Report Overview

A smart office leverages technology for assisting its employees in improving work productivity and efficiency. The technologies and services make sure that the employees are stay connected with their team no matter where they operate.

The global smart office market reached USD 31,029.79 million in 2020 and is further projected to reach USD 73,109.67 million by 2027, growing at a CAGR of 11.42% during 2021-2027 (forecast period). The global smart office market growth is attributable to the rising demand for commercial spaces in developing economies. It is accompanied by an acute shortage of space which is raising the costs of commercial spaces in the major metropolitan cities. Additionally, the growth of the global smart office market is also affected by the rising adoption rates of the latest technologies like the Internet of Things (IoT) and Artificial Intelligence in offices across the developed nations. The technologies are helping in incorporating businesses to opt for intelligent solutions in their office premises, thereby enabling the growth of the global smart office market.

Source: BlueWeave Consulting

Global Smart Office Market Overview

A smart office leverages technology for assisting its employees in improving work productivity and efficiency. The technologies and services make sure that the employees are stay connected with their team no matter where they operate. Smart offices combine the use of analytics and technology to comprehend the working space environment and initiate projects that could help improve the overall performance of their employees. Smart offices technology leverages different hardware, software and service like audio-video conferencing software, employee engagement software, energy management tools and hardware, smart security solutions and others. The hardware technology consists of various beacons and sensors that help identify the location of an employee, determine the meeting duration, different rooms location, and others, which reduces the efforts. Additionally, it helps companies manage their employees and reduce their operational costs, which are essential in scaling business over time.

Global Smart Office Market Forecast and Trends

Growth Drivers

Advancements of IoT in Smart office offerings

The technological advancements and the advent of IoT is one of the major factors that are contributing to the rising potential growth of the global smart office market. The smart office industry leverages smart solutions like smart lightning technologies, smart security and surveillance systems and others. The global smart office markethas also been witnessing a surge in the incorporation of such IoT enabled devices due to the advantages it holds such as, better time management, connectivity with employees, office functions, and analyzing the work productivity of their employees.According to the 5G Readiness index estimate released from the European Commission; In 2021, Finland is the most 5G network-ready country in the world. Since 5G plays a pivotal role in augmenting the capabilities of the IoT technology and enhances the connectivity of devices, the growth of the 5G network is allied to the growth of IoT. Since the countries are enhancing their technology infrastructure to incorporate 5G networks; It is thus helping in the growth of the global smart office market.

Rise in Demand for Smart Office Solutions and Sensor Networks for Energy Efficiency

Businesses are incorporating smart offices solutions to reduce their operational costs amid rising concerns about energy-efficient systems. Smart office solutions have proven essential in optimizing unwanted energy usage, thereby helping in plummeting the overall operational costs. The lighting, heating, air conditioning, and ventilation systems are some of the major energy-consuming systems inflating the operational costs. Initially, the companies were reluctant to make a move for expensive lighting options, which provided higher efficiency. However, the companies have started opting for smart lighting hardware solutions that can automatically adjust the brightness levels according to the requirements, thereby optimizing the energy usage and helping and driving the growth of the global smart office market. Additionally, these smart office solutions have aided the organizations in diagnozing the problems related to the energy systems which helps in reducing the maintenance costs to be incurred in the future and diminishes the possibilities of a potential breakdown.

Restraints

High initial setup costs

The initial costs of incorporating such technologies may not be suitable for some startup or medium-scale companies that are already trying to improve their operating models for increasing profits. It is accompanied by high labor costs as the deployment of smart office solutions requires experienced personnel that know the installation process of these solutions. However, the global smart office market is witnessing a shortage of such personnel.

Smart office solutions such as, IoT-enabled room control systems, motion sensors, and smart voice control functions are expensive solutions for a startup that could enhance its operational costs temporarily. As a result, it induces the companies to opt for pay cuts and shifting the office premises for an affordable location which can disrupt the performance of their employees. Thus, it encourages the MSME firms to refrain from incorporating such expensive solutions, which is impeding the growth of the global smart office market.

Impact of COVID-19 on Global Smart Offices Market

The WHO declared the COVID-19 to be a pandemic back in May 2020. After the initial lockdown measures, many industries including, the office's had to shut to curb the spread of the virus. Various measures were adopted to eradicate the possibility of the severe impact of the virus on the people.  However, the widespread growth of coronavirus led to a decline in the production of chipsets which are an essential component in the production of smart offices hardware and software, thereby impacting the industries in the Asia-Pacific. The two major 5G chipset manufacturing companies, namely, Huawei Technologies & Samsung electronics, had to shut their production in the Asia-Pacific region, which disrupted the supply chain of the chipsets that are the building blocks of smart office hardware. Additionally, the companies were encouraged to work-from-home which disrupted the demand for hardware solutions, thereby posing a bottleneck to the growth prospects of the global smart office market.

