Connectivity & Data
Governance and Citizen
Energy & Environment
Public safety, intelligent transportation, and resilient energy and infrastructure projects will attract the largest share of funding in 2019
Spending on smart cities initiatives is to reach $95.8 billion in 2019, according to analyst International Data Corporation (IDC). This is an increase of 17.7 per cent over 2018.
In an update to its Worldwide Semi-annual Smart Cities Spending Guide, it also reveals that Singapore, New York City, Tokyo, and London will each invest more than $1 billion in smart cities programmes this year. The guide has expanded its coverage to 100 cities.
Initiatives related to data-driven public safety, intelligent transportation, and resilient energy and infrastructure will attract the largest share of funding in 2019, but key use cases in the areas of economic development and civic engagement, and sustainable planning and administration will also see considerable investments.
The smart cities use cases that will receive the most funding in 2019 include fixed visual surveillance, advanced public transit, smart outdoor lighting, intelligent traffic management, and connected back office.
Together, these five use cases will represent 34 per cent of worldwide spending this year. Strong investment growth in intelligent traffic management solutions will make it the third largest use case in 2020, overtaking smart outdoor lighting.
The use case that will see the fastest spending growth over the 2017-2022 forecast period is officer wearables, which includes smart apparel, smart headsets and glasses, and smart holsters. Other use cases that will experience significant spending growth include digital twin and vehicle-to-everything (V2X) connectivity.
"There is a long tail of cities focusing on specific issues or looking for cross-departmental transformation on a smaller scale”
"The smart cities market is extremely dynamic, and while only a small number of cities have the budget for large scale integrated projects, our database of 100 cities, which includes most of the largest capitals and innovative cities around the world, only represents around one quarter of global smart city spending," said Serena Da Rold, programme manager in IDC’s customer insights and analysis group.
She added: "There is a long tail of cities focusing on specific issues or looking for cross-departmental transformation on a smaller scale. These cities represent a big opportunity for providers of smart city solutions that can be replicated and adapted to address specific use cases in different cities, leveraging the experience gained in a similar context."
On a geographic basis, the Asia/Pacific region represents more than 40 per cent of total spending on smart cities initiatives, while the Americas represent around one third, and Europe, Middle East and Africa around one quarter of the global opportunity.
IDC said that alongside the big picture provided by the regional distribution of spending, city-level detail provides a useful measure of national commitment. In the United States, for example, only four cities (New York City, Los Angeles, Washington, DC and Chicago) are forecast to spend more than $300 million on smart cities programmes this year. In comparison, 11 cities in China will exceed the $300 million level in 2019.
"In the Asia/Pacific region, the exponential growth and diversity of smart city initiatives in second- and third-tier cities are continually challenging many first-tier cities to transform,” said Gerald Wang, head of IDC Asia Pacific public sector research.
“With competition for talent and foreign direct investment being even more intense today, these socio-economic hubs provide huge openings for solution providers to aid in seamless connectivity and collaborations, enhanced productivity and automation, as well as address security and privacy concerns.”
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