The global smart cities market has been forecast to increase at a compound annual growth rate (CAGR) of 15% over the next five years, rising to a value of $1.03 trillion by the end of 2017.
Smart cities can be identified (and ranked) along six main axes or dimensions: a smart economy, smart mobility, a smart environment, smart people, smart living, and smart governance.
These six axes connect with traditional regional and neoclassical theories of urban growth and development. In particular, the axes are based - respectively - on theories of regional competitiveness, transport and ICT economics, natural resources, human and social capital, quality of life, and participation of citizens in the governance of cities.
A city can be defined as 'smart' when investments in human and social capital and traditional (transport) and modern (ICT) communication infrastructure fuel sustainable economic development and a high quality of life, with a wise management of natural resources, through participatory action and engagement.
With 6.3 billion people expected to populate cities by 2050, and booming growth happening in developing countries, it's no surprise that cities are looking for tools to improve efficiency in everything from transportation to energy use. But it isn't just opportunistic tech companies pushing the technologies.
Over the last twelve months, the market has shifted away from being shaped largely by technology suppliers and city developers. Today, the market is being driven by the enthusiasm of city leaders.
Mayors and other city executives have seized on the smart city concept as a rallying point for the technological, commercial, and social innovation needed to meet the challenges and opportunities facing their communities.
The main challenge for smart cities going forward is to scale technologies from pilot projects to citywide projects. This will be vital to ensuring momentum in pathfinder cities and building confidence for other cities to embark on the same journey.
For more information on the global smart cities market, see the latest research: Global Smart Cities Market
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