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The global smart infrastructure market size was USD 77.66 billion in 2020. The market is projected to grow from USD 97.20 billion in 2021 to USD 434.16 billion in 2028 at a CAGR of 23.8% during the 2021-2028 period. The global impact of COVID-19 has been unprecedented and staggering, with smart infrastructure witnessing a negative demand shock across all regions amid the pandemic. Based on our analysis, the market exhibited a stagnant growth of 9.9% in 2020 as compared to the average year-on-year growth during 2017-2019. The sudden rise in CAGR is attributable to this market’s demand and growth returning to pre-pandemic levels once the pandemic is over.
Smart infrastructure helps in establishing a smart community that integrates digital technology such as the use of information and communication technology (ICT) for delivering values of self-monitoring and accuracy in decision making for improving sustainability. The smart community facilitates smart type of infrastructure such as water and energy networks, transportation & mobility, data centers, buildings, streets, and others. This system includes the use of Internet of Things (IoT) devices such as connected sensors, lights, meters, which collect and analyze the data. This data is further used for improving infrastructure, public utility, and services.
COVID-19 Disrupted Global Value Chain Supply of Advanced Infrastructure Products
The global health emergency caused by the sudden outbreak of COVID-19 viral infection has significantly affected numerous verticals. The COVID-19 impact has resulted in global lockdown, which has caused disruptions and changes to global production networks and cost nearly USD 50 billion to the global value chain in early March 2020 when the pandemic has not even expanded globally. Furthermore, the sudden drop in global trade has caused vast implications for economics and societies, resulting in subsequent fall in job opportunities, income, and price fluctuations.
The pandemic has struck the global value chain by three channels. Firstly, the huge distribution of transportation system got disconnected with the logistics access of the supply chain, where the global value chain accounted for more than 60% of global trade and affecting all the subsequent production activities. Furthermore, as many countries have adopted social distancing and border control measures, this has significantly reduced the transportation of goods and services and resulted in serious disruption in the supply chain.
The second channels that impacted the global value are the disruption of the supply side of production. Other than that, the closure of transportation and workplaces has also put a significant constraint on supply-side production. The third channel through which the global value chain was impacted is the sudden drop in demand and cancellation of orders from March 2020, when the virus spread globally.
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Rising Technological Advancement in Smart Grid Technology to Drive Market Growth
The substantial growth of smart community services which facilitate advanced infrastructures, such as energy networks, transportation, data center, energy, buildings, and others has emphasized the best practice for smart cities by implementing integrated asset management solutions. For example, the smart grid infrastructure is equipped with power grids and information and communication technology (ICTs), which has enabled the effective use of electricity use and grid operation based on sustainability principles.
For instance, in August 2020, ABB developed a seamless platform associated with clean energy generation systems and energy storage devices in China, which controls power generation with the help of distributed power management systems. This technological advancement has helped monitor various electrical and environmental parameters across the power distribution system, ensuring efficient power management strategies such as peak shaving and load transfer. At the real time, it has also led to intelligent distribution, along with metering and coordination control for creating a smart grid which benefits energy efficiency and energy saving.
Rising Implementation of Telecommunication Networks Acts as Market Drivers
Many industries in large cities use the smart infrastructure model for enhancing and improve the quality of sustainable life, mobility, healthcare, energy, and others. The telecommunication infrastructure adds up to the development of advanced infrastructure, and this model includes various technologies, such as the Internet of Things (IoT), Wireless Sensor Networks (WSNs), and Cloud Computing which plays an important objective for efficient network and communication.
However, access to this infrastructure and data communication is the key component for smart city infrastructure, and cities ensure that the communication platforms and infrastructure are established and accessible openly and efficiently. For instance, in May 2021, Mavenir worked with National Telecom Public Company Limited (NTI), Cisco Systems, to build the future of networks with cloud-native, open architecture software that has made Ban Chang Thailand’s first fully functioning 5G based smart city.
Increasing Focus on Sustainability & Switching to Green Energy Resources to Fuel Growth
The growing urbanization has created a subsequently increased consumption of resources and has aroused numerous challenges for smart cities, to obtaining sustainable solutions and improving environmental hazardous. The increasing concern about global warming and carbon emission has accelerated the increasing focus on green energies and controlling the carbon footprint.
