Municipalities worldwide are shifting their smart city initiatives from experimental pilots to financially sustainable, large-scale deployments. This strategic change is driven by a growing emphasis on achieving a clear return on investment and building scalable technological infrastructure, according to new industry data.
Research from Berg Insight indicates that city governments are consolidating various technology trials into unified, manageable networks of assets. This move aims to ensure that smart city projects deliver tangible economic and operational benefits beyond the demonstration phase.
Infrastructure as a Foundation
A key indicator of this maturation is the expansion of smart street lighting networks. The installed base of individually controlled smart street lights, excluding deployments in China, reached 27.9 million units globally in 2024. This infrastructure is forecast to expand at a compound annual growth rate, forming a foundational layer for further urban innovation.
These connected lighting systems are no longer viewed as standalone projects. Instead, they are increasingly seen as a backbone for other services. The poles can host sensors for monitoring air quality, traffic flow, and noise levels, or provide public Wi-Fi and electric vehicle charging points.
The Drive for Measurable Outcomes
The transition from pilot to permanent installation reflects a more disciplined approach to urban technology spending. Operational leaders and city finance officers are demanding concrete evidence of cost savings, efficiency gains, or new revenue streams before approving large budgets.
For smart lighting, the return on investment calculation is often straightforward, involving reduced energy consumption from LED bulbs and lower maintenance costs due to remote monitoring and control. The success of these measurable projects builds political and public support for more complex smart city applications.
This focus on financial sustainability helps mitigate the risk of projects stalling after initial grant funding expires. It encourages planners to design systems with long-term operational costs and revenue models in mind from the outset.
Consolidation and Interoperability
The trend toward consolidation, as noted by analysts, addresses a common problem in early smart city development: fragmented systems that cannot communicate. Cities are now prioritizing platforms and technologies that can integrate data from various sources, such as transportation, utilities, and public safety, into a single management dashboard.
This interoperability is crucial for maximizing return on investment. It allows for more comprehensive urban management and data-driven decision-making, rather than operating isolated “silos” of technology that offer limited insight.
Global Implications and Future Development
The shift in strategy has global implications for technology vendors, network operators, and municipal planners. Suppliers are adapting their offerings to emphasize total cost of ownership, scalability, and open standards. The market is evolving from selling discrete devices to providing holistic urban solutions with clear value propositions.
Looking forward, the expansion of proven, revenue-generating or cost-saving infrastructure like smart lighting is expected to continue. This established network will likely accelerate the deployment of adjacent technologies. The next phase of development may see a stronger focus on applications that directly impact citizen services and quality of life, such as intelligent traffic management to reduce congestion and smart waste collection to optimize routes.
Source: Berg Insight
