Smart cities have developed in urban areas for creating sustainable economic development and improving the quality of life in key areas such as environmental impact, technology, government, people, and the economy. Large-scale migration from rural to urban areas has resulted in infrastructural challenges for governments and municipal associations. The smart cities concept has emerged to manage limited resources and meet the needs of the urban population efficiently and resourcefully. The global smart cities market is anticipated to expand at a steady CAGR of 14.0% during the period from 2013 to 2019 and reach a total value of US$1,265.85 billion.
Smart Cities Growth Driven by Energy Saving Benefits
Aspects such as smart buildings, smart homes, energy management, intelligent transportation, security, and sustainability are the essential pillars of smart cities. Smart cities have new-generation services with the support of information and communication technologies. Through these systems, reduced CO2 emissions, implementation of energy-saving modes, effective utilization of natural resources, and security of data can be achieved effectively.
Smart Cities to Expand Due to Increase in Urbanization in Emerging Nations
In smart cities, there is planned urbanization and early detection of security incidents. The urban population is expected to increase from 3.6 billion to 6.3 billion during 2015 to 2050. The concept of smart cities has picked up speed due to the need for ecologically sound infrastructure, growing rural to urban migration, and awareness about energy efficiency. The demand for smart cities is foreseen to remain high over the coming years and this growth is anticipated to be the most conspicuous in emerging nations such as South Korea, India, China, and several other regions. Some of the major cities of the world, such as Singapore, Cairo, Amsterdam, Shanghai, Tokyo, New York, Dubai, and Seoul, have initiated smart city projects. Manufacturers are attracted to the field of smart city infrastructure and technology due to the promise of a high profit margin.
Smart Transportation Leads Market due to Improved Transportation Infrastructure Needs
Among the application segments of the smart cities market, smart transportation had the largest share of approximately 12% in 2012. Smart transportation improves transport flow, reduces fuel consumption and travel delays, and builds better transportation infrastructure.The smart security application segment of the smart cities market is projected to grow at a strong CAGR of 15.0% till 2019.By geography, North America had the largest share in the global smart cities market, accounting for 34.5% of the market in 2012, and is foreseen to reach a value of US$392.41 billion by 2019.
Factors such as upgrades in transportation and water infrastructure and escalation of smart grid investments are mainly responsible for the growth of the smart cities market in these regions. These regions are aiming to reduce carbon emissions and expand renewable energy resources. In North America, governments want to achieve zero waste of energy by 2020. Some of the major players in the smart cities market include ABB Ltd., IBM Corporation, Siemens AG, Hitachi Ltd., Honeywell international Inc., Alcatel-Lucent S.A., Alstom S.A., General Electric Company, Oracle Corporation Cisco Systems Inc., Telefonaktiebolaget L. M. Ericsson, and others.
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