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Smart Government Market Snapshot (2023 to 2033)

Future Market Insights predicts that the smart government market is expected to generate revenues of US$ 12.96 billion in revenue by 2023, up from US$ 12 billion in 2022, growing at a compound annual growth rate of 17%. By 2033, the market is expected to reach a value of US$ 62.6 billion.

Increasing adoption of modern technologies, mobile applications, and trending social media accounts are stimulating the growth of the smart government market. A significant increase in investments in smart government projects and technologies is expected to further contribute to the growth of the market.

The market is supported by:

  • Technological advancements continue to progress
  • Infrastructures that are smart are in greater demand
  • Increased industrialization and urbanization
  • Investments by the government in the development of new products
  • Increasing use of smartphones
  • Smart development investments are on the rise
  • Security enhancements and the use of big data
  • Remote monitoring and network expansion
  • Transparency in data transfers
  • Increasing influence of public policies
  • Systems for planning government resources

Increasing demand for digital media and proactive wealth preservation strategies coupled with smart government technologies are expected to create a market for smart government products and services. With more smart solutions on the market, there will be a need for ongoing support and maintenance, which will drive the demand for professional services in the market.

Agile techniques are being adopted to develop various software programs, manage assignments, and deliver services for the smart government market. In addition, governments are using technology to enhance citizen engagement by facilitating two-way communication. Through online surveys, social media, and mobile apps, citizens can interact with the government and provide feedback for further development of the nation.

National Institute for Smart Government (NISG) assists the Central and State governments in the development of e-governance initiatives to make government more efficient and effective for citizens, businesses, and communities. Through further innovation in policies and business models, the smart government is also used to address affordability, environmental sustainability, and service challenges in the market. Connected information systems and communication networks will further grow the market for smart government.

According to market analysts, North America is projected to account for the largest share of services in the smart government market. In recent years, smart governments have gained traction due to the development of smart infrastructures and smart cities in the region. The adoption of the Internet of Things (IoT) and cloud computing is becoming more widespread throughout this region, creating growth opportunities for the market.

Due to the presence of a large number of technology hubs in the Asia Pacific region, this region will serve as the major growth engine for the market. A growing number of smartphones and connected devices will lead to Asia-Pacific's largest revenue share during the forecast period. Initiatives to enhance smart government are being spearheaded by the European Union. Several EU programs and initiatives have been launched to promote the adoption of digital technologies by governance units.

As a result of technological breakthroughs, governments are increasingly utilizing cloud technology. With the growing importance of security and data breaches, the market for smart government has grown rapidly in the past few years. For instance, in March 2019, Los Angeles' IT infrastructure was transformed with the mainframe being moved from its facilities to the Sacramento state data center of the California Department of Technology (CDT).

Providing real-time data and insights to governments will help facilitate data-driven decision-making, which will grow the smart government's market. Using this method, governments can monitor trends, predict problems, and make more informed decisions when dealing with these issues in the global world.

Data Points Key Statistics
Estimated Base Year Value (2022) US$ 12 Billion
Expected Market Value (2023) US$ 12.96 Billion
Anticipated Forecast Value (2033) US$ 62.6 Billion
Projected Growth Rate (2023 to 2033) 17% CAGR

This rise in urban population impacts city infrastructures and resources as governments are trying to cope up with the influx of new inhabitants and improve their living standards.

Therefore, they are looking forward to developing smart cities, with key focus on digital transformation of urban ecosystem to meet environmental, financial, and social outcomes. In line with, the global smart cities market, the smart government market is projected to expand at significant rates during the forecast period.

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What are the Key Trends Impacting Growth of the Smart Government Market?

Owing to the availability of resources and initiatives by governments, countries are witnessing an increase in the number of smart cities. With the same intention, various city councils in the countries are collaborating with various solution providers for implementing new information and communication technologies (ICT).

Moreover, with the intention of proliferating the adoption of smart devices and smart technologies, various organizations are collaborating with the country’s government entities to drive smart cities projects, which further is contributing towards the growth of the market.

For instance, In January 2018, the city of Duisburg signed a Memorandum of Understanding (MoU) with Huawei Enterprise Business Group for enabling Duisburg to become a smart city. Also, In May 2018, GFCA (Global Future Cities Alliance) partnered with CATIS (China Association of Trade in Services) for accelerating the smart city development in the country.

Increasing Transition towards Urbanisation

In addition, rapid increase in urbanization is creating congested landscapes, thereby giving rise to issues such as climate change, high energy consumption, water scarcity, and other economic and social problems. According to the United Nations, the global urban population in 2015 was 54%, which is expected to increase to 66% by 2050.

This rapid rate of change in urbanization is expected to exert substantial pressure on the available resources.Thus, the governments of most developed and developing countries are focusing on smart city projects to implement new technologies which ensure optimal utilization of the available resources, along with providing superior connectivity and healthy lifestyles.

Sudip Saha
Sudip Saha

Principal Consultant

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How is the demand forSmart Devices and Technologies Reshaping the Smart Government Market?

With the rise in the number of smartphones and tablets and other smart devices, the opportunities for the growth of digital technologies is growing continuously. For any city to cater to and meet the growing demands of an urban population and the consumption of man-made and natural resources, it must leverage technology and the resultant smart solutions to drive a holistic benefit for the entire ecosystem.

Furthermore, owing to the initiatives taken by the governments of various countries, such as China and India, for adopting smart meters and smart grids, a high opportunity for the growth of smart government market is expected.

For instance, In June 2018, HPL Electric and Power Ltd., an Indian-based company, received a BIS certification for the deployment of smart meters in the country. In June 2018, Vector, an Auckland-based energy and utility company, partnered with mPrest, an Israeli-based software company, for offering smart grids in Australia.

