Smart Cities Market- 5G to Emerge as a True Catalyst for Market Growth

Smart cities market size was valued at USD 521.01 billion in 2022, and is expected to reach USD 1,291.75 billion by 2029, exhibiting a CAGR of 13.85 % during the forecast period (2023-2029)

A "smart city" is defined as an innovative city that uses information and communications technologies (ICT) and other means to improve the quality of life, the efficiency of urban operations and services, and urban competitiveness, to meet the economic, social, and environmental needs of current and future generations. According to MMR, the global smart city market (by revenue) is expected to be worth USD 1,291.75 billion by 2029, with North America and Europe accounting for half of the smart cities. Blockchain, artificial intelligence, 5G, and edge computing are emerging technologies that are critical for smart city development. The generation, analysis, and exchange of massive amounts of data are critical to the development of smart cities. Indeed, one of the primary goals of smart cities technology is to make cities data-driven, allowing municipal systems and services to respond to and act on data in real time.

The increased connection of a variety of technologies, including smartphones, RFID-enabled gadgets, smart cards, body cameras, and GPS systems, is driving the growth of the smart cities market. With government organizations increasingly required to analyse data kept in government systems as well as data from outside government, there is a growing demand for advanced databases and information-organization software. Governments across the world are finding it increasingly difficult to manage road traffic, crime, and public events, therefore social media and information from mobile applications and cell phones are becoming increasingly important. As the volume of data increases, software must become increasingly sophisticated, complicated, and adaptable to a wider range of hardware platforms and systems.To know about the Research Methodology :- Request Free Sample Report
Smart Cities Market Trends
Big Data and Analytics: Big Data analytics is a relatively new technology with enormous potential to improve smart city services. Big Data refers to data quantities that are too enormous for typical databases and most other analytic tools to handle. Smart cities linked by millions of sensors is expected to create massive amounts of data that may be utilized in a variety of useful ways. As a result, big data analytics will be critical to the development of smart cities. The big data and business analytics market (by revenue) is expected to reach USD 274 billion in 2022, representing a 27% rise year on year. The Asia Pacific, in particular, is expected to grow by 16% through 2024, reaching a total market size (by sales) of USD 42 billion.

Kansas City, Missouri, in the United States, is employing big data analytics to enhance services. The smart cities are using data sets to improve the services ranging from water management to healthcare. It has also created a crime prediction program to understand where crime will occur and who can assist in preventing it, as well as a pothole prediction tool to enhance roadway maintenance. The competitive intelligence report has covered the driving factors for smart city market with its market size and potential that make this report comprehensive.

Cloud Computing in Smart City Industry: Cities contain several departments, and the cloud may be utilized to store data created by these departments. Once on the cloud, data is shared to improve public services. Cloud computing is used to evaluate real-time data, allowing municipal authorities and agencies to make more informed choices, and helping governments to decrease expenses, enhance operational efficiencies, and maximize profits. Waste management, street lighting, traffic flow, environmental sensing, public safety, and parking are among the areas that gain the most from cost savings. The utilization of securely shared data can unlock government repositories that were previously reserved for policymakers. There are several examples of governments and municipalities using cloud computing to make cities more efficient.

Artificial Intelligence (AI): AI systems combine machine learning with the capacity to communicate with humans using natural language to extract insights from huge volumes of data. AI systems in IoT-enabled smart cities can analyze massive volumes of data and make rapid, autonomous business decisions without the need for human interaction. AI systems' predictive analytics skills can detect and recognize trends that municipal managers can employ to improve the quality of life for inhabitants. Some immediate uses of AI might include improved diagnosis and individualized therapy for patients. AI and cognitive computing may be used to help doctors comprehend medical data to make the correct diagnosis and provide the most effective therapy.
China has been at the forefront of incorporating AI technology into smart cities. Previously, Alibaba's City Brain AI has been implemented in Hangzhou. There are already 10 Alibaba City Brain projects in operation that use AI algorithms to monitor and regulate traffic lights and street cameras.

