The smart city movement is gaining momentum across the globe. Cities are investing in technology to become more efficient, sustainable, and responsive to citizen needs. A large portion of this investment is going into IoT infrastructure—the systems of sensors, connected devices, and data platforms that enable cities to function smartly. In this article, we explore 30 key stats on how budgets are being allocated to IoT infrastructure in smart cities and what they mean for decision-makers, planners, and technology providers.

1. Global smart city IoT infrastructure spending reached $130 billion in 2023

This number shows just how committed governments and city planners are to building smarter cities. The $130 billion spent in 2023 reflects both new projects and upgrades to existing systems.

It’s not just large cities making these moves—medium-sized cities and smaller municipalities are joining in too. That opens up opportunities across the board.

If you’re a city planner or tech vendor, this stat signals an open field. Many cities still haven’t rolled out full-scale IoT programs, so there’s room for partnerships, pilot projects, and funding proposals.

Also, budgeting for this kind of infrastructure isn’t a one-time thing. It’s ongoing, covering installation, integration, and maintenance.

For companies in the IoT space, your pitch should emphasize how your solution fits into the long-term strategy—not just short-term savings. Highlight reliability, ease of integration, and scalability.

For cities, the key is to build flexible budgets. Costs can evolve as technology changes, so it’s smart to keep funds reserved for adjustments down the road.

The $130 billion spent globally is a clear sign that the era of smart cities is no longer a distant goal—it’s a present-day movement.

2. IoT devices account for nearly 45% of smart city tech budgets

This tells us that almost half of what cities spend on tech goes into devices themselves—things like sensors, cameras, meters, and connected equipment.

These are the eyes and ears of a smart city, collecting real-time data to improve everything from traffic to air quality.

So, if you’re selling or managing IoT devices, this is your moment. But it’s not just about getting the contract. Once devices are installed, they must be managed, updated, and maintained.

This creates a long-term relationship opportunity for service providers.

For city planners, this stat suggests a critical need for a clear device strategy. Don’t just think about what you need now. Think ahead: how many devices will you need in five years?

What’s the upgrade path? Will the devices you buy today still work with tomorrow’s software?

Spending nearly half the tech budget on devices means the pressure to get it right is high. Choose equipment with strong vendor support and proven performance.

And don’t forget about cybersecurity—each device is a potential entry point for hackers. Plan for protection, not just function.

3. By 2025, IoT infrastructure spending in smart cities is projected to hit $200 billion

That’s a huge jump in just two years. From $130 billion in 2023 to $200 billion by 2025 means cities are accelerating their plans. Delays are no longer an option; urgency is here.

If you’re involved in funding, procurement, or development, this forecast matters. The growth shows investor confidence and indicates that cities are prioritizing long-term value over short-term costs.

Now’s the time for cities to line up their financing strategies—grants, public-private partnerships, and innovative funding models.

With that kind of spending ahead, competitive bidding will get tighter, and innovation will become a key differentiator.

Companies selling IoT infrastructure need to demonstrate how their solutions reduce complexity, shorten deployment times, and offer measurable returns.

Cities, in turn, need internal champions to push these projects through approvals and ensure public buy-in.

With $200 billion in play, there’s no reason to wait. Start planning now. Build alliances. Push pilot programs that can scale quickly. The future is being funded faster than ever.

4. 60% of smart city budgets include dedicated funds for sensor networks

Sensor networks are everywhere in a smart city: on streets, in buildings, in vehicles, on poles.

They collect data that helps city services make real-time decisions—about traffic flow, pollution, energy use, and more.

If 60% of budgets already include these, it’s clear they’re foundational. But it also means there’s room for optimization. Are those sensors working efficiently? Are they interoperable with other city systems?

Cities should consider adopting sensor platforms that support open standards.

This prevents vendor lock-in and makes it easier to expand or change technology later. Maintenance is another big one. A sensor is only as good as its calibration and data accuracy.

