Smart Building Market Size By Component (Solution [Energy Management, Infrastructure Management, Safety & Security Management, Network Management, Workplace Management], Services), By Application & Forecast, 2023-2032

Industry Drivers

Smart Building Market size crossed USD 85 billion in 2022 and is poised to observe over 20% CAGR from 2023 to 2032, attributed to the escalating government efforts toward reducing energy consumption. Governments across both developed and developing economies have been undertaking several initiatives to reduce energy consumption by promoting the adoption of energy-efficient building solutions.
 

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Regulatory authorities globally have also been introducing stringent norms and incentives to encourage building owners & managers to invest in smart building technology, thus favoring the market growth. For instance, in October 2022, the European Council agreed on a recommendation to modify the Energy Performance of Buildings Directive to make sure that all buildings are energy efficient. The directive mandates that all new buildings need to be zero-emission facilities by 2030, and existing establishments are required to be transformed into zero-emission buildings by 2050.
 

High upfront costs may lead to sluggish growth

Smart building solutions often involve significant upfront costs associated with equipment, installation, and integration with existing building systems. This can act as a barrier to their adoption by building owners & managers, particularly those operating on tight budgets or with limited resources. Therefore, the high investment cost is one of the crucial challenges hampering the market demand. However, an increased emphasis on reducing carbon emissions is creating an opportunity among key and other players to expand their smart building portfolio. This has also encouraged players to collaborate, partnerships, and mergers to strengthen their business standing, fostering new growth opportunities for the smart building market.
 

Smart building solutions to gain traction due to an increased emphasis on promoting energy efficiency

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The solution segment will reach USD 300 billion by 2032. Energy-efficient buildings are gaining popularity globally to reduce greenhouse gas emissions. Smart building solutions help optimize energy usage and mitigate energy costs. They provide real-time data on energy consumption across the entire building infrastructure and enable efficient monitoring & controlling of HVAC and other systems.
 

Integration of IoT to support the growth of smart commercial buildings

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The smart building market revenue from the commercial segment accounted for USD 55 billion in 2022, driven by rising adoption of IoT sensors in smart commercial buildings to collect data from various building systems and subsystems. Building operators can utilize this data to automate and enhance building operations & maintenance. Moreover, this data can also be used to improve building controls, automate important building-management duties, including heat & lighting, and detect operational inefficiencies in businesses.
 

North America to become a prominent business hub due to evolving technological landscape

The North America smart building market size is estimated to cross USD 150 billion by 2032. North America has witnessed the emergence of the most delinquent smart building solutions that leverage new technologies, such as big data,  IoT, cloud computing, deep learning, data analytics, and Artificial Intelligence (AI). The growing investments in smart buildings for speeding up renewable energy adoption and grid resilience may create favorable growth prospects for the market revenue in the U.S.
 

Partnerships and collaborations remains key growth strategy

Major companies operating in the smart building market include Microsoft Corporation, Intel Corporation, ABB Limited, Huawei, Hitachi Ltd., IBM, and Johnsons Controls. The companies operating in the market are focusing on partnerships, acquisitions, and releasing new smart building solutions in the market to gain a competitive edge.
 

These firms are actively working on strengthening their strategic bonds with their competitors and new players to gain a strong foothold in the global market. For instance, In February 2023, Johnson Controls collaborated with Willow, a provider of digital twin solutions, to digitally transform the facilities & buildings into safer & sustainable environments for occupants & customers. The digital twin technology helps in the construction, operation, and design of facilities and buildings, thereby making them efficient & sustainable.
 

Impact of COVID-19 on the smart building market trends

The COVID-19 pandemic has escalated the need for smart, intuitive systems. As social distancing became a norm, technologies such as visitor management systems, which were earlier considered non-essential, became increasingly important to manage visitors' flow across buildings. While several companies struggled to make it through the crisis with limited investments. However, the ones that invested in these technologies witnessed the widespread potential of smart building software.
 

This market research report of smart building includes in-depth coverage of the industry with estimates & forecast in terms of revenue in USD from 2018 to 2032 for the following segments:

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Market, By Component

• Solutions
  • Energy management
  • Infrastructure management
  • Safety and security management
  • Network management
  • Workplace management
• Services
  • Consulting
  • Deployment and integration
  • Infrastructure monitoring and management

Market, By Application

• Commercial
• Residential

The above information has been provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Netherlands
  • Sweden
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • ANZ
• Latin America
  • Brazil
  • Mexico
• MEA
  • Saudi Arabia
  • UAE
  • South Africa