Blockchain: Blockchain technology has enormous potential for improving government management and assisting with urban planning. Blockchain is essentially a digital ledger book or record book. Blockchain transactions, unlike traditional databases, are never destroyed, and there is no master copy or single administrator. Blockchain technology may be used by governments to effectively retain public documents. This will increase openness in government purchases, investments, welfare expenditures, and public programs. A shared ledger system will increase public trust while reducing corruption in government agencies.
Many communities, like Austin, Chicago, and South Burlington, have used blockchain technology to provide efficient services to their residents. Dubai has collaborated with IBM to build the Dubai Blockchain Platform. Federal and municipal governments have been experimenting with blockchain technology to make cities smarter. Taipei, Taiwan's capital, has teamed with the IOTA Foundation (developer of distributed ledger technology) to further its smart city objectives.

5G-True Catalyst to Smart Cities: Large volumes of data must be exchanged in real-time via linked devices in smart cities. Because it has the bandwidth to accommodate massive volumes of data, the next generation of wireless technology, known as 5G, is excellent for this. It boasts transmission speeds that are 10-100 times quicker than conventional technologies, making it perfect for enabling numerous use cases and applications required for smart cities. According to MMR, global 5G connections are expected to reach 1.15 billion by 2024. This creates a huge potential for businesses and governments to reshape cities by using next-generation technologies.
As major firms like Nokia, Qualcomm, Ericsson, Broadcom, and Verizon move on with their plans for 5G technology and service rollout, 5G connections are expected to increase. Barcelona, Spain, is one of the first European cities to launch a large-scale 5G experimental program. This initiative will continue through December 2022. It entails utilizing the 5G network to provide creative solutions in areas such as education, industry, commerce, tourism, transportation, and safety and emergency management.
Smart Cities Market Dynamics
Smart Energy Solutions for Implementation of Smart Cities

Smart energy solutions are critical for smart city deployment. Smart meter cost reductions might total USD 157 billion by 2035 as utilities watch, forecast, and plan the volatility of today's energy use and production trends. Between 2021 and 2025, 572.3 million smart power meters will be installed in China, India, Japan, and South Korea. Energy networks may be outfitted with sensors that capture vast quantities of data previously utilized by utility companies using smart city technologies. This data can provide information about the status of a grid as well as the energy consumption habits of various homes. Big Data Analytics on the data collected via smart grids can help planners, decision-makers, and designers of a Smart City in the following ways:

Outage Management: Companies can obtain reports from the grid itself rather than waiting for consumers to report disruptions. A Smart Grid may notify the utility provider of outages, automatically report their location, and verify their recuperation in real-time.
Demand and Capacity Management: Data gathered from both the producer and consumer sides can help in analyzing demand and capacity. It can help in understanding the peak/non-peak hours of usage.

Better Understanding of Transmission Losses: Data collected from each sensor at regular intervals from production to consumption can give insight into where the actual loss is happening.

Behavioral Analytics of Consumers: With so much data accessible on energy usage at various periods - from dawn to night, different seasons, across different geographies, and different utility pricing plans - Big Data analytics can aid in understanding customer behavior.

Smart Transportation: MaaS, Smart Mobility, and Traffic Management

Mobility as a Service (MaaS) is quickly becoming a key idea in smart city design aiming at enhancing inhabitants' lives. Many towns throughout the world have already adopted the concept. In Helsinki, for example, citizens use the Whim app to plan and pay for all kinds of public and private transportation throughout the city. Many other cities have tested the concept, including Paris, Eindhoven, Gothenburg, Montpellier, Vienna, Hanover, Las Vegas, Los Angeles, Denver, Singapore, and Barcelona.

