Dive Brief:
- A MarketsandMarkets report predicted the global smart building market will grow from $5.73 billion in 2016 to $24.73 billion by 2021, increasing at a compound annual growth rate of 34% over the period.
- Major demand drivers cited in the report include a growing interest in energy-efficient buildings and CO2 emission reduction, increased adoption of Internet of Things (IoT) platforms, government initiatives that encourage construction of smart buildings, and growing demand for integrated security systems.
- Smart city initiatives will give Europe the largest smart buildings market share, while the system integration and deployment services segment is expected to grow at the highest CAGR during the forecast period to satisfy an accelerated rate of adoption, according to MarketsandMarkets.
Dive Insight:
File this report under further indications that the IoT age is upon us. Late last year, Gartner predicted that 2017 will be the year that IoT technology sees widespread residential adoption — following the faster-to-adopt commercial sector — based on demand for connected home technologies like the Nest thermostat. Google was certainly on that track early, purchasing Nest for $3.2 billion in early 2014.
This MarketsandMarkets report points to smart city construction and its related energy-efficient commercial building design and development as the major weight behind a coming market surge for smart building technologies. One major example of the smart city trend is the currently under-construction Gramercy District project in Ashburn, VA. Several construction and technology giants are developing the 2.5 million-square-foot, $500 million complex, which will be the first smart city in Virginia and one of only a handful in the U.S. Gramercy executives said the goal of the project is to create "a seamless integration of technology and real estate" where people who live and work there can use their smart phones and other devices to interact with the development around them.
In addition, the report's expectation that implementation and deployment services will account for the highest compounded growth rate over the forecast period is indicative of both an accelerated and a nascent market. Whether and when smart building technology sees a market maturation and corresponding slowdown in growth will depend on the outcome of those deployments. The necessity for training, adoption, and implementation is likely to put pressure on both growth and systems R&D as end-users, builders and designers realize both the challenges and opportunities inherent in building out fully connected communities.
