Smart city technology market set to reach $775 billion by 2021
Source: TechRepublic on August 15, 2017 | Teena Maddox
Smart city tech will grow exponentially in the next few years, driven by advances in information and communications technology, including IoT sensors and analytics platforms.
The smart city market is one of the fastest growing segments of government and is set to hit $775 billion in 2021, according to BCC Research.
In just a few years, the number of smart cities has grown from approximately two dozen to more than 100, and it's just the tip of the iceberg, with more than 600 cities set to "go smart" in the next few years.
"This is a large and growing market. There are currently around 100 smart city projects, and we think in a short period of time that will expand to roughly 10-13% of medium to large cities. We see about 5,000 cities of that size and 600 will go to smart city technology in the fairly near term," said Michael Sullivan, BCC analyst and author of the report, Smart Cities: Growing New IT Markets. The report defines a medium city as having a population of more than 150,000 people, and a large city as having a population of more than 500,000 people.
There is increased interest in smart cities due to the convergence of information and communications technology, particularly when it comes to advanced connectivity and analytics software and hardware. This includes IoT sensors and analytics platforms to coordinate information within departments and across city agencies.
Key findings from the report include:
- North America will continue to dominate the global market for smart city technologies.
- Investment rate in North America will increase from $118.5 billion in 2016 to $244.5 billion in 2021. Technology ubiquity, advanced investment, and organizational models in cities led by New York, Los Angeles, and Chicago in the US and Toronto, Vancouver, and Calgary in Canada will drive investment.
- Europe and Asia-Pacific continue to gain momentum as regional and local governments drive smart city technology adoption.
- Early investments in Asia-Pacific will boost market value in the short term, at $91.7 billion in 2016, helped by the aggressive growth investments by major countries.
- Economic climate improvement in the EU and major initiatives, such as energy management, will drive a 24.3% compound annual growth rate in the region, surpassing Asia-Pacific's CAGR of 14.7%
- Latin America and other small markets in the rest of the world are expected to exhibit strong growth.
The downside is that there is a lot of economic pressure on cities that don't have the financial resources to add smart city technology, Sullivan said.
The two significant movements that are driving smart city technology are sustainability and creating safer cities. "The safe city concept is unifying a lot of these initiatives," Sullivan said. Video surveillance, gunshot detection technology, body cameras on police officers, and using big data to send emergency responders to the scene faster are all part of smart city technology that makes citizens safer.