Technological advancements stand at the core of Asia’s smart city revolution, leveraging modern technologies such as artificial intelligence (AI), the Internet of Things (IoT), robotics, digital twins, and data analytics to revolutionize urban living.
The ongoing rollout of 5G and future deployment of 6G technologies will further support smart city developments, enabling smarter buildings, transportation systems, and services, fundamentally reshaping how cities operate.
The Asia-Pacific smart cities market is projected to reach USD 1,635.3 billion by 2032, growing at a compound annual growth rate (CAGR) of 38% from 2025 to 2032, according to Meticulous Research. This growth is attributed to the increasing government initiatives to meet the needs of the rising urban population.
As Asian countries race to keep pace with the global transition to a smarter world, more investments continue to flow into transforming urban landscapes with innovative technologies.
Asia’s Smart City Market
China is poised to dominate the Asia-Pacific smart cities market in 2025, followed by Japan, India, and Singapore. Japan is expected to exhibit the highest growth rate during the forecast period, driven by the increased adoption of IoT technologies and the growing demand for energy-efficient solutions.
Singapore, often considered as the benchmark for smart city developments, is set to lead the Southeast Asian market, driven by the rapid adoption of cutting-edge solutions and government-led initiatives. Supporting this claim, Singapore leads the technological readiness sector in Southeast Asia, followed by Malaysia, Brunei, Thailand, and Vietnam, according to PwC.
The transformation of Asia’s smart cities spans various sectors, including smart buildings, governance, healthcare, transportation, security, energy, and infrastructure. Advancements in these areas not only provide greater access to technology but also drive economic growth and innovation, contributing to increased gross domestic product (GDP) and job creation.
For Southeast Asia alone, the smart cities market is projected to hit USD 236.7 billion by 2032 at a 39.9% CAGR, driven by the growing use of IoT and smart devices.
In a significant effort to unify smart city developments across the region, the ASEAN Smart Cities Network (ASCN) was launched, with a total of 108 smart city projects as of September 2024.
Challenges to Urban Development
Establishing smart cities presents challenges that must be addressed to ensure successful developments. Smart sustainable cities rely on secure and reliable telecommunication infrastructure for interoperability to support large volumes of ICT-based applications and services, according to the International Communication Union (ITU).
While rapid advancements in urban development have enabled new technologies to improve quality of life, it has also led to extreme traffic congestion.
The integration of AI and IoT technologies into smart cities introduces significant security challenges. Without reliable cybersecurity measures, cybercriminals could potentially disrupt an entire smart city. The constant data exchange between private and public sectors can also enable unauthorized access, leading to data breaches.
Network connectivity may also pose a challenge, with many advanced technologies relying on connectivity to operate.
High implementation costs of smart infrastructure may hinder development, particularly in developing remote areas. Massive data processing capacity and reliable network connectivity is already required to power smart cities, which can be challenging to achieve and maintain.
While technical and financial hurdles exist, social inclusion remains a concern in smart city developments. Many residents may struggle to adapt to new technologies. For instance, elderly people who are not familiar with using smartphones and applications may struggle to navigate digital processes and transportation systems. Technology savvy residents may benefit but others may be left behind due to age, lack of abilities, or resources.
Building the Asian Cities of the Future
Asian countries are making significant strides in smart city developments, with international organizations providing substantial support. The ITU has established Study Group 20 (SG20) to develop international standards for IoT technologies in smart cities. The United for Smart Sustainable Cities (U4SSC) initiative, launched by the ITU in collaboration with the United Nations Economic Commission for Europe (UNECE) and UN-Habitat, promotes public policy and encourage the use of ICTs.
Developments in key areas include digital inclusion and transformation, crowdsourcing for urban infrastructure monitoring, smart fire protection, smart buildings, and data-middle platform IoT. A smart village initiative was also introduced to accelerate the implementation of Sustainable Development Goals (SDG) in remote areas.
Established in 2017, China’s city of the future, Xiongan New Area, is being developed to showcase the country’s high technology and urban development. Xiongan features advanced infrastructure, including a high-speed rail station and ‘city brain’ data center as well satellite internet, Beidou navigation system, and smart connected vehicles.
South Korea continues to advance its smart city initiatives. In 2024, the country introduced its 4th ‘Smart City Comprehensive Plan’ for 2024-2028 to expand sustainable space models, construct AI and data-driven city foundations, and promote the global expansion of K-smart cities. In support of this plan, a K-city expansion to the Philippines has recently been announced.
Originally launched in 2014 as ‘Smart Nation Vision,’ Singapore refreshed its initiative as ‘Smart Nation 2.0’ in 2024, aiming to utilize technology more effectively to transform the country’s digital future. The new initiative will enable Singapore to adapt to the ever evolving technological trends. The initiative includes ‘Virtual Singapore,’ a 3D intelligent representation of the country for implementing future use cases.
In early 2025, Toyota announced the completion of Woven City’s Phase 1 at the base of Japan’s Mount Fuji. Designed as a ‘living laboratory,’ this futuristic city will incorporate advanced technologies such as AI, robotics, and autonomous vehicles, a significant milestone in Japan’s smart urban development. In addition, Japan also launched the Society 5.0, an initiative that aims to solve social issues through the use of innovative technologies.
While several smart city initiatives have already emerged, the world’s biggest smart city project, the ‘New Manila Bay City of Pearl,’ is yet to rise in the Philippines by 2035. This 407.42-hectare development on reclaimed land is the biggest ‘Belt and Road’ project between the Philippines and China to date.
India’s ‘Smart Cities Mission’ (SCM) aims to establish 100 smart cities to modernize the country’s urban environment. As of December 2024, the mission has completed 7,380 out of 8,075 projects. Moreover, 10 smart beach lagoon cities with Edge data centers are set to be developed in Karnataka.
In 2024, Malaysia announced its plans to build ‘Discovery City,’ a 582-acre smart city project in Johor, while Thailand revealed its plan in 2023 to establish 105 smart cities by 2027 as part of its Thailand 4.0 digitalization initiative.
Looking Ahead
As we look at 2025 and beyond, Asia holds a promising digital future. AI-driven technologies are becoming central to smart city initiatives across the region to address critical issues such as traffic congestion.
Partnerships and government leaderships have proven to be critical in advancing smart city initiatives. However, the region must push to balance technological advancements with sustainability and social equity, which will impact millions of lives within Asia and beyond.