Global Smart Building Market Size, Segmentation, Trends and Growth Analysis Forecast by 2031

Smart Building Market Overview and Analysis:

The Smart Building Market is currently valued at USD The global smart building market size was valued at USD 69.80 billion in 2022 and is expected to register a CAGR of 11.3% from 2023 to 2031.

A smart building is a structure that uses IoT and automated technologies to control building functions such as heating, ventilation, air conditioning, lighting, security, and other systems. A smart building collects and manages data using sensors, actuators, and microchips by the functions and services of an organization (or household). Such smart infrastructure solutions assist building owners, operators, and facility managers in improving asset dependability and performance, decreasing energy consumption, improving space utilization, and reducing buildings' environmental effects.  

Smart Building Market Latest Trends:

The surge in the adoption of smart buildings in multiple regions is driven by the growing need for better utilization of buildings (and building premises) and the need for better resource management in urban environments. In addition, the growth in the need for public safety and security is fueling the growth of the smart building market. However, security concerns associated with intelligent building and lack of funding & and adequate infrastructure limit the growth of this market. Conversely, the emergence of artificial intelligence in smart buildings and the rise in the IoT market & and its application in smart buildings are anticipated to provide numerous opportunities for the expansion of the smart and intelligent building market during the forecast period.

Segmentation:

The Report Covers Global Smart Building Solutions and technology is segmented

By Components :

• Building Energy Management System,
• Infrastructure Management System,
• Intelligent Security System

Applications :

• Residential
• Commercial

Geography

• North America
• Europe
• Asia-Pacific
• Middle East
• Africa
• South America

Drivers Smart Building Market Need for Efficient Resource Utilization

Smart building management solutions can provide businesses (or residents) with effective resource management tools. For instance, the automated scheduling and monitoring tools enabled by networked sensors allow for greater resource utilization, such as enhanced power management and water use. Moreover, IoT-enabled devices can provide automated control over numerous operational areas, such as inventory management, delivery tracking, fuel management, and replacement parts management.

For instance, RFID tags and a network of sensors can be used to track the position of equipment and shipments within the building. Such applications of smart building solutions are promising great growth opportunities for the intelligent building market.

Smart Building Market Minimize energy costs and promote sustainability

Maintaining sustainability and minimizing carbon footprint can be challenging for commercial buildings. According to a report published by the World Economic Forum in February 2021, non-residential buildings are on average 40% more energy-intensive than residential buildings. Moreover, as per a study conducted by Energy Star, EPA in March 2020, more than 30% of the energy consumed by commercial buildings is wasted. Such instances highlight the need for smarter building management solutions, which in turn produce some great opportunities for the growth of smart building solutions. Furthermore, many governments have stringent rules for construction companies to ensure that buildings use suitable energy-saving measures and have effective resource management systems in place. Such regulations further promote smart building market growth

Restraints Smart Building Market Growing Incidence of Cyber Attacks

The risks associated with cyber-attacks on critical infrastructure are amplified due to the increasing use of interconnected devices used to automate processes and manage operations more efficiently. According to Kaspersky's 2019 report, almost 40% of the computer systems used to control smart buildings and homes were subject to some form of malicious attack in the first half of 2019. In most cases, computers that control BAS were compromised. Thus, such instances show that the growing incidence of cyber-attacks may slow down the growth of the studied market.

COVID-19 Impact Analysis of Smart Building Market

With the advent of a global pandemic and various social distancing measures and lockdowns being imposed globally during the period, the majority of individuals were stuck in their homes, leading to an increased demand for advanced home automation and IoT tools for specialized services such as smart energy management, smart heating, ventilation, and air conditioning (HVAC) control, smart lighting control, among others. According to a study published by the Swedish multinational networking and telecommunications company, Telefonaktiebolaget LM Ericsson in March 2022, stated that consumer devices will account for 63% of all installed IoT equipment in 2020, and the number of mobile IoT connections is predicted to reach 3.5 billion by 2023. Such instances indicate a positive consumer trend towards the adoption of IoT and building automation solutions thus aiding in the growth of the global smart building industry in the coming years.

