Smart City Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Component (Hardware, Software, Service), By Functional Area (Smart Infrastructure, Smart Governance & Smart Education, Smart Energy, Smart Mobility, Smart Healthcare, Smart Buildings, Others), By Region, and By Competition, 2020-2030F

Market Overview

The Global Smart City Market will grow from USD 601.00 Billion in 2024 to USD 2418.68 Billion by 2030 at a 26.12% CAGR. The Global Smart City Market encompasses an urban development paradigm leveraging information and communication technologies, Internet of Things devices, and data analytics to optimize city operations, enhance public services, and improve resident quality of life. Market growth is primarily driven by accelerating urbanization, which mandates efficient resource management and sustainable infrastructure, alongside increasing government initiatives aimed at modernizing urban environments and improving civic services. According to the International Telecommunication Union (ITU), in 2024, over 200 cities globally have formally adopted the United for Smart Sustainable Cities (U4SSC) Key Performance Indicators, reflecting widespread commitment to intelligent urban development.

However, a significant challenge impeding market expansion involves the substantial initial capital expenditure required for deploying comprehensive smart city infrastructure and integrated technological platforms. This financial requirement can present a considerable barrier for municipalities seeking to implement extensive smart city projects.

Key Market Drivers

Rapid urbanization and persistent population growth represent a primary impetus for the global smart city market, generating significant pressures on existing urban infrastructure and public service delivery. As cities absorb a larger proportion of the global populace, there is an escalating requirement for efficient resource management, improved sustainability, and enhanced livability across sectors such as transportation, energy, and public safety. This demographic shift necessitates transformative solutions. According to the World Bank, in 2024, the urban population constituted 57.7% of the total global population, underscoring the extensive scale of this concentration and the imperative for cities to evolve sustainably. Simultaneously, advanced technological capabilities, particularly in the Internet of Things, artificial intelligence, and sophisticated connectivity solutions, provide the critical tools needed to address these complex urban demands. The proliferation of interconnected sensors, robust data analytics, and high-speed communication networks facilitates real-time monitoring, predictive modeling, and automated system management. According to GSMA Intelligence, in March 2024, the enterprise segment accounted for 10.7 billion IoT connections, highlighting the profound integration of connected technologies into modern urban and industrial environments to create responsive and adaptive city operations.

These fundamental drivers are propelling widespread investment and project implementation in smart city solutions globally, signifying a concerted effort to create more resilient and efficient urban environments. The confluence of demographic shifts and technological innovation is not merely theoretical but translates into concrete development. According to C40 Cities, in February 2024, the Reinventing Cities competition had engaged over 3,500 businesses worldwide, with 40 innovative urban projects currently under development globally. This demonstrates active collaboration between cities and the private sector to deploy tangible smart technologies and sustainable urban planning strategies.

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Key Market Challenges

The significant initial capital expenditure required for deploying comprehensive smart city infrastructure and integrated technological platforms presents a considerable barrier to market expansion. Municipalities often face substantial financial hurdles in initiating and developing extensive smart city projects, encompassing everything from advanced sensor networks and high-capacity data centers to sophisticated software integration. This fundamental financial requirement directly impacts the pace and scale of urban modernization efforts globally.

This substantial investment directly hampers the growth of the Global Smart City Market by limiting the number of projects undertaken and the breadth of their implementation. Cities with constrained budgets find it challenging to allocate the necessary funds for these large-scale, long-term initiatives. According to a 2024 audit by the Court of Auditors in Italy, 12 planned intelligent transportation projects were abandoned due to an inability to secure co-financing, illustrating the direct consequence of insufficient capital. This financial impediment can lead to delays in crucial urban development, thereby decelerating overall market progression.

Key Market Trends

The "Global Smart City Market" is significantly influenced by the accelerating adoption of digital twin technology, which provides a comprehensive framework for urban planning and management. This trend involves creating virtual models of physical city assets and systems, allowing for real-time monitoring, predictive analytics, and scenario simulation to enhance operational efficiency and sustainability. According to the Digital Twin Consortium, in June 2024, the organization substantially expanded its global partnership with the Smart Cities Council to accelerate the adoption of digital twins across various urban verticals including smart airports, intelligent transportation hubs, and intelligent buildings. A notable instance of this trend is Siemens' €4.5 billion "Siemensstadt Square" project in Berlin, initiated in June 2024, which leverages a multi-sided digital twin to integrate data from the campus, buildings, and energy systems for sustainable urban development and improved decision-making.

Another pivotal trend shaping the market is the evolution of sustainable and electric mobility ecosystems. This focuses on integrating electric vehicles, advanced charging infrastructure, and smart public transportation solutions to reduce emissions and enhance urban livability. According to the International Association of Public Transport (UITP), in April 2024, a survey estimated that 52% of Europe's bus fleet would comprise clean energy vehicles by 2027, projecting a 6% increase in the total bus fleet by 2030. Reflecting this growth, EVgo announced in October 2024 plans to deploy 7,500 new high-speed DC charging ports across the US over five years, supported by a $1.05 billion loan from the U.S. Department of Energy, significantly expanding critical infrastructure to support the increasing adoption of electric vehicles in urban environments.

