The next decade of smart city growth
Transportation and energy upgrades are expected to be the big drivers of smart city spending over the next decade.
Why it matters: Global spending on smart city projects will reach nearly $124 billion this year, an 18% increase over 2019, according to IDC, a market research firm.
The big picture: Singapore, Tokyo, New York and London are expected to be the biggest spenders (~$1 billion each) on smart city projects this year.
- While about a third of global investment has come from the biggest cities, IDC expects small and mid-sized cities to continue to spend on smaller-scale initiatives (~$1 million or less).
Transportation: Research firm Kantar predicts that greener modes of transportation will represent nearly half of all trips taken in cities in 2030. Globally, cycling will increase by 18%, walking by 15% and public transit use will increase by 6%.
- Micromobility options are currently getting the most attention as e-scooters and e-bikes show up on sidewalks. This month, Lime committed to using 100% emission-free vehicles by 2030.
- Electric vehicles are expected to make up half of new car sales by 2040, per BloombergNEF, and McKinsey predicts that about $50 billion in investment in charging stations will be needed through 2030, Bloomberg reports.
Energy: Utilities are central to making cities more efficient — a key component of what makes a city "smart."
- Power grid upgrades are underway to handle the increased loads from EVs.
- 50% of utilities expect to significantly increase the amount of grid-scale solar through 2030, according to Utility Dive's 2020 State of the Electric Utility Survey.
Be smart: Intelligent grids and transportation systems need ubiquitous connectivity to respond to real-time demand and monitor traffic flows.
- Right now, 4G connectivity can power the technologies being piloted, but 5G networks will boost the capacity and efficiency of smart city projects as more come online.
- The 5G market is expected to be around $700 billion by 2030, per market research firm IDTechEx, powered by mobile services, fixed wireless services and Internet of Things applications.
What to watch: Cities hosting Olympic games — such as Tokyo this year and Los Angeles in 2028 — are investing heavily in infrastructure to accommodate the deluge of visitors, and will be see as test-beds for what works.