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Smart Cities to Create Business Opportunities Worth $2.46 Trillion by 2025, says Frost & Sullivan

In observance of World Cities Day on October 31st, Frost & Sullivan experts reveal key findings on the smart city ecosystem

Smart Cities to Create Business Opportunities Worth $2.46 Trillion by 2025, says Frost & Sullivan

The uncertain post-pandemic situation will compel smart cities to focus more on developing collaborative, data-driven infrastructure to provide appropriate healthcare facilities as well as public security services. They will create significant business opportunities with a market value of $2.46 trillion by 2025.

"Smart cities will focus on data-driven and connected infrastructure, which will lead to higher adoption of technologies like AI and 5G. They will prioritize more digitalized services and a strong data analytics infrastructure, leading to increased spending toward technology," said Malabika Mandal, Visionary Innovation Group Industry Analyst at Frost & Sullivan.

Archana Vidyasekar, Visionary Innovation Group Research Director at Frost & Sullivan, added, "Now more than ever, the strategy of being technology-first, optimistic, and focused on 'smart' is critical. While COVID-19 has largely been a health crisis, it has disrupted city ecosystems and infrastructure tremendously. Smart technologies offer innovative solutions that can reverse the damage and bring some respite, if not normalcy. For instance, digital contact tracing can play a critical role in empowering citizens with knowledge of COVID-impacted areas and promote safer urban movement."

Frost & Sullivan's key findings on smart cities include:

  • Smart cities' spending on technology in the next six years is expected to grow at a CAGR of 22.7%, reaching $327 billion by 2025 from $96 billion in 2019. Technologies like artificial intelligence and big data will be in high demand to combat the pandemic, with growing opportunities for crowd analytics, open data dashboards, and online city services.

  • There will be more than 26 smart cities by 2025, with 16 in North America and Europe.

  • More than 70% of global smart city spending by 2030 will be from the United States, Western Europe, and China. Smart cities in the US and Europe will continue spending on 5G and autonomous and robotic technologies. Almost all smart cities in the US and Europe have already invested in open-data initiatives during the pandemic. In addition, China has renewed investments in 5G, smart grids, AI, data centers, and other smart city-related areas through the "new infrastructure initiative" introduced in 2018.

  • Growing demand for crowd management and monitoring in smart cities will lead the crowd analytics market to grow by 20%-25% by 2030. It had market revenues of $748.6 million in 2020. Crowd analytics can be used to access collective real-time data. It can help ensure proper public healthcare services, traffic movement, and security and surveillance services across the smart city.

  • Investments in smart initiatives are expected to rise over the next two years. Smart cities have already invested in contact tracing wearables and apps, open data platforms, autonomous drones, and crowd analytics to fight the pandemic. Post-pandemic, investment in smart projects like smart grids, intelligent traffic management, autonomous vehicles, smart lighting, e-governance services and data-enabled public safety and security will gain traction.


About Frost & Sullivan

For over five decades, Frost & Sullivan has become world-renowned for its role in helping investors, corporate leaders and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models, and companies to action, resulting in a continuous flow of growth opportunities to drive future success.


SOURCE: Frost & Sullivan

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