The smart city market is expected to grow from US$ 1094.23 billion in 2022 to US$ 3110.58 billion by 2028; it is estimated to grow at a CAGR of 19.0% from 2022 to 2028.
Smart cities are a concept where various aspects of a city or a province are based upon advanced technologies. These cities use digital technology and the internet to enhance the performance of services and quality of life by optimizing energy and improving security for the citizens. The smart city concept aims to develop robust connectivity and infrastructure to enable real-time information access for building a management system that efficiently connects citizens, service providers, and administrators. Furthermore, the government ensures that inhabitants actively participate in improving the overall sustainability and productivity of services by furnishing the cities with elemental infrastructure.
Smart infrastructure technology has significantly changed over time, and various disciplines, such as building automation for facility and emergency response management, building energy optimization, parking management, and in-building communication systems, are now being widely adopted. Furthermore, Green building initiatives have taken center stage across many countries, especially across Europe, North America, and APAC regions. Focus on reduction in energy consumption and concerns over the proliferation of environmental wastes are the major driving factors for the development of smart cities. Transportation is expected to be another major focus area during the smart city market forecast period.
Depletion of energy sources and inefficient resource management are gradually becoming major concerns across the globe. This is driving the demand for smart energy solutions across the globe. Smart energy management systems use sensors, advanced meters, renewable energy sources, digital controls, and analytic tools to automate, monitor, and optimize energy distribution and usage. Such systems optimize grid operation and usage by balancing the needs of the different stakeholders involved (consumers, producers, and providers). There are several innovations in smart energy infrastructure, such as distributed renewable generation, microgrids, smart grid technologies, energy storage, automated demand response, virtual power plants, and demand-side innovations such as electric vehicles and smart appliances. Such innovations provide an extended network of intelligent energy devices across a city, with a detailed view of energy consumption patterns, enabling community-based energy monitoring programs and improving the energy efficiency of buildings.
Regional Analysis of Smart City Market
From the regional perspective, North America held the largest share of the global smart city market in 2021. The high adoption of technologically advanced solutions across all industrial sectors of the region is contributing to the growth of the North America smart city market. The increasing government support for technology adoption through the announcement of subsidies, tax credits, and funding to industries for technological development is further catalyzing the market, thereby offering lucrative business opportunities to the smart city market players operating across the region. For instance, in November 2021, the US federal government announced funding of US$ 500 million under the Infrastructure Investment and Jobs Act to overcome the challenges of smart cities. Additionally, the presence of several smart city market players across the region, engaged in constant innovation and product development, is further driving the North America smart city market.
Lucrative Regions – Smart City Market Share
Market Insights – Smart City Market
Industry Vertical-Based Insights
Based on industry vertical, the smart city market size is segmented into smart infrastructure, smart energy, smart governance, smart transportation, smart healthcare, and smart education. The smart transportation segment is expected to grow at the highest CAGR over the forecast period. Smart transportation is an innovative traffic and mobility infrastructure built on new technologies and designed to save resources for maximum efficiency. Deployment of key technologies such as cloud computing, 4G, machine-to-machine learning, and operations in novel projects is expected to become more commonly applied to smart transport systems such as railways, providing efficient passenger and freight services across the globe, resulting in the generation of a pool of opportunities for numerous industry players in the ecosystem of smart cities. This would also attract various capitalists and investors, leading to tremendous growth in the smart transportation market.
Players operating in the smart city market are mainly focused on developing advanced and efficient products.
- In October 2021, Siemens AG announced the acquisition of Squills. This acquisition strengthened the company’s mobility solutions, such as reservation and ticketing software.
- In May 2021, Microsoft Corporation and Itron Inc entered into a strategic partnership to collaboratively offer highly advanced Mobile device management (MDM) services to their clients.
The smart city market size is segmented into five major regions—North America, Europe, Asia Pacific (APAC), Middle East & Africa, and South America. In 2022, North America led the market with a substantial revenue share, followed by Europe. Further, Asia Pacific is expected to register the highest CAGR in the smart city market from 2022 to 2028.
The key global smart city market players include ABB Ltd; Cisco Systems, Inc.; Oracle Corporation; Microsoft Corporation; and IBM Corporation. Apart from these, several other players were analyzed during the research study, including Accenture, General Electric Company, Schneider Electric SE, Siemens AG, and Ericsson AB.
Revenue forecast, Company Analysis, Industry landscape, Growth factors, and Trends
North America, Europe, Asia Pacific, Middle East & Africa, South & Central America
This text is related
to country scope.
The List of Companies - Smart Cities Market
- ABB Ltd.
- Schneider Electric
- IBM Corporation
The Insight Partners performs research in 4 major stages: Data Collection & Secondary Research, Primary Research, Data Analysis and Data Triangulation & Final Review.