For instance, on 19 April 2021, Israel’s ministry of energy has announced a plan for reducing the greenhouse gas emission effects by 80%. This plan includes shutting down coal-fired power plants, improving power grid technologies, and increasing electricity generation by renewable energies. In addition, The U.S. Environmental Protection Agency (EPA) is issuing plans for clean energy and implementation of smart grids, distribution networks, and others which are having a significant contribution in minimizing carbon emissions.
Furthermore, Hyundai Motor Company and Kia Motor Corporation have delivered mobility solutions by developing the world’s first predictive Information Communication and Technology (ICT) connected shift system, enabling the vehicle to automatically set on the optimal gear after identifying traffic and road conditions. In addition, Mitsubishi has leveraged the demonstration of the commercial application of V2G (Vehicle to Grid), which used electric vehicle (EVs) as an energy source. These factors are likely to drive the market growth.
Rising Cybersecurity Threats and Privacy Concerns over Telecommunication Technology to Restrain Growth
Smart infrastructure projects require funding from public and private resources. These advanced infrastructure models use ICTs services to communicate or optimize resources. Due to the constant interaction, big data plays a vital role in developing and building a smart infrastructure. However, this massive amount of data exchanged and integration between the system has aroused concern for privacy, security, and cybersecurity threats in smart type of infrastructure projects. In addition, due to the lack of policies and common standards, many cities are experimenting with integration problems on privacy and cyber threats.
For context, the smart infrastructure projects comprise three layers where data is being exchanged in large numbers, and smart government may use this to generate new insights. However, this data exchange has created a significant challenge: security policies, procedures, and other hidden security vulnerabilities throughout the smart city ecosystem, which has aroused the risk of threat actions in the system and disrupted the ground operations. For example, in 2020, the Australian transport company, Toll Group, was attacked by hackers and massive amounts of data, including financial reports, invoices, and the locking of the system with ransomware.
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Smart Grid Segment to Dominate owing to Detection in Local Power Usage Changes
Based on type, the market is segmented into Smart Grid, Smart Water Network, Intelligent Transportation Network, Intelligent Buildings, and Others.
The smart grid segment accounted for the major share of the market in 2020. Smart grid detects local changes in power usage and reacts automatically without the need for human intervention. Smart grid has excellent advantages over traditional distribution system such as it reduces electricity theft, electricity losses, cost, meter reading cost, reduces equipment failures, it reduces sustained outages, and reduces consecutively associated restoration cost and it reduces air emissions of carbon dioxide, sulfur dioxide, and nitric oxide. Hence smart grid contributes to keeping the environment green.
The intelligent transportation network segment is expected to grow as it is widely used in real-time parking management, electronic toll collection, emergency vehicle notification systems, automated road speed enforcement, speed alerts, variable speed limits, dynamic traffic light sequence, and collision avoidance systems.
The smart water network segment is the fastest-growing segment of the market in 2020, owing to its rising demand from commercial building infrastructure for a water management system. A smart water network helps to prevent the potential presence of Legionella bacteria in building plumbing systems with IoT flow monitoring and detect and fix wasteful leaks with flow monitoring.
Built Environment Segment to Dominate Attributable to Minimal Waste and Lower Environmental Impact
The built environment segment accounted for the major smart infrastructure market share in 2020. The term built environment encompasses all forms of building such as housing, industrial, commercial, hospitals, schools, and civil engineering infrastructure. In the built environment, the smart type of infrastructure is used to minimize waste with their lower environmental impact and use of renewable sources and materials. This is anticipated to contribute to the segmental growth in the forthcoming years.
Private and public facilities for electricity, data, gas, oil and petroleum products, water, storm water or sewage, wireless, as well as facilities that share poles, ducts, or conduits, and any connected infrastructure, make up the utility sector.
Smart transportation market includes the use of basic management systems such as car navigation, traffic signal control systems, container management systems, automatic number plate recognition, or speed cameras.
North America Smart Infrastructure Market Size, 2020 (USD Billion)
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The market has been analyzed across five key regions: North America, Asia Pacific, the Middle East & Africa, Europe, and Latin America.
