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Worldwide Smart City Industry to 2028 - Energy Conservation and Waste Management Solutions are Factors Attracting Investors

The global smart city market is anticipated to grow at a CAGR of around 18.1% during the forecast period. A smart city is an urban area that utilizes different types of data for managing assets and resources effectively. Data is gathered from devices, citizens, and assets, the data is then analyzed for monitoring and managing traffic, transportation system, waste management, water supply network, and other related services.

Smart cities are developed using the latest technologies such as data analytics, IoT, wireless sensor networks, and cloud computing. Government initiatives and innovations & technologies are key motivators of the market. Energy conservation and waste management solutions are other factors that are attracting investors and consumers to the market.

Furthermore, changing the standard of living in emerging economies such as India and Japan, growing IT infrastructure, and investments are further expected to boost the global smart city market. For instance, as per the Consumer Technology Association, the worldwide spending on smart city developments is expected to reach USD 34.35 billion, by 2020.

However, certain factors are hampering the growth of the market. High cost of implementation and maintenance, lack of awareness among masses, and reluctance to adopt are estimated to be the major constraint in the growth of the market. Besides these petty constraints, the smart city market is yet to explore its full potential. The emerging Asia-Pacific region and smart city initiatives in Europe and the US are developing numerous expansion opportunities for the growth of the market.

COVID-19 Impact on Global Smart City Market

During the COVID-19 pandemic, various governments across the globe have been deploying smart city technologies to keep a record of the patients affected by the COVID-19 pandemic, also to keep track of the spreading and number of people dying.

To fulfill the medical requirements, and to supply vaccines and related doses, advanced smart city platforms incorporated with technologies such as heat maps, GPS systems, and aerial surveillance has been used. Moreover, smart city projects play a significant role in the COVID-19 prevention and control process. In COVID-19 pandemic prevention and control practice, related technologies and projects, samples, represented by "smart cities" have been applied to the pandemic prevention and spreading.

Segmental Outlook

The global smart city market is bifurcated into components and applications. Based on components, the market is classified as hardware, software, and others. Based on applications, the market is categorized into building and infrastructure, transportation system & services, safety & security, communication, energy management, waste management, healthcare system & services, water management, and others.

Transportation System & Services Segment Holds the Largest Share in Smart City Market

Among Applications, the transportation system & services segment held the largest share in 2020, and it is further anticipated to grow at significant CAGR during the forecast period. Transportation is the major factor affecting urban areas. Growing traffic congestion owing to the increasing number of transport vehicles due to rapid urbanization are driving the segment growth in developed and developing countries.

The use of Intelligent transportation systems in traffic management center to monitor and coordinate a large network of sensors are finding innovative ways to improve traffic congestion and urban mobility. Moreover, the increasing adoption of various technologies as the internet of thing (IoT) in transportation to improve the traffic management systems is the prominent factor contributing to the Smart City market growth.

Regional Outlook

Geographically, the global smart city market is classified into four major regions including North America (the US and Canada), Europe (UK, GermanyFranceItalySpain, and Rest of Europe), Asia-Pacific (IndiaChinaJapanSouth Korea, ASEAN, and Rest of Asia-Pacific), and Rest of the World (Latin America and the Middle East and Africa (MEA)).

North America dominates the global smart city market due to the growing development of water infrastructure and transport sector, government regulations, and policy to reduce carbon emission and the strong presence of IT giants and infrastructure developing companies.

Asia-Pacific is projected to be the fastest-growing region in the global smart city market

Geographically, Asia-pacific is projected to become the fastest-growing during the forecast period. increasing technological awareness improved living standards, government initiatives such as smart cities mission in India and rising demand for residential development in the region are driving factors responsible for the growth of the market.

Moreover, huge investments for infrastructure developments and increasing adoption of automation technologies such as the Internet of Things (IoT) and artificial intelligence (AI) in transportation management are also considered as driving factors contributing towards regional growth. The presence of key players and continues developments in Smart City projects by them are also expected to drive the regional economy.

Market Players Outlook

The key players in the smart city market contributing significantly by providing different types of products and increasing their geographical presence across the globe. The key players of the market include Cisco Systems, Inc., Ericsson, IBM Corp, Schneider Electric SE, Siemens AG, Hitachi, Ltd., Huawei Technologies Co., Ltd., Intel Corp. among others.

These market players are adopting several market strategies including product launch and approvals, merger and acquisition, partnership collaboration, business, and capacity expansion, and others. For instance, in February 2018, Honeywell announced its latest smart building technology, which connects building personnel with data analytics to help drive operational improvements and efficiencies.