The global market for smart cities is projected to reach US$3 trillion by the year 2027 driven by a post COVID-19 CAGR of 22.5% over the analysis period 2020 through 2027. The growth will be driven by the growing world population, unscrupulous exploitation of natural resources, and the ensuing search for sustainable ways to accommodate the 7+ billion people on the planet. The continued growth in population is already wielding a profound impact both on the environment and quality of human life. Lavish lifestyles in the developed Western economies are resulting in these economies consuming more than their fair share of Earth's already constrained resources, while haphazard urbanization, ill-planned cities and overcrowding in developing economies are resulting in enormous wastages of precious natural resources. Unchecked urban sprawl is driving modern cities to their limits. Key benefits of smart cities driving government investments in smart city technologies include higher and more productive citizen engagement in civic activities; better utilization of infrastructure; enhanced public safety; better communication and improved ability of cities to respond to natural and manmade calamities; unrivalled social, economic and environmental benefits and higher quality of life; massive reduction in energy and water consumption and wastages, among others. Other major trends in the market include growing integration of artificial intelligence (AI) in smart cities to provide actionable insights for policy makers to improve operational efficiencies, reduce resource consumption, monitor security risks and contain costs; undivided focus on demand response for its ability to enable closer consumer engagement in competitive city energy markets; and surging penetration of smart water meters and smart gas solutions against the backdrop of the expanding reach of smart utility services.

Although the COVID-19 crisis is expected to reduce public and private investments in smart city initiatives in the year 2020, the benefits of the concept is coming to fore amid the disruptions unleashed by the pandemic. In June 2020, the Singaporean government announced plans to increase its information technology investment by 30% in 2020 to US$3.5 billion. The country's Government Technology Agency (GovTech) cited developing new tools for combating COVID-19 as the primary reason for increasing investments. In addition, China, which had unveiled a new infrastructure initiative in 2018, is now pledging fresh efforts in advancing the program on back of the COVID-19 pandemic. The Chinese government has been pushing ahead increased investments in smart city technologies for spurring innovation and economic growth, as well as advancing its attempt to overtake the US in the technology sector. The government plans to increase investments in various smart city-related sectors, including data centers, 5G, and smart grids. Aggregation of data sources across cities has already been identified as a key component of the initiative and would help smart city platforms to grow significantly. In New Orleans, Louisiana, tools such as Microsoft Power BI are being used for setting up dashboards for tracking key COVID-19 pandemic-related trends. These dashboards, utilizing both city- and state-level data, overlay vital data, such as fatalities and testing results with geographical data to determine the areas that require higher attention from government agencies. Amid the COVID-19 outbreak, smaller cities and municipalities in North America are also increasing their smart city investments, providing tremendous opportunities for the suppliers of smart city technologies.

The COVID-19 pandemic well-demonstrated the many benefits smart cities can offer in making provision for essential services to citizens. Even though near term smart city projects will see temporary reductions in investments due to the pandemic induced economic crisis, there is no denying that smart technologies are inevitable for urban life and therefore just a few years from now focus on smart city infrastructure would be completely revived. The ongoing COVID-19 crisis has also accentuated the need for smart cities. Smart city infrastructure could perform the critical task of gathering data about people. For this reason, going forward, instead of postponing projects, cities can try repurposing them so that they better serve the need at hand. Already, in a few cities in countries across the world, the crisis forced administrations to accelerate implementation of smart city projects. In Vancouver for instance, the crisis forced officials in the city to speedily implement a smart city project in which GIS, enterprise data and analytics programs could be deployed to provide administration with critical support in handling the crisis. The four-year technology development plan of Vancouver includes programs for significant investments in smart tech, which would enable the city save considerably during the economic downturn post-COVID.