Lisa Arrowsmith | July 29, 2014

The number of smart cities worldwide will quadruple within a 12-year period that started last year, proliferating as local governments work with the private sector to cope with a multitude of challenges confronting urban centers, according to a new report from IHS Technology (NYSE: IHS).

There will be at least 88 smart cities all over the world by 2025, up from 21 in 2013, based on the IHS definition of a smart city. While the combined Europe-Middle East-Africa (EMEA) region represented the largest number of smart cities last year, Asia-Pacific will take over the lead in 2025. In all, Asia-Pacific will account for 32 smart cities of the total in nine years’ time, Europe will have 31, and the Americas will contribute 25, as shown in Figure 1 attached.

“Smart cities encompass a broad range of different aspects, but IHS has narrowed the definition of the term to describe cities that have deployed—or are currently piloting—the integration of information, communications and technology (ICT) solutions across three or more different functional areas of a city,” said Lisa Arrowsmith, associate director for connectivity, smart homes and smart cities at IHS. “These functional areas include mobile and transport, energy and sustainability, physical infrastructure, governance, and safety and security.”

These findings are available in the report entitled, “Smart Cities: Business Models, Technologies and Existing Projects,” from the Information Technology service of IHS Technology.

City projects in the Americas are typically somewhat narrower in scope than those found in Europe. Unlike broad projects underway in cities like Vienna or Amsterdam, U.S. projects will often focus on a single functional area, such as mobility and transport.

Meanwhile, many of the budget issues facing government expenditures in the well-developed economies of Europe are not found to the same extent in the Asia-Pacific region. In effect, this has the potential to create more scope for investment in smart city projects in Asia-Pacific, where projects are sometimes based around creating new infrastructure, rather than replacing legacy systems.

Under the smart city definition of IHS, annual investment on smart city projects reached slightly over $1 billion in 2013, but will go on to surpass $12 billion in 2025.