U.S. Smart Cities Market Size, and Growth Report, 2032 – P&S Intelligence

U.S. Smart Cities Market: A Report on Sustainable Urban Development

Executive Summary and Market Projections

The United States smart cities market was valued at USD 150.0 billion in 2024 and is projected to reach USD 364.9 billion by 2032, expanding at a Compound Annual Growth Rate (CAGR) of 11.9% from 2025 to 2032. This growth is fundamentally driven by the imperative to create more sustainable, resilient, and inclusive urban environments, directly aligning with the United Nations’ Sustainable Development Goals (SDGs).

As urbanization intensifies—with projections indicating that 89% of the U.S. population will reside in urban areas by 2050—the need for efficient resource management becomes critical. Smart city initiatives are instrumental in addressing challenges related to transportation, energy consumption, and environmental stewardship, thereby advancing SDG 11 (Sustainable Cities and Communities). Government funding and policies supporting digital transformation are key catalysts, promoting the adoption of technologies that underpin sustainable development. The market’s trajectory is further accelerated by technological advancements in AI, 5G, and cloud computing, which serve as enabling platforms for achieving a broad spectrum of SDGs.

Market Segmentation Analysis and Alignment with SDGs

Component Insights

The market is analyzed across several key components, each contributing to specific sustainable development outcomes.

• Transportation & Mobility (Largest Category): Holding a 35% market share, this segment is crucial for achieving SDG 11.2 (provide access to safe, affordable, accessible, and sustainable transport systems). Investments in intelligent traffic management and public transport solutions aim to reduce congestion and carbon emissions, directly supporting SDG 13 (Climate Action). The promotion of electric vehicle (EV) infrastructure further reinforces this commitment.
• Infrastructure & Environment (Fastest-Growing Category): This segment’s growth is driven by a direct focus on environmental sustainability goals.
  • Smart Energy Management: Contributes to SDG 7 (Affordable and Clean Energy) by optimizing grid efficiency and integrating renewable sources.
  • Smart Waste Management: Addresses SDG 11.6 (reduce the adverse per capita environmental impact of cities) and SDG 12 (Responsible Consumption and Production).
  • Smart Water Management: Aligns with SDG 6 (Clean Water and Sanitation) through efficient monitoring and conservation of water resources.
• People & Society: Focuses on enhancing the quality of urban life.
  • Healthcare: Leverages technology to support SDG 3 (Good Health and Well-being).
  • Education: Utilizes smart solutions to advance SDG 4 (Quality Education).
  • Public Safety & Security: Contributes to creating safer urban environments as targeted by SDG 11 and SDG 16 (Peace, Justice and Strong Institutions).
• Governance & Management: Promotes transparent and efficient urban administration, supporting the objectives of SDG 16.

Focus Area Analysis

Investment priorities within the smart city framework highlight a strategic focus on foundational systems for sustainability.

1. Smart Utilities (Largest Category): With a 30% market share, this area is paramount. Investments in smart grids and smart water meters are essential for advancing SDG 7 and SDG 6, respectively. The significant capital expenditure on upgrading utility infrastructure also supports SDG 9 (Industry, Innovation and Infrastructure) by building resilient and modern systems.
2. Smart Transportation (Fastest-Growing Category): The rapid growth in this area underscores the urgency of creating sustainable mobility solutions in line with SDG 11.2 and SDG 13.
3. Smart Buildings: Focuses on energy efficiency and sustainable design, contributing to SDG 7 and SDG 11.
4. Smart Citizen Services: Aims to create more inclusive and accessible cities, aligning with SDG 11 and SDG 16.

Technology Insights

Enabling technologies form the backbone of smart city ecosystems, facilitating progress toward the SDGs.

• 5G (Largest Category): The rollout of 5G is a critical enabler, providing the high-speed, low-latency connectivity required for real-time data applications. This infrastructure is vital for the effective functioning of smart grids (SDG 7), intelligent transport systems (SDG 11), and telehealth services (SDG 3).
• Internet of Things (IoT) (Fastest-Growing Category): IoT devices are the primary data-gathering tools for monitoring and managing urban systems, from energy consumption to traffic flow, making them indispensable for achieving nearly all urban-focused SDGs.
• Other Key Technologies: Artificial Intelligence, Cloud Computing, Big Data Analytics, and Blockchain are integral to processing data and generating insights that drive efficient and sustainable urban management, supporting SDG 9 by fostering innovation.

City Size Analysis

Large cities, representing 55% of the market, are at the forefront of smart city adoption. These metropolitan areas face the most acute challenges related to population density, traffic, and resource consumption, making the implementation of smart solutions a high priority for achieving the targets of SDG 11. Medium-sized cities are identified as the fastest-growing segment, indicating a broadening commitment to sustainable urban development across the nation.

Geographical Analysis

The Western U.S. is the dominant region, accounting for 35% of the market in 2024. Home to major technology hubs and progressive policy environments, this region leads in deploying solutions that advance sustainability goals. Its focus on smart energy, EV infrastructure, and efficient transport systems directly contributes to SDG 7, SDG 11, and SDG 13. The South is noted as the fastest-growing region, signaling an expanding geographical focus on smart and sustainable urbanism.

Competitive Landscape and Strategic Partnerships

The U.S. smart cities market is fragmented, characterized by a diverse ecosystem of technology corporations, specialized solution providers, and innovative startups. This competitive environment fosters innovation, a key component of SDG 9. The prevalence of public-private partnerships is essential for implementing large-scale, integrated smart city projects, reflecting the collaborative approach advocated by SDG 17 (Partnerships for the Goals). This collaborative model allows for the pooling of resources and expertise to address complex urban challenges and accelerate progress toward the Sustainable Development Goals.