North America is estimated to hold the largest market share worth USD 26.5 billion in 2020. This is attributable to the rapid-paced industrialization and urbanization in the region. Moreover, the increasing adoption of new technologies and solutions for addressing the escalating demand of inhabitants living, driving, working, is creating growth opportunities for developing smarter infrastructure and delivering a flexible solution. For instance, Intel and the City of San Jose are collaborating for implementing Intel’s IoT smart city demonstration platform for City’s green vision initiative by creating environmental sustainability and enhancing the quality of life. Moreover, the Array of things (AoT) project was initiated in Chicago to improve the living experience by collecting real-time data.
Asia Pacific is anticipated to hold the second position in the market during the forecast period. Asia Pacific has continuous acceleration for smart cities compared to other regions due to the extensive availability of IoT sensors and IT infrastructure. Developed countries such as Singapore, Hong Kong, Japan, Thailand, Australia, and others are piloting many smart city concepts by offering blueprints of emerging Asia cities, particularly those with rapidly aging populations. For instance, Thailand has introduced The Eastern Economic Corridor (EEC) for transforming three Thai provinces into smart cities. Moreover, the country aims to achieve 100 smart cities by 2024.
During the forecast period, Europe is expected to increase at an exponential rate. The European Commission has developed two approaches that support the implementation of smart urban technologies. For example, the CITY KEYS project is developed for a smart city performance measurement system to overcome a regulatory barrier and performance monitoring factor. The project aims to validated and develop a framework for measuring performance for promoting a common, transparent, comparable monitoring for smart city solutions across European cities.
The evolution and perspectives for a smart city are transforming the cityscapes in South America. For example, In Santiago, the Chilean authorities have recognized the importance of clean mobility with the increasing air contamination and traffic congestion and aim for increasing the numbers of electric mobility by 2022.
The Middle East & Africa is the prominent region due to the growing demographics in urbanizations along with rapid expansion has led to gain sustainable smart cities traction across the region. For example, Masdar City of Abu Dhabi is the first smart sustainable city in the Middle East region. Moreover, Masdar city has used a combination of various technological innovations in the planning of architecture and energy along with smart water meters for helping wastewater.
Siemens to Focus on Expanding Its Product Line and Utilize Its Channels to Market New Products
Siemens is a multinational conglomerate that specializes in electrification, automation, and digitalization. Siemens is a leading supplier of systems for power generation and transmission, as well as medical diagnosis, and is one of the world's top developers of energy-efficient, resource-saving technology. The company's smart infrastructure products aid in the creation of safe and healthy indoor environments, the reduction of airborne and surface contaminants, the improvement of air quality through new HVAC maintenance strategies and advanced filtration, the management of energy performance by offsetting new HVAC guidelines with energy efficiency strategies and IoT technology, the provision of real-time updates to occupants regarding space utilization and emergency notifications, and the maintenance of healthy and safe indoor environments.
The smart infrastructure market has witnessed a large number of small and large players delivering products for numerous applications, which are shaping the competitive landscape of the market. These participants are operating at the country and regional levels, limiting them to cater to needs overseas effectively. However, some established organizations such as Schneider Electric (Spain), Indra (France), Sensus (U.S.), Aclara (U.S.), And Philips (Netherlands), among others, possess a significant integration with local sales partners to hold a substantial global presence.
An Infographic Representation of Smart Infrastructure Market
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The global smart infrastructure market research report presents a comprehensive assessment of the industry by offering valuable insights, facts, industry-related information, and historical data. Several methodologies and approaches have been adopted to make meaningful assumptions and views to formulate the market research report. Furthermore, the report covers a detailed analysis and information as per market segments, including type, application, and regions, helping our readers to get a comprehensive overview of the global industry.
Value (USD Billion)
By Type; By End-user; and By Region
Fortune Business Insights says that the global market size was USD 77.66 Billion in 2020 and is projected to surpass USD 434.16 billion by 2028.
In 2020, North America stood at USD 26.5 billion.
Registering a CAGR of 23.8%, the market will exhibit a decent growth rate during the forecast period (2021-2028).
By type, the smart grid segment is anticipated to hold a significant share and dominate the market during the forecast period.
The rising focus on intelligent buildings is the key factor driving the market growth.
Siemens, Schneider Electric, Indra, Sensus, Aclara, and Philips, among others, are the key participants operating in the market.
North America dominated the market in terms of share in 2020.
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