Segmental Analysis:

Building Energy Management System to Hold a Significant Market Share of Smart Building Market

Due to an increasing number of commercial buildings, the growing demand for reduction in energy consumption levels and continuing growth of energy use created a need to develop innovative techniques to reduce and optimize building energy use. Building energy management systems (BEMS) have gained popularity because of the increasing interest in energy conservation and savings. Building energy management systems can control and monitor the building's energy needs. Further, in July 2021, Johnson Controls, a global player in innovative, healthy, and sustainable buildings, announced the availability of OpenBlue Net Zero Buildings as a Service. Johnson Controls will serve as a one-stop shop for businesses seeking to achieve net zero carbon and renewable energy targets.

The offering recognizes customers' need for assistance in making these goals easier to plan, execute, track, and achieve. Thus, due to the above-mentioned reasons the segment is expected to witness significant growth over the forecast period.

The Commercial Smart Building Segment is Expected to Witness Significant Growth Over the Forecast Period.

Smart commercial buildings have advanced IoT sensors in place to collect data from various building functions and subsystems, data that the building’s operator can use to both automate and enhance the building’s operations and maintenance. For example, building operators can use this smart building IoT data to identify operational inefficiencies in their building, improve building controls, and automate key building-management tasks, including heat and lighting management. Furthermore, the recent developments are expected to fuel the growth of the studied market. For instance, in June 2021, Endeavor Business Media launched Smart Buildings Technology, a new brand dedicated to serving the ecosystem that brings integrated intelligence to new construction and existing commercial buildings. 

North America to Dominate the Market Over the Forecast Period of Smart Building Market.

North America is one of the leading markets for Smart Buildings and IoT-enabled smart devices, the region witnesses the increased application and acceptance of Smart building solutions. North America holds a significant market share owing to the high volume of early adopters in the United States and Canada. Over the forecasted period, the region is expected to dominate the global market, owing to its developed infrastructure that can house smart automation solutions in residential and commercial segments.

For instance, in October 2021, The U.S. Department of Energy (DOE) announced USD 61 million in funding for ten pilot projects using new technology to transform thousands of homes and workplaces into cutting-edge, energy-efficient structures. These Connected Communities can interact with the electrical grid to optimize their energy consumption, significantly reducing carbon emissions and energy costs.

Furthermore, with the rise in energy costs and environmental awareness, more and more Americans are looking for smart, connected, and automated building solutions; with the add-in capabilities of safety and alarm systems, fire safety, surveillance, and security are the most installed products. The IoT-enabled smart building solutions are also widely accepted in the USA. According to the Energy Impact Assessment, U.S. Energy Information Administration, the average energy charges of the USA in 2022 were anticipated to increase by 3.9% to 14.26 cents/kWh, which has been on a constant rise since the 1990s.

Competitive Landscape :

The Smart Building Market is highly competitive due to the presence of many global players working globally and regionally. Some of the market players working in this domain are

Key Players :

• Honeywell International Inc.
• Siemens AG
• ABB Ltd.
• Schneider Electric SE
• IBM Corporation
• Huawei Technologies Co. Ltd.
• Cisco Systems Inc.
• Johnson Controls Inc.
• Legrand SA Avnet Inc.
• Hitachi Ltd.

Recent Developments:

• The smart building market is currently fragmented, with the presence of established global and domestic players across the globe. The market will be mainly driven by modern technologies and customizations to attract end-users. Vendors are concentrating primarily on offering innovative products and solutions that can optimize energy consumption and serve a high degree of building automation.
• July 2021 - Honeywell and Nexii Building Solutions Inc. announced a strategic alliance to advance the development of low-impact buildings. This alliance designates Honeywell as the exclusive building technologies supplier for Nexii's latest buildings, offering products that provide energy savings and operational efficiencies.
• April 2021 - Johnson Controls, a provider of smart, healthy, and sustainable building solutions, has partnered with a Connected IoT Device service provider subsidiary of Arm to accelerate innovation in connectivity, security, and intelligence at the edge for Johnson Controls OpenBlue technology.

Frequently Asked Questions (FAQ) :

Q1. What is the Growth Rate of the Smart Building Market ?

Q2. Which factor is Limiting the growth of Smart Building Market ?

Q3. Which Region is expected to hold the highest Market share ?

Q4. What segments are covered in the Smart Building Market Report ?