Smart Building Market Size to Hit USD 277.92 Bn By 2034

The global smart building market is projected to grow from USD 100.58B in 2024 to USD 277.92B by 2034, with a CAGR of 10.7% from 2025-2034.

Key Takeaways

• North America region dominated the market in 2024 and accounted for a revenue share of 35%.
• By solution, the safety & security management segment has generated the largest revenue share in 2024.
• The energy solution segment is poised to grow at the CAGR highest over the forecast period.
• By service, the implementation segment has accounted maximum revenue share in 2024.
• The support and maintenance service segment is expected to grow at the fastest CAGR during the forecast period.
• By end-use, the commercial segment has held the largest revenue share in 2024.
• The residential end-use segment is growing at the highest CAGR over the forecast period.

The smart building market is rapidly growing, driven by advancements in IoT, energy efficiency, and automation. These buildings integrate smart systems for lighting, HVAC, security, and more, enhancing operational efficiency and sustainability. Rising urbanization, green building initiatives, and the demand for cost-effective solutions fuel market expansion. Segmented by solution type (building automation, energy management, etc.) and region, the market is set to grow significantly, supported by technological innovation and government policies promoting smart infrastructure.

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Market Scope

Key Drivers

While smart buildings contribute significantly to smart cities, their development operates independently. Integrated sensor networks within buildings enable real-time monitoring of electricity and water consumption, evaluation of sustainability metrics, and seamless interaction with other smart city systems. Consequently, the rising adoption of smart cities is a key factor propelling the growth of the global smart building market.

Opportunities

• Increased IoT Adoption: Growing integration of IoT devices enables advanced building automation and real-time monitoring.
• Green Building Demand: Rising focus on sustainable construction and energy-efficient solutions presents vast growth potential.
• Smart City Development: Expanding smart city initiatives create demand for interconnected and intelligent building systems.
• Technological Advancements: Innovations in AI, machine learning, and cloud computing open doors for smarter, predictive building management systems.
• Government Support: Incentives and policies promoting energy efficiency and digital infrastructure encourage market expansion.

Challenges

• High Initial Costs: The upfront investment in smart building technologies, including sensors, automation systems, and infrastructure, can be a significant barrier for many organizations.
• Integration Complexity: Integrating new smart technologies with existing building systems or legacy infrastructure can be complex and costly.
• Data Security and Privacy: The use of interconnected devices and sensors raises concerns over cybersecurity and the protection of sensitive data from potential breaches.
• Technological Compatibility: Compatibility issues between different smart technologies and platforms can hinder seamless system integration and reduce the effectiveness of smart building solutions.
• Lack of Skilled Workforce: The need for professionals with expertise in smart building technologies, IoT, and automation systems exceeds the current supply, limiting growth in some regions.

Regional Insights

In 2024, North America led the smart building market, accounting for 35% of the revenue share. The energy solution segment is set to grow at the highest CAGR. The implementation service segment dominated the market, while the support and maintenance service segment is expected to experience the fastest growth. The commercial sector held the largest revenue share, and the residential segment is projected to grow at the highest rate during the forecast period.

Market Key players

• Siemens AG
• Schneider Electric
• ABB Ltd.
• Cisco Systems Ltd.
• IBM Corp.
• United Technologies
• Delta Controls
• Building IQ
• Johnson Controls
• Honeywell International Inc.

Recent Announcements

• In April 2024, the global leader in smart, healthy, and sustainable buildings, Johnson Controls, was named the overall leader for its smart building management platform in the Smart Building Management Platforms competitive assessment conducted by ABI Research, a global technology intelligence company.
• In March 2024, as India intensifies its efforts to decarbonize its expanding building infrastructure, the Mahindra Group, a prominent Indian industrial enterprise, and Johnson Controls, a global leader in smart, sustainable, and healthy buildings, announced a groundbreaking Net Zero Buildings Initiative.
• This collaborative effort aims to support the decarbonization of India’s commercial, urban residential, and public buildings. The initiative will streamline access to essential data and resources, enabling organizations to embark on their journey toward net-zero buildings.

Market Segmentation

By Component

• Solutions
  • Safety and security management
    • Access control system
    • Video surveillance system
    • Fire and life safety system
  • Energy management
    • HVAC control system
    • Lighting management system
  • Building infrastructure management
    • Parking management system
    • Smart water management system
    • Elevator and escalator management system
  • Network management
    • Wired technology
    • Wireless technology
  • IWMS
    • Operations and services management
    • Real estate management
    • Environment and energy management
    • Facility management
    • Capital project management
• Services
  • Consulting
  • Implementation
  • Support and maintenance

By System

• Parking Management System
• Physical Security System
• BEMS
• Others

By Technology

• Wireless Technology
• Bus Technology
• Others

By Application

• Commercial
  • Retail
  • Hotel
  • Healthcare
  • Others
• Residential
• Industrial

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