Smart cities spend to top $189 billion in next five years

Global spending on smart cities will reach $189.5 billion in 2023, according to the latest IDC Worldwide Semiannual Smart Cities Spending Guide. The report claims that the main priorities  for investment will be resilient energy and infrastructure projects, followed by data-driven public safety and intelligent transport. It suggests that these priority areas will account for more than half of all smart city spending throughout the 2019-2023 forecast period. The guide claims to quantify the expected technology opportunity around initiatives at a regional and global level.

Meanwhile, vehicle-to-everything (V2X) connectivity, digital twin, and officer wearables are predicted to be the uses that will see the fastest spending growth over the five-year forecast.

A focus on Berlin

[perfectpullquote align=”right” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]The growth in investment will be led by projects such as the plans by Siemens AG to invest €600 million in the Siemensstadt district of Berlin[/perfectpullquote]

The growth in investment will be led by projects such as the plans by Siemens AG to invest €600 million in the Siemensstadt district of Berlin (pictured). This project, which covers an area of 70 hectares, aims to transform this former industrial area into a modern, urban district with a range of residential, technological, business, transport and lifestyle improvements. A further goal is to invest in key technologies and innovation in partnership with the scientific and business communities. The district is to become home to centres of research and expertise, including start-up incubators.

Singapore will remain the top investor in smart city initiatives, driven by the Virtual Singapore project. New York City will have the second largest spending total this year, followed by Tokyo and London. Beijing and Shanghai tied for the number five position and spending in all these cities is expected to surpass the $1 billion mark in 2020.

On a regional basis, the United States, Western Europe, and China will account for more than 70 per cent of all spending throughout the forecast. Japan and the Middle East and Africa (MEA) will experience the fastest growth in smart cities spending with CAGRs of around 21 per cent.

“In the latest release of IDC’s Worldwide Smart Cities Spending Guide, we expanded the scope of our research to include smart ecosystems, added detail for digital evidence management and smart grids for electricity and gas, and expanded our cities dataset to include over 180 named cities,” said Serena Da Rold programme manager in IDC’s Customer Insights and Analysis Group.

“Although smart grid and smart meter investments still represent a large share of spending, we see much stronger growth in other areas, related to intelligent transportation and data-driven public safety, as well as platform-related use cases and digital twin, which are increasingly implemented at the core of smart cities projects globally. On a regional basis, the United States, Western Europe, and China will account for more than 70 per cent of all smart cities spending throughout the forecast”

“We are excited to present our continued expansion of this deep dive into the investment priorities of buyers in the urban ecosystem, with more cities added to our database of smart city spending and new forecasts that show the expanded view of smart cities, such as smart stadiums and smart campuses,” said Ruthbea Yesner, vice president of IDC Government Insights and Smart Cities programmes. “As our research shows, there is steady growth across the globe in the 34 use cases we have sized and forecast.”