Connected Infrastructure Market Report Scope & Overview:

The Connected Infrastructure Market is witnessing remarkable growth owing to the increasing proliferation of smart technologies in urban and industrial domains. These solutions and systems that allow the different elements of infrastructure, from transportation networks to energy grids to public utilities, to communicate and connect, take up a separate marketplace. One of the primary driving factors is the push for smart city projects across the world, where both government and private sectors are heavily investing in IoT-enabled infrastructure to improve efficiency, sustainability, and public safety. By 2023, over 70% of connected infrastructure solutions used in urban development projects around the world, and Asia-Pacific leading the charge on smart cities.

The ongoing digital transformation of industries is another major growth driver, optimizing operational efficiencies requiring advanced connectivity solutions. 5G networks boosted connected infrastructure even further, by providing high-speed and low-latency connectivity vital to transferring data in real-time. Additionally, the use of artificial intelligence and machine learning in connected systems has facilitated predictive maintenance, optimized resource allocation, and improved decision-making capabilities. Smart grid and integration of renewable energy are driving the energy sector, which is one of the major components for the growth of the market. More than 60% of new energy projects around the world will use connected infrastructure to make the grid more efficient and reliable by 2023. Likewise, the transportation industry is experiencing an increase in connected infrastructure growth that is driven by the emergence of self-driving cars and smart traffic management systems. Environmental sustainability is another major contributor to market growth, with connected infrastructure allowing for resource management and monitoring, leading to waste and emissions reductions. Although high costs of implementation and issues related to cybersecurity are ongoing challenges, with persistent developments in the technology space and favorable governmental policies, this is expected to be reduced. Future Market Outlook is bright, as edge computing and blockchain will further optimize connectivity, efficiency, and security across infrastructure systems.

Connected Infrastructure Market Dynamics

Drivers

• The rise in urbanization and the need for efficient infrastructure solutions fuel the adoption of connected infrastructure technologies.

Urbanization is one of the key drivers contributing to the growth of the Connected Infrastructure Market. With rapid urbanization, the demand for infrastructure that is efficient, scalable, and sustainable is increasing among cities. Economic growth, climate change, and population growth may exacerbate the issue as traditional systems, including transportation, energy grids, and water management systems, often cannot sustain or scale to the level needed by increasing urban populations, presenting a ripe opportunity for connected infrastructure technologies. The technologies facilitate real-time monitoring, automation, and optimization of urban systems. With connected infrastructure, urban areas will incorporate advanced technologies such as the Internet of Things, artificial intelligence, and 5G networks. Such innovations assist cities to prepare better in terms of resource management, provide better service delivery, and a better quality of life to the people in the city. Smart traffic management systems, for instance, minimize congestion, while smart grids enhance energy distribution, leading to sustainability and savings.

Smart cities are rising, and the infrastructure that needs to be connected keeps getting bigger. By leveraging IoT, data analytics, and automation technologies, cities can tackle issues such as energy usage, garbage disposal, public safety, and transportation efficiency. There is a growing investment from governments and municipalities in smart infrastructure projects that can enhance operational efficiency, minimize environmental footprint, and improve the quality of life in urban communities. Urbanization drives the demand for more efficient, more sustainable, and more technologically advanced infrastructure. Technologies that enable connected infrastructure provide answers to these challenges and can drive economic activity and improve the human experience of urban life.

• Supportive policies and funding for digital infrastructure and smart grid systems promote market growth.

• The growing focus on energy-efficient and eco-friendly infrastructure drives the need for connected solutions.

Restraints

• The shortage of qualified professionals with expertise in connected infrastructure technologies hampers market growth.

The dearth of experienced and skilled professionals with knowledge about connected infrastructure technologies is one of the prominent restraints hindering the growth of the connected infrastructure market. The emergence of smart cities and smart organizations using IoT, AI and 5G has created an ongoing demand for professionals with the skills to design, implement, and maintain these complex systems. As a result, a gap in skilled workers for the technology is common because the technology advances so fast that the workforce lacks adequate training.

Infrastructure technologies that are part of a connected ecosystem will need trained professionals who are not only well-versed in hardware and software systems but also in how the technologies work together. Experience in data analytics, cybersecurity,  network management, and systems engineering High skill requirements restrict how organizations and municipalities deploy these solutions effectively and on time. This gap in skills leads to a situation where the labor cost is also larger due to a higher demand-to-supply ratio of individuals with the proper skill set. As a result, it can also require cash outlay for training programs and forcing businesses to outsource,  increasing costs as well. Additionally, lack of expertise could lead to delays and inefficiencies, and security vulnerabilities that could ultimately be detrimental to the benefits brought about by connected infrastructure technologies. The skills gap in connected infrastructure retards market growth by delaying and complicating market adoption of the technology. Addressing this challenge via focused education, training, and workforce development is critical to speed up the deployment of connected infrastructure solutions.

• The integration of IoT and AI raises issues around data protection and vulnerability to cyberattacks.

• Integrating new technologies with existing infrastructure systems can be challenging and time-consuming.

