Smart Cities Market Segmentation By Functional Area [Smart Transportation (Roadways, Railways, and Airways), Smart Building, Smart Utilities (Energy, Water and Gas Utilities), and Smart Citizen Services (Smart Education, Healthcare, Public Safety)]; and By Solutions [Transportation (Smart Ticketing, Traffic Management System, Others), Buildings (Building Energy Optimization, Emergency Management)]– Global Demand Analysis & Opportunity Outlook 2027

Buy Now Report ID: 2156 | Published Date: Feb 15, 2023


Data Security Concerns

Security concerns lying over the deployment of smart devices in cities and the fear of cyber threats along with the increasing cybercrimes, coupled with the fear of data breach, all of these factors are anticipated to act as a barrier to the growth of the global smart cities market.

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Market Size and Forecast

The global smart city market is thriving on the back of recent technological advances in domains such as healthcare, transport, energy, governance and intelligence gathering among others. Additionally, growing adoption of technologies, for instance, Internet of Things (IoT), cloud computing, big data, cognitive computing and open data among others, along  with advancements in smart railways, smart lighting technologies, and others are some of the factors promoting significantly towards the growth of the global smart city market. CLICK TO DOWNLOAD SAMPLE REPORT

The market is anticipated to record a CAGR of around 18.05% throughout the forecast period, i.e. 2019-2027. The global smart city market is segmented by functional area into smart transportation, building, utilities, and citizen services. The smart healthcare segment, which is a sub-segment of the smart citizen services is anticipated to hold the largest market share on the back of growing health expenditure by the government of various nations. According to the statistics by the World Health Organization (WHO), domestic general government health expenditure per capita in the world grew from 556.2394 (current USD) in the year 2010 to 762.5433 (current USD) in the year 2016.


Growth Drivers

Favoring Initiatives Of The Government

Various nations around the globe have been playing a major role in the development of smart cities by developing numerous regulations and initiatives focused on the development of the smart services as a major part of the infrastructure. Governmental organizations across the globe are organizing symposiums so as to promote the implementation of smart city technologies which are beneficial for a sustainable living for the citizens of the nation.


For instance, ISO 37100 (Sustainable cities and communities) family of standards of the International Organization for Standardization (ISO) provides cities with an overall framework for defining sustainable development objectives as well as a roadmap to achieve them. The World Smart City Forum event, organized by International Telecommunication Union (ITU), in partnership with IEC and ISO, along with the Government of the Province of Santa Fe and Universidad Tecnologica Nacional, Argentina was held on 29th of November 2018. The event focused on the challenges in smart city development and how to solve those issues together. Moreover, strong inter-relationship between the two principal stakeholders, i.e. government and the private sector, together is anticipated to develop a three-tier continuum on reshaping how the smart city digital infrastructure will develop, financed and delivered in the upcoming years. Such a factor is anticipated to promote the growth of the global smart cities market during the forecast period.


Rapid Urbanization to Promote Growth of the Smart Cities

According to the Department of Economic and Social Affairs of the United Nations (UN), 55% of the world population lives in urban areas, which is expected to increase to 68% by 2050. Another statistics of the UN World Urbanization Prospects stated that number of people living in urban areas reached 4.13 billion in the year 2017 from 3.20 billion in the year 1997.

With the growing urbanization primarily taking place across nations worldwide, the growth of the cities and economic development are inextricably linked. The rising urbanization will also demand for smart technology initiatives from the government and private sectors. Additionally, the rise in population and the dynamic shift in the number of urban dwellers, along with economic growth of megacities, all of these factors together are anticipated to contribute towards the growth of the global smart cities market.


