Singapore is expected to remain the top investor in smart city initiatives, followed by Tokyo, New York City and London.
Global spending on smart city initiatives will total nearly $124 billion this year, an increase of 18.9 per cent over 2019, according to the International Data Corporation’s (IDC) latest Worldwide Smart Cities Spending Guide.
The report finds that the top 100 cities investing in smart initiatives in 2019 represented around 29 per cent of global spending. It says that while growth will be sustained among the top spenders in the short-term, the market is quite dispersed across mid-size and small cities investing in relatively small projects.
Serena Da Rold, program manager in IDC’s Customer Insights & Analysis group, said: “The Spending Guide provides spending data for more than 200 cities and shows that fewer than 80 cities are investing over $100 million per year. At the same time, around 70 per cent of the opportunity lies within cities that are spending $1 million or less per year.
“There is a great opportunity for providers of smart city solutions who are able to leverage the experience gained from larger projects to offer affordable smart initiatives for small and medium-sized cities.”
Global spending on smart city initiatives will reach $189.5 billion in 2023, according to IDC.
In 2019, a third of use cases related to resilient energy and infrastructure, driven mainly by smart grids, IDC said. Data-driven public safety and intelligent transportation represented around 18 per cent and 14 per cent of overall spending respectively.
Smart grids (electricity and gas combined) are still expected to attract the largest share of investments for now, although IDC predicts that their relative importance will decrease over time as the market matures and other use cases become mainstream.
Fixed visual surveillance, advanced public transportation, intelligent traffic management, and connected back office are the next biggest opportunities, IDC said.
The use cases expected to see the fastest spending growth over the next five years are vehicle-to-everything (V2X) connectivity, digital twins and officer wearables.
Singapore is forecast to remain the top investor in smart city initiatives in 2020, with Tokyo in second place, driven by the Summer Olympics, followed by New York City and London. These four cities are each expected to invest over $1 billion in smart city initiatives in 2020.
Regionally, the United States, Western Europe and China are predicted to account for more than 70 per cent of global smart city spending to 2024, with Latin America and Japan seeing the fastest growth in spending in 2020.
Ruthbea Yesner, vice president of IDC Government Insights and Smart Cities and Communities, said: “Regional and municipal governments are working hard to keep pace with technology advances and take advantage of new opportunities in the context of risk management, public expectations and funding needs to scale initiatives.
“Many are moving to incorporate smart city use cases into budgets or financing efforts through more traditional means. This is helping to grow investments.”