Smart Cities Market Report 2025

The smart cities market size has grown rapidly in recent years. It will grow from $792.03 billion in 2024 to $949.94 billion in 2025 at a compound annual growth rate (CAGR) of 19.9%. The growth in the historic period can be attributed to rapid urbanization, environmental sustainability concerns, traffic congestion and mobility issues, energy efficiency and resource management, government initiatives and funding.

The smart cities market size is expected to see exponential growth in the next few years. It will grow to $1.98 trillion in 2029 at a compound annual growth rate (CAGR) of 20.3%. The growth in the forecast period can be attributed to integration of 5G networks, focus on health and safety, resilience and disaster preparedness, citizen engagement and inclusivity. Major trends in the forecast period include citizen engagement platforms, edge computing for real-time processing, smart building automation, public safety and emergency response systems, digital twin technology for city modeling.

The global growth of smart cities is anticipated due to the rising urbanization trend. Urbanization involves the movement of the population from rural to urban areas, leading to increased human population densities in urban settings. A smart city utilizes electronic technologies, voice activation methods, and sensors to gather information and enhance urban area management and citizens' quality of life. According to the United Nations Department of Economic and Social Affairs, it is projected that 68% of the world's population, approximately 2.5 billion people, will live in urban areas by 2050. Hence, the escalating urbanization worldwide is a key driver for the growth of the decorative coatings market.

The rising levels of traffic congestion are anticipated to drive the growth of the smart cities market in the coming years. Traffic congestion is characterized by a situation on roadways where the volume of traffic exceeds the infrastructure's capacity, resulting in reduced speeds and longer travel times. Smart cities can greatly enhance their capacity to manage and alleviate traffic congestion by identifying congestion hotspots, implementing smart parking systems, encouraging public transportation use, facilitating traffic diversion and alternate routes, improving road safety, integrating transportation systems, and enabling emergency vehicles to navigate through traffic more effectively. For example, in January 2024, NAVIT, a Germany-based mobility solutions provider, reported that in 2022, traffic congestion cost U.S. drivers an average of $869, an increase from $564 the previous year. In Dublin, commuters experience significant congestion, taking approximately 1 hour and 14 minutes to cover 10 kilometers during peak hours, with over 40 minutes lost in traffic. Therefore, the escalating traffic congestion is fueling the growth of the smart cities market.

Technological advancements are driving trends in the smart cities market, with major companies emphasizing innovative technologies to modernize urban transit infrastructure. Yunex Traffic, part of Siemens Mobility, launched Yutraffic Studio in December 2023. This cloud-based advanced traffic management system offers planning, monitoring, and optimization tools to handle traffic challenges swiftly and efficiently. It can handle current transportation management issues and adapt to future changes in traffic demands, utilizing massive volumes of data from various sources, including linked cars.

Leading companies in the smart cities market are increasingly channeling investments into innovative technologies, such as real-time data from connected vehicles and AI-driven analytics, to enhance urban infrastructure, improve public services, and develop sustainable environments that promote connectivity and elevate the quality of life for residents. Real-time data from connected vehicles refers to the immediate information collected from vehicles that communicate their speed, location, and other traffic-related information, allowing traffic management systems to optimize traffic flow and safety in real time. For example, in December 2023, Yunex GmbH, a Germany-based IT service management company, introduced Yutraffic Studio, a cloud-based Advanced Traffic Management System (ATMS) aimed at tackling contemporary traffic challenges with advanced planning and monitoring tools. This platform integrates real-time data from connected vehicles and provides modular, scalable solutions tailored to the evolving needs of smart cities.

In June 2023, ABB Ltd., a Switzerland-based automation company, acquired Eve Systems for an undisclosed amount. This acquisition allows ABB to bolster its position in the smart home market, accelerating the development of energy-efficient and user-friendly smart home solutions that utilize the Matter and Thread connectivity standards. Eve Systems is a Germany-based firm specializing in the production of smart home and home automation devices.

Major companies operating in the smart cities market include Microsoft Corporation, AT&T Inc., Huawei Technologies Co Ltd., Hitachi Ltd., Siemens AG, General Electric Company, Siemens Mobility GmbH, Accenture plc, Intel Corporation, International Business Machines Corporation, Cisco Systems Inc., Schneider Electric SE, Honeywell International Inc., ABB Ltd., Nokia Corporation, Telefonaktiebolaget LM Ericsson, Koninklijke Philips N.V., Infineon Technologies AG, Emerson Electric Co, NXP Semiconductors N.V., Atsuke, Xerox Holdings Corporation, Giesecke+Devrient GmbH, Cubic Corporation, HID Global Corporation, Scheidt & Bachmann GmbH, Vix Technology Ltd., Confidex Ltd., Robert Bosch GmbH, Capgemini SE, Cognizant Technology Solutions Corporation, Dell Technologies Inc., Fujitsu Limited, Infosys Limited, NEC Corporation, Oracle Corporation, SAP SE.

North America was the largest region in the smart cities market in 2024. The regions covered in the smart cities market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the smart cities market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

A smart city utilizes information and communication technology (ICT) to enhance operational performance, share data with the public, and improve government services and citizen comfort. The adoption of technology addresses municipal challenges and provides various services to residents.

The primary components in smart cities consist of solutions and services. Solutions refer to smart implementations such as smart parking, utilities, metering, healthcare, buildings, and governance. These solutions play a role in accelerating citizen growth across residential, commercial, and industrial sectors. Various types include residential, commercial, and industrial, with applications spanning smart governance, building, utilities, transportation, healthcare, and more.

The smart cities market research report is one of a series of new reports that provides smart cities market statistics, including smart cities industry global market size, regional shares, competitors with a smart cities market share, detailed smart cities market segments, market trends and opportunities, and any further data you may need to thrive in the smart cities industry. This smart cities market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The smart cities market includes revenues earned by entities by providing solutions and services that automate the processes of energy management, street light monitoring, temperature monitoring, parking management, water resource management, smart metering solutions, and unified command & control platform to improve and optimize the operational efficiency of any city and making critical infrastructure elements such as energy, lighting, water work in a smart manner. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

This product will be delivered within 3-5 business days.