The global smart cities market size is expected to reach USD 3,728.3 billion by 2030, registering a CAGR of 25.8% from 2023 to 2030, according to a new report by Grand View Research, Inc. The market growth can be attributed to rapid favorable government initiatives worldwide and emerging technologies, such as Artificial Intelligence (AI), cybersecurity, big data analytics, and the Internet of Things (IoT). This has encouraged several countries to invest in smart city projects to manage infrastructure and assets. Further, the increasing adoption of Electric Vehicles (EVs) has also created a demand for the development of charging infrastructure in cities globally. Due to this, it provides energy storage and creates new revenue streams from EV batteries. These benefits will further boost the smart cities market's growth during the forecast period.

The smart cities market is witnessing a high investment in smart security, smart metering for utilities, integrated traffic management systems, and smart mobility. Several technologically innovative cities use IoT platforms to monitor their infrastructure, manage traffic flows, water management, parking, and air quality, and use the generated smart data to handle longer-term decisions for environmental sustainability. Market players are establishing strategic partnerships with technology providers to improve their smart cities portfolio. For instance, in February 2022, an electric utility company, E.ON SE, partnered with telecom company Vodafone Group plc to develop smart water, gas, and electricity meters, accrelating the smart cities market growth.

Gather more insights about the market drivers, restrains and growth of the Smart Cities Market

Detailed Segmentation:

Market Concentration & Characteristics

The growth of the smart cities market is high, and the growth’s pace is accelerating. Emerging technologies such as AI, ML, cloud, data analytics, IoT and cyber security have developed rapidly. The increased adoption of these technologies in the smart city environment has enabled better connectivity, leading to growth of the smart cities market per regions such as, Asia Pacific, and Europe. For Instance, countries government across the European countries such as, U.K., and Germany are increasingly undertaking smart cities projects, such advanced projects are used to enrich the lives of citizens, and improve environmental sustainability, and privacy.

Application Insights

The smart utility segment dominated the market and accounted for a market share of over 28% in 2022. The smart utility segment forms an integral part of the city infrastructure and includes multiple domains such as water treatment, consolidated data management, energy distribution, and civil distribution infrastructure management, among others. The advent of smart grids is also a significant factor driving the adoption of smart utilities. Integration of advanced data analytics and cloud technologies is also expected to drive market growth. With the rapidly increasing demand for energy, companies and governments are formulating and implementing strategies for improving renewable sources' contribution to overall energy production.

Smart Utilities Insights

The energy management segment dominated the smart utilities segment in 2022 and accounted for more than 55% of revenue. The growing energy demand has sparked the adoption of virtual power plants, which operate on AI, machine learning, and IoT to provide security and efficiency. Key market players are focusing on establishing a strong R&D infrastructure to drive the development and overview of advanced energy management systems and design analytics solutions to integrate emerging technologies such as blockchain.

Smart Transportation Insights

The Intelligent Transportation System (ITS) segment accounted for the largest revenue share in 2022. The increasing number of vehicles on the road and the need to reduce traffic congestion are key factors in deploying advanced traffic management systems. These systems reduce delays and air pollution, ensure efficient traffic management by reducing travel duration, and enable authorities and public safety agencies to rapidly and efficiently respond to accidents and emergencies. Furthermore, the government of several countries is adopting intelligent transportation systems to improve road safety and operational performance of the transport system and reduce the impact of transportation on the environment. Thus, there is high growth of the transportation segment in smart cities market.

Smart Governance Insights

The smart infrastructure segment dominated the market and accounted for a market share of over 28% in 2022. Shifting various governments' focus on digitizing their business operations is anticipated to fuel the demand for smart infrastructure solutions in multiple sectors such as BFSI, healthcare, retail, manufacturing, and F&B. The majority of governments, such as the U.K., Australia, India, Canada, the U.A.E., and the U.S., are investing in smart infrastructure solutions for economic digitalization. For instance, in December 2021, the Government of Australia invested USD 135.9 million under its program to transform the economy into a digital economy by 2030. The government will also create the regulatory framework for BFSI infrastructure to support, monitor & control evolving payment systems and crypto ecosystems.

Regional Insights

North America held the major share of over 30.4% of the global smart cities market in 2022. The regional market growth can be credited to the constant digital transformation in various industry verticals, such as government, telecom, and banking, among others. The region has a well-developed Information and Communication Technology (I.C.T.) infrastructure, the collaboration of federal and local governments with I.C.T. vendors, and the presence of prominent technology vendors. These service providers and other local authorities have widely deployed parts of the civic connectivity infrastructure which will lead to the planning for the construction of smart cities in the region. These factors will supplement the regional market's growth during the forecast period. 

