According to research and consulting firm Frost & Sullivan, smart cities will accelerate Saudi Arabia’s diversification and significantly contribute to its Gross Domestic Product (GDP) by 2030.
The consultancy said in a statement that since the kingdom’s economy is largely based on oil, it is gradually looking to diversify, and a smart city is one step in that direction. By 2030, Saudi Arabia wants to increase non-oil exports’ share of non-oil GDP from 16 percent to 50 percent.
According to the statement, the key factors for developing smart cities in Saudi Arabia are the growth of new economic sectors, the increase in demand for sustainable and eco-friendly cities backed by global green initiatives, and improving living standards for the country’s people and residents.
Smart governance and education, smart healthcare, smart buildings, smart mobility, smart infrastructure, smart technology, smart energy, and smart people are among the eight smart concepts identified by Frost & Sullivan as being active and verifiable pursuits in a community.
Saudi Arabia has already allocated $500 billion to invest across 285 municipalities to implement smart cities and has already begun efforts to transform the first five cities, which include Makkah, Riyadh, Jeddah, Al-Madinah, and Al-Ahsa. Smart cities are expected to add hundreds of thousands of jobs by 2030.
“Today, we find several evidence of smart initiatives leading to a sustainable environment and enabling more citizen involvement in co-creating city services, which will not benefit the current generation but will also help create a sustainable environment for future generations,” the statement added.
Frost & Sullivan has forecasted that the global smart city market will reach over $2.46 trillion in 2025. According to the statement, smart city technology investment is projected to rise at a Compound Annual Growth Rate (CAGR) of 22.7 percent over the next six years, reaching $327 billion by 2025 from $96 billion in 2019.
Artificial intelligence and big data would be in high demand to fight the pandemic, with increasing opportunities for crowd analytics, open data dashboards, and online city services, which predicted that by 2025, more than 26 smart cities will exist, mostly in North America and Europe.