Smart Cities to Drive Diversification in Saudi Arabia: Frost & Sullivan

smart city riyadh xpress
smart city riyadh xpress

Smart Cities to Drive Diversification in KSA

Fateen Obaid, Riyadh – Frost & Sullivan’s recent analysis finds that the coming decade will see widespread uptake of smart city solutions, especially in medium-sized cities and cities in developing nations.

The smart city market will grow $2.46 trillion in 2025, presenting significant opportunities for solution providers operating within the smart city space. There will be 26 smart cities by 2025, with the majority existing in North America and Europe.

Smart Cities

Smart cities are cities built on ‘smart’ and ‘intelligent’ technology and solutions. 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.

Smart cities spending on technology in the next six years is expected to grow at a CAGR of 22.7%, 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 dashboards, and online city services.

Vision 2030

As per the vision of Saudi Crown Prince Mohammed Bin Salman, he envisions creating the world’s most livable city that can attract the world’s greatest minds and best talents by 2030.

Saudi Arabia needs smart cities to serve as an economic engine for the Kingdom. Being primarily an oil-reliant economy today, the Kingdom is increasingly looking to diversify, and a smart city is a step in that direction.

For instance, the Kingdom is looking at raising the share of non-oil exports in non-oil GDP from 16% to 50% by 2030. The Kingdom expects smart cities to add hundreds of thousands of jobs by 2030; smart cities are expected to drive diversification and will contribute significantly to the domestic GDP by 2030.


The Kingdom has already allocated $500 billion to invest across 285 municipalities to implement smart cities. Saudi Arabia has already initiated efforts towards transforming the first five cities, including Makkah, Riyadh, Jeddah, Al-Madinah, and Al-Ahsa.

The Kingdom has a clear vision and has taken a holistic approach focusing on key dimensions such as governance, mobility, economy, environment, people, and living to achieve its aspirations.

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.

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.

Smart Cities

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