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Smart Cities Initiatives Spending to Reach $124 Bn in 2020: IDC

February 17, 2020 / Rashmi Singh
SHARESHARESHARE

At a Glance:

  • Global spending on smart cities initiatives will total nearly $124 billion in 2020

  • Singapore will remain the top investor for smart city initiatives, followed by Tokyo, New York, and London.

  • IDC has also released its 2019/2020 Global IoT Decision-Maker Survey: Australia and New Zealand Insights report.

The global population continues to grow and age as people live longer. This calls for innovative ideas to manage the planet’s resources and deliver services to everyone. More than half of the world’s population lives in cities and this number is steadily rising, resulting in enormous challenges. More people, more traffic, more pollution, more energy consumption more water usage, and more waste. At the same time, people have greater access to information, products, and services that are increasingly global and they expect these to be tailored to their individual needs. Smart cities are supposed to help cope with these problems.


IoT is transforming today’s cities into smart cities of tomorrow. Smart cities that leverage technology to serve people, making city more livable, more alive. The city of the future is smart, it’s entirely interconnected, start with an information network, will regulate traffic, save energy, fight crime, assisted by big data and the Internet of Things, promoting sound, sustainable development.


Learn more:  How IoT-based devices are helping cities grow smarter


New data from IDC’s shows global spending on smart cities initiatives will figure nearly $124 billion this year, an increase of 18.9% over 2019 as per a new forecast from IDC, which also says that governments is trying to keep pace with and take advantage of new technologies.


Smart grids Still Attract the Largest Share of Investments

As per the research firm in its latest Worldwide Smart Cities Spending Guide, the top 100 cities that invested in smart initiatives in 2019 represented nearly 29% of global spending. Data-driven public safety and intelligent transportation represented around 18% and 14% of overall spending, respectively.


The Spending Guide beyond 200 cities reveals that less than 80 cities are investing over $100 million per year. Around 70% 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.

Serena Da Rold, Program Manager at IDC’s Customer Insights & Analysis group.

Looking at the largest use cases, electricity and gas Smart grids will “still attract the largest share of investments, although their relative importance will decrease over time as the market matures and other use cases become more mainstream”, IDC said in a statement. Solid visual surveillance, excellent public transportation, smart traffic management, and connected back-office follow, these five use cases combined with smart grids currently represent over half of projected spending.


According to IDC prediction, vehicle-to-everything connectivity, digital twin and officer wearables will likely see the fastest spending growth over the next five years.


Learn more:Worldwide Smart Cities Spending Guide


Top Spenders

Singapore will remain the top investor in smart city initiatives. Tokyo will be the second-largest spender in 2020, driven by investments for the Summer Olympics, followed by New York City and London. These four cities will each see smart city spending of more than $1 billion in 2020.


On a regional basis, the United States, Western Europe, and China are predicted to account for more than 70 percent of global smart city spending to 2024, with Latin America and Japan seeing the fastest growth in spending in 2020". IDC reported. Meanwhile, APAC excluding Japan and China will makeup, just 11.8% of the market.


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.

Ruthbea Yesner, Vice President of IDC Government Insights and Smart Cities and Communities.


Additionally, the company has also published its 2019/2020 Global IoT Decision-Maker Survey: Australia and New Zealand Insights report. According to the report, one of the key insights for IoT vendors is that firms say that their top vendor selection criteria are not technology-related; it is relationship related. Firms elect IoT vendors depending on their existing trusted commercial partnerships.


New Zealand organizations prefer to select vendors that they know. Enterprises are also looking for vendors with cost-effective solutions. Vendors that have strong relationships with customers in adjacent fields may find benefit in offering IoT. Conversely, IoT vendors may gain from partnerships with adjacent vendors that already have strong customer relationships. Vendors that can establish themselves as market leaders and put themselves in the eye of customers will generate business with new customers. They will create the opportunity to cultivate mutually beneficial relationships

Liam Landon, Associate Market Analyst at IDC

About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,100 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. IDC’s analysis and insight help IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly-owned subsidiary of International Data Group (IDG), the world’s leading tech media, data and marketing services company.


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