In Europe, the smart cities market is poised for remarkable growth in the coming years, underscoring a telco renaissance and paving the way for economic prosperity. By 2024, the market’s projected revenue is estimated to reach an impressive USD 14.75 billion, showcasing the immense potential within this sector. Furthermore, the market is anticipated to experience a steady annual growth rate (CAGR 2024-2029) of 10.74%, culminating in a substantial market volume of USD 24.56 billion by 2029.
According to the Thinkz report “Revolutionizing Urban Mobility: A Smart City Blueprint for Europe,” the continent’s approach to smart city development focuses on several key areas: The Human Connection, Innovation at the Speed of Life, Engaging Local Commerce, and Sustainable Solutions for Urban Challenges.
Smart cities and regions are at the forefront of the EU’s ambition to become the first climate-neutral continent by 2050. A host of initiatives attest to this, including the European Green Deal, the reinforcing REPowerEU initiative as well as the binding targets set by the Climate Law. Furthermore, the European Commission aims to mobilize at least EUR 1 trillion in sustainable investments over the next decade to decarbonize economies.
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The Top 10 Leading Sustainable Smart Cities (and Initiatives) in Europe
Nicosia, Cyprus: In partnership with Logicom Solutions and Cisco, Nicosia is developing next-generation data networks, intelligent street lighting, and smart mobility systems. CYENS Centre of Excellence is building a digital twin of Nicosia using CesiumJS. This 3D model integrates IoT data, visualizing city landmarks, road networks, environmental data, and more, facilitating better urban planning and public engagement.
Oslo, Norway: The Powerhouse alliance is developing energy-positive buildings that generate more energy than they consume and Oslo’s public transport is set to become emission-free by 2028. The city also has extensive cycling infrastructure.
Freiburg, Germany: Freiberg is pursuing investments in solar panels and wind turbines; energy-efficient building materials and designs; smart grid technology; IoT sensors for energy, water, and waste management; green public transport and cycling infrastructure.
Barcelona, Spain: Barcelona’s Sentilo Platform manages data from 18,000 sensors monitoring weather, electricity, water, air quality, and noise levels. The Barcelona Lighting Masterplan upgraded 1,100 lampposts to LED, reducing energy usage and integrating air quality sensors. Additionally, the smart water management project installed 20,000 smart meters to optimize irrigation, resulting in a 25% increase in water conservation.
Zurich, Switzerland: The smart waste management initiative utilizes sensors to monitor bin levels, optimizing collection routes and cutting costs. Zurich’s smart public transport system utilizes real-time data from IoT devices to improve efficiency and reliability. The Power-to-Heat (P2H) System harnesses excess renewable energy to heat buildings via the district heating network. eZürich fosters digital technologies to enhance public services and citizen engagement.
Amsterdam, Netherlands: The Amsterdam Smart City Platform is an online hub connecting over 4,000 members in an effort to foster projects across areas such as infrastructure and technology, energy, water and waste, mobility, circular city, governance and education, and citizens and living. The city’s smart traffic management system uses IoT sensors and real-time data to improve traffic flow, cut congestion, and lower emissions, achieving a 43% reduction in parking search time. Circular economy initiatives, like the Circular City Scan and Power to Protein, focus on minimizing waste and promoting resource regeneration. Digital DEMO Amsterdam collaborates with major companies to test sustainable, innovative, and digital solutions for the city’s future.
Helsinki, Finland: Helsinki leverages a digital twin, a virtual simulation of the city, to enhance urban planning and traffic management. Smart mobility initiatives, such as the Mobility Lab Helsinki, use real-time traffic data and AI to optimize traffic flow and reduce emissions, with projects like the Trombia Free automated street sweeper illustrating these efforts. Aiming for carbon neutrality by 2035, Helsinki integrates renewable energy and smart home solutions in residential areas like Kalasatama. AI innovations are widespread, from detecting brain disorders at Helsinki University Hospital to monitoring indoor air quality through the Quasimodo project. Smart buildings, such as Merihaka and Vilhonvuori, are incorporating smart thermostats and renewable energy systems. The DataLokki platform supports the tourism industry with real-time data for informed decision-making.
Vienna, Austria: Vienna’s smart traffic management uses real-time data, smart traffic lights, and sensors to optimize traffic flow and reduce congestion. Its smart water management system employs IoT sensors to enhance water usage efficiency and reduce waste, while its smart waste management system utilizes IoT-enabled systems to optimize waste collection and recycling.
Stockholm, Sweden: The Stockholm Royal Seaport is a sustainable development featuring energy-efficient buildings, smart grids, and renewable energy sources. Hammarby Sjöstad is an eco-friendly district with integrated waste, energy, and water management systems. Digital Demo Stockholm (DDS) has partnered with the Royal Institute of Technology to explore sustainable, innovative solutions, while the DOLL Living Lab tests smart solutions for lighting, parking, waste, and environmental monitoring.