If you’re a vendor, position your solution as easy to deploy, self-healing if possible, and low on maintenance costs. And highlight how your sensors play well with other infrastructure—traffic systems, emergency services, energy grids.

The smart move for cities is to treat sensors not as a one-time investment but as part of a living network that evolves with the city’s needs.

5. Traffic and transportation consume about 25% of IoT infrastructure budgets

Traffic management is one of the biggest reasons cities go smart in the first place. Congestion is costly, frustrating, and a major source of pollution. That’s why a quarter of the budget goes here.

Cities are installing adaptive traffic lights, vehicle detection systems, and real-time transit tracking.

These systems reduce delays, increase safety, and lower emissions. But it’s not just roads—smart parking, electric vehicle charging, and even bike-sharing systems all count.

If you’re in transportation tech, lead with data—how your product improves flow, saves money, or reduces carbon. For cities, the key is integration. A smart traffic light is good. But when it talks to emergency vehicles, public transit, and pedestrians, it’s powerful.

Also, think about the citizen experience. Can residents see traffic info on their phones? Can buses adjust based on demand? Small improvements can create big wins.

Don’t forget: transportation solutions need constant updates. Build that into your budget. Cities change, and your systems need to keep up.

6. Environmental monitoring takes up 12% of IoT spending in smart cities

Air quality, water levels, noise, temperature—these are the silent factors that shape urban life. Environmental sensors help cities make smarter decisions and respond faster to emergencies like floods or wildfires.

With 12% of spending going here, it’s clear this is becoming a priority. Climate change is driving new regulations, and cities are under pressure to provide clean, safe environments.

For vendors, the opportunity is to provide sensors that are reliable, weather-resistant, and easy to install. Bonus points if they self-report maintenance issues or calibrate automatically.

Cities should not just install sensors and walk away. Set up dashboards that make data easy to read and act on. Involve public health, emergency services, and environmental agencies in data analysis.

And don’t forget the public. Publishing this data on a citizen portal builds trust and keeps communities informed. It’s not just about collecting data—it’s about using it to make life better.

7. Public safety and surveillance receive 18% of IoT infrastructure budgets

Keeping citizens safe is always a top priority, and IoT makes it smarter. Cameras with AI, gunshot detection systems, emergency response automation—all fall into this category.

At 18% of budgets, this is a major area of investment. Cities want faster response times, more coverage, and better coordination among departments.

The tech stack might include everything from facial recognition (where legal) to predictive policing tools.

Vendors need to be sensitive here. Privacy concerns are high. Solutions should have transparency built in—clear data retention policies, encryption, and audit trails.

Cities must involve legal and ethics teams early in the process. How long is footage stored? Who has access? How are biases in AI addressed?

Also, look beyond crime. IoT can improve fire detection, emergency medical response, and disaster alerts. Broaden your definition of safety to get more value from your investment.

8. Smart energy and utilities consume 20% of IoT-related spending

Energy efficiency is no longer optional. With climate goals tightening, cities are upgrading their grids, water systems, and energy networks using IoT.

At 20%, this is a major slice of the budget. Smart meters, leak detectors, and energy demand forecasting tools are all in demand.

Cities can save millions by finding leaks early, managing energy usage in real time, or shifting loads during peak hours. These are practical, budget-friendly changes with long-term returns.

Vendors should focus on interoperability. Your system should plug into existing utility software without custom work. Also, emphasize cost savings and measurable ROI. Utilities are usually regulated and need to justify every dollar.

Cities should create feedback loops. If the system shows high water use, is someone fixing it? If electricity demand spikes, can you respond in time?

Use the data. Don’t just collect it.

Use the data. Don’t just collect it.

9. Waste management IoT systems account for 6% of infrastructure budgets

It may seem small, but this 6% can make a big difference. Overflowing bins, inefficient collection routes, and landfill overuse are all problems that smart waste systems can solve.

