Governments of various countries are taking supportive initiatives for digitalisation and significantly launching projects of smart cities, which the analysts consider is propelling market growth. The rising public and private investments in digital infrastructure are found to be also contributing to the growth of the market. Furthermore, the growing need among the commercial sector to optimise energy consumption, enhance operational efficiency, and automate processes has escalated the market growth.

Acceleration of technological advancements

The market for smart buildings is growing primarily due to the quickening pace of technological advancement. In the future years, it is anticipated that advances in artificial intelligence research will lay the groundwork for the creation of game-changing technologies that will greatly improve human lifestyles. In addition to helping people adapt to changing lifestyles and vocations, big data, cloud computing, and the Internet of Things (IoT) technologies also help to improve workplaces and individualised working environments. For instance, in March 2023, Grand View analysts found that ABB launched a new smart building management tool that allows emission reduction and significant energy savings. The ABB Ability Building Analyzer provides crucial information on building utilisation and utility consumption for facility managers aiming for energy savings.

Strong Asia Pacific activity

Various Asia Pacific countries are taking supportive initiatives to improve digital technology adoption without compromising consumer data privacy, which is supporting market growth. For instance, the researchers cite an example, in May 2022, Aveva Group plc announced a merger with Namchi (Sikkim) Smart City, a smart India city mission. The main aim of the merger was to develop a digital platform and integrated cross-city command centre to streamline and improve municipal services. To save energy, the city upgraded the existing city infrastructure. The city has reduced energy use by 20% while improving the standard of living for its growing population by utilising smart technology. It intends to promote tourism and spur economic development.

Interesting findings from the research:

• The solution segment accounted for the largest revenue share of over 77% in 2025. This segment includes advanced technologies such as AI-enhanced access control, biometric systems, video surveillance, emergency communication, and cyber security solutions, where occupant safety and threat prevention are critical.

• The safety & security management segment accounted for the largest market share in 2025. This segment encompasses technologies such as AI-enhanced access control, biometric systems, video surveillance, emergency communication, and cyber security solutions, where occupant protection and threat mitigation are paramount.

• The implementation segment accounted for the largest market share in 2025, driven by the installation and deployment of advanced building technology systems, including actuators, sensors, and microchips, to collect and manage data for optimising building operations.

• The commercial segment accounted for the largest market share in 2025. The commercial segment encompasses smart solutions deployed in offices, retail spaces, hospitality facilities, and other commercial establishments, focusing on enhancing energy efficiency, operational performance, and occupant well-being.

• The North America smart building market dominated the global scene with a revenue share of over 35% in 2025, driven by increasing public and private investments, coupled with the rapid adoption of digitalisation across commercial, industrial, and residential sectors.