, such as debt instruments, numerous new methods of financing smart city projects have been emerging owing to their multi-disciplinary nature. An important aspect of these investments is the divergent nature of funding sources driven by the nature of the projects and regional/local economy. While some projects are funded by public private partnerships, many projects are solely funded by the state or local administration.

Application Insights

The smart cities market is divided on the basis of application into governance, building, environmental solutions, utilities, transportation, and healthcare. Utilities dominated the market and is also anticipated to emerge as the fastest growing segment over the forecast period. Numerous countries are focusing on deploying digital technologies for distributing and billing of electricity, water, and Liquefied Petroleum Gas (LPG) to residents in order to improve delivery and enable effective usage, monitoring, and analysis. The smart utilities segment is propelled by growing demand in energy grids and smart meters in urban areas owing to rising need to control energy usage and develop sustainable communities.

The smart transportation and building segments are also expected to show significant growth over the forecast period, owing to increasing government initiatives to improve public transportation systems and enhance consumption and generation of renewable energy. As governing bodies’ world over try to develop their infrastructure in line with technological leaps, the segments may witness further growth in the coming years.

Regional Insights

The market is witnessing a proactive interest in almost all regions world over. Europe emerged as the largest market for smart solutions as it exhibited a rather developed marketplace as compared to other regions. The European Union’s initiatives, combined with major development projects initiated by local governing bodies, have aided the region’s growth as the largest adopter of the technology. In addition, multiple factors such as funding and financing models, governance structures, technology ecosystems, and infrastructure are playing an important role in smart city deployments in Europe.

The Asia Pacific market is anticipated to be the fastest growing region due to increasing demand for smart solutions for energy management, infrastructure management, and smart mobility. The growing exodus of people toward cities is also a prime factor that may positively affect demand for smart solutions for urban regions as they struggle to provide facilities to an ever-increasing population.

Smart Cities Market Share Insights

Key industry participants include Accenture; ABB Limited; Schneider Electric SE; Cisco Systems, Inc.; Siemens AG; IBM Corporation; and Microsoft Corporation. Companies such as Oracle Corporation; Honeywell International Inc.; Hitachi, Ltd.; Huawei Technologies Co. Ltd.; and Intel Corporation are also at the forefront of developing city solutions.  

The industry may also witness a rise in small companies that address niche markets and provide customized solutions with limited scope. However, the marketplace will largely be dominated by technology giants. The industry is also marked with growing number of collaborations between governments and companies to develop and implement pilot projects. Key players are also collaborating for development and deployment of customized smart cities solutions in the areas of city surveillance, energy management, transportation, and utilities, among others. Some companies are also playing the role of system integrators.

Report Scope

Segments Covered in the Report

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 2016 to 2025. For the purpose of this study, Grand View Research has segmented the global smart cities market report by application and region:

• Application Outlook (Revenue, USD Million, 2016 - 2025)

  • Governance

    • City Surveillance

    • Command & Control Solution

    • E-governance

    • Lighting

    • Infrastructure

  • Building

  • Environmental Solution

  • Utilities

    • Energy Management

    • Water Management

    • Waste Management

  • Transportation

    • Intelligent Transportation System

    • Parking Management

    • Ticketing & Travel Assistance

  • Healthcare

• Regional Outlook (Revenue, USD Million, 2016 - 2025)

  • North America

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Germany

    • Nordic Region

    • Eastern Europe

  • Asia Pacific

    • China

    • Japan

    • India

    • Australia

    • ASEAN

  • Latin America

    • Brazil

    • Mexico

  • Middle East and Africa