Driven by the intersection of social, environmental and economic urban challenges coupled with the impact of transformative technologies, the market for smart city tech is expected to grow at a 10% compound annual growth rate for the next decade, according to global market research firm Guidehouse Insights.
The new report, Smart Cities, says that the next decade is likely to be one of dramatic change for many cities around the world. Trends that have been drivers for smart city programs have been accelerated by a combination of the COVID-19 pandemic, the growing impact of climate change, and the rapid digitalisation of many services.
Accordingly, Guidehouse says the global smart city technology market will grow from approximately $121.1 billion in annual revenue in 2023 to $301.2 billion by 2032 at a compound annual growth rate (CAGR) of 10.7%. The report focuses on five key industries: energy, water, mobility, buildings and government.
Cities are showing a strong commitment to infrastructure investment, digital technologies and increased sustainability, often supported by central government funding.
Take Cary, North Carolina, for example. The city, with a population of 176,000, has been exploring and implementing smart city solutions since 2016. Cary has implemented an intelligent transportation system to give commuters a safer and more efficient drive; pedestrian and bicycle counters to help staff plan bike path expansions; and a building automation system that helps the town manage its energy use, to name just a few.
Guidehouse says that innovations in IoT and other forms of connectivity will boost future investments across the smart city market and are likely to accelerate the digitalisation of many city services.
New business models and finance programs are also expected to help accelerate investment. Additionally, new partnerships are being established across the public, technology, and finance sectors to support smart city investments and overcome the funding gap that has long been a significant drag on the market, according to the report.
“These global challenges are amplifying long-standing local issues around the quality of public services, environmental standards, and social inequalities,” says Eric Woods, research director with Guidehouse Insights. “At the same time technology is transforming how cities work and how they are experienced.”
Originally published on Power-Grid International.