Smart Cities Market Will Grow Rapidly In Coming Years

Smart Cities Industry Overview

The global smart cities market was valued at USD 748.7 billion in 2023 and is projected to grow at a robust compound annual growth rate (CAGR) of 25.8% from 2023 to 2030. This substantial growth is being driven by factors such as increasing urbanization, the pressing need for efficient resource management, heightened public safety concerns, and growing demand for energy-efficient environments. The COVID-19 pandemic significantly highlighted the dependence of global economies on urban areas and underscored the critical importance of public healthcare within smart city frameworks. During the pandemic, strict lockdowns and mobility constraints compelled organizations and governments to explore advanced technologies, such as the Internet of Things (IoT) and Artificial Intelligence (AI), to address pandemic-related challenges and enhance urban resilience.

The accelerating pace of urbanization and population growth has heightened the necessity for sustainable infrastructure, serving as a key catalyst for market expansion. Regional governments have increasingly taken proactive measures to address urban challenges through smart city initiatives across key sectors, including mobility, utilities, safety, and management. These efforts are being bolstered by policy-driven organizational and institutional transformations, strategic investments, and the creation of consortiums to unite diverse businesses under shared objectives. Public-private partnerships are evolving to meet the demands of smart city projects, fostering collaboration and innovation. Additionally, financing models, such as infrastructure development funding and governance systems, play a pivotal role in driving this transformation.

The adoption of advanced technologies is a cornerstone of smart city development. Innovations such as nanotechnology, Artificial Intelligence (AI), Machine Learning (ML), cloud computing, IoT, cognitive computing, big data analytics, and open data are instrumental in the creation and operation of smart cities. Furthermore, business models such as Build-Own-Operate (BOO), Build-Operate-Transfer (BOT), Original Brand Manufacturer (OBM), and Bill of Material (BOM) have proven essential for the successful execution of smart city projects.

Asian countries, in particular, have been at the forefront of initiatives aimed at fostering digital technology adoption for smart cities. These efforts are being balanced with a strong focus on maintaining consumer data privacy and security. Globally, government-led initiatives, including digital infrastructure development and policies encouraging private sector participation, are expected to further accelerate the growth of the smart cities market. This combined approach of leveraging cutting-edge technologies and fostering robust governance frameworks positions the market for sustained growth and innovation in the coming years.

Gather more insights about the market drivers, restrains and growth of the Smart Cities Market

Regional Insights:

North America Smart Cities Market

North America held over 30.4% of the global smart cities market in 2022.
Growth is driven by ongoing digital transformation across industries like government, telecom, and banking.
The region benefits from a well-developed Information and Communication Technology (ICT) infrastructure.
Federal and local governments collaborate extensively with ICT vendors to support the deployment of smart city components.
Prominent technology providers and service providers have laid significant groundwork for civic connectivity infrastructure.
Increased government investments in the U.S. aim to facilitate the transition to a digital economy, including digitization of commercial buildings to improve citizen experience and enhance transparency.

Europe Smart Cities Market

The European smart cities market was valued at USD 190.72 billion in 2022.
Governments in Europe actively collaborate with organizations and regions to boost smart city adoption.

U.K. Smart Cities Market Trends

The U.K. accounted for 23.1% of Europe’s smart cities market revenue in 2022.
Smart technologies are increasingly being implemented across buildings, transportation, and infrastructure.
Global companies are expanding operations in the U.K., contributing to market growth.

Germany Smart Cities Market Trends

Germany’s smart cities market is expected to grow at a CAGR of 21.3% from 2023 to 2030.
Growth is supported by advancements in digital technologies and the rise of innovative startups in the country.

France Smart Cities Market Trends

France is actively adopting smart city concepts at the local authority level.
The French government’s "New Industrial France" initiative supports companies in developing smart city solutions.

Asia Pacific Smart Cities Market

The Asia Pacific region is experiencing rapid growth due to rising disposable incomes, digital infrastructure development, globalization, and economic advancements.
Countries like Malaysia and Indonesia are seeing high implementation rates of smart city projects, fueling regional market expansion.

China Smart Cities Market Trends

China’s smart cities market is projected to grow at a CAGR of 27.0% from 2023 to 2030.
Government initiatives supporting smart city development and growing concerns about energy consumption in buildings are key growth drivers.

Japan Smart Cities Market Trends

Japan’s smart cities market is witnessing significant growth.
Efforts by major industry players are bolstering market demand.

India Smart Cities Market Trends

India’s smart cities market is fueled by factors like population growth, diminishing natural resources, and increased urban migration.

Middle East and Africa (MEA) Smart Cities Market

The smart cities market in MEA is expected to reach USD 319.46 billion by 2030.
Growth is driven by the adoption of automated vehicles and advanced networking technologies.

Saudi Arabia Smart Cities Market Trends

Saudi Arabia’s market is experiencing robust growth due to rapid urbanization.
Urban areas in the country are expanding significantly, driven by growing commercial activities and business hubs.

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Key Smart Cities Company Insights

Some of the key players operating in the market include Microsoft Corporation, and Oracle Corporation.

Microsoft Corporation provides business software and solutions. The well-known software products from Microsoft are the Microsoft 365 series of productivity programs, Windows series of operating systems, and the Edge browser. Its flagship hardware products are Xbox video game consoles and Microsoft Surface touchscreen computers.
Oracle Corporation is a provider of IT software and services. The company sells database software and technology, cloud engineered systems, and enterprise software products, such as, human capital management software, enterprise resource planning software, supply chain management software, enterprise performance management software, and customer relationship management software.
Ericsson, and Telensa are some of the emerging market participants in the smart cities market.
Ericsson develops the IT products and services for the telecommunications industry and is currently leading the way in 5G. The company sells infrastructure, software and services in the field of information and communication technology for mobile service providers and enterprises, including 3G, 4G and 5G equipment, Internet Protocol (IP) and optical transport systems.
Telensa offers simple and effective smart lighting solutions for public and district lighting to help cities, utilities and large areas manage their lighting to save money and reduce costs.

Key Smart Cities Companies:

The following are the leading companies in the smart cities market. These companies collectively hold the largest market share and dictate industry trends. Financials, strategy maps & products of these smart cities companies are analyzed to map the supply network.