Main development trends and prospects of the Smart City market
Analytical Report (full version)
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Analytical Report (full version)
Main development trends and prospects of the Smart City market
J'son & Partners Consulting presents results of an updated study dedicated to the state and prospects of the Smart City solutions market in Russia and the world.
Smart City is a concept of integrating various information technology solutions in the field of the Internet of things (IoT) to manage urban infrastructure. It is customary to single out a number of key components of Smart Cities: smart management, smart energy, smart buildings, smart mobility, smart infrastructure, smart technologies, smart healthcare, smart citizens. These components are now at various stages of commercialization in the world. At the same time, cities that have advanced to the greatest extent in the implementation of Smart City solutions, are characterized by high levels of practical implementation of a significant part of such solutions.
As part of the Smart City concept, information technologies are used for:
- More efficient use of the city's physical infrastructure in order to support its economic, social, and cultural spheres;
- Effective interaction with residents on local government issues and for decision-making through the use of open innovation processes and electronic interaction;
- Strengthening the "collective mind" of city institutions through the introduction of e-government elements with the participation of citizens and joint design of the urban environment;
- Achieving a high degree of adaptability to the introduction of new technological solutions, effectively responding to changes in the situation by improving the quality of urban environmental management.
The global market for Smart City solutions is actively growing. The first solutions in this area were implemented in the early 2010s, and to date, thousands of projects related to the Smart City concept have been implemented. At the same time, it should be noted that a number of various technologies that form the basis of the Smart City concept are at different stages of their life cycle. The pace of implementation of Smart City solutions in different regions of the world also differs significantly.
Main drivers and barriers to the Smart City solutions market development
The main factors contributing to the growth of the market are:
- High urbanization rates in a number of countries of the world;
- Introduction of new mobile communication standards;
- High development rates of the global Internet of things market;
- Reducing the cost of implementing Smart City solutions;
- Government support of the Smart City ecosystem development in a number of regions of the world, as well as increasing demand for solutions at the level of city administrations, and other factors.
The main barriers to implementing Smart City solutions are:
- The fact that a significant number of Smart City solutions are still being tested and marketed and are not ready to scale;
- Too high prices of large-scale Smart City solutions implementation in developing countries;
- Insufficient development of local ecosystems that cannot support Smart City solutions implementation in developing regions of the world;
- Ack of a strategic vision for the prospects of Smart cities and municipalities in a significant part of medium and small cities;
- A lack of qualified personnel and a number of other factors.
Volume and structure of the global Smart City market
The global market for Smart City solutions has shown high growth rates in recent years, and the total volume of the global Smart City market may exceed 2.5 trillion US dollars by 2025 (according to Grand View Research, 2018). The Smart City market is currently dominated by markets in North America and the European Union. At the same time, the Asian market may become the most dynamically developing regional market for Smart City solutions in the medium term. Currently, the key segments of the global market are smart services and smart public administration. According to Frost & Sullivan, the fastest growing market segments are smart energy and smart transport. In the medium term, we should expect a significant reformatting of the global Smart City market, as the growth rates of sales in different segments differ significantly.
Key players in the global Smart City market
The Smart City solutions market is one of the fastest-growing and most promising and is characterized by a highly dynamic competitive environment. Thousands of corporations, medium and small companies, and startups are working in this industry.
The Smart solutions market players can be divided into a number of categories, such as:
- Integrators. They implement projects that combine several segments of Smart City solutions by using specialized platforms and provide system integration. Examples: IBM, Accenture;
- Network service providers. They provide network infrastructure and perform data analysis functions and implement business solutions that connect people, assets, systems, and products with M2M capabilities. Examples: Cisco, Verizon, Ericsson and AT&T;
- Suppliers of Pure-Play products. They manufacture and supply various types of connected devices (smart meters, etc.). Examples: Eaton, Honeywell, ABB, Schneider Electric, and Siemens;
- Providers of specialized services. They offer 24-hour monitoring, management, and consulting in the field of Smart City solutions. Examples: IBM, Serco, SAIC, and Infosys.
The leaders of the global Smart City technology market today are such corporations as Huawei, IBM, Cisco, AT&T, Siemens, Oracle, Microsoft, Schneider Electric, Hitachi, and Ericsson.
Promising Smart City solutions for implementation in Russia
The prospects for implementing certain elements of Smart City solutions in Russia are determined by the following factors:
- The most pressing issues and challenges facing municipalities;
- City resources available for implementing Smart City elements;
- City administrations’ competence level and their interest in implementing Smart City solutions;
- Economic payback conditions of Smart City projects to be implemented in Russia;
- Availability of relevant hardware and software in the Russian market.
Taking into consideration a complex of technical, economic, social and political factors, the following Smart City solutions are currently the most promising in terms of their implementation potential in Russian cities: elements of smart housing and utilities; smart urban transport system; urban environmental quality management; smart healthcare.
This information note was prepared by the J'son & Partners Consulting. We work hard to provide factual and prognostic data that fully reflect the situation and available at the time of release. J'son & Partners Consulting reserves the right to revise the data after publication of new official information by individual players.
