The global market for smart cities engineering and construction services is set for an unprecedented boom driven by the rise of AI and IoT, coupled with sustainability policies and rapid urbanization
Astute Analytica forecasts that revenue in the smart cities construction market will ramp up from $114.3bn in 2021 to $453bn by 2030. The sector is registering growth at a CAGR of 16.5% over the forecast period of 2022-2030.
Key market drivers
The report said several factors are driving the rapid growth of smart cities construction and engineering services:
- Technological advancements: The advent of IoT, AI and big data analytics is revolutionizing urban planning and infrastructure development, enabling cities to become more efficient and responsive.
- Government initiatives: Increasing investments by governments worldwide in smart city projects are fueling market growth. Policies aimed at enhancing urban sustainability and resilience are also driving demand for smart engineering and construction solutions.
- Sustainability goals: Growing awareness of environmental issues and the need for sustainable urban development is propelling the adoption of green building practices and smart energy solutions.
- Urbanization: Rapid urbanization, particularly in emerging economies, is leading to the expansion of urban areas, necessitating the development of smart infrastructures to support the burgeoning population.
The Asia-Pacific region is anticipated to dominate the market, driven by significant investments in smart city projects in countries such as China, India and Japan.
North America and Europe are also expected to witness substantial growth, supported by advanced technological infrastructure and proactive government policies.
Market segmentation
The smart cities construction and engineering services market can be broadly categorized into the following segments:
- Smart infrastructure: Encompassing smart grids, intelligent transportation systems and automated building systems.
- Smart governance: Involving e-governance solutions and smart public safety systems.
- Smart energy: Focused on renewable energy integration and smart grid technologies.
- Smart mobility: Including electric vehicles, shared mobility solutions, and smart parking systems.
Smart cities: Challenges and opportunities
Despite the promising growth, the market faces challenges such as high initial costs, cybersecurity concerns and the need for standardization across technologies and platforms.
However, these challenges also present opportunities for innovation and collaboration among stakeholders to develop cost-effective, secure and interoperable smart city solutions, the report said.
Future outlook
The future of the smart cities construction and engineering services market looks bright, with continuous advancements in technology and growing support from governments and private enterprises.
As cities worldwide strive to become smarter and more sustainable, the demand for innovative engineering and construction solutions is expected to skyrocket.
Industry collaboration and innovation
Collaboration between technology providers, construction companies and urban planners is essential to realize the full potential of smart cities, the report said.
Innovations in materials, construction techniques and digital technologies will “play a critical role in shaping the urban environments of tomorrow”.
