The global smart city market could reach to $1.5-trillion by 2020 and prove to be one of the biggest investment avenues for private investors and institutions, according to market consultancy firm Frost & Sullivan.
Smart Cities were defined as cities built on “smart” and intelligent” solutions and technology that will lead to the adoption of at least five of the eight parameters: energy, buildings, mobility, healthcare, infrastructure, technology, governance and education, and citizens.
“The capital-intensive task of transforming cities into seamless ecosystems is prompting governments to seamless ecosystems is prompting governments to explore revenue sources beyond internal bodies and join hands with financial intermediaries and private investors,” Frost & Sullivan said in an analysis released late Thursday.
“With the rising connectedness of things and people, the global smart city market could expand to $1.5 trillion by 2020 and prove to be one of the biggest investment avenues for private investors and institutions,” it added.
Stakeholders in developing countries often resort to direct financing through government allocations or international grants, with the latter particularly dependent on political and economic stability.
Stakeholders in developed economies, on the other hand, rely more on revenue-based financing models.
“Stakeholders from both types of economies have found great value in adopting the public and private partnership model, even though the terms of agreement may vary according to the region,” it said.
Frost & Sullivan said the creation of smart cities held wide implications for all industries offering public and private services, particularly in terms of energy, transportation, waste management, and water distribution.
In the Philippines, the Bases Conversion Development Authority has said that Clark Global City would be the country’s first smart city.
The BCDA has signed an angreement with Huawei to design the necessary information and communications technology infrastructure. The agency is also looking for Asian Development Bank assistance to link with providers of smart transportation technology.
Hitachi, meanwhile, is expected to provide a smart grid solution to Clark for clean power.