How progressive local governments are investing in smart cities
Smart city initiatives are one of the most important developments worldwide in public sector digital transformation. Given the crucial role that cities will play in both overall digitization efforts and the development of national economies, the largest or fastest-growing use cases have the attention of municipal leaders across the globe.
Smart city initiatives will attract technology investments of more than $81 billion globally in 2018, and spending is forecast to reach $158 billion in 2022, according to the latest worldwide market study by International Data Corporation (IDC).
Smart city initiatives market development
"We are now delivering detailed sizing of 25 named use cases, as well as the first release of a new database of spending at city level," said Serena Da Rold, program manager at IDC.
Intelligent transportation and data-driven public safety remain the largest investment areas, but IDC analysts report they are also finding significant pockets of investment and growth in back-office and platform-related use cases, which are less often publicized but increasingly happening behind the scenes in cities around the world.
That being said, the three largest use cases, which will attract nearly one-quarter of global smart cities spending in 2018, are fixed visual surveillance, advanced public transit, and smart outdoor lighting.
By 2022, intelligent traffic management will overcome smart outdoor lighting in the third position, and the top three use cases will only account for one-fifth of total spending, as smaller and fast-growing use cases emerge and reach critical mass.
Officer wearables and vehicle to everything (V2X) connectivity, in particular, will generate the fastest growth, although they currently start from a small base in most regions.
On a geographic basis, the Asia-Pacific region, including China and Japan, will account for nearly 42 percent of global spending in 2018, followed by the Americas (33 percent), and Europe, Middle East and Africa (EMEA) (25 percent). The United States is the largest country market for smart city spending (over $23 billion in 2018), followed by China.
According to the IDC assessment, the three largest use cases appear among the top five in terms of spending across all regions, but other use cases that emerge among the largest current smart cities investment areas include mobile video capture and recording in the United States and Latin America, and digital permitting, licensing, and inspection in the Middle East and Africa region.
Outlook for smart city technology investment
Spending by the 53 cities that are currently sized in IDC's database accounts for around 15 percent of global smart city spending, with Singapore, Tokyo, New York City, London, and Shanghai leading the way in terms of 2018 investments.
"IDC expects to see strong, continued investment by the private and public sector in urban areas and in Smart Cities and Communities programs and projects," said Ruthbea Yesner, vice president at IDC. "This also means that it is a more competitive market."
Interested in hearing industry leaders discuss subjects like this and sharing their IoT use-cases? Attend the IoT Tech Expo World Series events with upcoming shows in Silicon Valley, London and Amsterdam to learn more.
There are conference tracks and sessions dedicated to smart cities.