Global Smart City Market By Application (Smart Governance, Smart Building, Environmental Solution, Smart Utilities, Smart Transportation, and Smart Healthcare), By Governance (City Surveillance, C.S., E-governance, Smart Lighting, Smart Infrastructure), By Utility (Water Management, Waste Management, Energy Management), By Smart Transportation (Intelligent Transportation System, Parking Management, Smart Ticketing & Travel Assistance), By Region and Companies - Industry Segment Outlook, Market Assessment, Competition Scenario, Trends, and Forecast 2024-2033

Report Overview

The Global Smart City Market size is expected to be worth around USD 4,605.7 Billion by 2033 from USD 762.7 Billion in 2023, growing at a CAGR of 19.7% during the forecast period from 2024 to 2033.

Smart cities are urban area that makes use of technology to enhance living conditions its inhabitants. Smart cities make use of sensors data analytics, sensors, as well as other tools to collect and analyze data on everything from energy and traffic usage to pollution and crime. The data collected is used to make informed choices on ways to increase the quality of services, infrastructure and overall quality of living.

The smart city market has been experiencing significant growth in recent years, driven by several factors. One of the key growth factors for smart cities is the rapid advancement of technology. Innovations in areas such as Internet of Things (IoT), artificial intelligence (AI), and cloud computing have enabled the development of smart solutions that can efficiently manage urban infrastructure. These technologies allow cities to gather real-time data, analyze it, and make informed decisions to improve services and optimize resource allocation.

Another factor contributing to the growth of the smart city market is the increasing urbanization worldwide. With more people migrating to urban areas, there is a growing need for effective urban planning and management. Smart city solutions offer the potential to address challenges related to population density, traffic congestion, energy consumption, and waste management, making cities more livable and sustainable.

However, along with growth opportunities, smart cities also face certain challenges. One of the primary challenges is the complexity of integrating various systems and stakeholders. Smart cities involve the integration of multiple domains, such as transportation, energy, healthcare, and governance, which requires collaboration among different entities. Coordinating these diverse systems and ensuring interoperability can be a daunting task.

Privacy and security concerns also pose challenges for smart cities. With the collection of vast amounts of data, there is a need to ensure the privacy of individuals and protect sensitive information. Additionally, as cities become more interconnected, they become vulnerable to cyber threats, requiring robust security measures to safeguard critical infrastructure and citizen data.

Nevertheless, the smart city market presents significant opportunities for governments, businesses, and citizens. For governments, smart cities offer the potential to improve governance, enhance public services, and reduce costs through efficient resource management. Businesses can capitalize on the market by providing innovative solutions and services to meet the growing demand for smart city technologies. Citizens can benefit from improved quality of life, reduced environmental impact, and enhanced connectivity and convenience.

According to worldmetrics, urban areas are projected to accommodate a staggering 70% of the global population by the year 2050, indicating a substantial increase in the demand for smart city solutions. By 2025, an estimated 58% of the world’s population, equivalent to approximately 4.6 billion people, will reside in urban regions. These statistics highlight the pressing need for cities to embrace smart technologies to effectively manage the challenges associated with such rapid urbanization.

A notable example of the integration of advanced technologies can be observed in the Chinese city of Hangzhou, where an impressive network of over 1 million Artificial Intelligence (AI) surveillance cameras has been deployed across the urban landscape. This implementation demonstrates the scale at which smart city solutions are being adopted in order to enhance the safety and security of citizens.

Furthermore, a comprehensive report by Frost & Sullivan indicates that the exponential growth of smart cities will result in a staggering 2.5 quintillion bytes of data being generated daily by 2025. This immense volume of data reflects the vast potential of smart city initiatives to capture and analyze real-time information from various sources, enabling cities to make data-driven decisions and optimize the management of essential services and resources.

