Smart City Tech Solutions Market Size, Share, Analysis, Trends, Growth, 2032

Smart City Tech Solutions Industry Prospective:

The global smart city tech solutions market size was worth around USD 189.26 billion in 2023 and is predicted to grow to around USD 395.05 billion by 2032, with a compound annual growth rate (CAGR) of roughly 8.52% between 2024 and 2032.

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Smart City Tech Solutions Market: Overview

Smart city technology solutions are modern devices and systems used for improving urban infrastructure and the overall quality of life of the citizens. State-of-the-art technologies can be used across industries to improve the safety of the citizens, allowing them to live a better life. Smart city tech solutions have several applications.

For instance, the development of smart & energy efficient buildings along with improved traffic management solutions are some of the common examples of technology solutions deployed in urban areas to improve the well-being of the residents. The demand for smart city tech solutions is influenced by several factors.

For instance, the rising focus on the development of smart cities as well as intelligent energy infrastructure is a major growth driver for technology solutions.

During the projection period, the development and launch of autonomous vehicles and delivery robots or drones are expected to generate significant growth opportunities. However, rising costs along with growing economic volatility worldwide may impact the market growth trends.

Key Insights:

• As per the analysis shared by our research analyst, the global smart city tech solutions market is estimated to grow annually at a CAGR of around 8.52% over the forecast period (2024-2032)
• In terms of revenue, the global smart city tech solutions market size was valued at around USD 189.26 billion in 2023 and is projected to reach USD 395.05 billion by 2032.
• The smart city tech solutions market is projected to grow at a significant rate due to rising investments in smart city projects worldwide.
• Based on offering type, the platforms segment is growing at a high rate and will continue to dominate the global market as per industry projections.
• Based on technology type, the smart buildings segment is anticipated to command the largest market share.
• Based on region, Europe is projected to dominate the global market during the forecast period.

Smart City Tech Solutions Market: Growth Drivers

Rising investments in smart city projects worldwide will drive the market demand rate

The global smart city tech solutions market is expected to benefit from the growing investments in the development of smart city projects. These regions are powered by advanced technologies. Smart cities rely heavily on information & communication technologies to deliver exceptional performance, improving citizen’s way of living.

In August 2024, the Cabinet Committee on Economic Affairs (CCEA) in India approved 12 smart city projects in the country. These programs will be carried out under the National Industrial Corridor Development Program (NICDP) with a total investment of USD 3.41 billion. The committee expects that the projects will attract over USD 18.12 billion in investments.

The Saudi government launched Vision 2030 in 2016. The initiative entails several large-scale projects, such as the development of Neom, a mega city, and other such intelligent real-estate marvels. Smart cities are powered by novel technology solutions, thus creating more revenue in the industry.

Integration of Artificial Intelligence (AI), the Internet of Things (IoT), and other technologies will help the industry flourish

Developers of smart city tech solutions are actively investing in incorporating emerging engineering tools such as AI, IoT, and big data to deliver more efficient results. In May 2024, the Sikkim state of India became the first region in the country to deploy AI-powered traffic management systems. The regional government is focusing on modernizing the state’s traffic management policies.

In July 2024, Intelligent Security Systems (ISS), a leading provider of video intelligence and data awareness tools, launched Intellisection. The novel platform is an automated intersection monitoring system leveraging AI and sophisticated neural network training technology. Developments such as Intellisection that are meant to improve road safety and provide dynamic traffic management solutions will promote exceptional growth in the global smart city tech solutions market.

Smart City Tech Solutions Market: Restraints

Cost-related barriers and a volatile global economy will restrict the market expansion trend

The global industry for smart city tech solutions is projected to be restricted due to the high cost associated with the development of advanced technologies. Implementation of intelligent solutions requires the development of existing infrastructure to allow seamless collaboration between legacy systems and modern technologies.

In addition, most smart city tech solutions are powered by high-speed internet. Several countries lack the required basic architecture to support the mass-scale deployment of tech solutions for smarter cities. Moreover, the changing global economic order will further complicate the growth process in the industry.