IoT sensors in trash bins tell collection teams when to pick up. GPS and AI can design the most efficient routes. Cameras can check for illegal dumping.

For cities, the benefits are lower costs and happier citizens. No one likes smelly bins or missed pickups. But it’s also about sustainability—less fuel use and fewer emissions.

If you’re offering a solution here, focus on simplicity. Your system should be easy to install and manage. Many cities still do waste collection manually—make the leap to IoT feel easy and low-risk.

Cities should start small. Try a pilot in one neighborhood. Prove it works. Then scale up.

10. 70% of smart city planners prioritize IoT connectivity in capital budgets

Without connectivity, none of this tech works. That’s why 70% of planners now prioritize it. Whether it’s 5G, fiber, or mesh networks, having strong, reliable communication is critical.

If you’re planning a smart city, connectivity should be the foundation. Start by mapping coverage gaps. Don’t just think about downtown—look at parks, rooftops, and underserved areas.

Vendors should offer flexible solutions that adapt to different network conditions. Edge computing can help where connections are weak.

Also, think about redundancy. If one part of the network fails, how does the system keep running?

Plan for the future. Today’s networks won’t be enough in five years. Budget for upgrades now to avoid being stuck later.

11. Edge computing receives approximately 10% of IoT infrastructure allocation

Edge computing is growing fast in smart cities, and for good reason. When devices can process data close to where it’s generated—on the “edge”—things run faster. There’s less delay, and the systems don’t rely so heavily on central servers or the cloud.

With 10% of infrastructure budgets going here, cities are starting to realize that sending every bit of data to the cloud just isn’t practical anymore. Traffic cameras, utility sensors, and emergency systems often need to act instantly. Edge computing helps them do that.

For city officials, this means rethinking where data is processed. Should a streetlight decide when to turn on by itself, or wait for a server to tell it? In many cases, autonomy makes more sense.

If you’re a vendor, show how your hardware or software improves performance at the edge. Emphasize real-time decision-making and lower bandwidth costs. And highlight security—edge devices need protection too.

Cities should also plan for management. Edge systems need monitoring, updates, and support just like centralized ones. Make sure your teams are ready for that.

This is not a “nice to have” anymore. It’s becoming essential for responsive, efficient urban systems.

12. Annual growth rate for smart city IoT budgets averages 19% globally

A 19% annual growth rate shows that cities aren’t slowing down—they’re scaling up. Every year, budgets are increasing, and the trend is global. That’s a strong signal for vendors, planners, and investors.

For cities, this means two things: first, you’ll need to build teams that can manage bigger projects. Second, you should create roadmaps that break your goals into phases—what do you want to accomplish this year, next year, and beyond?

A steady budget increase allows you to test and refine your strategies. Start with the basics—connectivity, traffic, safety. Then expand into areas like health monitoring, smart buildings, or citizen engagement platforms.

If you’re a solution provider, use this growth to build relationships. Offer scalable products. Cities don’t want to rip and replace every few years—they want tech that grows with them.

And remember, not every city moves at the same speed. Tailor your pitch to where they are in the journey.

13. Over 80% of smart cities plan to expand IoT infrastructure by 2026

That’s nearly every smart city out there planning to grow in just a couple of years. If you’re not ready for expansion now, you’ll be behind soon.

Cities already using IoT are looking to go deeper—adding more devices, linking more systems, and generating more data. That brings challenges too: integration, maintenance, and security all become bigger concerns.

For city leaders, this is a good time to assess what’s working and what’s not. Are you getting value from your current systems? Are there any bottlenecks or silos? Fix those before scaling up.

If you’re a tech provider, offer services that make expansion easier. Can your system connect with older tech? Does it support open APIs? Can it scale without needing new hardware?

Also, highlight your support capabilities. As systems grow, cities will need help keeping everything running smoothly.

Growth is good—but only if it’s managed well. Prepare now to avoid stress later.

