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Global spending on smart cities initiatives will reach $189.5 billion in 2023. The top priorities for these initiatives will be resilient energy and infrastructure projects followed by data-driven public safety and intelligent transportation. Together, these priority areas will account for more than half of all smart cities spending throughout 2019-2023, according to a forecast by IDC, a market intelligence provider.

The use cases that will experience the most spending over the forecast period are closely aligned with the leading strategic priorities: smart grid, fixed visual surveillance, advanced public transportation, smart outdoor lighting, and intelligent traffic management. These five use cases will account for more than half of all smart cities spending in 2019, although their share will decline somewhat by 2023. 

The use cases that will see the fastest spending growth over the five-year forecast are vehicle-to-everything (V2X) connectivity, digital twin, and officer wearables.

Over the next decade of smart cities work, there will be fewer IoT projects, more citizen input, and more communication between cars and infrastructure, 

Many city leaders face challenges with IoT projects: In 2020, 10% to 30% of IoT will fail to launch or scale due to weak performance metrics, poor understanding of products, and lack of funding. 

Ruthbea Yesner, vice president worldwide government insights at IDC said that more than 35% of cities have deployed an IoT project while 12% said they had developed but not launched it. “Some of these didn’t meet expectations because the outcomes were too broad or not measurable,” she said, according to

Climate changing is becoming a huge driver of smart city work.  “Cities are looking at how anything from communications to technology can build community resilience and help them respond and adapt to this changing environment,” Yesner said. 

5G vs. DSRC for vehicle-to-infrastructure communication: the report highlights a challenge cities face in making it easy for cars and trucks to communicate with city infrastructure like stop lights, crosswalks, and stop signs. A few years ago when municipalities started investing in vehicle-to-infrastructure technology (V2I), dedicated short-range communications was a viable choice. Now that 5G is becoming more available, cities are now stuck in the middle of the debate between two standards. 

IDC predicts that by 2025, 25% of major cities worldwide will have picked one standard or the other and installed V2I infrastructure.

Another IDC 5G prediction is that by 2024, 75% of all large cities will use 5G to scale key services including real-time crime centers, V2I connectivity, and smart stadiums.