Segmental Insights

In the dynamic Global Smart City Market, the Software segment is experiencing rapid growth as cities increasingly rely on integrated digital solutions to address complex urban challenges. This acceleration is primarily driven by software's essential role in enabling real-time data collection and advanced analytics from interconnected devices and sensors, which is crucial for informed decision-making across various municipal services. Software platforms facilitate the centralization and optimization of urban operations, from intelligent traffic management and public safety systems to efficient resource allocation and environmental monitoring. Furthermore, software solutions are vital for enhancing citizen engagement and ensuring interoperability among diverse urban systems, aligning with the evolving regulatory frameworks focused on data governance and smart infrastructure standards.

Regional Insights

North America leads the global smart city market due to substantial investments in infrastructure modernization, sustainability initiatives, and technological advancements. The region benefits from robust government policies and funding support, exemplified by initiatives such as the U.S. Infrastructure Investment and Jobs Act, which drive extensive smart city project deployment. A highly developed information and communication technology sector, coupled with an advanced technological landscape, fosters the widespread adoption of artificial intelligence, the Internet of Things, and 5G infrastructure. Furthermore, a strong presence of technology firms and innovators, alongside early adoption of smart city technologies, enhances urban services across areas like transportation, energy management, and public safety.

Recent Developments

• In November 2025, Dahua Technology unveiled its next-generation smart city solutions at the 2025 Smart City Expo World Congress in Barcelona. These new solutions were powered by the company's Xinghan Large-scale AI Models, representing a significant breakthrough in applying artificial intelligence to urban management. The objective was to enable city operators to gain a deeper understanding of their urban environments, leading to safer, smoother, and more sustainable city operations. This development underscored Dahua's ongoing commitment to collaborating with global partners for digital transformation and building more livable cities.

• In February 2025, IBM announced a collaboration with C40 Cities through its Sustainability Accelerator program, focusing on developing AI-powered solutions to enhance urban resilience. This initiative aimed to create a data-driven tool to help cities analyze potential risks from extreme heat and urban heat island effects, including stressed energy resources and increased mortality rates. By empowering cities with adaptation strategies, the project sought to alleviate public health risks and economic burdens, ultimately strengthening resilience efforts in urban communities globally. This collaboration was one of five new organizations selected to participate in the accelerator.

• In October 2024, Huawei, in collaboration with partners including Freedo Technology, Isoftstone Smart Technology, and RayChange Technology, launched its National Smart City Solution at GITEX GLOBAL 2024. This initiative aimed to integrate advanced Information and Communications Technologies (ICTs) with China's smart city development experience to propel overseas smart city construction. The solution focused on building an integrated intelligent system that coordinates cloud, network, edge, terminal, big data, Artificial Intelligence, and IoT, facilitating efficient urban governance and self-optimization. The company emphasized creating a future-ready technical architecture for digital cities to streamline urban operations.

• In July 2024, Siemens initiated a substantial €4.5 billion smart city regeneration project in Berlin, designated as Siemensstadt Square, intending it as a global blueprint for urban brownfield development. Siemens committed €750 million of its own investment over the next decade to transform this historical industrial area into a modern business and residential district for approximately 35,000 people. The project leveraged digital twin technology, integrating campus, building, and energy twins to create a virtual replica of the district. This comprehensive approach aimed to optimize performance, enhance sustainability, and facilitate informed decision-making for advanced urban management.

Key Market Players

• Cisco Systems Inc.
• IBM Corporation
• Siemens AG
• Microsoft Corporation
• Hitachi Ltd.
• Schneider Electric SE
• Huawei Technologies Co., Ltd.
• Intel Corporation
• ABB Group
• Honeywell International Inc.

Report Scope:

In this report, the Global Smart City Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Smart City Market, By Component:

o   Hardware

o   Software

o   Service

• Smart City Market, By Functional Area:

o   Smart Infrastructure

o   Smart Governance & Smart Education

o   Smart Energy

o   Smart Mobility

o   Smart Healthcare

o   Smart Buildings

o   Others

• Smart City Market, By Region:

o   North America

§  United States

§  Canada

§  Mexico

o   Europe

§  France

§  United Kingdom

§  Italy

§  Germany

§  Spain

o   South America

§  Brazil

§  Argentina

§  Colombia

o   Middle East & Africa

§  South Africa

§  Saudi Arabia

§  UAE

o   Asia Pacific

§  China

§  India

§  Japan

§  Australia

§  South Korea

Competitive Landscape

Company Profiles: Detailed analysis of the major companies presents in the Global Smart City Market.

Available Customizations:

Global Smart City Market report with the given market data, TechSci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).

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