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Smart Cities will drive diversification in Saudi Arabia, and significantly contribute to its Gross Domestic Product (GDP) by 2030, according to consultancy Frost & Sullivan.
Being primarily an oil-reliant economy today, the kingdom is increasingly looking to diversify, and a smart city is a step in that direction, the consultancy said in a statement.
Saudi Arabia is looking at raising the share of non-oil exports in non-oil GDP from 16 percent to 50 percent by 2030.
The statement said the development of new economic sectors combined with the rise in demand for sustainable and eco-friendly cities supported by green initiatives globally and improving living conditions for its citizens/residents are the main drivers for developing smart cities in Saudi Arabia.
Frost & Sullivan considers a city 'smart' when it has active and verifiable pursuits in at least five of the eight following smart concepts, namely, smart governance and education, smart healthcare, smart buildings, smart mobility, smart infrastructure, smart technology, smart energy, and smart citizens.
The kingdom has already allocated $500 billion to invest across 285 municipalities to implement smart cities, and already initiated efforts towards transforming the first five cities, including Makkah, Riyadh, Jeddah, Al-Madinah, and Al-Ahsa, the statement said, adding that Saudi Arabia expects smart cities 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 said.
Frost & Sullivan has forecasted that the global smart city market will grow over $2.46 trillion in 2025. According to the statement, smart cities' spending on technology in the next six years is expected to grow at a CAGR of 22.7 percent, reaching $327 billion by 2025 from $96 billion in 2019.
Technologies like artificial intelligence and big data will be in high demand to combat the pandemic, with growing opportunities for crowd analytics, open data dashboard, and online city services, it said, adding that more than 26 smart cities would be in existence by 2025, mainly in North America and Europe.
(Writing by Anoop Menon; editing by Seban Scaria)
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