Market Segmentation


Our in-depth analysis of the global smart cities market includes the following segments:

By Functional Area

  • Smart Transportation
    • Roadways
    • Railways
    • Airways
  • Smart Building
  • Smart Utilities
    • Energy Utilities
    • Water Utilities
    • Gas Utilities
  • Smart Citizen Services
    • Smart Education
    • Smart Healthcare
    • Smart Public Safety
    • Smart Street Lighting

By Solutions

  • Transportation
    • Smart Ticketing
    • Traffic Management System
    • Passenger Information Management System
    • Freight Information System
    • Connected Vehicle
    • Others
  • Buildings
    • Building Energy Optimization
    • Emergency Management
    • Parking Management System
    • Others
  • Utilities
    • Advanced Metering Infrastructure
    • Distribution Management System
    • Substation Automation
    • Others

By Region

On the basis of regional analysis, the global smart cities market is segmented into five major regions including North America, Europe, Asia Pacific, Latin America and Middle East & Africa region.

Asia Pacific is expected to hold the largest market share on the back of growing investments by the government of nations such as China and India for numerous smart city pilot projects. According to Smart Cities Mission of the Ministry of Housing and Urban Affairs of the Government of India, a total of USD 28612.31 million (in current USD) have been spent on Smart Mission Project. Moreover, a sum of USD 22916.31 million (in current USD) have been invested in area-based development, whereas USD 5430.83 million (in current USD) have been spent on pan city solution.


Additionally, focus of the government of these nations on developing the various departments of the country, for instance, transportation, energy, public security and others are also anticipated to contribute towards the growth of the global smart cities market in the region.

The global smart cities market is further classified on the basis of region as follows:

  • North America (U.S. & Canada) Market size, Y-O-Y growth & Opportunity Analysis
  • Latin America (Brazil, Mexico, Argentina, Rest of Latin America) Market size, Y-O-Y growth & Opportunity Analysis
  • Europe (U.K., Germany, France, Italy, Spain, Hungary, Belgium, Netherlands & Luxembourg, NORDIC, Poland, Turkey, Russia, Rest of Europe) Market size, Y-O-Y growth & Opportunity Analysis
  • Asia-Pacific (China, India, Japan, South Korea, Indonesia, Malaysia, Australia, New Zealand, Rest of Asia-Pacific) Market size, Y-O-Y growth & Opportunity Analysis.
  • Middle East and Africa (Israel, GCC (Saudi Arabia, UAE, Bahrain, Kuwait, Qatar, Oman), North Africa, South Africa, Rest of Middle East and Africa) Market size, Y-O-Y growth & Opportunity Analysis.

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Top Featured Companies Dominating the Market



In The News

  • Telefonaktiebolaget LM Ericsson have announced that it has been selected by the City of Dallas to install and host an Advanced Traffic Management System (ATMS). The technology will be based on Ericsson’s Connected Urban Transport Solution.

  • Honeywell International Inc. have announced its latest smart building technology “Command and Control Suite release 200 (CCS R200)”. The technology focuses on connecting building personnel with data analytics so as to help drive operational improvements and efficiencies.


Global Economic Impact

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Despite Inflation & Fearing Recession, Businesses Across the Globe Expected to Do Better in 2023:

In 2023, market players might incur losses due to huge gap in currency translation followed by contracting revenues, shrinking profit margins & cost pressure on logistics and supply chain.
Controlling Inflation has become the first priority for global economies from last quarter of 2022 and to be followed in 2023. With skewed economic situations, rise in interest rate by governments to control spending and inflation, spiked oil and gas prices, high inflation, geo-political issues including U.S. & China trade war, Russia-Ukraine conflict to intensify the global economic issues.
The interest rates in the U.S. may be less sensitive in 2023 as compared to 2022; sigh of relief for businesses. Positive business sentiments, healthy business balance sheets, growth in construction spending (private construction value in 2022 stood at $1,429.2 billion, 11.7 percent (±1.0 percent) above the $1,279.5 billion spent in 2021, Residential construction in 2022 was $899.1 billion, up by 13.3 percent (±2.1 percent) from $793.7 billion in 2021, non-residential construction touched $530.1 billion, 9.1 percent (±1.0 percent) above the $485.8 billion in 2021.) showcases minimal impact of recession in the country.
Similarly, spiked spending in the European and major Asia economics including, India, China & Japan to showcase less impact on the global demand.

Author Credits:  Abhishek Verma, Hetal Singh

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