Global Smart Cities Market to Reach $2.5 Trillion by 2026

Smart cities are described as cities that are designed and built using intelligent and smart technology and solutions. A smart city utilizes information and communications technologies (ICT) for improving the performance and quality of urban services, reducing consumption of resources and related costs, facilitating more active and efficient engagement with citizens, and enhancing quality of life of citizens sustainably. ICT is the core of smart cities initiative, since a knowledge infrastructure is critical for implementation of a smart city.

Amid the COVID-19 crisis, the global market for Smart Cities estimated at US$741.6 Billion in the year 2020, is projected to reach a revised size of US$2.5 Trillion by 2026, growing at a CAGR of 22.5% over the analysis period. Smart Governance & Education, one of the segments analyzed in the report, is projected to record a 24.4% CAGR and reach US$915.5 Billion by the end of the analysis period. After a thorough analysis of the business implications of the pandemic and its induced economic crisis, growth in the Smart Buildings & Infrastructure segment is readjusted to a revised 18.9% CAGR for the next 7-year period.

The ongoing COVID-19 pandemic can potentially provide an opportunity for expediting the use of digital technologies for creating smart cities and improving the lives of the citizens. Among the different initiatives that are being currently explored is the development of smart traffic control and parking management systems. In addition, options, such as charging a fee for street usage and creating dedicated bicycle lanes are being looked into for encouraging people to keep their vehicles parked at home. Digital technologies, such as big data and artificial intelligence, can be leveraged for developing and establishing intelligent and adaptive traffic light management systems that are able to react to changing traffic flows and specific traffic conditions, which could help in significantly reducing street congestion. While smarter traffic management would not only make streets less crowded, this would also help in freeing up space for additional lanes for pedestrians and cyclists, which in turn would facilitate in further lowering carbon emissions and pollution levels.

The U.S. Market is Estimated at $233.9 Billion in 2021, While China is Forecast to Reach $602.7 Billion by 2026

The Smart Cities market in the U.S. is estimated at US$233.9 Billion in the year 2021. China, the world`s second largest economy, is forecast to reach a projected market size of US$602.7 Billion by the year 2026 trailing a CAGR of 27.6% over the analysis period. Among the other noteworthy geographic markets are Japan and Canada, each forecast to grow at 18.3% and 19.1% respectively over the analysis period.

North America, Europe and Asia-Pacific are among the regions with highest adoption levels in the smart cities market. While the move towards Smart City is more visible in developed nations including the US, Japan, Canada, and Western European countries, several developing nations including China, India, South Korea, Malaysia, Brazil, Turkey, South Africa, and the UAE are actively pursuing the futuristic model. North America leads the global smart cities market, in terms of level of adoption of smart cities technology solutions. The region`s dominance is largely attributed to the high proportion of urban population in the region. The region also benefits from the rising investments in smart grids, and ongoing efforts to upgrade transportation and water infrastructure sectors. Smart city initiatives are also gaining ground led by efforts of governments to reduce carbon footprint by enhancing use of renewable energy resources. Governments across the region are also focused on achieving zero wastage target for energy. Growth is also supported by the strong use of smart cities solutions due to increased ICT investment by government bodies and significant adoption of connected solutions in the country. Europe is another region with strong focus on smart cities projects. The initiatives of the EU along with key development projects implemented by local governments have rendered momentum to smart city projects in the region. Further, financing and funding models, technology ecosystems, infrastructure development, and governance systems are also playing a key role in fueling the regional market.

Smart Energy Segment to Reach $652.9 Billion by 2026

Global market for Smart Energy (Application) segment is estimated at US$122.2 Billion in 2020, and is projected to reach US$652.9 Billion by 2026 reflecting a compounded annual growth rate of 27.1% over the analysis period 2020-2027. Europe constitutes the largest regional market for Smart Energy segment, accounting for 31.8% of the global sales in 2020. China is poised to register the fastest compounded annual growth rate of 33.0% over the analysis period, to reach US$176.1 Billion by the close of the analysis period.