Global smart city technology revenue will grow from $8.8 billion annually in 2014 to $27.5 billion in 2023, as cities around the world embrace smart city technology to meet sustainability goals, boost local economies and improve services, according to a report by Navigant Research.
The report notes that developments in areas such as wireless communications, sensor networks, geospatial analysis, mobile computing, data analytics and cloud computing are assisting in the development of smart city technologies to address issues such as energy management, water management, urban mobility, street lighting and public safety.
According to the report, the largest market driver for smart cities is urban population growth. According to the United Nations, the number of people living in cities will increase from 3.6 billion to 6.3 billion between 2010 and 2050.
Navigant assesses the smart city market in terms of five industries that are core to the development of smart cities: smart energy, smart water, smart transportation, smart buildings and smart government. Of these, smart transportation investment will be the largest of the five sectors. Smart water will be the fastest-growing sector over the forecast period as the water industry invests in its digital infrastructure as a result of concerns about the cost, quality and availability of water in cities.
The largest regional market is expected to be Asia Pacific, and the smart city technology market in that region is forecast to be worth $11.3 billion annually by 2023. North American cities are expected to play a lead role in climate mitigation and adaptation, and also in the renewal of core infrastructure for the region. Cities in Europe are expected to take a similar position in leading the charge to meet that region’s environmental, economic and social goals.