The Smart buildings market size was valued USD 66.5 billion in 2020 and projected to be worth around USD 170.5 billion by 2030, at a Compound Annual Growth Rate (CAGR) of 11.8% during the forecast period 2021 to 2030.
The major drivers for the Smart building include rising adoption of IoT-enabled building management system, rising awareness of space utilization, increased industry standards and regulations, and increase demand for energy efficient system.
A smart building is a building that automates its processes to control its infrastructure, lighting, security systems, heating, ventilation, air conditioning systems, and more. A smart building uses technology to make buildings more efficient, sustainable, safer, and reduce costs. The smart building solutions are part of the growing IoT and connected sensor ecosystem. The study characterizes the smart building market based on the component, and application. Solutions that automate and optimize the building’s operations and performance are studied.
Based on solution type, energy management segment of the Smart buildings market is projected to grow at the highest CAGR during the forecast period.
Based on the solution type, the energy management segment of the market is projected to grow at the highest CAGR from 2021 to 2030. As energy management solutions for smart building help to reduce and monitor the energy consumption of the building. Moreover, keeping operational expenses low is a continuous challenge for owners and managers of multistory buildings, schools, or building complexes which can achieved through smart building energy management solution.
Based on building type , the commercial segment is expected to lead the Smart buildings market in 2020.
Based on building type, the commercial segment is projected to lead the smart buildings market from 2021 to 2030. The growth of this segment can be attributed to need for appropriate and tailor-made solutions for optimized energy performance to reduce building energy consumption without compromising comfort or security and enhancing energy performance of the commercial buildings as these buildings consume higher energy and also generate more waste in the form of carbon and other solid wastes.
The North American region is expected to lead the Smart buildings market in 2020.
The North American region is expected to lead the Smart buildings market in 2020. North America is one of the most developed countries in terms of technology. The growth of the market in North America can be attributed to emergence of latest smart building solutions that leverage new technologies, such as IoT, big data, cloud computing, data analytics, deep learning, and artificial intelligence, for saving energy, reducing operational expenditures, increasing occupancy comfort, and meeting increasingly stringent global regulations and sustainability standards. Moreover, the US and Canada are prominent countries contributing to technological development in this region; for instance, US organizations are heavily investing into smart building measures, such as building controls and building systems integration, to leverage energy efficiency and energy storage and deliver smarter, safer, and more sustainable buildings while the Canadian government is taking initiatives to support Canada's commitment to protecting the environment and its resources by making federal buildings more energy efficient and reducing greenhouse gas emissions, driving the growth of smart buildings.
IoT has a significant impact on the Commercial Real Estate (CRE) industry owing to a growth in the efficiency of building operations, improved tenant relationships, and new revenue generation opportunities. IoT-enabled BMS is installed and used for increasing building performance efficiency and using sensor-generated data to enhance building user experience. It can also leverage a single infrastructure to operate all building management solutions and require minimum to no manual interventions. Furthermore, IoT-enabled BMS can be used for various purposes, such as reducing energy use, repairing and maintaining building systems, and cutting down administrative costs of the building. For instance, property owners use the data collected from various sensors, such as indoor-air quality and space utilization at the building level to regulate air-conditioning and lighting systems in real time, thereby reducing energy costs and optimizing the internal environment for its intended purpose. The IoT technology provides owners with an opportunity to have direct conversations and relationships with building users along with their tenants. For instance, sensors in shopping malls can help owners connect directly to various customer and provide their services, resulting into building relationships with customers and strengthening tenant engagement. Hence, IoT-enabled BMS is driving the smart buildings market.
Restraint: Lack of cooperation among standard bodies
Great cooperation is required among standard bodies, corporations, city governments, and other stakeholders for IoT and existing smart-building technologies to work together. This cooperation in the building of smart cities is vital in bringing out the maximum potential of these technologies. Moreover, the various layers of building management, such as property and tenant management and facility management, have their own requirements and operating systems, which are not necessarily designed for integration with other systems, making it difficult for obtaining information from the building systems.
Opportunity: Emergence of 5G technology
The introduction of 5G technology enhances new and powerful intelligent building capabilities and plays a pivotal role in the expansion of IoT-enabled devices by providing efficient real-time operational and analytic capabilities. A huge amount of data is generated owing to IoT-enabled devices in smart buildings, however 5G technology enables quick building data transport, interpretation, and efficient actions taken in an economical manner. 5G significantly enhances the user/occupant’s experience, while providing many other creative and useful Building Internet of Things (BIoT) and AI-enabled innovations.
Challenges: Rising privacy and security concerns owing to IoT-enabled devices
A large number of buildings are integrating smart technology with their designs and operations. The adoption of technologies, such as IoT and sensors offers tenants and landlords tremendous convenience. However, the adoption of these technologies poses a security threat to the building. Most IoT devices and sensors have a weak security built-in, use non-standard communication protocols, and are operated by old, unpatched software, which could expose smart buildings to various vulnerabilities. Furthermore, hackers always scan targets for technological weaknesses to infiltrate into a particular network and steal valuable data or take control of a facility. For instance, cybercriminals infiltrate the Business Activity Statement (BAS) in order to stop the working of passenger lifts, gain access to security feeds from Closed-Circuit Televisions (CCTVs), and disrupt power supplies to the entire building or parts of it. Moreover, a well-planned cyberattack involving readily-available IoT devices and sensors in any smart building could potentially expose sensitive data storage, servers, and employee and customer information, which could be used for malicious purposes. Thus, rising privacy and security concerns owing to the adoption of IoT-enabled devices poses a restraint to the smart buildings market.
By Building Type