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Detailed research results presented in the full version of the Report:
"Main development trends and prospects of the Smart City market”
1. DEVELOPMENT TRENDS OF SMART CITY SOLUTIONS IN THE WORLD
1.1. PURPOSE AND BASIC FUNCTIONAL CHARACTERISTICS OF SMART CITY SOLUTIONS
1.2. CURRENT DEVELOPMENT STATE OF SMART CITY SOLUTIONS IN THE WORLD. ANALYSIS OF THE MARKET DEVELOPMENT STAGE
1.3. ANALYSIS OF THE SMART CITY SOLUTIONS MARKET DEVELOPMENT ECOSYSTEM. KEY PROGRAMS, PROJECTS AND INITIATIVES THAT CONTRIBUTE TO THE MARKET DEVELOPMENT
1.4. ANALYSIS OF NATIONAL INFRASTRUCTURE READINESS FOR LARGE-SCALE IMPLEMENTATION OF SMART CITY SOLUTIONS IN VARIOUS REGIONS OF THE WORLD
1.5. KEY DRIVERS AND BARRIERS TO THE SMART CITY SOLUTIONS MARKET DEVELOPMENT IN THE WORLD
2. VOLUME AND STRUCTURE OF THE GLOBAL SMART CITY SOLUTIONS MARKET
2.1. DYNAMICS OF THE SMART CITY SOLUTIONS MARKET IN THE WORLD. MARKET DEVELOPMENT FORECAST
2.2. GEOGRAPHICAL STRUCTURE OF THE GLOBAL SMART CITY SOLUTIONS MARKET
2.3. SEGMENT STRUCTURE OF THE GLOBAL SMART CITY SOLUTIONS MARKET
3. ANALYSIS OF THE COMPETITIVE ENVIRONMENT IN THE SMART CITY SOLUTIONS MARKET
3.1. KEY CATEGORIES OF PLAYERS REPRESENTED IN THE SMART CITY SOLUTIONS MARKET
3.2. ANALYSIS OF THE COMPETITIVE ENVIRONMENT STRUCTURE IN THE SMART CITY SOLUTIONS MARKET BY COUNTRIES
3.3. BRIEF PROFILES OF KEY PLAYERS IN THE SMART CITY SOLUTIONS MARKET
4. ANALYSIS OF KEY PROJECTS IN THE FIELD OF SMART CITY SOLUTIONS
5. ASSESSMENT OF THE COSTS AND BENEFITS OF IMPLEMENTING SMART CITY SOLUTIONS
6. THE MOST PROMISING SMART CITY SOLUTIONS FOR IMPLEMENTATION IN RUSSIA
ANNEX 1. SMART CITY TECHNOLOGY IMPLEMENTATION CASES
ANNEX 2. RANKING OF SMART CITIES ACCORDING TO 2018/2019 TOP 50 SMART CITY GOVERNMENT RANKINGS
ANNEX 3. RANKING OF SMART CITIES ACCORDING TO DATA FROM THE VIENNA UNIVERSITY OF TECHNOLOGY
ANNEX 4. RANKING OF SMART CITIES ACCORDING TO IESE DATA
ANNEX 5. POSITION CHANGES IN THE IESE/CITIES IN MOTION RANKING, 2016-2018.
ANNEX 6. CITIES’ POSITIONS IN VARIOUS SMART CITY RANKINGS
ANNEX 7. GLOBAL LEADERS IN IMPLEMENTING INDIVIDUAL SMART SOLUTIONS
ANNEX 8. ASSESSMENT OF CITIES' READINESS TO IMPLEMENT SMART SOLUTIONS
List of figures
Fig. 1. Segmentation of Smart City solutions
Fig. 2. Main technological solutions of Smart City
Fig. 3. Analysis of the development stage of market’s key technologies that determine the Smart City solutions development prospects
Fig. 4. Analysis of the penetration degree of 5G solutions to markets in various regions of the world
Fig. 5. Penetration degree of the main technological solutions in the field of the Internet of things in various industries in the world as of 2018, %
Fig. 6. Dynamics of the number of Smart City development strategies published since 2008, pieces.
Fig. 7. Comparative analysis of the quality of Smart City strategies
Fig. 8. Global Smart City solutions market volume in 2018-2025, billion dollars
Fig. 9. Dynamics of the number of smart cities in China
Fig. 10. Segment structure of the global Smart City solutions market by 2025
Fig. 11. Average annual Smart City market growth rate by segments in 2012-2020, %
Fig. 12. Competitive environment structure in the global Smart City market (type 1 Segmentation)
Fig. 13. Competitive environment structure in the global Smart City market (type 2 Segmentation)
Fig. 14. Competitive environment structure in the global IoT market
List of tables
Table. 1. Forecasted volumes of the global IoT device market for the period up to 2030
Table. 2. Indicators of Smart City strategy development by cities in 2017-2019
Table. 3. Key drivers and limitations of the Smart City market in a number of countries