- Global spending on smart city initiatives will total nearly $124 billion this year, according to a new forecast from the International Data Corporation (IDC) Worldwide Smart Cities Spending Guide. That $124 billion mark would represent an increase of 18.9% over 2019 spending.
- Last year, the top 100 cities investing in smart initiatives worldwide accounted for 29% of global spending. While IDC expects them to keep leading the way in the short-term, mid-size and small cities are also investing in smart city projects, albeit smaller ones than some larger counterparts. IDC expects Singapore to remain the top smart city investor in 2020, followed by Tokyo, New York and London. Those four cities will account for more than $1 billion in smart city spending, IDC said.
- IDC defines more than 35 use cases that encapsulate smart city spending, including on areas like smart kiosks, "advanced" public transit, intelligent traffic management and smart lighting. Smart grids are the use case that still attracts the most investment, although it expects spending to slow as the market matures and other use cases become more mainstream, IDC said. Data-driven public safety and intelligent transportation also attract heavy investment.
While the largest and most advanced cities continue to lead the way on smart city spending, the number of mid-size and small cities looking to invest in smart initiatives points to opportunities available for both the public and private sector, IDC notes.
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 in IDC's Customer Insights & Analysis group, said in a statement.
Mid-size cities are often viewed as places with increasing potential, especially in the United States, which has traditionally been dominated by jurisdictions in Silicon Valley and elsewhere. In those cities, investments in smart infrastructure can be smaller but have just as big an impact. And with regional collaboration across municipal and even state lines, those impacts can be even greater, experts say.
It is also notable that Tokyo will be one of the world's largest spenders on smart city initiatives. That has been driven in large part by the arrival later this year of the Summer Olympic and Paralympic Games, according to IDC.
Despite many cities’ concerns over the cost of hosting major international sporting events, some see them as an opportunity and an incentive to upgrade their infrastructure. Los Angeles’ efforts to prepare for the 2028 Games, for example, are already well underway.