Smart Government Market Analysis

Component (Solution, Analytics, Service)

Solution segment is projected to dominate smart government market share of around 60.6% by the end of 2037, owing to rapid improvement in AI, IoT, and 5G technologies. The segment is characterized by diverse set of offerings that enable governments to provide efficient and citizen-centric services. The rising demand for citizen engagement platform boosts the growth of the component segment.

Citizen engagement platforms such as e-government services, digital voting platforms, feedback tools, apps, etc., witness a high rate of participation enabling the growth of the segment. For instance, the Christchurch Council in New Zealand has a Snap Send Solve app where users reported over 48000 local issues in 2019. The diverse offerings in the segment open new revenue streams for the service providers.

The analytics segment is poised to increase its revenue share during the forecast period due to greater demand for data-driven decisions (DDD) and formulating citizen-friendly policies. Due to the growing number of public sector organizations processing large amounts of data for better service delivery, smart service providers for advanced AI-driven analytics tools are witnessing a steady boost in revenue. For instance, in 2024, NITI Aayog in India launched the National Data & Analytics Platform (NDAP) that allows merger of datasets and make cross-sectoral analysis easier to provide data-driven solutions to the public.

Deployment (Cloud, On-Premise)

The cloud segment in smart government market is estimated to significantly increase its revenue share by the end if 2037. The segment’s growth is attributed to increasing adoption of cloud-based solutions by the public sector to improve service delivery and optimize operations. Governments require secure cloud-based solutions to store large amounts of data.

The increase in investments to modernize IT infrastructures by governments is attributed to the rapid growth of the segment. For instance, in 2021, Amazon Web Services became the official cloud platform of the Digital Agency of Japan for regional and public government. In 2022, the Digital Agency of Japan subscribed to cloud services from Microsoft and Oracle Corporation. Major cloud services platform like Oracle, Amazon Web Services, and Google Cloud offer dedicated government cloud infrastructure to maintain robust security.

Our in-depth analysis of the global market includes the following segments