Key Takeaways

• The Smart City Market size is expected to be worth around USD 4,605.7 Billion by 2033, up from USD 762.7 Billion in 2023, representing a CAGR of 19.7% during the forecast period from 2024 to 2033.
• Based on application, the smart utilities category dominated the market with a 30% market share.
• The Smart Infrastructure segment held a dominant position, capturing more than a 28% share of the market.
• In terms of utility, the energy management segment led the market with a 56% market share.
• For transportation, the intelligent transportation system (ITS) segment dominated with a 47% market share.
• The largest market share was held by North America, commanding 32% of the market.

By Application

Based on application, the smart utilities category dominated the smart city market with a 30% market share. An essential part of the municipal infrastructure is the smart utility segment, which includes a variety of fields such as water treatment, integrated data management, energy distribution, as well as administration of civil distribution infrastructure.

The creation of smart grids is a significant factor affecting the adoption of smart utilities. Also, it is projected that increased data analytics and cloud technology integration will fuel market growth. To rapidly meet the expanding demand for energy, businesses, also governments are creating and implementing projects to increase the proportion of renewable energy sources in overall energy output.

Throughout the forecasting period, the smart governance segment is anticipated to grow in the market at the fastest rate. The expansion of this market is being driven by the government’s increasing adoption of smart technologies to enhance and promote accountability, security, and collaboration. Various governments are implementing video surveillance systems to maintain public safety and stop criminal activity, which is expected to improve smart governance, with the help of distributors and OEMs.

Smart Transportation is also anticipated to see a rise in the smart city market. Due to rapid urbanization and increased economic activity, traffic congestion has worsened. This element is encouraging numerous governments all over the world to build smart transportation systems to manage assets as well as infrastructure. Due to the growing adoption of artificial intelligence in the transportation sector, the smart transportation market has grown internationally. Also, the popularity of electric vehicles and on-demand ridesharing is driving up demand for smart transportation solutions globally.

By Governance Analysis

In 2023, the Smart City market exhibited a multi-faceted approach to urban governance, with various segments contributing uniquely to the development of intelligent and efficient cities. Among these segments, the Smart Infrastructure segment held a dominant position, capturing more than a 28% share of the market. Smart Infrastructure encompasses a wide range of solutions that enhance the urban environment’s core components, such as transportation, energy, and communication systems.

These solutions leverage advanced technologies like IoT sensors, data analytics, and automation to optimize infrastructure management, improve resource allocation, and enhance overall city functionality. The focus on Smart Infrastructure aligns with the essential goal of building resilient and sustainable cities that can adapt to the challenges of the modern world. However, the Smart Infrastructure segment is just one facet of Smart City governance.

City Surveillance solutions, for instance, play a crucial role in enhancing public safety and security by deploying advanced surveillance cameras and analytics tools. E-governance initiatives leverage digital technologies to enhance citizen engagement, streamline administrative processes, and increase government transparency.

Smart Lighting systems not only contribute to energy efficiency but also enhance urban aesthetics and safety. Each of these governance segments addresses specific urban challenges, ranging from security and transparency to energy conservation and quality of life. The combined efforts of these governance approaches are pivotal in shaping the future of Smart Cities, creating urban environments that are technologically advanced, environmentally sustainable, and inclusive of their residents’ needs.

By Utility Analysis

Based on utility, the energy management segment dominated the Smart City Market with a 56% market share.  An energy management service for the smart city market would be a platform that facilitates efficient management and optimization of energy consumption in cities. It utilizes cutting-edge technologies such as IoT sensors to collect real-time data on energy consumption across different buildings and public spaces.

The platform would then analyze the data to uncover potential energy optimization opportunities and offer advice to city managers and stakeholders. For instance, it could suggest measures like switching off lights and appliances when not in use, optimizing heating/cooling systems, and using renewable energy sources. The energy management service could also implement demand response programs, which incentivize consumers to reduce their energy usage during peak hours in exchange for incentives. This helps maintain a balanced supply and demand of electricity in the city as well as avoid blackouts and other disruptions.

