PUNE, India — The global smart building market is forecast to grow from $5.73 billion in 2016 to $24.73 billion by 2021, increasing at a compound annual growth rate (CAGR) of 34 percent from 2016 to 2021, according to a report published by MarketsandMarkets.

The major drivers for an upsurge in demand for smart building technology solutions include an emphasis on energy efficient buildings and reducing CO2 emission, growing initiatives by government authorities for the development of smart building projects, rising need for integrated security and safety systems, and rising adoption of Internet of Things (IoT) platforms within building automation technology.

The report notes that evolving cloud-based IoT platforms and environmental concerns and green building initiatives offer major opportunities for smart building solution providers. According to the International Energy Agency, approximately 40 percent of the world’s energy is consumed by buildings. The growing consumption can be attributed to the increasing number of electrical appliances; the increasing use of energy is raising the amount of energy waste and CO2 emissions, which leads to an urgent need for sustainable and efficient usage of energy. The market for building energy management systems is expected to grow at a significant rate across the globe. Moreover, growing urbanization is also pushing greater adoption of building energy management.

The system integration and deployment services segment is expected to grow at the highest CAGR during the forecast period. The market for services is expected to witness a major increase because of the rise in the adoption of smart building automation software, which is propelled by the increasing demand for system integration, consulting, support and maintenance, and managed services that support the implementation of smart solutions across the various building types.

Europe is expected to hold the largest market share in the smart building market. Per the report’s geographic analysis, Europe is likely to benefit from its technological advancements and a large number of smart city initiatives being undertaken in the region, which are already underway. The adoption of smart building solutions across Europe is estimated to rise at a significant rate due to the regulatory push and policy initiatives, operational efficiencies, cost containment, and sustainability benefits, as well as changing business dynamics. This is expected to increase the penetration of system integration and deployment services in this region.

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