Spending on a wide range of smart cities technology is expected to grow by 18% a year for the next decade, according to an optimistic forecast by Persistent Market Research.
The new forecast was made available on Tuesday and includes a wide range of technologies that some analysts count separately, such as investments in cloud, mobile, big data and security. By comparison, some analysts count smart city investments to only include areas such as sensors, cameras, robots, IoT, and some forms of artificial intelligence.
However, PMR said it included a tally of a wide range of technologies for the scope of its latest market study. These areas include revenues for companies that offer hardware, software and services to develop critical infrastructure for smart transportation, water, buildings, energy, security, education, healthcare and even smart governance. The scope also includes spending from government and public entities for the development of smart cities.
Taking all those categories into account, PMR derived a tabulation of about $900 billion for the size of the smart cities market globally in 2018 alone, a total expected to increase 18% on average each year to 2029.
Chief among all the categories PMR counted, smart security spending for cities will grow at about 22% per year.
A big reason for the robust growth is demographics. United Nations data suggests that the global population living in cities will rise from 50% in 2018 to 75% in 2050, a factor on the minds of major technology companies.
“The rise in urban population impacts overall infrastructure and resources as governments try to cope with the influx of new inhabitants and improve their living standards,” PMR said.
Smart city technology providers are especially focused on cities in Asia Pacific areas where there’s increasing interest in use of smart city technologies, PMR said.
Growth of smart city tech in Asia stands in contrast to many areas of the U.S. Dozens of smart city pilots are underway in the U.S., but where full scale rollouts of smart city tech across an entire city are not moving ahead nearly as fast as technology vendors predicted five years ago. Part of the problem is finding funding and simplifying the complex government bidding process.
Public-private partnerships and collaborations are helping shape market growth. Sometimes these partnerships involve private utilities working with municipalities for installation of new streetlights citywide that are equipped with sensors that measure traffic, pedestrian movements, pollution and even noise.
PMR listed a group of key vendors in the smart cities market that includes Cisco, AT&T, Microsoft, IBM, Ericsson, Siemens, Schneider Electric, Huawei, General Electric and Signify. Others include Hitachi Vantara, Oracle, SAP, Toshiba, Panasonic, Verizon, Honeywell, ABB, Intel, Nokia, NEC and more.
Such prominent players captured nearly 50% of the total market in 2018, PMR said. In one example, Cisco formed a partnership with Iteris to deploy edge IoT solutions in Las Vegas to improve traffic flow and reduce congestion.