What are the Key Challenges that may Restrain Growth of the Smart Government Market?

A transition towards the adoption of fiber optic network systems is being witnessed from copper-based systems in some developed and developing countries. However, network systems of a high proportion of developing countries still function over copper-based cables and systems. This, as a result, restricts the efficient implementation of advanced technologies such as smart grids, IoT, etc.

Hence, the inability of supporting the required bandwidth for the implementation of advanced technologies (necessary for enabling smart government) across a major proportion of cities, globally, restrains the growth of the market.

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Competitive Landscape

Key players such as

  • IBM Corporatio
  • Oracle Corporation
  • Cisco Systems, Inc.
  • ABB Ltd.
  • General Electric
  • Symantec Corporation
  • Huawei Technologies Co., Ltd.
  • Avaya Inc.
  • Global Corporation
  • Amazon Web Services, Inc.
  • Hughes Identification Devices
  • Cap Gemini S.A.
  • Nokia Corporation
  • Others

are actively involved in offering smart governmentsolutions across various applications in different geographies.

What strategies are the Key Players adopting for Increasing their Market Share in the Smart Government Market?

Cisco Systems has a long history of jump-starting or accelerating its growth in market through strategic partnerships and collaborations with companies in the smart cities ecosystem. This planned and yet aggressive approach to business growth coupled with strong execution allowed the company to maintain its firm leadership position in the smart cities market and helps the company in building broadest portfolio of products and a customer base.

  • For instance, in January 2019, the company entered into the partnership with Iteris, an American company which provides applied informatics for transportation and agriculture. This partnership is aimed to deploy an edge-processing IoT solution in the City of Las Vegas which combines data feeds from the Iteris Vantage Next video detection platform with the Cisco Kinetic software solution to improve traffic flow and reduce congestion.

The companies are focusing on continuous improvements and technological advancements in smart government solutions. Moreover, the company aims at expanding its solution portfolio by introducing new product releases to cater to the technological advancements and demands from various industries.

  • For instance, in September 2019, the Cisco launched a next-generation CloudLink video conferencing solution which includes advanced technologies such as 4K and AI (Artificial Intelligence). This new solution is introduced to contribute in the foundation for extending smart office to all enterprise scenarios and digitally transforming all industries.

What are the Key Opportunities for Smart Government Solution Vendors?

With growing awareness about sustainable living, several countries such as Ecuador and Bolivia are developing their own consumption and sustainable lifestyle patterns. Sustainable living entails the adoption of environment-friendly lifestyle and reducing the carbon footprint by altering energy consumption, mode of transportation, etc.

Therefore, growing awareness about leading a sustainable lifestyle among consumers is expected to fuel the growth of the global smart government market in the near future.

The total amount of waste generated globally is expected to increase by approximately 50% over the next decade. This is gradually creating the need for waste management solutions beyond conventional landfills. Governments in Smart cities are deploying waste management solutions for the recycling and reduction of waste.

IBM Intelligent Waste Management Platform provides analytic tools that allow users to collate information about waste collection, demographics, & financial information, and present it in the form of visual analytics based on which cities can plan recycling programs and other activities.

How Government ofUnited States Enhancing Smart Governance for Transportation?

The government of North America continuously focuses on implementing technologically advanced innovations across all industry verticals. Hence, with the intention of enhancing the offerings and security associated with transportation, the region has witnessed continuous implementations of smart solutions; for instance, smart vehicles.

In May 2018, the Colorado Department of Transportation offered US$ 2.75 Million to Integrated Roadways, a Kansas city-based startup, with the intention of testing and implementing smart pavements for enhancing the roadway security of the region. Integrated Roadways, in partnership with Kiewit Infrastructure Co., Cisco Systems, WSP Global, and Wichita Concrete Pipe is focusing on building a half-mile smart pavement.

Increasing Adoption of Smart Meters in South East Asian Countries Such As India and Australia

Owing to the initiatives taken by the governments of some countries, such as India, for adopting smart cities and smart grids, a high opportunity for the growth of smart meters is expected. Hence, various companies are focusing on deploying/offering smart meters in the region.

In June 2018, HPL Electric and Power Ltd., an Indian-based company, received a BIS certification for the deployment of smart meters in the country.

In June 2018, Vector, an Auckland-based energy and utility company, partnered with mPrest, an Israeli-based software company, for offering smart grids in Australia.

What Is Impact Of Pandemic Outbreak On Smart Government Market?

The pandemic outbreak has a substantial impact on societies and economies and has affected the market significantly. As lockdowns had been imposed by governments all over the globe, the continuity of operations for a majority of industries was adversely impacted.

In addition, hardware and IoT sensors ar majorly manufactured in China due to low labour costs, but as the global supply chain was impacted abruptly, majority of countries have cut-off all their imports. Thus there will be a rise in costs of hardware and IoT solutions, which hinders the growth of the smart government market.

However, smart cities were using smart city platform for aerial surveillance, heat maps, GPS systems and othersto monitor the movement of suspected Covid-19 cases and health personnel. Thus there was demand for solutions and services during the pandemic outbreak. So the smart government market is anticipated to gain back its momentum by end of 2021.

Key Segments of Smart Government Market Covered in the Report

Based on Component:

  • Solution
    • Analytics
    • Open data platform
    • Government resource planning system
    • Remote monitoring
    • Network Management
    • Security
    • Smart Transportation
    • Others
  • Services
    • Professional services
    • Managed services

Based on Deployment:

  • Cloud-based
  • On-premise

Based on Region:

  • North America
  • Latin America
  • Europe
  • South Asia
  • East Asia
  • Oceania
  • Middle East & Africa

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