- Data Collection and Secondary Research:
As a market research and consulting firm operating from a decade, we have published many reports and advised several clients across the globe. First step for any study will start with an assessment of currently available data and insights from existing reports. Further, historical and current market information is collected from Investor Presentations, Annual Reports, SEC Filings, etc., and other information related to company’s performance and market positioning are gathered from Paid Databases (Factiva, Hoovers, and Reuters) and various other publications available in public domain.
Several associations trade associates, technical forums, institutes, societies and organizations are accessed to gain technical as well as market related insights through their publications such as research papers, blogs and press releases related to the studies are referred to get cues about the market. Further, white papers, journals, magazines, and other news articles published in the last 3 years are scrutinized and analyzed to understand the current market trends.
- Primary Research:
The primarily interview analysis comprise of data obtained from industry participants interview and answers to survey questions gathered by in-house primary team.
For primary research, interviews are conducted with industry experts/CEOs/Marketing Managers/Sales Managers/VPs/Subject Matter Experts from both demand and supply side to get a 360-degree view of the market. The primary team conducts several interviews based on the complexity of the markets to understand the various market trends and dynamics which makes research more credible and precise.
A typical research interview fulfils the following functions:
- Provides first-hand information on the market size, market trends, growth trends, competitive landscape, and outlook
- Validates and strengthens in-house secondary research findings
- Develops the analysis team’s expertise and market understanding
Primary research involves email interactions and telephone interviews for each market, category, segment, and sub-segment across geographies. The participants who typically take part in such a process include, but are not limited to:
- Industry participants: VPs, business development managers, market intelligence managers and national sales managers
- Outside experts: Valuation experts, research analysts and key opinion leaders specializing in the electronics and semiconductor industry.
Below is the breakup of our primary respondents by company, designation, and region:
Once we receive the confirmation from primary research sources or primary respondents, we finalize the base year market estimation and forecast the data as per the macroeconomic and microeconomic factors assessed during data collection.
- Data Analysis:
Once data is validated through both secondary as well as primary respondents, we finalize the market estimations by hypothesis formulation and factor analysis at regional and country level.
- 3.1 Macro-Economic Factor Analysis:
We analyse macroeconomic indicators such the gross domestic product (GDP), increase in the demand for goods and services across industries, technological advancement, regional economic growth, governmental policies, the influence of COVID-19, PEST analysis, and other aspects. This analysis aids in setting benchmarks for various nations/regions and approximating market splits. Additionally, the general trend of the aforementioned components aid in determining the market's development possibilities.
- 3.2 Country Level Data:
Various factors that are especially aligned to the country are taken into account to determine the market size for a certain area and country, including the presence of vendors, such as headquarters and offices, the country's GDP, demand patterns, and industry growth. To comprehend the market dynamics for the nation, a number of growth variables, inhibitors, application areas, and current market trends are researched. The aforementioned elements aid in determining the country's overall market's growth potential.
- 3.3 Company Profile:
The “Table of Contents” is formulated by listing and analyzing more than 25 - 30 companies operating in the market ecosystem across geographies. However, we profile only 10 companies as a standard practice in our syndicate reports. These 10 companies comprise leading, emerging, and regional players. Nonetheless, our analysis is not restricted to the 10 listed companies, we also analyze other companies present in the market to develop a holistic view and understand the prevailing trends. The “Company Profiles” section in the report covers key facts, business description, products & services, financial information, SWOT analysis, and key developments. The financial information presented is extracted from the annual reports and official documents of the publicly listed companies. Upon collecting the information for the sections of respective companies, we verify them via various primary sources and then compile the data in respective company profiles. The company level information helps us in deriving the base number as well as in forecasting the market size.
- 3.4 Developing Base Number:
Aggregation of sales statistics (2020-2022) and macro-economic factor, and other secondary and primary research insights are utilized to arrive at base number and related market shares for 2022. The data gaps are identified in this step and relevant market data is analyzed, collected from paid primary interviews or databases. On finalizing the base year market size, forecasts are developed on the basis of macro-economic, industry and market growth factors and company level analysis.
- Data Triangulation and Final Review:
The market findings and base year market size calculations are validated from supply as well as demand side. Demand side validations are based on macro-economic factor analysis and benchmarks for respective regions and countries. In case of supply side validations, revenues of major companies are estimated (in case not available) based on industry benchmark, approximate number of employees, product portfolio, and primary interviews revenues are gathered. Further revenue from target product/service segment is assessed to avoid overshooting of market statistics. In case of heavy deviations between supply and demand side values, all thes steps are repeated to achieve synchronization.
We follow an iterative model, wherein we share our research findings with Subject Matter Experts (SME’s) and Key Opinion Leaders (KOLs) until consensus view of the market is not formulated – this model negates any drastic deviation in the opinions of experts. Only validated and universally acceptable research findings are quoted in our reports.
We have important check points that we use to validate our research findings – which we call – data triangulation, where we validate the information, we generate from secondary sources with primary interviews and then we re-validate with our internal data bases and Subject matter experts. This comprehensive model enables us to deliver high quality, reliable data in shortest possible time.
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