Smart City Tech Solutions Market: Opportunities

Growing market for autonomous vehicles and intelligent energy management systems will generate higher growth opportunities

The global smart city tech solutions market is expected to be filled with growing demand for autonomous vehicles. These automobiles range from self-driving cars to drones and robots for delivering goods. For instance, Waymo, an automotive company making self-driving cars, launched the sixth-generation Waymo Driver in August 2024. The hardware systems deployed on the company ridesharing vehicles provide a 360-degree view of the environment.

Moreover, the vehicles are also fixed with four Light Detection and Ranging (LiDARs), 13 cameras, and six radar units to ensure passenger safety. Self-driving vehicles are becoming widely popular in urban areas due to the growing congestion rate and increased demand for novel vehicle solutions.

In addition, intelligent energy management systems have become an essential aspect of smart cities. These tools are required to effectively produce and manage the distribution of energy, allowing equal access to sustainable power. In October 2023, the U.S. Department of Energy (DOE) announced an investment plan worth USD 3.46 billion in the Grid Resilience and Innovation Partnerships (GRIP) Program that includes smart grid solutions.

Smart City Tech Solutions Market: Challenges

Cybersecurity risks and a complex regulatory environment will challenge the market expansion trend

The global smart city tech solutions industry is projected to be challenged by the growing risk of cybersecurity-related risks. Technology solutions are vulnerable to cybercrimes that can result in severe monetary and non-monetary losses. Additionally, the existence of a dynamic regulatory environment governing the use of tech solutions further complicates the market scenario of new players.

Smart City Tech Solutions Market: Segmentation

The global smart city tech solutions market is segmented based on offering type, technology type, and region.

Based on the offering type, the global market segments are services and platforms. In 2023, the highest demand was observed in the platforms segment. Governments worldwide are seeking novel and cost-effective platforms that can be deployed in urban areas and developing regions to improve residents’ safety and overall living conditions.

Moreover, rising investments in start-ups and revolutionary tech solution providers will fuel segmental revenue during the projection period. According to the official statistics, investments in the Middle East toward smart technologies reached more than USD 2.35 billion in 2021.

Based on the technology type, the smart city tech solutions industry divisions are smart governance & citizen services, smart buildings, smart mobility, smart infrastructure, smart healthcare, and others. In 2023, the highest growth rate was generated in the smart buildings segment.

One of the key segmental drivers is the rising use of advanced systems such as smart heating, ventilation, and air conditioning (HVAC) systems, access control systems, predictive maintenance technologies, and others. By 2026, more than 110 million smart buildings are expected to be constructed globally.

Smart City Tech Solutions Market: Report Scope

Smart City Tech Solutions Market: Regional Analysis

Europe is to continue witnessing a significant growth rate during the projection period

The global smart city tech solutions market will be led by Europe over the forecast period. Countries such as Sweden, Spain, Germany, France, and others will aid regional market expansion trends. European nations are leading in terms of the development and installation of innovative technology solutions to improve the overall living standard of their citizens.

For instance, in August 2024, Europe witnessed the launch of the SERENE project under the Horizon 2020 research and innovation program conducted by the European Union. Through the novel program, Europe is expected to make significant improvements in local energy systems across the region. SERENE is powered by smart technologies and advanced algorithms to improve energy consumption patterns.

The Middle East is a fast-emerging region for smart city tech solutions. Countries such as the United Arab Emirates (UAE), Saudi Arabia, and Kuwait are investing in diversifying the economic portfolio of their respective territories.

For instance, the UAE is known for its acceptance of advanced technologies to create a world-class real estate market. From 2018 to 2020, the UAE invested in the installation of more than 230,000 smart water meters across the country.

Smart City Tech Solutions Market: Competitive Analysis

The global smart city tech solutions market is led by players like:

• Urban SDK
• LocusView
• Enlighted
• N-Smart
• Eliko
• DoorsVision
• Breeze Technologies
• FLASH
• Green City Solutions
• Havr
• UrbanLogiq
• Woodoo
• The Future Fox
• Swiftly.

The global smart city tech solutions market is segmented as follows:

By Offering Type

•  Services
•  Platforms

By Technology Type

• Smart Governance & Citizen Services
• Smart Buildings
• Smart Mobility
• Smart Infrastructure
• Smart Healthcare
• Others

By Region

• North America
  • The U.S.
  • Canada
• Europe
  • France 
  • The UK
  • Spain
  • Germany
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Southeast Asia
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa
  • GCC
  • South Africa
  • Rest of Middle East & Africa