Smart Cities Report: Growing New Markets for Information Technology
The global market for smart city information and communications technologies should reach $994.6 billion by 2023 from $476.7 billion in 2018 at a compound annual growth rate (CAGR) of 15.8% from 2018 to 2023.
Editor's Note. October 23, 2019. Updated to include free, downloadable copy of McKinsey Global Institute's 2018 report 'Smart Cities: Digital Solutions for a More Liveable Future.' The most recent version of the BCC Research report (July 2018) can be accessed via the link below, but payment is required before downloading. We've kept the introduction to their 2015 report here since it still provides a good overview of the smart cities initiative.
NEW YORK -- The BCC Research report provides an examination of smart city projects around the world and related investments in smart city projects, including a study of regional trends, national programs and individual city projects. Includes forecast through 2019.
Use this report to:
- Learn about the main attributes that make cities smart and explore the role and potential of key information and communication technologies (ICT) infrastructure needed to enable smart city strategies in the identified market sectors.
- Identify smart city projects around the world and related investments, including a study of regional trends, national programs and individual city projects.
- Examine the evolution of the global smart city market, with impacts on key technology markets.
- Receive an in-depth analysis and forecasts of potential revenues for the various smart city sub-segments of technologies, solutions, services and regions.
- The global market for smart cities information and communication technologies (ICT) was valued at $212.3 billion in 2013 and$293.2 billion in 2014. This market is expected to reach $668.5 billion in 2019, with a compound annual growth rate (CAGR) of 17.9% from 2014 to 2019.
- North America represents the largest region of the smart cities market with revenue of $103.5 billion in 2014. This regional market is expected to reach $218.3 billion in 2019, a CAGR of 16.1% from 2014 to 2019.
- The European market for smart city ICTs is expected to increase from $69.9 billion in 2014 to $197.7 billion in 2019, a CAGR of 23.1% from 2014 to 2019.
A 'smart city' is an innovative city that uses information and communications technologies (ICTs) and other means to improve the quality of life, the efficiency of urban operations and services, and competitiveness, and ensure that it meets the needs of present and future generations with respect to economic, social and environmental aspects."
Despite the enormous potential embedded in the goals of a smart city, it is important to acknowledge the challenges associated with global urbanization, urban migration trends, environmental degradation, climate change, and aging populations and infrastructures, as well as constraints in the resources and structures needed to respond to these challenges.
Within these increasingly complex urban systems, ICTs can act as a platform to help overcome these challenges and take advantage of emerging opportunities as cities advance toward becoming smarter and more sustainable places to live.
Going beyond the environmental benefits, the improvement of systems through ICT can contribute to social equality through universal access to a city's public services. Such improvements save lives by allowing for more immediate access to emergency services. They make cities more resilient in times of crisis, allow them to prepare for natural and other disasters, and help to restore services after disruption in the wake of such disasters. They create new economic zones that drive growth and prosperity.
Such improvements are not exclusive to modern and wealthy communities. Via realistic, measurable timetables and financial vehicles, almost any city can achieve a more intelligent infrastructure.
By honing in on solutions that focus on their most acute "pain" points and taking a step-by-step, system-based approach, cities can implement strategies that deliver the immediate, visible, and measurable results they need and that their constituents deserve. City leaders worldwide have embraced innovative technology to help meet — and even exceed — citizen and business expectations while realizing the tangible benefits of being smarter.
However, becoming a smart city is a journey, and cities continue to face complicated challenges. Many regions lack the resources to keep pace with rapid population growth while delivering services that citizens and businesses demand. Cities and other urban organizations also must house and manage ever-increasing amounts and types of data, as well as contend with aging infrastructures, resource scarcity and increased security threats.
At the same time, they face an evolving constituency, as advances in social and mobile technology further empower citizens all over the world.
Cities that take this approach are commonly referred to as "smart cities," a concept highly discussed and often debated in urban planning and city policy circles worldwide.
In the last few years, interest in smart cities has triggered plenty of theoretical and technology-led discussions, but not enough market progress has been made in implementing these initiatives in cities around the world.
There are a number of factors hindering adoption of smart city solutions:
- scaling of newer technologies is unproven;
- technology challenges the status quo in how cities are run;
- and technology is not well understood across several city sectors.
However, the main barrier to adopting such solutions is the complexity in how cities are operated, financed, regulated and planned.
This report will show in considerable detail how the smart city market is arranged, what the major players are planning for the next years and how the process of implementing smart city solutions is achieved through the private sector with interaction with the public sector.
Access and Download McKinsey Global Institute's 'Smart Cities: Digital Solutions for a More Liveable Future' report: