The global elevator control market size was valued at USD 7.5 billion in 2021. It is expected to reach USD 13 billion by 2030, growing at a CAGR of around 6.2% during the forecast period (2022–2030).
Elevator control systems have developed quickly alongside the rise in high-height buildings. The market is expanding due to the integration of cutting-edge technology in control systems. Adopting advanced technology like artificial intelligence, smart sensors, and the Internet of Things helps reduce energy consumption, improve elevator safety, and effectively manage traffic or congestion. With the growth in smart buildings equipped with IoT systems, an upcoming trend in the integration of elevator control systems along with other intelligent building components is expected to become mainstream. The elevator control system also prevents unauthorized elevator users from accessing restricted floors of a building.
With door phones, ZKTeco elevator control systems instruct the elevator to go on an authorized floor after gaining building access. Intelligent building entry and floor access provide users with security and convenience. The development of a smart elevator control system offers continuous monitoring of the elevator's wear-out points and collects statistical data about them or measures some values. The predictive maintenance application at a remote monitoring center analyses data from the elevator and calculates the level of wear in different parts, alerting the building management or maintenance company for elevator parts approaching the end of their predicted lifetime.
One of the most energy-efficient elevators is the machine-roomless (MRL) traction elevator. The manufacturers primarily redesigned the motors and all the necessary equipment typically housed in a machine room above the conventional elevators to fit into the elevator's hoistway. These space-saving improvements have eliminated the need to build and supply energy to a machine room, thereby consuming significantly less energy than the larger versions previously used. The global government initiatives for smart cities are contributing to the rising demand for elevators.
Additionally, the rapid urbanization of regions such as Asia-Pacific is shaping the construction sector due to increased demand for infrastructure. It has fueled the need for towering skyscrapers for residential and commercial purposes. As a result, tall buildings are increasingly being built. Asia region accounts for a large share of the most elevated building projects, boosting the speedy growth of the elevator control market in the Asia-Pacific region.
Smart cities have been fueling the need for modern technologies that support urbanization with intelligent buildings. Smart cities are focused on greener buildings with technologies that use renewable energy sources. In addition, governments across the world have also been encouraging sustainability and green initiatives with significant financial packages. COVID-19 has also pushed the digital transformation to offer safety and convenience. The demand for artificial-intelligence-based analytics to make smarter proactive maintenance decisions have increased.
The vendors in the market are investing heavily in new technologies to meet the demand from the market. In June 2021, Hyundai Elevator and KT signed a memorandum of understanding (MOU) to expand elevator Digital Transformation (DX). The two companies announced the joint development of elevator DX services such as AI-based elevator control solutions, self-driving robots, and elevator linkage solutions. Both the companies plan to expand their cooperation by utilizing technologies such as AI, Big Data, and Cloud. Such instances drive market growth.
The increased investment in allied infrastructure has been rapidly increasing for sustainability and is majorly concerned with the growing urbanization trend. Significant investment in building infrastructure can be witnessed in emerging economies, such as India, China, Saudi Arabia, and other BRICS, which creates new opportunities for the elevator control market. Developing high-rise buildings has also created a demand for elevator control systems and components. In March 2021, England's prominent developer Woodbourne Group put the master plan out for consultation of an ambitious scheme consisting of three residential blocks and an office building. The developer claims the energy-efficient credentials of its Curzon Wharf proposals would make it the first mixed-use build of its kind to achieve net-zero operational emissions.
The vendors have been partnering with infrastructure developers to install elevators with modern elevator control systems. In 2019, Toshiba Group partnered with Surat Diamond Bourse or SDB (India) to deliver its solutions for a building with a capacity of 4200 offices, witnessing more than 65,000 footfalls per day. The company installed 128 elevator units that will operate at 3 meters per second. The elevators will be installed across 15-story high nine towers of the SDB. Such partnerships for mobility in newly developed infrastructure propel market growth.
The only factor that challenges the growth of the market studied is the high initial investment cost. The requirement of skilled technical consultants for the integration and installation of the elevator control system increases the total cost of investment. In addition, the manufacturing costs of such systems are also high, thus reflecting upon higher actual prices in the market. According to Colorado Elevator Solutions, on average, a home elevator installation costs between USD 2,000 and USD 60,000, depending on the type of elevator. The installation includes a car, cables, and a fully functioning electronic control system. The majority of the total costs of the building are for the electronic control system as it acts as the brain of the elevator system and is required for smooth operations, thus, requiring significant attention.