The market for waste management services in smart cities is expanding rapidly, driven by a need to manage waste efficiently, sustainably, and environment-friendly. Waste management services for smart cities typically incorporate advanced technologies, such as sensors, data analytics, and automation, to optimize waste collection, transportation, and disposal. Bins equipped with sensors can detect when they’re full and alert waste collection teams to empty them.

This reduces the need for frequent collection rounds, ensuring that bins are only emptied when necessary. Waste management companies can use data analytics to understand waste generation patterns, optimize collection routes and enhance operational efficiency. This helps reduce the carbon footprint of collection vehicles by minimizing their mileage and fuel consumption.

Cities can promote recycling with smart waste management services by providing separate bins for different types of waste, such as paper, plastics, and metals. Doing this reduces landfill accumulation and encourages a circular economy. Waste management companies can develop mobile applications that enable residents to report issues like overflowing bins, littering or illegal dumping.

By Smart Transportation

Based on Transportation, the intelligent transportation system (ITS) segment dominates the market with a 47% market share. Smart cities are a rapidly developing market. ITS utilizes cutting-edge technologies such as sensors, communication networks, and data analytics to enhance the efficiency, safety, and sustainability of transportation systems.

The market for IT in smart cities is being propelled forward by several factors, such as urbanization and its associated increases in traffic congestion, air pollution, and carbon emissions. Governments and transportation authorities are therefore looking to ITS solutions to manage traffic flow, reduce congestion, and promote sustainable modes of transport such as public transit, walking, and cycling.

The market for Intelligent Transportation Systems (ITS) in smart cities is being propelled forward by technological advancements, particularly artificial intelligence, machine learning, and the Internet of Things (IoT). These innovations have allowed the development of more sophisticated, as well as effective ITS solutions such as predictive traffic management systems, real-time route optimization, and connected vehicle technologies.

The parking management segment is growing rapidly, and this segment is an integral component of the smart city market. As cities expand and more people move into urban areas, efficient and effective management of parking becomes even more crucial. Smart parking solutions can reduce traffic congestion, improve air quality, and make parking more accessible and convenient for residents and visitors.

One of the key advantages of smart parking solutions is their capacity to reduce time spent searching for a parking spot. Modern solutions provide real-time information about available spots and direct drivers towards them quickly, saving time and decreasing frustration. Another advantage of smart parking solutions is their potential to reduce cost-of-parking.

Cities can utilize technology to manage to park, eliminating the need for enforcement officers and physical meters, thus saving both cities and drivers money on parking costs. Smart parking solutions can also improve safety and security by using cameras and other sensors to monitor parking areas, detect crime quickly and respond to incidents when immediately. Furthermore, smart parking solutions enhance accessibility for disabled drivers by providing designated spots as well as real-time information about available accessible spots. Overall, parking management is an integral component of the smart city market.

Driving Factors

• Urbanization and Population Growth: Rapid urbanization and the continuous influx of people into cities are primary drivers of the Smart City market. Cities are facing increasing challenges in managing resources, infrastructure, and services. Smart solutions provide the highest efficiency and sustainability, making them indispensable for urban settings.
• Technological advancements: Innovations in technology, specifically in the areas of IoT (Internet of Things) as well as AI as well as data analytics are also driving acceptance of smart solutions for cities. These technologies allow cities to analyze and collect information to improve decision-making and optimize resource use.
• Environment Sustainability: The necessity in sustainable development of cities has been a major motive. Smart city initiatives are designed to decrease energy consumption as well as reduce emissions. They also encourage environmentally friendly methods of living.
• Government Initiatives and Funding: Government support through funding and policies plays a pivotal role. Many governments across the globe are spending money on smart cities initiatives to improve living standards, enhance infrastructure, and solve urban issues. Public-private partnerships are also helping to foster the development of new technologies in this area.

