Smart Cities Market Report

Rising urbanization, a growing demand for infrastructure management, and asset management are all elements driving government expenditures in smart city development. Technological developments have fuelled the use of Internet of things technologies in smart cities to control traffic flows, monitor municipal infrastructure, and monitor air and water quality. The growing need to ensure public safety, effective resource utilization, increased need for efficient energy usage, and a healthy environment are expected to stimulate the growth of the smart cities market over the forecast period. Furthermore, governments throughout the world are taking initiatives and investing substantially to address concerns about growing population and fast urbanization by developing smart cities. 

The ability of smart cities to handle issues like utility management, safety, and mobility is further driving the demand for the development of smart cities. In addition, the rapid use of innovative technologies like artificial intelligence, nanotechnology, big data analytics, cloud computing, the internet of things, cognitive computing, and open data is a contributing factor towards the expansion of the global smart cities market. Moreover, the increasing adoption of various public-private partnership models such as Build, operate, transfer (BOT), Build, own, operate (BOO), Organisational Behaviour Management (OBM), and Bill of Materials (BOM) are significantly driving the implementation of various smart city projects around the world.

Major industry players are focusing their efforts on research and development in order to develop cutting-edge products that will complement current product offerings. They are also reinforcing their market position through a number of market strategies, including product launches, mergers, partnerships, and acquisitions. Siemens Mobility, for example, entered into a contractual deal for the acquisition of Sqills, a prominent provider of cloud-based inventory management, reservation, and ticketing software to public transit operators globally, in August 2021. This acquisition expanded Siemens Mobility's software portfolio and strengthened its capacity to deliver products and services that contribute to increased public transport utilization and convenience. 

Also, in May 2021, Itron, Inc., which is reinventing the way utilities and communities manage energy and water, announced its cooperation with Microsoft to deliver highly scalable cloud-based meter data management (MDM) services to consumers. As part of this, the firms conducted another round of rigorous performance and scalability testing on its Itron Enterprise EditionTM Metre Data Management (IEE MDM) solution. This was the first time the industry's single meter data management system had undertaken large-scale benchmarking in Microsoft Azure.

Later, in July 2022, Ericsson finalized its acquisition of Vonage Holdings Corp., strengthening Ericsson's goal of utilizing technological leadership to strengthen its mobile network business and expand into enterprise As part of this deal, Ericsson gained access to significant building blocks that would enable it to provide a comprehensive range of communications solutions, including Communications Platform as a Service (CPaaS), UCaaS, and CCaaS.

Privacy and security are major concerns in smart city projects. Since the smart cities market ecosystem is heavily reliant on numerous and central access points for various data, the ecosystem as a whole is highly vulnerable. To address the privacy and security challenges in smart cities, stakeholders must address issues holistically to ensure that the problems do not spread to the rest of the smart network. In addition to this, the need for a technically suitable solution to guarantee the security and privacy of customers adopting various identification systems has been increasing.

Furthermore, smart city solutions cannot be implemented in economies with limited resources due to the high cost of deploying these systems. Integrating core functions such as big data analytics necessitates extensive design, coding, testing, and documentation efforts. As a result, the cost of transforming existing infrastructure prevents governments from continuing large-scale investments. Even though smarter infrastructure may cut operating costs and improve energy efficiency, but the high initial investment is impeding market expansion.

Siemens, Cisco, Hitachi, IBM, Honeywell International Inc., Microsoft, Schneider Electric, Huawei, Intel, NEC, ABB, AGT International are some of the prominent market players operating in the global smart cities market.

North America is anticipated to hold a significant share in the smart cities market during the forecast period. The regional market growth can be attributed to the continuous digital transformation in many business verticals, such as government, telecom, and banking, among others. The region has a well-developed information and communication technology (I.C.T.) infrastructure, federal and local government engagement with I.C.T. suppliers, and the presence of significant technology companies. These service providers and other local governments have broadly deployed elements of the municipal connection infrastructure, which will contribute to the planning of smart city buildings in the region. All these factors are anticipated to support the expansion of the regional market during the forecast period.

Furthermore, Asia Pacific is expected to witness significant growth over the forecast period. The rise in disposable income, the expansion of digital infrastructure, globalization, and economic advancements have all contributed to the region's progress. Organizations in Asia Pacific are eager to capitalize on benefits associated with cloud-based solutions, such as cost-effectiveness, which bodes well for the expansion of applications such as smart transportation, smart governance, smart utilities, and smart buildings.