Smart cities put faith in ‘tech-first optimism’ as Covid-era tech-spend set to triple
Cities must keep faith in “tech-first optimism” as they grapple with the fallout from the coronavirus (Covid-19) pandemic in the next five years. A new forecast for smart-city spending in the period suggests they will embrace such a philosophy.
Frost & Sullivan has issued a new report that suggests spending on smart city solutions will grow at a compound annual rate of 22.7 percent to reach $327 billion by 2025, from $96 billion in 2019. More than 70 percent of global spending by 2030 will be from the US, Europe, and China, the company said.
At the same time, the market that grows up around new smart city infrastructure in the next five years will create business opportunities with a value of $2.46 trillion by 2025. In particular, Covid-19 will compel cities to focus on developing “collaborative, data-driven infrastructure” to enable new healthcare facilities and public security services.
Technologies like artificial intelligence and big data will be in high demand to combat the pandemic, with growing opportunities for crowd analytics, open data dashboards, and online city services, said Frost & Sullivan. The public and private sectors must hold their nerve, the company implied, that their tech investments will pay off.
“Now more than ever, the strategy of being technology-first, optimistic, and focused on ‘smart’ is critical,” commented Archana Vidyasekar, research director at Frost & Sullivan.
Vidyasekar explained: “While Covid-19 has largely been a health crisis, it has disrupted city ecosystems and infrastructure tremendously. Smart technologies offer innovative solutions that can reverse the damage and bring some respite, if not normalcy. For instance, digital contact tracing can play a critical role in empowering citizens with knowledge of Covid-impacted areas and promote safer urban movement.”
Frost & Sullivan reckons there will be more than 26 smart cities by 2025, with 16 in North America and Europe. It did not reveal how many cities it currently classifies as ‘smart’, but a recent presentation from the firm identifies 10 2025 candidates in Europe: London, Amsterdam, Paris, Barcelona, Vienna, Berlin, Oslo, Helsinki, Stockholm, and Copenhagen (or most capital cities in Western Europe). Again, it is unclear which of these already make the grade.
Almost all smart cities in the US and Europe have already invested in open-data initiatives during the Covid-19 pandemic, it said. The company reckons smart cities in the US and Europe will continue spending on 5G and autonomous and robotic technologies. It notes, China has renewed investments in 5G, smart grids, AI, data centres, and other smart city-related areas through its ‘new infrastructure initiative’, introduced in 2018.
Growing demand for crowd management and monitoring in smart cities will lead the crowd analytics market to grow by 20-25 percent by 2030; it had market revenues of $748.6 million in 2020. Crowd analytics can help ensure proper public healthcare services, traffic movement, and security and surveillance services across the smart city, it noted.
Smart cities have already invested in contact tracing wearables and apps, open data platforms, autonomous drones, and crowd analytics to fight the pandemic. Post Covid-19 investment in smart projects like smart grids, intelligent traffic management, autonomous vehicles, smart lighting, e-governance services and data-enabled public safety and security will gain traction.
Malabika Mandal, industry analyst at Frost & Sullivan, said: “Smart cities will focus on data-driven and connected infrastructure, which will lead to higher adoption of technologies like AI and 5G. They will prioritize more digitalized services and a strong data analytics infrastructure, leading to increased spending toward technology.”