Smart building solutions to move US$ 328.6 bn. by 2029

smart building device
Sheila Zabeu -

January 18, 2023

In 2023 and the coming years, new applications of technologies to make buildings smarter should emerge. According to a study by Fortune Business Insights, in addition to stricter government regulations around the world and concerns about high energy, environmental and sustainability costs, the wider adoption of Internet of Things (IoT) solutions and advances in Artificial (AI) will drive demand for smart building solutions, projecting a market valued at $328.6 billion by 2029, with a compound annual growth rate of 22.2% between 2021 and 2029.

In regions such as the United States and Europe, building owners are being pressured by regulatory agencies to reduce energy consumption and greenhouse gas emissions from their facilities and, as a result, an electrification trend called ‘Electrify Everything’, which recently began banning new natural gas installations for space heating and hot water supply.

“An all-electric building requires a viable sustainability plan and a smart monitoring strategy. It also requires creative thinking, investment in technologies and a holistic effort. Driving these changes can seem prohibitively expensive, but there are capable solutions. to significantly reduce operating expenses and help lower carbon emissions,” said Udaya Shrivastava, vice president and chief technology officer at Honeywell, a provider of building control technologies.

According to Honeywell, which recently presented its vision on trends that will help shape buildings that are more sustainable, safe and focused on the comfort and convenience of occupants, cybersecurity needs investment. The Internet of Things continues to approximate and combine Operational Technology (OT) and Information Technology (IT) systems, expanding the surfaces of cyberattacks, which are increasingly frequent and sophisticated. Therefore, having cybersecurity resources enhanced by AI will be essential, including for automating building control systems in a scenario with a shortage of specialized professionals.

In addition, we also need to make buildings more automated to be more energy efficient and sustainable. In these efforts, building management systems can rely on AI/ML tools to automate and optimize operations, identifying waste scenarios and providing the best balance between current building occupancy, weather conditions and utility prices.

“It has become imperative for building owners to make changes to monitor their impacts in terms of carbon emissions. To do that, they need better data about their operations,” says Manish Sharma, vice president and general manager of sustainable buildings at Honeywell.

Considering buildings inserted in the larger context of cities, Honeywell points out that it will be necessary to develop energy resilience in the face of the most extreme and frequent climatic events. Communities must deploy solutions to better respond to power outages, especially when they affect critical infrastructure such as hospitals and traffic control systems. Microgrids and battery energy storage systems with real-time adaptive control strategies will help cities and communities continue to provide essential services during and after disasters.

Why smart buildings matter

In a world increasingly concerned with sustainability issues, buildings are an important piece of the puzzle, both in the construction and operational phases. Of the total CO2 emissions in the world, 40% are generated by buildings, with 27% coming from the operational sphere. In comparison, building materials and infrastructure (commonly referred to as embodied carbon) account for an additional 13%.

There is enormous potential around the decarbonization of buildings. According to McKinsey, the real estate industry is looking to decarbonize its assets and create sources of value by increasing energy efficiency and replacing fossil fuel-powered heating systems with low-emission solutions. The average spending on physical assets could reach $1.7 trillion annually between 2020 and 2050. Furthermore, decarbonizing buildings could result in a net gain of around half a million direct jobs by 2050.