Following a projected victory for President-elect Joe Biden, the smart cities industry will be keeping a close eye on the development of artificial intelligence (AI), smart infrastructure, crowd analytics, smart grids and other technology-driven markets that are expected to see significant growth in the next five years.
A recent analysis from Frost & Sullivan found global smart cities can spur $2.46 trillion in business opportunities by 2025. Smart cities’ spending on technology is expected to grow at a CAGR of 22.7% to $327 billion by 2025, up from $96 billion in 2019. By 2030, more than 70% of this spending will be from the United States, Western Europe and China, the analysts found.
Frost & Sullivan defines a “smart city” as one that embodies at least five of eight parameters (identified below), which no city in the world has achieved so far, said Archana Vidyasekar, research director of the Visionary Innovation Group at Frost & Sullivan. “Under a Biden administration, efforts around smart cities can be expected to accelerate,” she said, with parameters such as smart infrastructure and healthcare being pillars of his campaign.
Frost & Sullivan predicted there will be more than 26 global smart cities that meet necessary parameters by 2025, with nine of those cities expected in the U.S. Strong governance will be key to drive development of these cities, Vidyasekar said, as will leadership in supporting municipal funding and helping to foster public-private partnerships.
The water sector — particularly investments in water infrastructure and the mitigation of drinking water contaminants — is one space the Biden administration is expected to particularly accelerate, Vidyasekar said, noting it is an “ideal candidate for digital transformation in the U.S.”
“While the specific details of their plans are yet to be revealed, we do know that one area of concern is PFAS pollutants,” she said. “A possible solution to this approach is the adoption of digital twins of water systems that can provide real-time insights to utilities on what-if scenarios and simulate events such as leaks, power cuts, and contamination.”
Transportation electrification will also be a priority for the Biden administration, particularly as he pushes to bring the electric power sector to 100% carbon-free power by 2035. Vidyasekar pointed out that Biden’s emphasis on reliable public infrastructure will bolster the use of charging infrastructure in non-residential areas, while the “coast-to-coast EV public charging network vision from the Biden government will also promote growth across key states.”
A number of public sector-facing organizations, such as the National Association of City Transportation Officials (NACTO), have come out in support of the president-elect since his victory was announced Saturday. In a statement, NACTO said the incoming Biden administration has the opportunity to “swiftly address the ongoing COVID-19 crisis, secure transit funding, and ensure that safe streets and high-quality public transit are a reality in all American cities.”
Meanwhile, the American Council for an Energy-Efficient Economy (ACEEE) said it welcomes Biden’s commitment “to scale up energy efficiency and confront the climate crisis.”
“His election offers the United States a historic opportunity to use energy efficiency to deliver the urgent and bold action needed to cut greenhouse gas emissions,” ACEEE said in a statement. “With robust investments, efficiency can halve U.S. carbon emissions by mid-century and buoy economic recovery by creating good-paying local jobs.”
This economic recovery has already been top of mind for the president-elect, who announced his Transition COVID-19 Advisory Board on Monday to mitigate the impacts of the public health crisis. Vidyasekar said the COVID-19 pandemic has “accelerated the movement towards smart cities” in making more citizens comfortable and accepting of technology, and it will be key for Biden to leverage this shift in consumer attitudes to drive recovery.