Improving mobility and transportation networks is critical for smart cities. Smart mobility solutions attempt to reduce traffic congestion, cut commute times, increase safety, and reduce pollution. IT systems (big data, cloud, AI) can play a critical role in the successful deployment of such systems. The city of Munich performed an intelligent traffic control pilot that resulted in a 35-40% increase in air quality.

Because of fast motorization, rapid urbanization causes traffic congestion and air pollution. The global automobile population is expected to reach 2.5 billion by 2050. Intelligent cities may employ technology and insights to improve traffic management. By 2023, revenue from smart city traffic technologies is expected to reach USD 4.4 billion. The capacity to install Intelligent Transport Systems (ITS) to provide city-wide mobility services is a critical component of smart city plans.

Concerns over Privacy & Data Sabotage

Smart city technology creates massive amounts of data. Software programs that access and exchange data raise privacy concerns and put the ethical usage of obtained data into question. Software systems may be hacked, allowing unwanted access to personal data. Data analytics may be used maliciously to infer someone's lifestyle, habits, and more. When subscribing to the terms and conditions of using a specific technology, most customers sign away their rights, yet regulators are progressively limiting the usage options. Regulators and corporations are increasingly struggling with the issues of striking a balance between the commercial use of data and privacy concerns.

Hundreds of thousands of linked systems are being integrated within a smart city infrastructure, which gives municipal officials real-time data to better the daily lives of its residents. Cyberattacks are possible on any linked devices in smart city technology. With so many systems in a linked smart city, a security compromise in one system might have a negative impact on another, and perhaps all systems. Cybercriminals can get access to a city's traffic control system, as well as enter a city's smart grid and disrupt power delivery. With the prevalence of cybersecurity breaches on the rise, data security is a critical concern that must be appropriately addressed.
Smart Cities Market Segment Analysis
Based on Application, Smart Transportation Segment Dominated the Smart Cities Industry in 2022

The smart transportation segment held the largest market share of over 20% in 2022. Other variables expected to contribute to segment growth include an increase in the number of cars on the road, a looming shortage of traffic data management, and an aging infrastructure. As a consequence of the necessity to regulate traffic flow across cities and roads, an alternative traffic management technology has emerged. With the adoption of smart technologies and a variety of activities by both public and private organizations, the importance of technology in creating the future of the intelligent transportation system market has been demonstrated.

Over the forecast period, the smart governance segment is expected to grow at a significant CAGR of 23.7%. The use of smart technology by governments to increase transparency, accountability, security, and citizen involvement by establishing a progressive government-public partnership can be credited to the rise. Governments in many areas are using video surveillance systems in multiple cities with the support of system integrators, Original Equipment Manufacturers (OEMs), and distributors to identify and avert illegal activity and promote smart governance.

Based on Smart Transportation, Intelligent Transportation System (ITS) Dominated the Smart Cities Industry in 2022

In 2022, the Intelligent Transportation System (ITS) segment accounted for more than 45% of the market. The growing number of cars on the road, as well as the desire to alleviate traffic congestion, are important drivers in the deployment of modern traffic management systems. These technologies decrease traffic delays and pollution, promote effective traffic management by shortening travel times, and allow authorities and public safety organizations to respond to accidents and crises quickly and efficiently.

Furthermore, governments in numerous countries are implementing intelligent transportation systems to improve road safety and the operational performance of the transportation system, as well as to lessen the environmental effect of transportation.

Based on Smart Utilities, Energy Management Segment Dominated the Smart Cities Industry in 2022

The energy management segment held the largest revenue share of the smart cities industry 55% in 2022. The rising need for energy has prompted the use of virtual power plants, which rely on AI, machine learning, and IoT to ensure security and efficiency. Key market participants are working on building a robust R&D infrastructure to push the development and overview of sophisticated energy management systems and design analytics solutions that combine emerging technologies such as blockchain. Over the forecast period, the water management segment is expected to increase at a CAGR of 23.8%. The increased concern for sustainable living has resulted in the development of various rules and legislation requiring cities to install water management systems in collaboration with system integrators and OEMs.