Copenhagen, Denmark: Project Air View measures street-level air pollution leveraging Google’s capabilities to guide anti-pollution policies. The Signature AI Project uses AI to optimize energy consumption in municipal buildings, reducing energy use and CO2 emissions. RAPID develops digital tools for managing public spaces during pandemics, including a 3D model of Copenhagen Central Station.
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Economic Viability and Standardization of Smart Cities in Europe
The economic viability and standardization of smart cities in Europe are central to the successful development and implementation of smart city technologies. The StandICT.eu 2026 project, funded by the European Union, highlights the importance of creating a comprehensive overview of smart city standards through its “Landscape of Smart Cities Standards” report. This project aims to identify gaps in standardization, which is crucial for enhancing technology deployment and interoperability across the EU and globally, especially in relation to smart city expansion.
The need for effective standards is underscored by the rapid urban population growth forecasted by the UN, which projects an increase from 4.4 billion (today) to 6.6 billion by 2050, with a significant number of cities surpassing one million inhabitants.
In the smart city market, smart infrastructure remains the largest segment, accounting for 55% of the market. However, there is anticipated growth in other areas such as smart buildings, digital energy, and smart environmental solutions. This shift indicates evolving investment opportunities and a broadening scope for smart city projects. The economic feasibility of these projects is supported by innovative funding models, including revenue-sharing with partners and performance-based payments.
The Smart Cities Marketplace, led by the European Commission’s Directorate-General for Energy, exemplifies these advancements. With a budget exceeding EUR 6 million, this initiative provides essential matchmaking services and support for smart city projects. It has successfully assessed over 130 bankable project proposals, amounting to a total investment value of EUR 668 million. This demonstrates the substantial financial backing and strategic guidance available to accelerate investments in smart, sustainable, and inclusive urban development. The integration of standardized practices and innovative funding approaches thus plays a pivotal role in advancing smart city initiatives across Europe.
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Telcos: Creating the Connection for Smart Cities
Telecommunications companies play a pivotal role in the advancement of smart cities through innovative technologies and strategic investments. Key technologies include high-speed broadband networks, such as 5G, 5G-Advanced and NB-IoT, which enable real-time data communication and support a wide range of smart applications from traffic management to environmental monitoring.
Innovations like smart poles, which integrate sensors and connectivity into urban furniture, and network slicing, which allocates dedicated bandwidth for different services, further optimize city operations. Additionally, private network solutions and enhanced optical networks facilitate secure and efficient data exchange, supporting the seamless integration of smart technologies across urban environments.
Virgin Media O2’s introduction of smart pole trials exemplifies how integrating connectivity with urban infrastructure can enhance smart city functionality by providing data collection points and high-speed internet.
Similarly, BT’s deployment of NB-IoT (narrowband IoT) networks supports smart cities by enabling efficient data communication for various IoT applications, such as smart meters and environmental sensors.
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The Port of Tyne’s implementation of 4G and 5G private network connectivity highlights the importance of robust and secure communication networks in managing and optimizing port operations, which are crucial for smart city logistics and infrastructure.
Nokia’s enhancement of GBI’s optical network capacity between the Middle East and Europe demonstrates how improving global connectivity supports smart city data exchange and services on an international scale.
Collaborations like those between CTHINGS.CO, Deutsche Telekom, and Valmont in showcasing 5G network slicing for urban infrastructure reflect the evolution of network technologies to support diverse smart city applications, from traffic management to public safety.
Cornerstone and Signify have transformed street lighting by integrating 5G and IoT connectivity, demonstrating how advanced telecommunications can improve urban lighting systems, making them more adaptable and energy-efficient.
Telefónica’s alliance with Nokia is set to enhance private 5G networks in Spain, further highlighting the critical role of telecom investments in strengthening the infrastructure that underpins smart city solutions.
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A Smart Future
The future outlook for smart cities in Europe is promising, driven by advancements in technology, increasing investments and supportive research and development (R&D) initiatives (largely encouraged by the European Commission).
The EU has invested about EUR 3.1 billion in urban sustainable development research in Horizon 2020, its current research and innovation program. A new feature of Horizon Europe is ‘Missions,’ which aims to deliver solutions to some of the greatest challenges facing our world (including that of sustainable smart city development).
The climate-neutral and smart cities mission will bring together the many activities of the Innovating Cities initiative. It has the ambition to support, promote and showcase 100 European cities in their systemic transformation towards climate neutrality by 2030 and turn them into innovation hubs for all cities, benefiting quality of life and sustainability across Europe.
JPI Urban Europe, supported by a coalition of 20 countries, is working to expand its influence through enhanced capacity building in urban policy, funding, and research. The initiative fosters a multi-stakeholder community—JPI Urban Europe AGORA—which facilitates knowledge sharing and the adoption of innovative approaches. Notably, the program’s sub-initiative—Positive Energy Districts and Neighbourhoods, established in 2018 in collaboration with SET Plan Action 3.2—aims to develop, implement, and replicate 100 Positive Energy Neighbourhoods by 2025. This ambitious goal underscores the continuous commitment to advancing sustainable smart city development across Europe.
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