Global Smart Cities Market for ICT to Reach $774.8 Billion in 2021

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The global smart cities market for Information and Communications Technologies (ICT) reached $342.4 billion in 2016 and should reach $774.8 billion in 2021, with a compound annual growth rate (CAGR) of 17.7% from 2016 to 2021.

North America represents the largest region of the smart cities market with revenue of nearly $148.6 billion in 2016 and should reach $327.0 billion in 2021, a CAGR of 17.1% from 2016 to 2021.

Europe as a segment of the smart cities market reached $100.8 billion in 2016 and should reach nearly $259.6 billion in 2021, a CAGR of 20.8% from 2016 to 2021.

With the number of smart cities increasing from about two dozen to more than 100 in just a few years, the market for smart city information and communication technology is already on a strong growth curve. However, these early cities are just the tip of the iceberg. The true addressable market comprises more than 1,500 cities with populations of more than 500,000 people and twice that many number of cities with populations over 150,000 people. This means that the smart cities market consists of about 5,000 medium to large cities, with most experts predicting at least 10% to 13% penetration, or about 600 cities, within the next 20 years.

The smart cities market opportunity is driven by the convergence of information and communications technology in a number of areas, in particular the development of advanced connectivity and analytic software and hardware. A branch of the Internet of Things (IoT), smart cities leverage the array of connected sensors and analytics platforms to drive stronger coordination within departments and across city agencies and community groups. Everything from video surveillance for security and traffic management to emergency coordination and public events participation benefit from smart city technology.

The goal of this report is to highlight information and communication technology investment driven by smart city applications. The market opportunity is expressed in terms of potential revenue for the addressable market for smart city technologies by geographic region, technology type and end-user segment. This report serves as an update to BCC Research's first smart cities report (IFT115A) published in 2015.