A smart city refers to an urban area that uses various types of electronic methods and sensors, with an aim to collect data. Insights acquired from that data are used to manage resources, assets, and services efficiently; that data is used to enhance the operations across the city. This includes data collected from devices, citizens, buildings, and assets that is then analyzed and processed to monitor and manage power plants, water supply networks, traffic and transportation systems, utilities, waste, crime detection, information systems, across several areas, such as schools, libraries, hospitals, and other community services.
Market Dynamics
Drivers
- Rising demand for public safety and communication infrastructure
- Increasing environmental concerns and demand for green initiatives
Restraints
- Huge initial investments
Rising demand for public safety and communication infrastructure
Rapid immigration towards urban cities, growing adoption of modern lifestyle and increasing demand of high tech infrastructure all around the world is driving the growth of the smart cities market.
Rapid expansion of urban areas over the past two decades has resulted in the mushrooming of megacities globally. The size and scale of these cities and management requirements pressurizes infrastructure development, public services provision, and environmental sustainability of the country which forces the government to invest more on smart cities development.
more people are moving to cities every day. The steady growth of global population as well as the high rate of flow of people towards urban areas in search of livelihood is driving the demand of smart cities market. For instance, as per World Health Organization (WHO) report, the urban population in 2018 accounted for about 55.2 percent of the total global population, increased from 34% in 1960, and continues to increase.
The United Nations (UN) under the theme ‘Transforming Our World' have projected to establish 43 mega cities with over 10 million population each. Such ambitious projects are pulling huge investment all around the world, contributing to the growth of the smart cities market.
Even if there are increasing government initiatives, some of the fastest-growing urban clusters are cities with less than 1 million population, many of them located in developing countries of Asia and Africa. Even if one in eight people live in 33 megacities globally, approximately half of the world’s urban population belong to much smaller cities with fewer than 5,00,000 inhabitants. As such many small cities are initiating smart cities projects to cater the future need, which increases demand for the smart cities market.
Geographical Analysis
The South America smart cities market is estimated to grow with a highest CAGR of 14.42% during the forecast period, reaching USD XX billion in 2027, from its recorded value of USD XX billion in 2019. Brazil contributed for the highest market revenue share of 48% in the year 2019.
In April 2020, Rio de Janeiro and Bogotá announced their plans to join the C40 Clean Air Cities Declaration in an effort to meet the World Health Organization’s air quality guidelines for cleaner air. They also plan to implement substantive clean air policies by 2025.
In December 2019, Planet Smart City, the global leader in smart affordable housing, announced its partnership with Brazilian real-estate specialist InLoop and the subsequent development of more than 2,250 high-quality, low cost apartments in São Paulo, the largest city in the Americas by population. The apartments will combine smart solutions across Planet Smart City’s four key areas: planning and architecture, technological systems, environment, and social innovation.
Powered by the free Planet App, residents can manage energy consumption at home and keep informed with any local updates or community initiatives. Urban gardens, a library and other free shared space will also provide opportunities for locals to come and learn and live together, promoting a circular economy and improving quality of life for all.
On the other hand, Argentina's smart cities market is expected to grow with a CAGR of 14.14% during the forecast period. Buenos Aires, Argentina's capital, has been named the "smartest city" in South America. The city has been recognized for its ambitious digital innovation programs, environmental policies, and technological advances, resulting in the city's emergence as the continent's leading "smart city."
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