The global smart cities market size was estimated at USD 1.82 billion in 2024 and is anticipated to reach around USD 13.95 billion by 2034, expanding at a CAGR of 22.59% from 2024 to 2034.
Key Highlights
- In 2023, North America held a 33% share of the smart cities market.
- The Asia Pacific region is anticipated to grow at a remarkable CAGR of 29.2% during the forecast period.
- The smart transportation segment accounted for 21% of the market share in 2023.
- The environmental solution segment is expected to expand at a CAGR of 28.7% throughout the projected period.
- Within smart utilities, the energy management segment dominated with a 57% market share in 2023.
- The waste management segment is forecasted to achieve a CAGR of 28% between 2024 and 2034.
- In the smart transportation sector, the Intelligent Transportation System (ITS) segment led with a 47% market share in 2023.
- The parking management segment is predicted to grow at a CAGR of 26.3% during the forecast period.
- In smart governance, the smart infrastructure segment captured a 29% market share in 2023.
- The smart lighting segment is expected to expand at a CAGR of 25.9% from 2024 to 2034.
AI Impact on Smart Cities Market
AI is transforming smart cities by enhancing efficiency, sustainability, and overall urban living. It optimizes infrastructure, improves resource management, and enhances public services through data-driven automation and intelligent decision-making.
In transportation, AI-driven traffic management systems reduce congestion, optimize public transit, and enable autonomous vehicles, improving urban mobility. AI also enhances energy efficiency by predicting power consumption, optimizing smart grids, and integrating renewable energy sources.
Public safety benefits from AI-powered surveillance, facial recognition, and predictive policing, ensuring quicker emergency response. AI-driven governance streamlines city operations, automates administrative tasks, and improves citizen engagement through virtual assistants and chatbots.
Environmental sustainability is boosted by AI-enabled waste management, air quality monitoring, and predictive analytics for pollution control. In healthcare, AI supports remote patient monitoring, predictive diagnostics, and smart home automation, improving quality of life.
AI also plays a vital role in economic growth and urban planning by analyzing big data to optimize infrastructure investments and predict the impact of policies. As AI technology advances, smart cities will become more connected, efficient, and resilient, shaping the future of urban living.
U.S. Smart Cities Market Size and Growth 2024 To 2034
The U.S. smart cities market was valued at USD 341.88 billion in 2023 and is projected to reach approximately USD 3,250.85 billion by 2034, expanding at a CAGR of 23% from 2024 to 2034.
North America led the global smart cities market in 2023, capturing approximately 33% of the total market share. The region’s growth is driven by rapid technological advancements and digital transformation across key sectors, including telecommunications, IT, retail, and banking.
A well-established information and communication technology (ICT) infrastructure, coupled with strong partnerships between local and federal governments and ICT industry players, has played a crucial role in the market’s expansion. Additionally, the increasing deployment of civic connectivity infrastructure is further propelling market growth. Organizations such as the U.S. Department of Transportation and the Smart Cities Council actively support smart city initiatives through networking events and strategic collaborations, fostering continued development in the region.
Scope of the Smart Cities Market
| Report Coverage | Details |
| Growth Rate from 2024 to 2034 | CAGR of 22.59% |
| Market Size in 2023 | USD 1.48 Trillion |
| Market Size in 2024 | USD 1.48 Trillion |
| Market Size by 2034 | USD 13.95 Trillion |
| Largest Market | North America |
| Base Year | 2023 |
| Forecast Period | 2024 to 2034 |
| Segments Covered | By Smart Utilities, By Smart Governance, By Application, By Components, and By Technologies and Region |
| Regions Covered | North America, Europe, Asia-Pacific, Latin America, and Middle East & Africa |
Smart Cities Market Companies
- Siemens
- Cisco
- Hitachi
- IBM
- Microsoft
- Schneider Electric
- Huawei
- Intel
- NEC
- ABB
Recent developments in the smart cities market highlight significant advancements across various regions and sectors:
European Smart City Initiatives
Several Spanish cities have been recognized for their smart city strategies. Alcobendas, Bilbao, Las Rozas, and Sant Feliú del Llobregat were included in the “Top 21” Intelligent Communities of 2025 by the Intelligent Community Forum (ICF). This selection, from over 300 candidates worldwide, evaluated aspects such as digital connectivity, local strategies, innovation, sustainable management, citizen participation, and efforts to reduce the digital divide.
Siemens’ Enhanced Focus on Smart Infrastructure
Siemens has raised its mid-term profit margin target for its Smart Infrastructure (SI) unit to 16-20%, up from the previous 11-16%. This adjustment reflects the growing demand for building automation and energy-efficient solutions. The SI unit, responsible for managing heating, lighting, and building access systems, reported a profit margin of 17.3% in the last fiscal year, underscoring its significance within Siemens’ portfolio.
India’s Progress in the Smart Cities Mission
Launched in 2015, India’s Smart Cities Mission aims to develop 100 smart cities to promote citizen-friendly and sustainable urban areas. As of January 2025, 7,479 out of 8,058 tendered projects have been completed, utilizing ₹150,002 crores out of the total tendered amount of ₹164,368 crores. This progress demonstrates India’s commitment to enhancing urban infrastructure and services through smart initiatives.