Growth is good—but only if it’s managed well. Prepare now to avoid stress later.

14. 35% of smart city IoT budgets go toward 5G and LPWAN integration

Connectivity isn’t just about Wi-Fi anymore. Cities are investing heavily in technologies like 5G and LPWAN (Low Power Wide Area Networks) to support their IoT systems.

These networks offer speed, reliability, and coverage that older systems can’t match.

35% of budgets going to this space shows just how central it is. 5G supports high-speed, high-density environments—great for urban cores. LPWAN is better for low-power sensors spread over wide areas, like in environmental or infrastructure monitoring.

Cities should start by mapping where each type of network is needed. Use 5G where latency matters—traffic lights, public safety, streaming. Use LPWAN for battery-powered sensors like water meters or air quality monitors.

For vendors, this is a great place to help cities make smart choices. Explain the trade-offs clearly. Don’t push tech for its own sake—match it to the city’s use case.

Also, consider long-term costs. What does it take to maintain these networks? Who owns the infrastructure? Can cities share access?

This investment lays the foundation for every other smart service.

15. Maintenance and lifecycle costs make up 30% of IoT infrastructure budgets

It’s easy to focus on new installations, but keeping everything running smoothly is where cities spend a big chunk—30%, to be exact. That includes replacing batteries, fixing broken sensors, updating software, and responding to unexpected failures.

Cities must plan for this early. Don’t just ask, “What does it cost to install?” Ask, “What does it cost to run this system for 10 years?” Smart budgeting here prevents surprises later.

If you’re a vendor, highlight reliability, durability, and service plans. Offer diagnostics tools that alert cities when something’s not right. Cities love vendors who help them prevent problems, not just fix them.

For cities, create an asset management plan. Track every sensor and device—when it was installed, when it needs servicing, and what parts are required.

Also, budget for training. Staff need to know how to operate and maintain the systems. That cost is often overlooked.

Maintenance isn’t exciting, but it’s essential. Get it right, and your systems will deliver value for years.

16. Cloud-based IoT platforms consume 15% of infrastructure investment

Cloud platforms are where data from IoT devices goes to be stored, processed, and analyzed.

Cities spend about 15% of their infrastructure budgets here, which shows just how important cloud computing is to the whole ecosystem.

A cloud platform lets cities access insights from anywhere. It also allows different departments to share data—transportation, utilities, emergency services, all working from the same source of truth.

But the cloud isn’t one-size-fits-all. Cities should evaluate platforms based on security, scalability, and integration. Do you need a private cloud, or can you go public?

Can your platform handle edge computing? What’s the backup and disaster recovery plan?

If you’re a provider, make onboarding simple. Offer APIs, templates, and training. And don’t just sell storage—sell insights. Show cities how to turn data into action.

Also, discuss data governance upfront. Who owns the data? Where is it stored? What happens if the contract ends?

The cloud is more than a tool—it’s a strategy. Use it wisely.

17. Cybersecurity for IoT systems accounts for 8% of infrastructure budgets

As cities get smarter, they also get more vulnerable. Every connected device is a potential entry point for hackers. That’s why cybersecurity is a growing part of the budget—currently 8%, and rising.

Cities can’t afford to treat security as an afterthought. Build it into every step—from procurement to deployment. That means using secure hardware, encrypting data, and constantly monitoring for threats.

If you’re a city planner, push for cybersecurity standards across all departments. One weak link could bring down the whole network. Also, consider third-party audits and penetration testing.

Vendors should offer transparency—what security measures are in place, how updates are handled, and how breaches are detected and reported.

Train your staff, too. Many breaches happen because someone clicked the wrong link. Human error is the biggest threat, and the easiest to address with the right education.

Security is not just about avoiding disaster. It’s about building trust with your citizens.

Security is not just about avoiding disaster. It’s about building trust with your citizens.

