Smart Infrastructure Market (2024 - 2030)

Smart Infrastructure Market Summary

Smart infrastructure collects valuable information using connected devices, cameras, and sensors to assist urban planners, transport department officials, and city leaders, among others, to provide countless benefits to citizens or end-users, thus supporting smart infrastructure market growth. Companies operating in this market, such as Siemens, Honeywell International Inc., and International Business Machines Corporation, are notably investing in developing smart infrastructure solutions, creating robust opportunities for the smart infrastructure industry.

For instance, in November 2023, VMware announced a collaboration with International Business Machines Corporation (IBM) to integrate IBM Watsonx data and Artificial Intelligence (AI) on Red Hat OpenShift and VMware Private AI platform. This will enable their clients to improve operational efficiency of their AI-powered infrastructure and cloud platform.

Shifting focus of governments of various countries such as China, India, Germany, Brazil, and South Africa towards smart cities to elevate living standards of citizens is creating a positive outlook for smart infrastructure market. Governments in these countries are launching various smart city projects, which are anticipated to fuel market growth. For instance, in April 2022, the Government of Mpumalanga province in South Africa announced the transformation of Nkosi city, which is located near the Kruger National Park, into a smart city. The project is valued at around USD 5.24 billion and has received all government approvals.

Furthermore, various governments are organizing smart city exhibitions, which is propelling market growth. For instance, in October 2023, the Government of New York organized Smart City Expo USA 2023 in partnership with National League of Cities (NLC) and the African American Mayors Association (AAMA). The event was held at Pier 36 NYC, New York, and visited by various key market players who presented their latest technology-equipped smart infrastructure solutions, demos, and workshops, among others.

Market Concentration & Characteristics

The growth of market is very high and pace is accelerating. The smart infrastructure market is characterized by a high degree of innovation owing to rapid advancements in various technologies such as Artificial Intelligence (AI), Machine Learning (ML), big data analytics, cybersecurity, and Blockchain, among others. Further, emerging AI and cloud platforms are disrupting the current market and creating new opportunities for market stakeholders.

The market is also witnessing a high level of merger and acquisition (M&A) activity by key players. These players are focusing on acquiring technology providers to optimize their research & development (R&D) costs and expand their business presence into untapped markets.

The market is also subject to rules and regulations set by international, regional, and country-level regulatory bodies. The regulations for the next generation of emerging technologies are becoming stringent owing to rising privacy violations and manipulation in application algorithms. Owing to this, rules & regulations can significantly influence the development of the smart infrastructure market.

There are no direct substitutes for smart infrastructure solutions. The industry is relatively focused on narrow solutions that have few technology-driven substitutes and comparable product offerings. Companies are investing large amounts in research and development for the development of new products and technologies.

End-user concentration is one of the considerable factors that is anticipated to influence market growth. These solutions are witnessing high demand owing to their sustainability and enhanced efficiency. High need for customizable solutions to address specific needs of end-users creates challenges for emerging market players who are trying to establish their brand image.

End-user Insights

Non-residential end-users held the largest market revenue share in 2023. This high share can be attributed to the increasing adoption of smart infrastructure solutions in various commercial and industrial companies to digitize their business operations and improve consumer experience. Smart infrastructure solution consists of automation systems that contribute to streamlining operations and effective resource utilization. Furthermore, businesses integrate smart infrastructure solutions to strengthen the digital security and safety of their sensitive data.

The residential end-user segment is projected to witness highest growth rate over the forecast period. The segment growth can be attributed to the rise in demand for HVAC management, smart home lighting, smart meters, and smart door lock security systems to monitor & manage a building's electrical and mechanical systems. Moreover, the segment is anticipated to benefit from increased awareness about smart grids, growth of the consumer electronics sector, rising personal income in developing economies, and improved power line communication.

Offering Insights

Products led the market and held over 68.0% of global revenue share in 2023. This high segment share can be attributed to increasing adoption of smart infrastructure hardware & software such as smart grid solutions, Building Automation Systems (BAS), and Internet of Things (IoT)-based environmental monitoring system, among others, to improve the operational efficiency and reduce human errors. This segment is expected to dominate the market through 2030 and witness robust functionality due to rapid technological advancements in smart infrastructure solutions development.

