Tuesday, 13 September 2011

Smart City business is booming – ABI Research

According to the Smart Cities Market Data study from ABI Research, the global spend on Smart City technologies will grow from $8.1bn in 2011 to $39.5bn in 2016 – an average annual compound growth rate of over 37%.

According to ABI there are six dimensions that together make up a smart city: smart economy, environment, governance, lifestyle, transportation and community. Josh Flood, senior analyst at ABI Research, said that “Smart city concepts are really taking off globally. Currently, the largest spending on smart city technologies is for smart grids; however, over the next five years we will see a significant increase on spending for smart transportation technologies such as automatic vehicle ID and smart governance systems such as e-ID and ID document systems.”

According to the report there are currently 102 smart city projects worldwide, with Europe leading the way at 38, North America at 35, Asia Pacific at 21, the Middle East and Africa at six and Latin America with two.


The ABI figures give a useful indication of the scale of the technology opportunity in smart cities. Not that I doubted it – any market that IBM (and most other major IT services companies) is targeting so strongly must represent a significant opportunity. 

It’s not a clear cut market, though. For example, depending on the country, a city may not be directly responsible for the power supply, so the grid may not be an issue (although smart grids do constitute the lions share of the overall business that ABI has identified and I suspect that remains the case through to 2016). Cities will have greater or lesser control over several of the other factors that can make them ‘smart’.

But the real question is whether smart city technology is green ICT. Certainly some of the technology has that impact – smart grids and smarter, integrated transport systems hold the promise of much reduced emissions (at least in the long term). But smart cities are ultimately about making cities work better. Green factors are just one of the outcomes, but one that is likely to become increasingly important, and a greater technology focus, over time.

© The Green IT Review

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