18. Cities in Asia-Pacific lead in IoT spending, accounting for 40% of global budgets

Asia-Pacific is leading the charge, with 40% of global IoT infrastructure spending happening in this region.

Countries like China, Singapore, South Korea, and Japan are making massive investments in smart cities.

Why? They have dense populations, fast-growing urban areas, and a strong focus on technology as a growth driver. They’re also often more agile in policy-making, allowing faster deployment.

For tech companies, this is a hotspot. But it’s also competitive. You’ll need a clear value proposition and local partners. Understand the local regulations and cultural expectations.

For cities outside the region, there’s a lot to learn here. Asia-Pacific cities are testing edge computing, AI-driven traffic control, and citizen feedback tools faster than anyone else.

Watch what they do, and see how you can adapt those strategies at home. Sometimes the future is already here—you just have to look east.

19. Smart street lighting makes up 7% of IoT infrastructure spending

Street lighting may seem basic, but it’s one of the easiest and most visible wins in smart city upgrades. Smart lights can dim when no one’s around, brighten when needed, and even alert crews when they go out.

At 7% of infrastructure budgets, this area punches above its weight.

It saves energy, lowers costs, and improves safety. Plus, light poles can double as sensor hubs—hosting cameras, air quality sensors, or Wi-Fi hotspots.

Cities should start by upgrading existing lights with smart nodes. This is often cheaper and faster than full replacements. Look for solutions that can be installed in bulk and managed remotely.

For vendors, ease of integration is key. Make your lights work with the city’s energy grid and IoT platform. Also, highlight the ROI—many cities recover their costs in energy savings within a few years.

Lighting is a smart city’s gateway tech. It’s visible, measurable, and impactful. Start here, and build from it.

20. Data analytics platforms connected to IoT receive 11% of budgets

Collecting data is just the beginning—what you do with it is what truly matters.

That’s why cities are now directing 11% of their IoT infrastructure budgets into data analytics platforms. These systems help cities make sense of massive data streams from thousands of devices spread across transportation, energy, safety, and more.

Analytics platforms help identify patterns, predict future outcomes, and guide better decisions. For example, if traffic data shows a spike at a certain hour every day, a city can adjust traffic signals to reduce congestion.

If energy data reveals peak consumption times, utilities can recommend off-peak usage to residents.

Cities should look for platforms that offer dashboards tailored for different departments. One-size-fits-all rarely works. Transportation planners need different insights than utility managers. Make sure your analytics solution can slice and visualize data in useful ways.

If you’re a provider, go beyond the numbers. Offer predictive tools, alerts, and automation triggers. Cities want to act on data, not just read reports.

Also, make data accessible to non-tech teams. A powerful platform is useless if no one knows how to use it. Training, simple interfaces, and real-time data streams can turn analytics into everyday tools instead of backroom reports.

Remember, analytics is the brain of the smart city—it ties everything together.

21. 65% of cities increase IoT infrastructure funding year-over-year

A majority of cities—65%—are raising their IoT infrastructure budgets annually. That’s a strong sign of growing confidence. It shows that initial investments are paying off and that city leaders see real results.

This trend also tells us that smart city transformation isn’t a one-and-done process. It’s evolving. Cities are scaling their projects, layering on new capabilities, and expanding into areas like AI, blockchain, and autonomous systems.

For city officials, this is a chance to build momentum. Show early wins, share success stories with the public, and use results to justify budget growth. Keep your stakeholders involved and updated—they’re more likely to support increases when they see impact.

If you’re a vendor, plan for long-term partnerships. Don’t just sell a device or system—sell a roadmap. Offer multi-year packages or staged rollouts to help cities align spending with goals.

Also, be ready for repeat business. A city that bought smart lighting today might be looking for smart parking tomorrow. Build relationships, not transactions.

Growing budgets mean growing expectations. Make sure your team is ready to deliver more as the city grows smarter.