Restraining Factors

• High Implementation Costs: The upfront costs of deploying smart city infrastructure and technology can be substantial. Cities may face budget constraints and difficulties in securing financing for large-scale projects, hindering widespread adoption.
• Data Privacy and Security Concerns: As smart city systems collect vast amounts of data, concerns about privacy and cybersecurity grow. Protecting sensitive data from cyber threats and ensuring citizens’ privacy rights is a significant challenge that can impede adoption.
• Complex Interoperability: Many smart city solutions come from different vendors and technologies, leading to interoperability challenges. Ensuring that various systems can seamlessly communicate and work together can be complex and time-consuming.
• Resistance to Change: Resistance to change within city administrations and among citizens can be a restraining factor. Implementing new technologies and altering established processes can face opposition, slowing down the adoption of smart city solutions.

Growth Opportunities

• IoT Expansion: The Internet of Things is at the core of smart cities. Expanding IoT networks and applications in areas like smart transportation, healthcare, and utilities present significant growth opportunities as more devices and sensors connect to enhance city services.
• 5G Connectivity: The rollout of 5G networks provides a foundation for faster and more reliable data transmission. This enables real-time data processing, supporting applications like autonomous vehicles, smart grids, and augmented reality experiences in cities.
• Smart Mobility Solutions: The growth of smart mobility solutions, including ride-sharing, electric vehicles, and autonomous transportation, presents a substantial opportunity. Cities are looking to reduce traffic congestion and improve transportation efficiency.
• Sustainable Infrastructure: The demand for sustainable infrastructure, such as green buildings, energy-efficient lighting, and water conservation systems, creates a growth avenue. Smart city projects that prioritize sustainability align with global environmental goals.

Key Market Trends

• Digital Twin Technology: The use of digital twin technology to create virtual replicas of physical city assets is gaining traction. This allows for simulations, predictive maintenance, and data-driven decision-making, enhancing overall city management.
• Edge Computing: Edge computing is becoming integral in smart cities by processing data closer to the source, reducing latency, and improving real-time decision-making. This trend supports applications like smart traffic management and public safety.
• Citizen Engagement Platforms: Smart cities are increasingly focusing on citizen-centric approaches. Engagement platforms and mobile apps empower citizens to participate in governance, report issues, and access city services conveniently.
• Circular Economy Initiatives: Some smart cities are adopting circular economy principles by reusing, repurposing, and recycling resources. This trend aims to reduce waste and promote sustainable resource management.

Key Market Segments

Based on Application

• Smart Governance
• Smart Building
• Environmental Solution
• Smart Utilities
• Smart Transportation
• Smart Healthcare
• Other Application

Based on Governance

• City Surveillance
• C.S.
• E-governance
• Smart Lighting
• Smart Infrastructure

Based on Utility

• Water Management
• Waste Management
• Energy Management

Based on Smart Transportation

• Intelligent Transportation System
• Parking Management
• Smart Ticketing & Travel Assistance

Growth Opportunity

The smart city market presents an immense opportunity for both businesses and governments. Smart cities utilize technology that promotes sustainability and streamlines processes. One of the major prospects for businesses in the smart city market is growth opportunities across a variety of areas, such as smart infrastructure development, services to support initiatives related to smart cities, and the creation of innovative technologies designed specifically to achieve these objectives.

Businesses can create smart energy management systems, intelligent transportation systems, and waste management solutions. Furthermore, they offer consulting services to cities on developing and implementing smart city strategies or providing data analytics tools, so that cities make better use of data. Governments too can benefit from the smart city market. Smart city initiatives can assist governments in improving public services such as transportation, healthcare, and education. In conclusion, the smart city market presents an immense opportunity for businesses and governments alike.

Latest Trends

IoT sensors and devices are becoming increasingly prevalent in smart cities, enabling real-time data collection and analysis that can inform decision-making. Smart cities are prioritizing sustainable solutions such as renewable energy sources and green infrastructure to reduce their carbon footprint and promote environmental sustainability.

Successful smart cities often arise from collaboration between the government, the private sector, and citizens – leading to creative solutions and an integrated approach to urban planning. AR and VR technologies are being employed to provide immersive experiences for citizens and visitors, as well as aid in urban planning and design. Smart cities are exploring the use of autonomous vehicles for public transportation and delivery services, with potential advantages including improved safety, reduced traffic congestion, as well greater mobility for citizens.

