Smart Cities Initiatives Forecast to Drive $189 Billion in Spending in 2023
A new forecast from IDC shows global spending on smart cities initiatives will reach $189.5 billion in 2023. The top priorities for these initiatives will be resilient energy and infrastructure projects followed by data-driven public safety and intelligent transportation. Together, these priority areas will account for more than half of all smart cities spending throughout the 2019-2023 forecast.
"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, program manager in IDC's Customer Insights & Analysis group.
"Although smart grid and smart meter investments still represent a large share of spending within smart cities, 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."
The use cases that will experience the most spending over the forecast period are closely aligned with the leading strategic priorities: smart grid, fixed visual surveillance, advanced public transportation, smart outdoor lighting, and intelligent traffic management. These five use cases will account for more than half of all smart cities spending in 2019, although their share will decline somewhat by 2023. The use cases that will see the fastest spending growth are vehicle-to-everything connectivity, digital twin, and officer wearables.
Singapore will remain the top investor in smart cities 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 were essentially tied for the number 5 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% of all smart cities 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%.