Report: Rapid Growth in Smart Cities Market and Why Cities Can’t Avoid It
The worldwide smart cities market hasn’t quite reached $1 trillion yet, but a new research report forecasts that another major milestone won’t be far behind. Frost & Sullivan predicts the global market will be worth $1.56 trillion by 2020.
That’s rapid growth for a market that was barely worth a half-trillion three years ago, but the report says given the population trends, cities no longer have a choice in the matter. They will have to become smarter.
In developed regions, cities will likely hold 81% of the total population by 2025, according to the forecast. That urbanization places tremendous strain on city resources, forcing them to abandon their inefficient management silos for collaboration driven by real-time data.
Energy likely to post powerful growth
While the overall market is expanding, smart energy is forecast to post the biggest gains. By 2025, Frost & Sullivan predicts that smart energy will make up nearly a quarter of the overall smart cities market, posting a compound annual growth rate of nearly 29%.
The growth in smart energy comes as cities scramble to invest in smart grids and intelligent energy solutions to keep up with the demand for reliable power. Distributed energy generation has doubled over the past decade, and the report says energy storage is a key area to watch over the next decade.
Buildings are getting smarter
Ten years from now, smart buildings are forecast to comprise 7% of the total market, and sensors will be a big part of that growth. The report forecasts that in two years, the value of sensors sold will be double what it was two years ago.
A lot of the smart building growth is the result of environmental demands, which is prompting innovation out of necessity. The report highlighted work in Brisbane to share a cooling system among several buildings. A centralized plant would chill water during off-peak periods, and send the cool air into the connected buildings as needed during the day using a network of underground pipes.
The approach is expected to result in energy savings of 30%, and has worked in certain parts of Europe and Asia. But this project would be the first of its kind in Australia, and the study points out that ideas like this will become more common as more demands are placed on urban areas.
Finding green in waste
Smart water and waste management is another area that’s growing fast. As populations swell, cities will have to become smarter about what they do with all the waste. Some governments have turned waste into a huge opportunity. In Sweden, just 1% of its waste is sent to landfills. In fact, it has to import garbage from other countries to power its energy plants. It’s a double win for Sweden. It has an energy source — and other countries are paying for it.