Therefore, with growing urbanisation, the need to manage infrastructure and assets is prompting countries across the world to invest in smart city projects. Furthermore, the increasing investment in sustainable and green technologies has further contributed to the adoption of these technologies by smart cities around the world.

Additionally, the growing adoption of electric vehicles has also created a demand for the development of advanced charging infrastructure in cities worldwide. Integrating electric vehicles in smart cities may create such benefits by providing energy storage and creating new revenue streams from electric vehicles batteries. Moreover, analysts forecast that the growing adoption of electric vehicles is expected to pave the way to green mobility with zero carbon emissions.

According to the findings, the market is currently witnessing high investment for smart security, smart metering for water and utilities, smart mobility, and integrated traffic management systems. Most technologically advanced cities use IoT platforms to monitor city infrastructure, manage everything from traffic flows and parking to water and air quality, and use the resulting smart data generated to handle longer-term decisions around environmental sustainability. The increase in traffic congestion and greenhouse gas emissions is driving the adoption of smart mobility and efficient energy management applications.

The market covers several sectors such as transport, water, healthcare, assisted living, energy, and security. The cost incurred in the transformation of the existing infrastructure acts as a deterrent for governments to continue large-scale investments to establish different sectors and departments for efficient smart city implementation which may hinder the market growth. The lack of awareness among people is also cited as by Grand View Research as a major factor for the slow development of smart cities, as it causes ignorance about smart city projects and lowers the level of impulsion by the government to implement smart solutions for cities.

However, the analysts conclude that investing in smart cities will lead to improving the regional and global competitiveness to attract new residents and improve business and allow the government bodies to make informed decisions with the available technologies, which can lead to economic development.

Other highlights

The smart utilities segment is expected to witness a considerable CAGR of 22.9% over the forecast period, because of increasing investments in smart grid systems around the world. 

The smart infrastructure segment is anticipated to register a CAGR of 24.3% over the forecast period. The rise in rigid industry standards and regulations and the growing focus on efficient energy consumption are the key factors driving the segment. 

The waste management segment accounted for a market share of over 20% in 2021, and the smart ticketing and travel assistance segment is expected to witness a significant CAGR of 23.4% over the forecast period. The growing adoption of new technologies in the smart ticketing market such as Near Field Communication (NFC), Radio Frequency Identification (RFID), Quick Response (QR) code, and local wireless ticketing enables the key players to offer smart solutions across several sectors including, transportation, BFSI, and healthcare.

In terms of geographical strength, the Asia Pacific regional market is expected to register the fastest CAGR of 27.7% over the forecast period, owing to the rapid economic developments, globalisation, digitalisation, and the increased proliferation of smartphones. A large number of 5G deployments and initiatives taken by major Asian mobile operators to resolve the problem of high bandwidth requirements are anticipated to drive the growth.