Global Smart Office Market- By Component

Across the component segment, the global smart office market is bifurcated into Hardware, Software, Services. The software sub-segment accounted for the largest share in the market in 2020. However, the hardware sub-segment is expected to register the fastest CAGR in the upcoming years. The software solutions leverage cloud computing technologies to solve business problems with the help of the internet. Some of the most commonly leveraged smart office software includes time and attendance software, payroll software, CRM support software, location and proximity software, employee engagement and communications software, software to track the productivity of the organization and others. The software enables various opportunities for the organization to tap into and identify the loopholes within the organizations, that once taken into account, could help in the expansion of the business.

Global Smart Office Market- By Office Type

Based on office type, the global smart office market has been segmented into Retro Fit and New Construction Offices. The retrofit offices held the larger share in the global smart office market in 2020. In contrast to this, the new construction offices segment is anticipated to record the fastest CAGR over the upcoming years. The growth of the sub-segment can be attributed to the growing adoption of newer technologies in the already manufactured offices to avoid unwanted construction costs. Since the advent of IoT, companies have started incorporating the solutions in their commercial offices for enhancing their performance without bearing marginal costs. According to an estimate from Commercial Buildings Energy Consumption Survey (CBECS) released in December 2020, the U.S. recorded a 6% jump in sales of commercial spaces and approximately 5.8 million already sold in the year 2018. It indicates that the companies are finding the retrofit set-up to be an optimal choice over new construction offices. Additionally, the sluggish 5G network growth is encouraging countries to stick to the retrofit method. The companies are expected to initiate a transition to new construction offices once the penetration of the 5G technology rises, thereby positively impacting the growth of the retro offices in the global smart office market.

Source: BlueWeave Consulting

Global Smart Office Market- By Region

Based on region, the global smart office market is divided into North America, Europe, the Asia-Pacific, and the Rest of the World. The North American region holds the largest share in the global smart office market. The factors attributable to the growth of the market include the presence of major players like Cisco Systems Inc. and United Technologies Corp., which happen to be the biggest contributors to smart office solutions globally. According to the Center for Strategic and International Studies, over 2000 cities in America, spanning over 200 million people, has some access to 5G technology stating the companies have already started incorporating such technologies to improve the overall functioning of their organizations. The rising penetration rates of the 5G network accompanied by a forecast stating that over 50% of the population in North America may have access to 5G technology by 2025 state that the region is expected to solidify its position in the global smart office market. 

Source: BlueWeave Consulting

Global Smart Office Market - Competitive Landscape

The presence of some technology giants in the market place has greatly impacted the opportunities for new entrants in the market. Additionally, the global smart office market requires high initial capital investments, which is not feasible for small players. As a result, the global smart office is consolidated in nature. Some of the key players in the global smart office market include ABB Ltd., Cisco Systems Inc., Lutron Electronics Co., Inc., Crestron Electronics, Inc., Schneider Electric SE, Siemens AG, Johnson Controls International Plc, Honeywell International Inc., Signify Holding, ASSA ABLOY AB, and other prominent players. 

Recent Developments

•  On 28^thMay 2021, Signify announced the optimization of features for its Interact Office software applications (Space management and Workspace app). The optimization can help organizations and employees to incorporate physical distancing measures. The Interact software applications are powered by connected lighting infrastructure, which can help the building managers curate plans, thereby making critical spacing decisions based on data points generated from the assumptions raised by the applications

• On 12^thMay 2021, ASSA  ABLOY announced its investment in Paravision, which is a leading provider of facial recognition solutions. The investment is expected to augment the company's strategy for the development of biometric solutions. The solution can leverage facial recognition algorithms, thereby providing employee engagement and management solutions that could enhance the working efficiency of the organization.

Scope of Report

By Component

• Hardware
  • Smart Lighting
  • Security Systems
  • Energy Management Systems
  • Smart HVAC Control System
  • Audio–Video Conferencing Systems
• Software
• Services
  • Advisory & Consulting Services
  • Installation & Support Services
  • Managed Services

By Office Type

• Retro Fit Office
• New Construction Office

By Region

• North America
• Europe
• The Asia-Pacific
• The Rest of the World