Growing budgets mean growing expectations. Make sure your team is ready to deliver more as the city grows smarter.

22. Retrofitting legacy systems eats up 20% of initial IoT budgets

Many cities aren’t starting from scratch—they’re upgrading old systems. And it’s expensive. Around 20% of initial IoT budgets go into retrofitting legacy infrastructure to work with modern technology.

This includes things like converting analog meters to digital, integrating old traffic systems with new platforms, or updating wiring and power supplies. It’s often messy, and it rarely goes as smoothly as expected.

For cities, this means being realistic. Budget extra time and resources for retrofits. Expect surprises, and work with vendors who understand how to handle legacy systems. Look for solutions that use adapters, middleware, or converters to bridge the old and new.

Vendors, you need to be flexible. Not every client will have the luxury of a clean slate. Offer support for older protocols, and help cities modernize without replacing everything at once.

Also, be honest about what can be saved and what can’t. Sometimes, full replacement is cheaper in the long run.

Retrofitting is the price cities pay for progress. But when done right, it’s also the foundation for a smoother digital transition.

23. Parking and vehicle management systems receive 9% of IoT funding

Smart parking might sound simple, but it solves a big city problem. Finding parking wastes time, fuel, and patience. That’s why 9% of IoT budgets are going toward better vehicle and parking management.

Sensors in parking spots, mobile apps, automated payments, and real-time availability signs are all part of the package. They make cities more efficient and residents less frustrated.

Cities should start by identifying high-traffic areas with frequent parking problems. A smart system here will have the biggest impact. Use pilot programs to gather feedback, then scale.

Also, link parking systems with public transit data. If a commuter sees there’s no parking near a train station, they might choose a different route.

Vendors should offer modular systems. Cities may not be able to overhaul all parking lots at once, but they can add new areas over time. Highlight ease of use, maintenance, and integration with enforcement tools.

Parking is where IoT meets daily life—and when done right, it earns big public support.

24. Nearly 50% of IoT infrastructure costs are allocated in the first two years

Half of the budget is spent upfront. That’s a big commitment, and it’s often where projects make or break.

Cities need to plan carefully for this early spike. It covers hardware, installation, training, and system integration. Any mistakes here can become expensive long-term problems.

Don’t rush. Take time to evaluate vendors, test technologies, and build internal expertise. A rushed implementation leads to regret.

Create milestones and review points. Instead of deploying everything at once, phase it in. This lets you learn as you go and spread costs more evenly.

For vendors, be transparent about timelines and costs. Offer phased pricing or financing options that reduce the upfront burden. Cities will appreciate solutions that fit into multi-year budgets.

The early phase is about building the foundation. Make it strong, and everything else becomes easier.

25. Public-private partnerships fund 30% of smart city IoT infrastructure

Cities can’t always go it alone—and that’s where public-private partnerships come in. Around 30% of IoT infrastructure is funded this way. It’s a powerful model that brings in private expertise and capital while advancing public goals.

For cities, this means learning to speak the language of business. Develop clear value propositions, ROI cases, and performance benchmarks. Show that your city is a good partner—organized, transparent, and results-driven.

Private companies should understand that cities operate differently. Be patient, flexible, and clear about what you expect in return—data, exposure, or revenue-sharing.

The key is alignment. Both sides must see mutual benefit, whether it’s cleaner streets, better transit, or new services for residents.

Also, structure contracts carefully. Define responsibilities, timelines, and dispute resolution paths. A solid partnership agreement prevents future headaches.

PPP is more than a funding model—it’s a collaboration engine for innovation.

PPP is more than a funding model—it’s a collaboration engine for innovation.

26. 40% of smart city projects face budget overruns due to IoT integration complexity

Integration is where many smart city dreams hit a wall. When systems don’t talk to each other or when data formats clash, costs go up—fast. That’s why 40% of projects go over budget.