Water utilities are embracing smart technologies, such as IoT-enabled Advanced Metering Infrastructure (ATM) smart water meters, to speed different business processes and allow users to collect actionable data and make educated decisions regarding optimum water distribution and consumption. During the forecast period, these smart solutions are likely to drive up demand for water management systems.

Based on Smart Governance, City Surveillance Segment Dominated the Smart Cities Industry in 2022

The city surveillance segment held the largest revenue share of the smart cities industry over 20% in 2022. The rising public safety and security concerns, which drive the use of video management systems and IP cameras around the world, can be credited to the segment's rise. It is an essential component in the development of a smart city for controlling and monitoring transportation systems, civic bodies, public assets, and other community services. Furthermore, rising technology breakthroughs in analytics and software, as well as lower IP camera prices, are boosting the expansion of the city surveillance industry. Over the forecast period, the Command and Control Center (CCC) industry is expected to grow at a strong CAGR of 21.4%. The CCC center is where smart city applications including waste management, smart lighting, energy management, city surveillance, Intelligent Traffic Management System (ITMS), and smart parking are accessed and monitored.
Smart Cities Market Regional Insights
North America held the largest smart cities market revenue of 30.5% in 2022 and dominated the smart cities industry. Rising technical breakthroughs and digital revolutions in many business verticals such as telecommunications, government, IT, retail, and banking have resulted in the growth of the North American smart cities market. The region has a well-developed Information and Communication Technology (ICT) infrastructure, federal and local government partnerships with ICT suppliers, and the presence of major technology companies. ICT service providers and other local governments in the region have widely implemented civic connectivity infrastructure, which will contribute to the planning of smart city buildings in the region. The US Department of Transportation and the Smart Cities Council collaborate to promote the smart cities idea in the North American region by hosting a variety of networking events. During the forecast period, these factors will fuel the growth of the smart cities market.The Asia-Pacific region is one of the fastest-growing for innovative city technologies, with China playing a vital role in market growth. The country has been a pioneer in developing and exporting smart cities technologies such as networked cameras, sensors, and location services—as well as the rest of the Internet of Things—to collect a wide range of data to control things like traffic, energy usage, and crime, as well as to augment state power. The Japanese government has decided to participate in an attempt to spur investment in the creation of smart cities. According to an announcement made by the Ministry of Land Management, the government previously agreed on smart city principles,' which deal primarily with the use of information technology to develop modern urban spaces and urban management, effectively joining the Cambodia-Japan Public-Private Platform for Urban Development.

The Indian government intends to boost IoT as part of the Digital India agenda. The government has set aside INR 7,000 crore to construct 100 smart cities driven by IoT devices to regulate traffic, use water and power more effectively, and collect data using IoT sensors for healthcare and other services. The budget was likewise ambitious, with the national government committing USD 7.5 billion to the effort and forcing towns to match it. Such developments are expected to fuel major investment in the smart city sector.

The state-run Korea Water Resources Corp. (K-Water) has developed and deployed a wide range of smart water management technologies that govern Korea's modern ICT infrastructure to improve performance and decrease loss throughout the water cycle. K-Water has successfully exported similar solutions to other nations. Freshwater accounts for about 3% of the South Korean area, or a little under 100,000 square kilometers. In South Korea, everyone has access to better water supplies and sanitation.
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Smart Cities Market


Report Coverage
Details


Base Year:
2022
Forecast Period:
2023-2029


Historical Data:
2018 to 2022
Market Size in 2022:
US $ 521.01 Bn.


Forecast Period 2023 to 2029 CAGR:
13.85%
Market Size in 2029:
US $ 1,291.75 Bn.


