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IDC report expects spending to accelerate over the next five years, says Rene Millman.
Spending on technologies to enable smart cities programmes in Asia Pacific, excluding Japan (APeJ), is set to reach $ 28.3 billion in 2018, according to new figures released by IDC.
In its first Worldwide Semi-annual Smart Cities Spending Guide since it began tracking these projects in 2006, the analyst firm has looked at the technology investments associated with smart city use cases. IDC finds that as these initiatives gain traction, spending is set to accelerate and hit $ 45.3 billion by 2021.
“This research spans an exhaustive compilation of worldwide Smart City projects across 41 categories of use cases,” said Gerald Wang, head of Public Sector at IDC Asia Pacific.
“This is expected to aid both technology buyers and market suppliers to have a greater grasp of the broad trends and niche opportunities, as well as best practices in regional and global smart city programmes.”
Where the money goes
IDC predicts that the key investments for connected projects in APeJ will be in intelligent transportation, data-driven public safety, and resilient energy and infrastructure. Wang added: “A deeper dive suggests different prioritisation across first-, second-, and third-tier cities in the region”.
The report finds that intelligent traffic transit and fixed visual surveillance systems are already seeing a big push from governments in APeJ, in order to streamline traffic and make communities more secure. Together, these two use cases represent more than 36 percent of overall spending throughout the forecast period, says IDC.
However, use cases for Vehicle to Everything (V2X) connectivity and ‘officer wearables’ (such as Fitbits and smart glasses) will grow at a compound annual growth rate (CAGR) of 45 percent and 43.3 percent, respectively.
State/local government and transportation are the two leading adopters of smart city technologies. Services account for the highest single spending bloc overall, with a 32.5 percent share last year. The sector is likely to experience linear growth to hit $ 16.7 billion by 2021, according to IDC.
Hardware was the second largest technology group in 2017, with $ 31.7 billion of spending, followed by software (with an 18 percent share) and connectivity (with 17.8 percent). Throughout the forecast period, software is expected to grow fastest to reach $ 8.3 billion by 2021, according to IDC.
“With the fast influx of populations to urban areas in APeJ, it will be a challenge for all governments to supply sufficient fresh water, universal access to cleaner energy, the ability to travel efficiently from one point to another, and a sense of safety and security,” said Ashutosh Bisht, IDC’s research manager for Asia Pacific.
“These are the kinds of promises that smart cities must fulfil if they are to stay competitive and provide a decent quality of life to their citizens.”
Internet of Business says
This is one area where many Asian countries – including Japan – are streets ahead of much of North America and Europe. Fast-expanding cities in China, South Korea, and Japan, together with Singapore, are forging ahead with connected services, automation, smart transport, and more.
In some cases, they have a more relaxed and encouraging attitude to technologies such as pilotless air transport, while keeping pace with US achievements in autonomous and connected cars. As a result, the West has a real challenge on its hands to strike the right balance between legacy services, safety, and light touch regulation for the future.
That said, China in particular lacks regulations to protect its citizens’ private data from mass exploitation by government and others. In Europe, GDPR prevents initiatives such as China’s upcoming compulsory social ratings system, which seeks to control people’s behaviour via the way they use public services, transport, and other connected networks.
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