Browse through Grand View Research's Next Generation Technologies Industry Research Reports.

• The global small drone market size was estimated at USD 12.03 billion in 2023 and is expected to grow at a CAGR of 14.5% from 2024 to 2030. 

• The global service virtualization market size was valued at USD 786.0 Million in 2023 and is projected to grow at a compound annual growth rate (CAGR) of 17.4% from 2024 to 2030.

Key Smart Cities Company Insights

Some of the key players operating in the market include Microsoft Corporation, and Oracle Corporation.

• Microsoft Corporation provides business software and solutions. The well-known software products from Microsoft are the Microsoft 365 series of productivity programs, Windows series of operating systems, and the Edge browser. Its flagship hardware products are Xbox video game consoles and Microsoft Surface touchscreen computers.

• Oracle Corporation is a provider of IT software and services. The company sells database software and technology, cloud engineered systems, and enterprise software products, such as, human capital management software, enterprise resource planning software, supply chain management software, enterprise performance management software, and customer relationship management software.

• Ericsson, and Telensa are some of the emerging market participants in the smart cities market.

Key Smart Cities Companies:

The following are the leading companies in the smart cities market. These companies collectively hold the largest market share and dictate industry trends. Financials, strategy maps & products of these smart cities companies are analyzed to map the supply network.

• ABB Limited

• AGT International

• AVEVA Group plc.

• Cisco Systems, Inc.

• Ericsson

• General Electric

• Honeywell International Inc.

• International Business Machines Corporation

• Itron Inc.

• KAPSCH Group

• Huawei Technologies Co., Ltd.

Smart Cities Market Segmentation

Grand View Research has segmented the global smart cities market on the basis of on application, smart governance, smart utilities, smart transportation, smart healthcare, and region:

Smart Cities Application Outlook (Revenue, USD Billion, 2018 - 2030)

• Smart Governance

• Smart Building

• Environmental Solution

• Smart Utilities

• Smart Transportation

• Smart Healthcare

• Smart Public Safety

• Smart Security

• Smart Education

Smart Governance Outlook (Revenue, USD Billion, 2018 - 2030)

• City Surveillance

• C.C.S.

• E-governance

• Smart Lighting

• Smart Infrastructure

Smart Utilities Outlook (Revenue, USD Billion, 2018 - 2030)

• Energy Management

• Water Management

• Waste Management

• Meter Data Management

• Distribution Management System

• Substation Automation

• Other Smart Utilities Solutions

Smart Transportation Outlook (Revenue, USD Billion, 2018 - 2030)

• Intelligent Transportation System

• Parking Management

• Smart Ticketing & Travel Assistance

• Traffic Management

• Passenger Information

• Connected Logistics

• Other Smart Transportation Solutions

Smart Cities Smart Healthcare Outlook (Revenue, USD Billion, 2018 - 2030)

• Medical Devices

• Systems & Software

Smart Cities Regional Outlook (Revenue, USD Billion, 2018 - 2030)

• North America

o U.S.

o Canada

• Europe

o UK

o Germany

o France

o Italy

o Spain

o Russia

o Nordic Region

o Eastern Europe

• Asia Pacific

o China

o Japan

o India

o South Korea

o Australia

o ASEAN

• Latin America

o Brazil

o Mexico

• Middle East and Africa (MEA)

o UAE

o South Africa

o Saudi Arabia

Order a free sample PDF of the Smart Cities Market Intelligence Study, published by Grand View Research.

Recent Developments

• In December 2023, Msheireb Properties (MP), Qatar based property developer, signed a Memorandum of Understanding (MoU) with Microsoft Corporation, software products developer, to develop a ‘Smart Experience’ project for visitors, retail, residents, and commercial customers in MP’s development, Msheireb Downtown Doha (MDD).The Smart Experience project is revolutionizing the way citizens interact with the urban environment by incorporating new solutions to improve the lives of MDD members.

• In November 2023,Smart City Expo World Congress (SCEWC), the international event on cities and smart urban solutions organized by Fira de Barcelona. It is an exhibition of innovative urban solutions and projects that focus on ways to transform modern cities into more sustainable, efficient and habitable places. The congress program of SCEWC comprises eight main themes, including energy and environment, enabling technologies, mobility, housing and inclusion, management and economy, security and blue economy, and infrastructure and buildings.