Smart cities look set to be gold mines when it comes to creating business opportunities.
According to an American study, smart cities — which focus on using technology to provide services and solve problems — could create business opportunities with a market value of over US$2 trillion by 2025. And this drive is already underway due to the Covid-19 pandemic.
Business opportunities to the tune of some $2.46 trillion could be created by the development of smart cities by 2025, according to a report from Frost & Sullivan, published October 29. According to the research, the uncertain post-pandemic context could drive these cities of the future to develop even more collaborative, data-driven infrastructure, in turn creating new business opportunities, notably in healthcare services and public security services.
Archana Vidyasekar, Visionary Innovation Group Research Director at Frost & Sullivan, said: “Now more than ever, the strategy of being technology-first, optimistic, and focused on ‘smart’ is critical. While Covid-19 has largely been a health crisis, it has disrupted city ecosystems and infrastructure tremendously. Smart technologies offer innovative solutions that can reverse the damage and bring some respite, if not normalcy. For instance, digital contact tracing can play a critical role in empowering citizens with knowledge of Covid-impacted areas and promote safer urban movement.”
USA, Europe and China will drive more than 70 per cent of global smart city spending
The sum spent by smart cities on technology is expected to show a compound annual growth rate (CAGR) of 22.7 per cent in the next six years. The study estimates that spending could reach $327 billion by 2025, compared to $96 billion in 2019. “Smart cities will focus on data-driven and connected infrastructure, which will lead to higher adoption of technologies like AI and 5G. They will prioritise more digitalised services and a strong data analytics infrastructure, leading to increased spending toward technology,” explains Malabika Mandal, Visionary Innovation Group Industry Analyst at Frost & Sullivan.
More than 26 smart cities will be developed by 2025 with the majority — 16, to be precise — in North America and Europe, the study explains. By 2030, over 70% of worldwide smart city spending will be driven by the USA, Western Europe and China. The study also predicts that smart cities in the USA and Europe will continue spending on 5G and autonomous and robotic technologies. In fact, almost all smart cities in the USA and Europe have already invested in open-data initiatives during the pandemic. Similarly, China has renewed investments in fields such as 5G, smart grids, AI and data centers. The crowd analytics market — which had revenues of $748.6 million in 2020 — is forecast to grow by 20%-25% by 2030, thanks to growing demand for crowd management and monitoring in smart cities.
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