Less than seven years from now, smart cities will create business opportunities to the tune of $2 trillion, according to the analyst firm Frost & Sullivan, driven by artificial intelligence, personalized healthcare, robotics and distributed energy generation.
The Asia-Pacific region is anticipated to be the fastest-growing region in the smart energy space by 2025. In Asia, more than 50 percent of smart cities will be in China, and smart city projects will generate $320 billion for China’s economy by 2025.
North America has been quickly catching up, with many Tier II cities, such as Denver and Portland, committed to building their smart city portfolios. The total NA smart buildings market, comprising the total value of smart sensors, systems, hardware, controls, and software sold, is projected to reach $5.74 billion in 2020.
Europe will have the largest number of smart city project investments globally, given the engagement that the European Commission has shown in developing these initiatives. The European e-hailing market, central to cities developing smart mobility solutions, currently generates revenues of $50 billion and is estimated to reach $120 billion by 2025.
In Latin America, cities actively developing smart city initiatives include: Mexico City, Guadalajara, Bogotá, Santiago, Buenos Aires and Rio de Janeiro. In Brazil, smart city projects will drive almost 20 percent of the overall $3.2 billion IoT revenue by 2021.
AI plays a key role in smart cities in the areas of smart parking, smart mobility, the smart grid, adaptive signal control and waste management. Major corporations, such as Google, IBM, and Microsoft, remain key tech innovators and the primary drivers of AI adoption.
“AI has been the most funded technology innovation space in the past two years, with large investments coming from independent and corporate venture capital companies,” explained Jillian Walker, visionary innovation principal consultant at Frost & Sullivan.
Along with AI, personalized healthcare, robotics, advanced driver assistance systems (ADAS) and distributed energy generation are believed to be the technological cornerstones of smart cities of the future.
“Currently most smart city models provide solutions in silos and are not interconnected. The future is moving toward integrated solutions that connect all verticals within a single platform. IoT is already paving the way to allow for such solutions,” added Vijay Narayanan, visionary innovation senior research analyst at Frost & Sullivan.
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