By 2021, spending on smart city tech is forecast to hit $135 billion, according to the International Data Corporation.
Across the globe, smart city technology spending is anticipated to hit $80 billion this year, and grow to $135 billion by 2021, according to a new report from the International Data Corporation (IDC).
Cities are digitally transforming to improve environmental, financial, and social aspects of urban life. The IDC defines smart city development as the use of smart initiatives combined to leverage technology investments across an entire city, with common platforms increasing efficiency, data being shared across systems, and IT investments tied to smart missions.
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"Smart Cities have recently evolved from a collection of discrete flagship projects to a sizeable market opportunity that will drive significant technology investments in 2018 and beyond," said Serena Da Rold, program manager in IDC's customer insights and analysis group. "IDC believes that the strategic priorities we identified will drive digital transformation across cities of all sizes, but our research demonstrates that there can be significant differences in the focus of investments across regions. The new spending guide is a powerful tool to help vendors identify where the best opportunities lie for each specific use case now and over the next several years."
This year, IDC projects the focus of smart initiatives will be intelligent transportation, data-driven public safety, and resilient energy and infrastructure. The two largest use cases, when measured by worldwide spending, are intelligent traffic and transit and fixed visual surveillance, followed by smart outdoor lighting and environmental monitoring.
The priorities shift depending on the region, however. Intelligent traffic and transit are expected to be the top priorities for investments in the US, Japan, and Western Europe. In China, fixed visual surveillance will be the leading use case, and it is the second largest in the US. In Japan, environmental monitoring will be more important than fixed visual surveillance, according to the IDC report.
Ruthbea Yesner, vice president of IDC government insights and smart cities programs, said, "IDC has a truly innovative approach to size the global Smart City market by identifying 41 key use cases that will have the most impact on local government over the next three years, and sizing and forecasting their growth. This approach provides technology suppliers with a detailed look at the opportunity in cities and offers a view into niche areas as well as broad market solutions."
The US will experience the larger smart city tech market, with spending forecast to reach $22 billion this year. China will be second with spending at nearly $21 billion, according to the IDC report.
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