Global Smart Cities Market size is forecast to reach $318.8 billion by 2025, estimated to grow at a CAGR of 25.29% during 2020-2025. The growing urbanization with the rapid use of technologies such as IoT, AI, 5G technology and so on are enhancing the smart cities market. Moreover, the growing use of electric cars for providing smart mobility, and the use of advanced connectivity for offering smart infrastructure are also driving the smart cities market. The growing investments by developing countries such as India, South Africa and so on for deploying smart technology are boosting the smart cities market. These significant factors are therefore, fueling the growth of smart cities market during the forecast period 2020-2025.
Application – Segment Analysis
Smart Mobility held the largest market share in the Smart Cities market in 2019. As cities are becoming more populous the need for smart driving is highly increasing. The growing demand for eco-friendly transport and use of vehicles in more conscientious way has enhanced the need for smart mobility. Recently, it was also predicted that the smart mobility market will be approximately $400 million by 2025, owing to the developments such as smart fuel, smart vehicles and smart transportation. Additionally, the growing need to reduce CO2 emission and fuel consumption are driving the smart mobility application, thereby surging the smart cities market.
The growing urbanization has led to the need for advanced infrastructure and leading to the increasing investment in the smart city projects. Moreover, urbanization is also leading to the deployment of cities which are turning towards building electrification. The need to reduce emissions are also boosting the creation of electrified building that will meet emission reduction goals. This will also lead to accelerate the market for cost-effective technologies required for electrification and further resulting in long-term cost benefits. In addition, urbanization will also allow developing countries to accelerate the technological development and will open up opportunities for major technology providers such as Honeywell, Microsoft and so on to invest in this countries. This key factors will lead to the deployment of smart future thus propelling the smart cities market during the forecast year.
Deployment of Advanced Analytical Technology
The deployment of advanced analytical technology including machine learning, artificial intelligence, blockchain and so on has significantly led to the introduction of digital transformation in smart cities. In order to leverage the advantage of these technologies, cities are investing in machine learning systems and artificial intelligence to navigate huge amount of data. Recently, Amazon web services (AWS) has democratized blockchain technology with their blockchain-as-a-service platform which people can choose to subscribe too. This has led to the increasing use of blockchain technology beyond payments and crypto currencies which are widely being adopted in smart cities for intellectual property and royalties, food safety, and real estate asset management. These major use of advanced analytical technologies by the people are highly leading to the growth of smart cities which is enhancing the market growth.
Challenges – Smart Cities Market
Issues related to Privacy and Security
The monitoring or controlling of an environment has become the most critical task in today’s world. The development of smart cities has led to the need for high standards in order to provide transparency and oversight that could result in protecting data and make them use legally. Additionally, the measures such as General Data Protection Regulation (GDPR) can be used to for ensuring privacy and enhance the benefits related to public safety. However, the deployment of IoT devices which are connected to public networks can result in inherent vulnerabilities, and make them appealing for attackers. These significant concerns related to privacy and security of data in order to maintain public safety are hampering the deployment of smart cities.
Technology launches, acquisitions and R&D activities are key strategies adopted by players in the Smart Cities market. In 2019, the market of Smart Cities has been consolidated by the major players – Cisco Systems, Microsoft Corporation, Oracle Corporation, Schneider Electric, Huawei Investment & Holding Co. Ltd., IBM Corporation, Siemens AG, Ericsson, Hitachi Ltd and Toshiba Corporation
In January 2019, Honeywell demonstrated advanced Internet of Things (IoT) software and hardware solutions for safe, secure and more enhanced smart cities. This demonstration was held at Intersec 2019, in January 20-22 at the Dubai World Trade Center (DWTC). Additionally, the annual spending on smart city technologies within the Middle East and Africa (MEA) region was expected to be doubled from $1.3 billion to $2.7 billion over the next four years.
In April 2020, Microsoft provided support to Gaia Smart Cities, a small Internet of Things company. This will lead to help citizens to assess the risk related to Covid-19. In addition, Gaia is providing a platform that includes an app that uses Microsoft’s cloud computing service Azure. This also enables citizens to provide information about their health risk and could result in helping the city administration to track responses by Pin-code for preventive action.
In 2019, the Smart Cities market was dominated by North America owing to the rollout of 5G technology in the US for providing smart transportation and the deployment of civic connectivity infrastructure.
The growing urbanization and the electrification of buildings in order to reduce carbon emission are further leading to the development of smart cities market.
The rapid use of advanced analytical technology such as machine learning, AI, block-chain and so on for providing smart mobility and transportation to the public are enhancing the market growth.
The rising use of smart technologies such as IoT, AI and so on has resulted in huge data formation which is leading to rise the issues related to privacy and security. This issue is hindering public safety as it making the data vulnerable to cyber-attacks and easy for hackers to hack the data that is further hampering the market growth.