The market for software and digital sensors commonly classified as “smart city” technology is expected to continue to grow steadily over the next eight years, according to a report published Friday by Allied Market Research.
The firm projected that the smart-city market will grow from $160 billion in 2021 to $708 billion by 2031, the result of a compound annual growth rate of 16.2%. Researchers said companies such as Amazon Web Services, the German engineering firm Bosch and the California device and software company Quantela are among the market leaders.
“Smart city” technology is a broad category of software and devices that includes data-analytics software and street-level sensors designed to give bureaucrats a more accurate picture of their cities.
According to a news release, the market’s growth is promising, but also fettered.
“Rise in adoption of smart cities, growing number of projects under various government smart city initiatives, and surge in need for better natural resource management in urban environments drive the growth of the global smart city platform market,” the release reads. “On the other hand, security concerns associated with smart cities and lack of funding & adequate infrastructure restrain the growth to some extent.”
According to Allied, the “smart city” offerings are split between platforms — software that cities can buy to monitor and possibly improve the efficiency of their operations — and services. Researchers said the deployment model of offerings also continue to be split between on-premises technology and cloud-based services.
The technologies cut across an array of concerns faced by urban leaders, including transportation, pollution, public safety, energy, education and health care. According to Allied’s research, the “smart infrastructure” segment accounts one-fifth of the market’s revenue and is expected to continue holding that share through 2031. Researchers named “smart energy,” meanwhile, as the segment expected to have the fastest growth.
While generally considered to be chiefly a marketing term rather than a description of any narrowly defined set of technologies, “smart cities” tech continues to be favored by politicians and some technologists in many large and medium-sized cities. Officials in San Antonio last month announced a new smart-city strategy that emphasizes how technology might be used to further an agenda of “equity and inclusivity.”