Frost & Sullivan’s experts anticipate that smart cities will create huge business opportunities with a global market value of over $2 trillion by 2025.
Artificial intelligence, personalized healthcare, robotics, and distributed energy generation are among the technologies that will drive growth, efficiency, connectivity, and urbanization in the future, according to Frost & Sullivan’s studies.
“The creation of smart cities enables a smooth transition to urbanization, with technological advances helping municipalities optimize resources for maximum value to the population, whether that value is financial, savings in time, or improvement in quality of life,” the analysts say.
AI plays a key role in smart cities for parking, mobility, the grid, adaptive signal control, and waste management, according to Frost & Sullivan’s research. The business consulting firm says that major corporations such as Google, IBM, and Microsoft will remain key tech innovators and the primary drivers of AI adoption.
Other findings from the studies pointed to regional differences in the smart cities market. Frost & Sullivan experts anticipate that the Asia-Pacific region will be the fastest-growing region in the smart energy space by 2025. More than 50% of the smart cities in Asia will be in China, their research says. “Smart city projects will generate $320 billion for China’s economy by 2025.”
In North America, the research shows that many Tier II cities such as Denver and Portland have committed to building their smart city portfolios. “The total North American smart buildings market, comprising the total value of smart sensors, systems, hardware, controls, and software sold, is projected to reach $5.74 billion in 2020.”
In Latin America, cities actively developing smart city initiatives include Mexico City, Guadalajara, Bogotá, Santiago, Buenos Aires, and Rio de Janeiro, according to Frost & Sullivan. Analysts predict that smart city projects in Brazil will drive almost 20% of the overall $3.2 billion IoT revenue by 2021.
Globally, Europe will have the largest number of smart city project investments, the analysts say. This is due to the European Commission’s interest and engagement in developing these initiatives. In particular, the European e-hailing market, which currently generates revenues of $50 billion, is estimated to reach $120 billion by 2025.
Frost & Sullivan’s prediction for the global smart cities market lines up with a report last August from Markets & Research estimating that the value would reach $2.452 trillion by 2025. Companies featured in the market report included ABB, Cisco, General Electric, IBM, Ingersoll Rand, and Schneider Electric. Demand in areas like facility management and energy optimization, building automation, and emergency response management were identified as key market drivers.
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