Europe Smart Cities Market Size, Share & Trends Analysis Report By Application (Smart Utilities, Smart Governance, Smart Transportation, Smart Healthcare), By Country, And Segment Forecasts, 2024 - 2030

Europe Smart Cities Market Size & Trends

The Europe smart cities market size was estimated at USD 212.5 billion in 2023 and is expected to grow at a CAGR of 22.7% from 2024 to 2030. This growth is attributed to the growing urbanization, the need for effective resource management, and the development of cutting-edge technologies such as the Internet of Things (IoT), artificial intelligence (AI), and big data analytics. In addition, the advancement of European nations into smart cities is facilitated by cooperative activities among governments, organizations, and regions, as demonstrated by programs such as the European Innovation Partnership on Smart Cities and Communities.

Europe accounted for 28.4% of the global smart cities market share in 2023. An urban setting known as a "smart city" uses cutting-edge technology to improve the standard of living for its citizens and boost general effectiveness in a number of city administration areas. Infrastructure, services, and communication are optimized by integrating data analytics, the Internet of Things (IoT), and information and communication technology (ICT). Driven by a rise in technical innovation and sustainable urban development initiatives, the Europe smart city market is expanding and changing significantly. Across the continent, cities are adopting intelligent solutions to improve sustainability, efficiency, and the standard of living for their citizens.

Moreover, investments in research and innovation, the development of policies to achieve triple-bottom-line gains, and the leveraging of emerging technologies in transport, energy, and ICT present significant growth opportunities for the European market. Furthermore, the European Court of Auditors' special report on smart cities in Europe provides a comprehensive overview of the current state of smart city initiatives across the continent. It covers the types of smart city solutions being introduced, the challenges faced by cities, the support provided by the European Commission, and future smart city projects. The report also includes a survey conducted by the European Court of Auditors that focused on the development and obstacles of smart city initiatives. It also highlighted the main funding sources for future smart city projects, with 50% coming from EU funds, 43% from local economies, and 10% from other sources.

Application Insights

The smart utilities segment dominated the market with the largest revenue share of 28.5% in 2023. This can be attributed to the rising awareness of the environmental impact of energy consumption and the need for sustainable energy practices are also encouraging both residential and commercial users to embrace smart electric meters, further enhancing market expansion across Europe. The region's strong commitment to sustainability and reducing carbon emissions, led to extensive investments in smart grid infrastructure, with smart electric meters playing a crucial role.

The smart governance segment, on the other hand, is expected to grow rapidly in the coming years owing to the rising implementation of advanced technologies such as IoT and AI, increasing government support and investments in smart city initiatives, and the requirement for effective and transparent public services to improve citizens' quality of life. Additionally, the rising demand for sustainable urban development and resource management is also contributing to the segment growth.

Smart Utilities Insights

Energy management led the smart utilities segment and accounted for the largest revenue share of 55.3% in 2023. This can be attributed to the EU's "Fit for 55" plan, which aims to reduce greenhouse gas emissions and energy consumption by 2030. Furthermore, the growing adoption of smart meter data, Distributed Energy Resources (DERs), and energy-efficient technologies are key factors driving the segment's growth.

The water management segment registered significant growth in 2023. This can be attributed to government initiatives, such as the Smart Water Management Platform (SWAMP) project, the need to address water shortages and aging infrastructure and the growing adoption of smart water technologies.

Country Insights

UK Smart Cities Market Trends

The smart cities market in the UK dominated the regional market and accounted for the largest market share of 22.7% in 2023. This growth is attributed to the rising demand for smart solutions in areas such as energy management and transportation. Furthermore, government support and investment in smart city development, including promoting the adoption of technologies such as IoT, AI, and 5G, is further driving the growth of the market.

Germany Smart Cities Market Trends

The Germany smart cities market witnessed significant growth in 2023 owing to advancements in digital technologies and emerging startups. In addition, the automation of operations in transportation, government institutions, and residential and commercial sectors reduces costs, enhances safety, and improves residents' quality of life, thereby supporting market growth in the country.

Key Europe Smart Cities Company Insights

Market players in Europe are adopting various strategies, such as increasing incentives for renewable energy projects, promoting digitalization, and fostering innovation through public-private partnerships and financial incentives. Some of the key players in the market include AGT International; AVEVA Group plc; Honeywell International Inc.; Osram GmbH; SAP SE; and Siemens AG.

• AVEVA Group plc is a leading provider of software solutions for engineering, design, and information management. The company caters to customers in diverse industries, including petrochemicals, building and infrastructure, pulp and paper, marine and offshore, power & utilities, chemical processing, mining & mineral, fabrication, pharmaceutical, oil and gas, and processing. In addition to its software offerings, AVEVA also provides comprehensive product support and training services to its clients.

Recent Developments

• In April 2024, AVEVA collaborated with Newpoint Trillium Management, LLC, to create a digital twin for clean hydrogen and manufacturing projects. The partnership leveraged AVEVA's Connect platform and EPC 4.0 solutions to create a cloud-based, data-driven framework. This unified approach enabled seamless tracking of processes from design to processes and maintenance, enhancing the projects' effectiveness and transparency.

• In July 2023, Siemens AG announced a strategic partnership with PRODEA Investments, a leading real estate investment company based in Greece. This partnership aims to implement Siemens AG’s Building X solutions, which provide a scalable platform to manage, digitalize, and optimize building operations. The primary objectives of this partnership are to reduce PRODEA Investments’ carbon footprint and drive digital transformation across its under-development and existing building assets. This collaboration is expected to contribute to the development of high-tech investments in the real estate sector, leveraging technology as an accelerator of sustainability.

Europe Smart Cities Market Report Scope

Europe Smart Cities Market Report Segmentation

This report forecasts revenue growth at a country level and analyzes the latest industry trends in each of the sub-segments from 2018 to 2030. For this study, Grand View Research has segmented the Europe smart cities market report based on application and Country:

• Application Outlook (Revenue, USD Billion, 2018 - 2030)

  • Smart Governance

  • Smart Building

  • Environmental Solution

  • Smart Utilities

    • Energy Management

    • Waste Management

    • Water Management

  • Smart Transportation

  • Smart Healthcare

• Smart Utilities Outlook (Revenue, USD Billion, 2018 - 2030)

  • Energy Management

  • Waste Management

  • Water Management

• Country Outlook (Revenue, USD Billion, 2018 - 2030)

  • Europe

    • Germany

    • France

    • Italy

    • Spain

    • Russia

    • UK

    • Nordic Countries