European Investments in Smart City Initiatives Will Reach $19 Billion in 2018
European spending on smart city initiative related technologies is expected to reach $19 billion in 2018, according to IDC. With European smart city initiatives going beyond early stage and isolated pilots, IDC expects spending to accelerate over the 2017–2021 forecast period, growing to $31 billion in 2021.
"European cities face significant forces for change — urbanization, collaboration, and the democratization of public services, to name a few. In response, cities are becoming increasingly smart; they are adopting innovative technology solutions and redesigning business and service delivery models to take a more user-centric approach, while allowing users to have greater input into how their city works," said Chris Pennell, research director in IDC ' s Government Insights Europe group.
Smart cities attain digital transformation in an urban ecosystem to meet environmental, financial, and social outcomes. In IDC's view, a smart city begins to be developed when multiple smart initiatives are coordinated to leverage technology investments across an entire city, use common platforms to decrease service time/maintenance costs, share data across systems, and tie IT investments clearly to smart missions. Smart city programs are enabled by 3rd Platform technologies, and emerging technologies are accelerated in the city ecosystem to deliver innovative solutions in very specific areas.
On a geographic basis, Western European countries represent more than 90% of European spending, expected to reach $16.9 billion in 2018. On the other side, Central and Eastern European countries will grow at a slightly faster pace when compared with Western Europe, with an expected 2017–2021 compound annual growth rate (CAGR) of 21.1%.
In Europe, intelligent traffic and transit forms a bulk of the spending, as cities are prioritizing transport as one of their main smart city focus domains. Among other more prominent use cases are smart city platforms and environmental protection related use cases. Western Europe, in comparison with Central and Eastern Europe, is focusing more on non-revenue water management, while in CEE there is a focus on fixed surveillance and smart outdoor lightning.
"For each region IDC has identified spending patterns and stakeholder priorities in order to size the global smart city market," said Jan Alexa, senior research analyst for IDC Government Insights. "In Europe we see the steep acceleration of the smart city market and estimate that between 2016 and 2021 the market will more than double in size."