Analysis of Sustainable Development Goals in the U.S. Smart Cities Market Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

1. SDG 6: Clean Water and Sanitation
   • The article mentions “Smart Water Management” and the deployment of “smart water meters” as part of the smart utilities focus area. This directly relates to the efficient management and use of water resources in urban settings.
2. SDG 7: Affordable and Clean Energy
   • The text highlights “smart energy management,” “smart grids,” “energy-efficient lighting systems,” and investments in “natural gas, wind, solar, and battery storage capacities.” These initiatives aim to improve energy efficiency and support sustainable energy practices, which are central to SDG 7.
3. SDG 9: Industry, Innovation, and Infrastructure
   • The core theme of the article is the development of “smart city infrastructure.” It emphasizes the role of technology such as “IoT,” “AI,” “cloud computing,” and “5G” in upgrading urban infrastructure. The article also notes government funding for “digital infrastructure development” and the need to replace or upgrade “outdated infrastructure.”
4. SDG 11: Sustainable Cities and Communities
   • This is the most prominent SDG in the article. The entire concept of “smart cities” is about making urban areas more sustainable, resilient, and inclusive. The article discusses managing expanding urban populations, improving “urban quality of life,” and addressing issues like “transportation,” “waste management,” and “public safety.”
5. SDG 13: Climate Action
   • The article explicitly states that “carbon emission reduction needs urge cities to implement smart technologies.” It also mentions that smart transportation systems are intended to “cut carbon emissions,” directly linking smart city development to climate change mitigation efforts.
6. SDG 17: Partnerships for the Goals
   • The article points to the importance of collaboration, mentioning “joint efforts of technology corporations, urban development specialists, and utility control entities” and the role of “government partnerships and public-private initiatives” in driving the market.

2. What specific targets under those SDGs can be identified based on the article’s content?

1. Target 6.4: By 2030, substantially increase water-use efficiency across all sectors and ensure sustainable withdrawals and supply of freshwater to address water scarcity.
   • The article’s mention of “Smart Water Management” and “smart water meters” directly supports this target by focusing on technologies that enhance the efficiency of water use in urban areas.
2. Target 7.3: By 2030, double the global rate of improvement in energy efficiency.
   • The focus on “smart energy management,” “smart grids,” and “energy-efficient lighting systems” are all strategies aimed at improving energy efficiency, aligning with this target.
3. Target 9.1: Develop quality, reliable, sustainable and resilient infrastructure, including regional and transborder infrastructure, to support economic development and human well-being.
   • The article discusses significant investments in “digital infrastructure,” “5G rollouts,” and upgrading “outdated infrastructure” to create the foundation for smart cities, which reflects the goal of this target.
4. Target 9.c: Significantly increase access to information and communications technology and strive to provide universal and affordable access to the Internet in least developed countries.
   • While the article focuses on the U.S., its emphasis on the rollout and expansion of “5G network technology” as a critical enabler for smart cities directly relates to increasing access to advanced ICT.
5. Target 11.2: By 2030, provide access to safe, affordable, accessible and sustainable transport systems for all.
   • The article details efforts in “intelligent transportation systems,” “advanced traffic management systems,” “public transport,” and the development of “electric vehicle charging networks” to improve urban mobility.
6. Target 11.3: By 2030, enhance inclusive and sustainable urbanization and capacity for… sustainable human settlement planning and management.
   • The use of “data-based urban planning” and the overall goal of using technology to manage the growth of urban populations (expected to reach 89% of the U.S. population by 2050) align with this target.
7. Target 11.6: By 2030, reduce the adverse per capita environmental impact of cities, including by paying special attention to air quality and municipal and other waste management.
   • The article’s mention of “smart waste management” and the goal to “cut carbon emissions” through smart solutions directly addresses the reduction of the environmental impact of cities.
8. Target 17.17: Encourage and promote effective public, public-private and civil society partnerships.
   • The text highlights that the market is shaped by “government partnerships and public-private initiatives,” which are essential for funding and implementing large-scale smart city projects.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

1. Indicator for Target 7.3 (Energy Efficiency):
   • The article provides a financial metric: “spending by major electric utilities in the country rose by 12%, to USD 320 billion in 2023 from USD 287 billion in 2003,” with funds directed at deploying “smart meters, sensors, and automated controls.” This spending indicates investment in energy efficiency technologies.
2. Indicator for Target 9.c (ICT Access):
   • Investment in 5G infrastructure is a key indicator. The article states, “Spending by the major U.S. telecom operators… rose from ~USD 29 billion/year during 4G to USD 32 billion annually through 2025.”
3. Indicator for Target 11.2 (Sustainable Transport):
   • The article provides a specific metric for electric vehicle infrastructure: “the country already had more than 64,00 EV charging stations in October 2024.”
4. Indicator for Target 11.3 (Sustainable Urbanization):
   • The proportion of the population living in urban areas is a direct indicator. The article states, “83% of the population of the nation resides in urban regions… by the year 2050, 89% of the U.S. population will inhabit urban areas.”
5. Implied Indicator for Target 6.4 (Water Efficiency):
   • The deployment of “smart water meters” is mentioned. While no numbers are given, the count of such meters installed would serve as a direct indicator of progress in smart water management.
6. Implied Indicator for Target 11.6 (Environmental Impact):
   • The goal to “cut carbon emissions” is stated. The measurement of CO2 emissions per capita in cities implementing these technologies would be the corresponding indicator.

4. Summary Table of SDGs, Targets, and Indicators

Source: psmarketresearch.com