In 2023, the smart cities market achieved a value of USD 588.4 billion, and it is expected to rise to USD 1,610.1 billion by 2030, marking a growth rate of 15.5% from 2024 to 2030. This growth can be attributed to advancements in technology, public safety and security improvements, increasing urbanization, and rising concerns about sustainability.

Technological Advancements: The use of technologies such as 5G, IoT, AI, and big data facilitates the collection and analysis of vast amounts of data, aiding in decision-making and optimizing city operations.

Urbanization: The rise in urbanization drives the demand for smart city solutions that ensure efficient resource management, better infrastructure, and an enhanced quality of life.

Data-Driven Decision-Making: Cities are leveraging data collected from various devices and sources to better understand traffic patterns, energy usage, and resident behavior, guiding decisions on resource allocation and service provision.

Market Segmentation:

  • Components: The hardware segment dominates the market. Smart cities heavily rely on reliable hardware components for seamless operations, requiring the integration of various hardware from different suppliers with a focus on interoperability and compatibility.
  • Applications: The smart utility segment holds the largest market share. Smart utilities are vital to a city’s infrastructure, with the proliferation of smart grids driving the adoption of smart utilities.

The integration of advanced data analytics and cloud solutions is anticipated to further propel industry growth. As energy consumption continues to rise, global efforts by companies and governments to increase the share of renewable energy sources in overall energy production are accelerating.

Regional Insights: North America generates the highest revenue in the smart cities market. This is due to a continuous digital transformation across sectors such as government, telecom, and banking. The region boasts a highly advanced ICT infrastructure, key technology providers, and strong collaboration between local and federal governments and ICT providers.

Local establishments and service providers have extensively deployed parts of the public connectivity infrastructure, laying the groundwork for smart city development in the region. Additionally, increased government spending in the U.S. to facilitate the transition towards a digital economy has created a positive outlook for smart cities in the country.