Connected Infrastructure Market Segment Analysis

By Technology

The IoT segment dominated the market and represented a significant revenue share in 2023, as it provides us with real-time monitoring and control of different things. This allows for smooth communication between devices which will enable smart cities and industries to optimize resource management. The integration of IoT with sensors, cloud computing, and data analytics facilitates its large-scale application in different industries like transportation, energy, and healthcare. the IoT will add up in the way of growing demand for automation, predictive maintenance, and optimized resource management in urban areas. The IoT will continue to be dominant and will see a stable growth pattern in the market. As IoT connects with new technologies such as AI, 5G, and edge computing, the platform will have more innovative functionalities, resulting in more connected infrastructure. As cities and industries become smarter and depend more on IoT-enabled infrastructure systems to collect data in real-time, resource allocation in communities, monitoring, and decision-making, this vertical market of connected infrastructure is expected to have a measured growth global forecast.

The 5G network segment is expected to register the fastest CAGR during the forecast period, owing to ultra-low latency, high-speed data transfer, and massive connectivity. They are critical for the fluid running of connected infrastructure, particularly for applications in smart cities, autonomous cars, and industrial IoT. The seamless communication and timely transfer of information between devices which is made possible with 5G is vital for making infrastructure management efficient and decision-making seamless. 5G will underpin connected infrastructure due to its gigantic capacity for devices along with its support of applications such as autonomous driving, smart grids, and real-time public safety, among others.

By Deployment

The cloud segment dominated the market and represented a significant revenue share in 2023, as it is flexible, scalable, and cost-effective. Cloud solutions allow organizations to store and manage large amounts of data off-site, which minimizes the on-site infrastructure and maintenance required by the organization. Smart cities and industries also benefit from cloud-based platforms offering more real-time data analytics, and resource allocation and integrating easily with other technologies—characteristics that the cloud was created for, The increasing cloud layout in sectors such as healthcare, transportation, and energy also fortifies its market dominance. Cloud market solutions remain in the lead with fast-paced growth as cloud computing adoption strengthens across sectors. The cloud-based platforms combined with advanced technologies such as AI, IoT, and 5G will not only enhance their capabilities but also become the basis for connected infrastructure development in the future.

The on-premises segment is expected to grow at the fastest CAGR during the forecast period, owing to the growing demand for data security, control, and compliance. For some industries, like government, defense, and finance, on-premise can provide better security and privacy because your organization is in complete control of the infrastructure. On-premises deployments are witnessing increased demand in connected infrastructure due to the rise of data protection regulations and the need for secure and localized data storage. The on-premises segment is expected to grow rapidly as industries with strict security needs remain focused on maintaining their data privacy and solution compliance. Although cloud-based value helps the vast majority of the business, the on-premises section is foreseen to observe a standard interest, especially in managed sectors.

Regional Analysis

North America dominated the market and accounted for the largest revenue share in 2023, due to the higher technology infrastructure, adoption of IoT, AI, and 5G technologies, and substantial investments in smart city campaigns across the region. Strong government support for connected infrastructure and a diverse and mature regulatory environment has spurred rapid connected infrastructure solutions development, particularly in support of HS2 and the smart city concept over the last decade and in anticipation of challenges. Moreover, the rising demand for urban planning, energy management, and transportation systems has driven the adoption of connected infrastructure technologies in the region. The Connected Infrastructure Market in North America will continue to dominate the market owing to the ongoing investments in smart cities, digital transformation, and the deployment of 5G networks. Increased demand for connected infrastructure solutions across the region will be driven by newly announced region-wide revenue-generating initiatives that prioritize sustainability, energy efficiency, and improved public safety. The market will continue to grow in North America as cities and industries adopt these technologies.

The Asia-Pacific region is projected to witness the fastest CAGR during the forecast period, as this region is characterized by increased urbanization, modernization of technologies, and government initiatives for smart cities. While nations like China, India, and Japan invest extensively in modernizing and digitalizing infrastructure. The connected infrastructure solutions are pushed largely by the increasing demographic in the region and the requirement for improved energy, transportation, and well-being systems. Growth in the Connected Infrastructure Market in Asia-Pacific is anticipated to be robust, fueled by increasing emphasis on smart city development, energy efficiency, and digital transformation among governments and industries.

Key players

The major kay players along with their products are

• Cisco Systems – Cisco IoT Solutions

• Siemens AG – Siemens Smart Infrastructure

• Schneider Electric – EcoStruxure™ Smart City

• IBM – IBM Watson IoT Platform

• General Electric (GE) – Predix Industrial IoT Platform

• Microsoft – Azure IoT Suite

• Honeywell – Honeywell Connected Industrial

• Huawei Technologies – Huawei Smart City Solutions

• Ericsson – Ericsson IoT Accelerator

• Intel Corporation – Intel IoT Platform

• Qualcomm – Qualcomm 5G Solutions

• Philips Lighting (Signify) – Interact IoT Lighting System

• Bosch Group – Bosch IoT Suite

Recent Developments

In January 2024, Nokia announced two strategic deals to refocus its network infrastructure business, aiming for mid-single-digit growth rates and increasing margins to 15%-20% from the current 12%.