Smart Cities Market

According to a research report "Smart Cities Market by Focus Area, Smart Transportation, Smart Buildings, Smart Utilities, Smart Citizen Services (Public Safety, Smart Healthcare, Smart Education, Smart Street Lighting, and E-Governance), and Region - Global Forecast to 2028" published by MarketsandMarkets, the Smart Cities market is estimated at USD 549.14 billion in 2023 and is projected to reach USD 1,114.45 billion by 2028, at a CAGR of 15.2% from 2023 to 2028.

Browse 320 market data Tables and 53 Figures spread through 338 Pages and in-depth TOC on "Smart Cities Market by Focus Area, Smart Transportation, Smart Buildings, Smart Utilities, Smart Citizen Services (Public Safety, Smart Healthcare, Smart Education, Smart Street Lighting, and E-Governance), and Region - Global Forecast to 2028"
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The growth of smart cities is driven by rapid urbanization, increasing demand for efficient resource management, and advancements in digital infrastructure. Governments, together with municipalities, direct investments toward smart city projects to establish sustainable operations along with minimized energy usage and better public service delivery enabled by AI, IoT, and big data analytics technology. The 5G networks and edge computing combination support real-time data processing, enabling smarter transport, security services, and utility system management. Environmental awareness and the world's pursuit of carbon neutrality are driving the application of intelligent waste management and smart grids. Public-private partnerships are key in formulating smart city strategies by delivering robust regulatory frameworks, greater connectivity, resilience, and sustainability for urban environments.

By 2028, the smart cities market is expected to grow moderately in terms of value.

The smart cities market is growing as urbanization has increased and governments around the globe have started to invest in advanced technologies leading to a better environment in cities. According to the United Nations, by mid-2023, 4.6 billion people, 57% of the global population, lived in urban areas, and it is expected to reach 5.2 billion by 2030. As the global population surpassed 8 billion in 2022, the share of urban dwellers is projected to increase to 70% by 2050. The demand for Al, alongside IoT and data-driven solutions, has increased as they enhance infrastructure quality, energy utilization, and public service delivery. China leads in smart city initiatives with around 500 pilot projects integrating Al, IoT, and big data; in contrast, Europe coordinated efforts such as the European Innovation Partnership on Smart Cities and Communities (EIP-SCC) focus on energy efficiency and smart mobility. Singapore is one of the leading countries in Asia for digital transformation, contributed by its Smart Nation program. While, Thailand is building a network of smart cities, demonstrating its dedication to digital governance and smart urban development. Many cities, like Barcelona and Amsterdam, are adopting smart lighting and connected vehicle systems, as governments and businesses seek to make cities more efficient, sustainable, and livable.

Smart transportation solutions dominate the global market in 2023, in terms of value.

Smart transport solutions for the city use AI, IoT, and big data for better mobility, congestion reduction, and making the whole system more efficient. Some solutions include intelligent traffic management with real-time data for optimized traffic signals, smart parking with navigation for available parking spots, and connected public transport with real-time information. Autonomous vehicles, electric mobility, and Mobility as a Service (MaaS) platforms make urban transport smoother, more sustainable, and, most importantly, less emitting. Predictive analytics helps the city anticipate traffic flow, and digital payment systems facilitate fare collection. Making these technologies an integral part of the system will enhance the commuter experience, enhance safety on the road, and facilitate sustainable urban growth through reduced transport expenditure.

North America is expected to account for the largest market share in 2023.

Urbanization, technological innovation, and robust government investments are driving the North American smart cities market, which is set to grow swiftly. The United States drives this growth with large-dollar initiatives like the Infrastructure Investment and Jobs Act (IIJA), signed into law in November 2021, and the Smart City Challenge, launched in 2015, pouring billions into transportation, connectivity, and urban infrastructure. These initiatives include the SMART Grants Program, which has received USD 500 million in funding over five years and was announced in November 2021. It encourages projects that improve mobility and safety, leading to more intelligent urban development. Canada is also on an impressive trajectory, with initiatives like the Smart Cities Challenge offering municipalities and Indigenous communities funding to create cutting-edge urban products. The Global Cities Team Challenge (GCTC) presented smart city projects at the Smart Cities Connect conference in December 2023 and highlighted community transparency and involvement. These undertakings include the City of Guelph and Wellington County’s USD 10 million circular food economy plan, alongside Canada's multibillion-dollar initiative to construct a 100% electric high-speed rail system between Quebec City and Toronto, which was announced in February 2025. Thus, potentially contributing to the growth of the smart cities market in North America, these initiatives reflect the scales of integration of information and communication technology in the development of urban infrastructure in the region, as well as goals to ensure sustainable, efficient, and improved quality of life by addressing urbanization challenges.

Prominent companies include Cisco (US), IBM (US), Siemens (Germany), Microsoft (US), Hitachi (Japan), Schneider Electric (France), Huawei (China), Intel (US), NEC (Japan), ABB (Switzerland), Ericsson (Sweden), Oracle (US), Fujitsu (Japan), Honeywell (US), Accenture (Ireland), Vodafone (UK), AWS (US), Thales (France), Signify (Netherlands), Kapsch (Austria), Motorola (US), GE (US), Google (US), TCS (India), AT&T (US), Nokia (Finland), Samsung (South Korea), SAP (Germany), TomTom (Netherlands), AppyWay (UK), Ketos (US), Gaia (India), TaKaDu (Israel), FlamencoTech (India), XENIUS (India), Bright Cities (Brazil), Maydtech (Mexico), Zencity (Israel), Itron (US), and IXDen (Israel).

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