Regional Analysis

The largest share in the market will be dominated by North America with 32% of the market share

North America is one of the world’s most technologically advanced regions and a pioneer in smart city development. Numerous smart cities throughout North America utilize cutting-edge technologies to improve their citizens’ quality of life. North America’s smart city market is being driven by several factors, such as the increasing need for sustainable infrastructure, demand for energy-efficient buildings, and efforts to reduce traffic congestion and enhance transportation.

Furthermore, governments and private organizations in the region are investing heavily in smart city initiatives – further fueling the market growth. North America is seeing the development of smart city technologies at an unprecedented rate. Cities such as New York City, San Francisco, and Boston are leading the charge in this space by using advanced technologies for better transportation, energy efficiency, and public safety. Canada too boasts several smart cities such as Toronto, Vancouver, and Montreal which are using cutting-edge solutions for waste management and public safety initiatives.

Note: Actual Numbers Might Vary In The Final Report

The Asia Pacific region is a key market for smart cities, with countries such as China, Japan, and South Korea leading the charge. This region is marked by rapid urbanization and an expanding middle class which has fuelled demand for these technologies. Government initiatives and investments in infrastructure development are expected to fuel future growth within this region.

Europe is a leading market for smart cities, with countries such as the United Kingdom, France, Germany, and Spain at the forefront of adoption. This region of Europe boasts strong government involvement and investment with the European Union playing an integral role in funding and promoting smart city initiatives. Forecasts indicate that this market will grow significantly over the coming years due to an increasing focus on sustainability and energy efficiency initiatives.

Key Regions and Countries Covered in this Report

• North America
  • The US
  • Canada
• Europe
  • Germany
  • France
  • The UK
  • Spain
  • Italy
  • Russia
  • Netherland
  • Rest of Europe
• APAC
  • China
  • Japan
  • South Korea
  • India
  • Australia
  • New Zealand
  • Singapore
  • Thailand
  • Vietnam
  • Rest of APAC
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East and Africa
  • South Africa
  • Saudi Arabia
  • UAE
  • Rest of MEA

Key Players Analysis

Market players have been observed investing resources into research and development activities to fuel growth, enhance internal business operations, and engage in mergers & acquisitions or partnerships to further upgrade their products and gain a competitive edge on the market. Companies are efficiently working on new product development as well as improving existing ones to attract new customers and gain greater market shares.

Top Key Players in Smart City Market

• ABB Limited
• AGT International
• AVEVA Group plc.
• Cisco Systems, Inc.
• Ericsson
• General Electric
• Honeywell International Inc.
• International Business Machines Corporation
• Itron Inc.
• KAPSCH Group
• Huawei Technologies Co., Ltd.
• Microsoft Corporation
• Oracle Corporation
• Osram Gmbh
• SAP SE
• Schneider Electric SE
• Siemens AG
• Telensa
• Verizon
• Vodafone Group plc
• Other Key Players

Recent Developments

• In June 2023, TIM, a telecommunications operator, and Ericsson revealed plans to boost their investments in private networks and IoT projects in Brazil. TIM specifically outlined new initiatives, focusing on smart cities and public lighting. The previous month saw the announcement of a smart lighting project in Porto Alegre, Rio Grande do Sul state, utilizing 4G NB-IoT technology. This initiative was in collaboration with IPSul, the entity overseeing public lighting in the city.
• In November 2022, Emerson Electric Co. successfully concluded the USD 3-billion sale of its InSinkErator business to Whirlpool Corporation. Founded in 1938 and acquired by Emerson in 1968, InSinkErator specialized in manufacturing food waste disposers and instant hot water dispensers for both residential and commercial use. Whirlpool Corporation, a leader in the home appliance industry, is strategically positioned to leverage InSinkErator’s rich legacy and performance for sustained long-term growth and success.

Report Scope