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Smart cities refer to cities built on smart and intelligent solutions and new technologies. The goal of smart cities is achieved by adoption of smart parameters such as smart energy, smart building, smart transportation, smart healthcare, smart governance, smart education, and involvement of smart citizens. Further, the smart cities market is gaining significant growth globally due to huge investments by public and private players, including the government of various countries across the globe. Smart cities solutions can further be classified as combination of hardware and software components. The hardware components majorly include sensors, chips, and actuators; while the software component include various smart applications such as infrastructure management, and utility management. The growth of the global smart cities market is also supported by expansion of various automation product portfolios by manufacturers.
The market for smart cities is also gaining interest due to advancement in automation technology and adoption of internet of things across various industries, globally. Further, increasing adoption of advance technologies helps in enhancing the country’s infrastructure components, including urban mobility, public security and safety, efficient energy management, and waste management.
The global smart cities market is expected to grow at a CAGR above 20% during the forecast period, to reach $2,578,063.5 million by 2023. A significant growth in demand for smart cities is anticipated due to growth in automation technologies such as internet of things (IoT), and adoption of cloud based technologies. In addition, development of cost effective and easily available automation solutions, substantial operational cost savings, and public data management are further fueling growth in smart cities market, globally.
One of the major trends observed in the global smart cities market is the presence of strategic alliance or business partnerships between hardware and software providers, various telecommunication providers, and data analytics software providers. Apart from this, increase in the integration of cloud based services in cities’ infrastructure such as wireless security and surveillance, and real time public data monitoring system are also some of the major trends observed in the global market. In addition, smart public data monitoring system allows civic authorities in providing essential services to the citizens effectively.
Global smart cities market is driven by factors such as increase in demand for smart governance, surge in demand for smart utility such as smart meters, decreasing cost and availability of automation technology and services and growing adoption of IoT enabled devices and related technology by public & private smart city developers, globally. Further, the increasing adoption of IoT augments in developing the monitoring systems across remote and less developed areas.
Demand for smart healthcare and smart utility are also the key factors driving the growth of global smart cities market. Latest mobile and digital technologies are escalating the demand for smart healthcare in smart cities market. Local authorities of the respective areas are also focusing on enhancing the communication with its citizens to ensure priority to public healthcare, through regular health checkups and analysis of past public health data for policy formation. In addition, advancement and adoption in smart utilities such as smart grids, smart meters, and smart waste management system has gained huge interest from public policy makers to integrate next generation smart utility applications, right from the lowest level of smart city development. These elements of smart cities would also help in reducing the wastage and enhancing the city sustainability.
Growing concerns for land scarcity and traffic congestion are some the key opportunities for the global smart cities market. Rapid growth in the global population, particularly in developing countries like India, has already impacted the settlement patterns of some of the large metropolitan cities. Uneven housing plan, absence of structured transportation, and lack of communication has resulted in high level of congestion and wastage of resources. With the introduction of smart applications, there lies an opportunity for cities to be built on new approach and technologies, such as proper land utilization, effective inner and outer communication, and adequate transportation facilities. Apart from this, availability of clean water through pipelines, for domestic and industrial purpose, and urban sanitization management are some of the major factors creating ample growth opportunity for the global smart cities market.
Successful implementation of IT & communication technology within a city infrastructure is another opportunity for the growth of global smart cities market. Development of wired and wireless broadband network would allow significant improvement in the quality of life of citizens by providing basic citizen services over these networks, such as smart education and parking management, and smart security.
The intensity of rivalry in the global smart cities market is comparatively moderate. Most of the major vendors prevailing in the global smart cities market are actively focused on enhancing their offerings to meet the ongoing demand for smart cities solutions. This includes advance software developments, new hardware integrations, and advancement in automation technology areas.
Some of the key players operating in the smart cities market are Cisco Systems Inc., Microsoft Corporation, IBM Corporation, Oracle Corporation, Google, Inc., General Electronics (GE), and ABB Group.