By 2022, APEC’s Smart City Spending Will Reach $35.4 Billion

The latest IDC Global Semi-annual Smart City Spending Guide shows that by 2019, smart city initiatives in the Asia Pacific region (excluding Japan) will reach $35.4 billion, up 16.8% from the 2018 forecast. Comprehensive spending on smart city projects from Singapore, Beijing, Shanghai and Seoul is expected to exceed $4 billion this year.

“Before 2018, cloud solutions dominated the digital transformation needs of smart cities. Gerald Wang, head of public sector research at Asia Pacific, the International Data Center, said that as the city government moved from the initial digitally isolated cloud Integrated and inter-agency hubs, interconnected ecosystems such as transportation and public safety are becoming more and more needed. “Intelligent edges will also become a new stage in the development of mature smart cities. As edge-based smart solutions gain greater computing power, the cloud platform can be used as a grid computing architecture to fully coordinate and optimize the city's different computing power, thereby facilitating automation within the city.

Hardware spending is the highest, accounting for nearly 40% of total smart city-related spending in 2019. In terms of spending, services are the second largest technology group, followed by software and connectivity. Interestingly, service spending is expected to exceed hardware spending before the end of the forecast, with a five-year compound annual growth rate of 17.9% (2017-22).

Strategic priorities related to data-driven public safety, resilient energy and infrastructure, and smart transportation will bring most of the spending in 2019. Among the key strategic priorities for smart city investment, the top five use cases are fixed visual surveillance, advanced public transportation, intelligent traffic management, non-residential water (NRW) management, and smart outdoor lighting. The combined expenditure of these use cases accounted for 40.7% of the total investment in 2019. Similarly, networked back-offices and smart kiosks are key use cases in the areas of economic development, civic engagement and sustainable planning and management, and these areas will receive considerable investment.

China will account for the majority of Asia/Pacific smart city-related technology investment spending. As the demand for video information sources to track and monitor civic activities continues to increase, fixed video surveillance spending in 2019 will come primarily from fixed video surveillance.

The spending guide also reflects the use cases that IDC has observed in the market. Singapore is building its own digital twins, and South Korea has become one of the most connected countries in the Internet; other countries such as China, India, Australia and Indonesia are also taking steps to follow up on the adoption of the Internet of Things. In addition, India’s demand for technology investment is also increasing due to the increase in urban population.

“The Asia-Pacific region is the center of innovation, and governments are finally realizing that their energy and investments are concentrated on smarter technology choices, enabling cities across the region to manage growth and increasing market opportunities. IDC Asia Pacific IT Expenditure Team Senior Market Analyst Swati Chaturvedi said: "As more and more cities and communities begin to adopt better equipped, interconnected and sustainable lifestyles, IDC expects regional spending in the Asia Pacific region to accelerate during the forecast period.

IDC's Global Semi-annual Smart City Expenditure Guide quantifies the expected technology opportunities for smart city initiatives across regional and global scales. Consumption data can be used in more than 100 cities and 30 use cases, as well as the size of the entire smart city market. The Expenditure Guide is designed to provide IT vendors with insight into how this fast-growing market and how the market will evolve over the five-year forecast period.

About IDC Expenditure Guide

IDC's Expenditure Guide details key technology markets from a regional, vertical industry, use case, buyer, and technology perspective. Expenditure guides are available in PivotTable format or custom query tools, allowing users to easily extract meaningful information about each market by looking at data trends and relationships.

About IDC

International Data Corporation (IDC) is the world's leading provider of market intelligence, advisory services and information technology, telecommunications and consumer technology marketplaces. With more than 1,100 analysts worldwide, IDC provides global, regional and local expertise in technology, industry opportunities and trends in more than 110 countries. IDC's analysis and insights help IT professionals, business executives, and the investment community make fact-based technology decisions and achieve their key business goals. Founded in 1964, IDC is a wholly owned subsidiary of International Data Group (IDG), the world's leading media, data and marketing services company that activates and attracts the most influential technology buyers.