According to Frost & Sullivan, the smart city market will top over $2.4 trillion in 2025 and create opportunities for solution providers operating in the segment.
The market intelligence firm predicts widespread adoption of smart city solutions in midsize cities unlike in previous years when majority of the projects were in a select group of innovator cities.
The industry has over the past years been characterised by pilot projects.
In its Smart City Readiness Timeline report, Frost & Sullivan has identified three factors which will determine the pace of cities’ in adopting smart city solutions.
The factors include population strain, relative city wealth and smart city readiness in terms of infrastructure and technology.
Frost & Sullivan assumes cities with high population will invest in smart technologies to avoid restraining resources and cities with stronger tax and consumer base more quickly than other cities in their respective countries.
In addition, it will be easy to invest in smart city technologies for cities whose transport, energy, water, and telecommunications infrastructure are above standards.
Factors challenging the growth of the smart city market over the past years include:
- The nascent nature of many smart city solutions and the need to verify ROI prior to wider uptake by budget-conscious cities
- Cities delaying the development of cohesive smart city visions and strategies
- Lack of multi-stakeholder buy-in to support smart city initiatives
- A shortage of adequate and compelling funding models and resources
- Siloed city agencies hindering the ability to coordinate initiatives
Despite the challenges, public-private partnerships have helped smart city solutions to gain momentum.