U.S. smart city market projected to surge to $2.5 trillion by 2026

Smart city market growth is rapidly on the rise but why such a staggering spike in interest? A smart city that employs information and communication technology across the enterprise to improve the performance and quality of urban services thereby reduces resource consumption and related costs. Weaving together and cross connecting the functionality of diverse business groups, smart city deployment allows the municipality to aggregate and share relevant data across these business units providing a more holistic view of the city offerings and services to their populous. This fosters more active and efficient citizen engagement and in turn, enhanced quality of life and sustainability.

The energy management segment dominated the smart utilities segment in 2020 and accounted for a revenue share of over 55%. Key functionalities of energy management solutions include collection and analysis of energy consumption data, service order management, scalability, and overall information lifecycle management. Driving the development and introduction of advanced energy management systems and design analytics solutions to harvest valuable information using smart meter technology is only one exploding course of action.

The water management segment is expected to witness significant growth over the forecast period as well. Growing concerns regarding global climate change and water scarcity are impelling various governments to implement water management solutions and are sometimes focusing on the cities where the natural water bodies are depleting due to increased construction activities.

With the growing awareness about “smart everything,” the smart cities concept has been garnering significant attention and if not in the planning stages, is certainly on the drawing board for most communities. Increasing investments by the federal government and dedicated governing bodies have fueled the interest in the directive causing more localities to cast an eye toward the movement. Financing and funding models, technology ecosystems governance structures, and investments in infrastructure play an essential role in smart city deployments and are expected to continue to drive market growth.

In addition, the ongoing COVID-19 pandemic can potentially provide an opportunity for expediting the use of digital technologies for creating smart cities and improving the lives of the citizens. Among the different initiatives that are being currently explored is vegetation control and other more creative approaches to extending the impact of data management to make a difference in daily life. Future options, such as charging a fee for street usage and creating dedicated bicycle lanes or more fresh ideas could emerge to encourage people to keep their vehicles parked at home. Digital technologies, such as big data and artificial intelligence, can be leveraged for developing and establishing functions such as intelligent and adaptive traffic light management systems that are able to react to changing traffic flows and specific traffic conditions, which could help in significantly reducing street congestion. Smarter traffic management could not only make streets less crowded, additional lanes for pedestrians and cyclists could be freed up, which in turn would facilitate further lowering carbon emissions and pollution levels.

EDITOR'S NOTE: This market has continued to grow since this original blog, with estimates of smart city market growth in North America topping $6 billion by 2032, according to a Market.us report. (Our software partner Oracle is listed as a leader in the smart in the same report.) 

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