 Segments Covered:
by Application
1.Smart Building
2.Smart Transportation
3.Smart Utilities
4.Smart Governance
5.Smart Healthcare
6.Environmental Solution


by Smart Building
1.By Component
1.1.Solutions
1.1.1.Building Infrastructure management
1.1.2..Safety and Security Management
1.1.3.Energy Management
1.1.4.Network Management
1.1.5.Integrated Workplace Management System
1.2.Services
1.2.1.Consulting
1.2.2. Deployment and Integration
1.2.3.Infrastructure Monitoring and Management
2.By Type
2.1.Residential
2.2.Commercial
2.3.Industrial



by Smart Transportation
1.By Component
1.1.Solutions
1.1.1.Smart Ticketing
1.1.2.Traffic Management
1.1.3.Parking Management
1.1.4.Traffic Surveillance
1.1.5.Passenger Information
1.1.6.Connected Logistics
1.1.7.Other solutions
1.2.Services
1.2.1.Consulting
1.2.2.Deployment and Integration
1.2.3. Infrastructure Monitoring and Management
2.By Type
2.1.Roadways
2.2.Railways
2.3.Airways



by Smart Utilities
1.By Component
1.1.Solutions
1.1.1..Advanced Metering Infrastructure
1.1.2.Distributed Management System
1.1.3. Substation Automation
1.1.4.Other Solutions
2.1.Services
2.1.1.Consulting
2.1.2.Deployment and Integration
2.1.3.Infrastructure Monitoring and Management
2.By Type
3.Energy Management
4.Gas Management
5.Water Management
6. Other types



by Smart Governance
1.City Surveillance
2.CCS
3.E-governance
4.Smart Lighting
5.Smart Infrastructure


by Smart Healthcare
1.Medical Devices
2.System and Software
3.Services



Smart Cities Market, by Region
North America (United States, Canada and Mexico)
Europe (UK, France, Germany, Italy, Spain, Sweden, Austria, Turkey, Russia and Rest of Europe)
Asia Pacific (China, India, Japan, South Korea, Australia, ASEAN and Rest of APAC)
Middle East and Africa (South Africa, GCC, Egypt, Nigeria and Rest of ME&A)
South America (Brazil, Argentina, Columbia and Rest of South America)
Smart Cities Market Key Players are:
1.Cisco Systems, Inc.(US)
2. Verizon(US)
3.Microsoft Corporation(US)
4.Oracle Corporation(US)
5. General Electric(US)
6.Honeywell International Inc.(US)
7.International Business Machines Corporation(US)
8.Itron Inc.(US)
9. KAPSCH Group(Austria)
10. Huawei Technologies Co., Ltd.(China)
11. Schneider Electric SE (France)
12. Ericsson (Sweden)
13.Osram Gmbh (Germany)
14.AGT International (Germany)
15.SAP SE(Germany)
16. Siemens AG(Germany)
17.Vodafone Group plc(UK)
18.Telensa (UK)
19. AVEVA Group plc. (UK)
20. ABB Limited (Switzerland)

Frequently Asked Questions:

1] Which trends are driving the growth of the smart cities industry?
Ans. IT, Big Data analytics, cloud computing, Artificial Intelligence, blockchain, and 5G are trends driving the smart cities industry growth.

2] Which region held the largest market share in the global smart cities industry in 2022?
Ans. The North American region held the highest share of 30.5% in the smart cities market.

3] Which are the companies with the largest smart city patent owners worldwide?
Ans. State Grid Corp, Samsung, LG Electronics, Denso, Chinese Academy of Science, Mitsubishi Electric, and Toyota Motor, are a few companies among others with the largest smart city patent owners worldwide.

4] Which cities across the world had the highest smart cities index ranking in 2022?
Ans. Smart cities with the highest index ranking worldwide are Dusseldorf, Melbourne, Sidney, Amsterdam, Brisbane, Zaragoza, Munich, Seoul, New York, etc.

5] What was the technology spending on smart cities initiatives worldwide in 2021?
Ans. The technology spending on smart cities initiatives across the world was USD 132.50 billion in 2021.