Cities need to plan for complexity. Create clear system architectures from the beginning. Document interfaces, protocols, and data standards. Build teams with cross-functional skills—IT, engineering, public policy.

Vendors should offer open systems and strong integration support. Avoid closed ecosystems unless absolutely necessary. Work with the city’s other tech partners, not against them.

Also, test integrations in sandbox environments before full deployment. Problems are cheaper to fix in test mode than in the field.

Integration isn’t just a tech issue—it’s a planning issue. Get it right, and you avoid the most common and costly trap in smart infrastructure.

27. Only 12% of smart city IoT infrastructure budgets go toward citizen-facing applications

Despite all the investment, only 12% of budgets go into things people actually interact with. That’s a missed opportunity.

Citizen-facing tools—like apps that show bus arrivals, real-time air quality maps, or feedback portals—build trust and improve engagement. They make residents feel like smart city investments are making their lives better.

Cities should shift more focus here. Find out what residents want. Are they more concerned about safety, transit, or green spaces? Use that insight to shape public-facing tools.

Vendors, design with people in mind. Simple interfaces, clear visuals, and multi-language support go a long way. Also, include options for people without smartphones—text alerts, kiosks, or automated calls.

Visibility matters. If citizens don’t see or feel the benefits, support for smart projects can fade fast.

28. Predictive maintenance solutions using IoT consume 5% of infrastructure funds

Fixing things before they break is smart. That’s the idea behind predictive maintenance—and cities are starting to invest, allocating 5% of their budgets here.

By analyzing sensor data, cities can detect wear and tear early. This applies to streetlights, elevators, HVAC systems, water pipes—you name it.

The result is fewer outages, lower costs, and less disruption.

Cities should start by identifying their most critical infrastructure. Where would a failure cause the most problems? Start there with pilot programs.

Vendors, emphasize savings. Show how your system prevents breakdowns, extends equipment life, and saves money over time.

Maintenance doesn’t have to be reactive. IoT turns it into a strategy, not just a service.

29. 78% of cities allocate funds for integrating AI into IoT systems

Artificial intelligence takes IoT to the next level. It helps cities automate decisions, recognize patterns, and predict problems before they happen. That’s why 78% of cities are now budgeting for AI integration.

Think of AI as the control center. It processes massive data streams and gives actionable recommendations—like adjusting traffic signals in real time or rerouting trash trucks based on bin status.

Cities need to choose use cases carefully. Start where AI can make the biggest impact—traffic, public safety, or energy.

Vendors, make your AI tools explainable. Cities want to know why a decision was made, especially in sensitive areas like law enforcement or health.

Also, train your AI on local data. What works in one city might not fit another.

AI isn’t magic. It’s a tool—and when combined with IoT, it becomes incredibly powerful.

30. Lifecycle IoT infrastructure costs are typically 2–3x the initial capital outlay

Many cities underestimate what it really costs to run a smart system over time. Initial installation is just the beginning. Maintenance, upgrades, data storage, software licenses, and training add up. That’s why lifecycle costs are often 2 to 3 times the original spend.

Cities should take the long view when budgeting. Plan for the full lifespan of each component. What does it cost to replace batteries? How often do firmware updates happen? Who provides support?

If you’re selling a solution, be transparent. Break down costs year by year. Offer service packages and update plans.

Also, look for efficiencies. Can devices self-diagnose? Can you automate updates? Small savings, multiplied across hundreds of devices, make a big difference.

Lifecycle planning avoids budget shocks and ensures your smart city stays smart over time.

Lifecycle planning avoids budget shocks and ensures your smart city stays smart over time.

wrapping it up

Smart city budgets are no longer futuristic concepts—they’re real, growing, and full of opportunity. Whether you’re building, funding, or supplying IoT infrastructure, understanding where the money goes is key to getting the most value.

These 30 stats give a clear roadmap of priorities, pain points, and possibilities. Use them to plan better, pitch smarter, and build cities that work better for everyone.