Service offering is anticipated to witness the highest CAGR from 2024 to 2030 in the market for smart infrastructure. The considerable growth expected during the forecast period can be attributed to shifting focus of organizations on utilizing smart infrastructure services to optimize their budgets. Market players offer consulting, support & maintenance, and designing services to assist end-users in digitalizing their operations and maximizing their business profitability.

Regional Insights

North America dominated the market with a share of 30.84% in 2023. This high share is attributable to presence of established market players such as Cisco Systems Inc., Honeywell International Inc., Johnson Controls, & International Business Machines Corporation, as well as favorable government policies for digitalization. In the U.S., various non-residential sectors emphasize transforming their existing offices into smart offices. Such initiatives by end-user companies are anticipated to boost smart infrastructure solution adoption in this country during the forecast period.

Asia Pacific is anticipated to witness significant growth in the smart infrastructure industry. This growth is aided by high urbanization, shifting consumer focus toward remote management services through IoT technology, and increasing rate of internet penetration. Supportive government initiatives for smart cities and rising concerns regarding energy consumption among buildings are driving China's smart infrastructure market growth. Moreover, regional industries are focusing on automation to improve their business operations and reduce overhead costs.

Type Insights

Smart transportation system accounted for the largest revenue share in 2023. Current advancements in computing, communications sensors, and network speed have made it possible to overhaul the transportation infrastructure, vehicular operations, and traffic management. Advances in sensing technologies and telecommunications have improved the capabilities of transportation systems to ensure safety and security. Further, favorable policies and regulations, increased awareness of road safety, and a growing number of vehicles pose many potential opportunities in this segment during the forecast period.

Smart waste management is expected to register the fastest CAGR during the forecast period. The significant segment growth can be attributed to the rising usage of smart bin technology, implementation of Blockchain technology for tracking waste from generation to disposal, and development of automated sorting systems. Local governments, technology solutions providers, distributors, and system integrators are the major stakeholders in the implementation of city-level waste management projects. Different types of mobile apps are being developed to monitor the fill levels of bins and enhance user convenience.

Key Companies & Market Share Insights

Some of the key players operating in the market include ABB; Honeywell International Inc., International Business Machines Corporation; Siemens; and Cisco Systems, Inc.

• ABB offers smart infrastructure solutions for the management of water, energy, healthcare facilities, and communications, among others. ABB’s Asset Manager and Ability Energy Manager are cloud solutions that offer asset and energy management functionalities through a single intuitive dashboard.

• Honeywell International Inc. utilizes its IoT-enabled command & control platform for city management. It offers various smart city applications for Geographic Information System (GIS)-based incident management, citizen engagement, and workforce dispatch.

Panamax Infotech, Huawei Technologies Co., Ltd., and Dynamic Ratings, Inc. are some of the emerging market participants in the smart infrastructure market.

• Panamax Infotech provides Smart Infrastructure Solutions (SIS) that includes Integrated Command and Control Centre (ICCC), smart surveillance, smart transport & mobility solution, and smart healthcare solution.

• Dynamic Ratings specializes in designing and developing smart infrastructure solutions such as EV charging systems, outage detection systems, and Distributed Energy Resources (DERs).

Recent Developments

• In September 2023, Huawei Technologies Co., Ltd. launched smart infrastructure solutions such as Intelligent DC OptiX, an ultra-broadband solution, and CloudEngine XH, the company’s AI Computing DCN Switch Series to enable enterprises to digitize their business operations

• n August 2023, Honeywell International Inc. announced that it would be providing its City Suite Software for a smart city project handled by Atlanta BeltLine that includes the redevelopment of 22 miles of railroad in this city. The software will help smart city developers display data from multiple points across the whole area in a single unified view

• In June 2023, ABB strengthened its smart home product portfolio with the acquisition of the smart home solution provider Eve Systems GmbH for an undisclosed amount. The acquisition will help ABB improve its brand image in North America and Europe

Smart Infrastructure Market