Pike Research is forecasting that the number of people living in cities will almost double – from 3.6 billion to 6.3 billion by 2050 – and the research firm expects that phenomenal growth will lead to similar growth in smart city initiatives, as well as a smart cities technology market expected to top $20 billion in annual value by 2020.
According to its report, Smart Cities, Pike anticipates there will be 37 megacities with populations of over 10 million by 2025, and that 22 of those cities will be in Asia.
The predicted technology market growth will be driven by the integration of technology into strategies for sustainability, citizen well-being and economic development.
"Over the last 12 months, the market has shifted away from being shaped largely by technology suppliers and city developers," said research director Eric Woods. "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."
Pike also notes that the smart city shouldn't be viewed as a traditional technology market, but rather as a complicated confluence of many existing markets as well as a conduit for new, emerging solutions that cross several traditional domains.
The big test for smart cities now is to confirm that innovative pilot projects can be implemented on a citywide scale and reproduced across cities. That success will be essential to guarantee momentum in "pathfinder" cities and encouraging other cities to take the same path. It also will be essential to persuade commercial partners and other stakeholders that those projects are economically sensible models that will generate long-term returns for both citizens and investors.