According to the United Nations Department of Economic and Social Affairs, the global urbanization rate was approximately 53.9% in 2015 and is expected to reach 68.4% in 2050. These urban centers are becoming important national and regional economic growth drivers. Smart cities are growing globally due to rapid urbanization. According to estimation by the United Nations, in India (404 million), China (292 million), and Nigeria (212 million), urban dwellers are expected to be added to the existing populations by 2050.
With the increasing infrastructure modernization, the need for elevators has become inevitable in buildings. However, with the growth in the number of elevators across buildings, the number of people using these elevators is also exponentially rising. This is creating extreme congestion or traffic due to increased wait times. Hence, the need to integrate these elevators with control systems equipped with machine learning, artificial intelligence, IoT, and many more facilitates seamless vertical mobility across buildings.
The global elevator control market share is segmented by application and region.
By application, the global elevator control market is segmented into Residential and Commercial.
The Residential segment accounts for the largest market share and is expected to witness the highest CAGR of 6.4% during the forecast period. With rapid urbanization worldwide, the demand for modern living and the development of smart buildings increased over the past few years. According to Population Reference Bureau, in mid-2020, the degree of urbanization was around 56% globally. The same source suggests that North America was the most urbanized continent worldwide, with approximately 82% of the population living in cities.
Furthermore, Latin America and the Caribbean were reported to have a high degree of urbanization, with around 79% of the population living in cities. Europe ranked third in terms of the degree of urbanization. It is projected that the global share of people living in urban areas will increase to nearly 70% by 2050, compared to 56% in 2020. Such trends are expected to act as primary drivers for the growing demand for smart living across these regions, stimulating market growth. Also, smart buildings and smart homes are the microcosms of smart cities, as residential homes are growing vertically worldwide. Consequently, there is an opportunity for deploying centralized and advanced solutions to gain more impact.
The Commercial segment is the second largest. It includes office buildings, retail, and hospitality sectors. The consolidating trend of developing energy-saving infrastructure in commercial areas is anticipated to push the segment's growth. Modern and smart cities further drive the demand for smart and efficient technologies to support urban development with smarter buildings. These cities will comprise smart transportation services and greener buildings with advanced technologies that promote an eco-friendly and connected world. Advanced elevator technologies are crucial to ensure future smart city sustainability. The global green infrastructure standards, combined with the statutory requirements, are expected to be influential in promoting the application of smarter and better elevators inside the buildings.
Multi-national companies have been expanding their presence in emerging regions, such as Asia, to capture potential growth with minimum cost. These companies are streamlining their operations in a more established market and increasing their headcount in Asian countries. The information technology and the pharmaceutical sectors experienced robust growth of MNCs. For example, according to Singapore's Economic Development Board (EDB) report, more than 37,000 international companies, including around 7,000 MNCs, have their headquarters in Singapore. This expansion fueled the construction of multiple multi-story buildings for workspace and the demand for fast and smarter elevators to move employees to their desired floors with the least number of stops. Such growth parameters have been assisting control system requirements as well.
Region-wise, the global elevator control market share is segmented into North America, Europe, Asia-Pacific, and LAMEA.
Asia-Pacific accounts for the largest market share and is expected to grow at a CAGR of 7.2% during the forecast period. Asia-Pacific represents the fastest-growing region for smart city technologies, with China playing a significant role in the market growth. The development of smart city technology in the region is primarily driven by government investment and the need for public safety improvements, economic development, and efforts to reduce costs and increase sustainability. With countries racing to embrace technology to improve urban life, the demand for market growth is expected to be phenomenal during the forecast period.
KONE, for instance, reported that its new installation of elevator equipment in 2020 represented China as the largest market accumulating a 66% share. Furthermore, South East Asia, India, and Australia accounted for 6% of the share. The rising integration of essential building equipment and systems with Artificial Intelligence (AI) and Machine Learning has increased the demand for smart buildings in these countries. The pandemic has also spiked the demand for contactless and advanced elevator control systems in the region.
Europe is the second-largest region and is estimated to reach USD 2.5 billion by 2030, growing at a CAGR of 4%. Considering market vendors' activities, Schindler transformed the elevator industry with PORT destination control. It primarily catered to large elevator groups or straight-line configurations in heavy-traffic commercial buildings. Also, the PORT technology increased the handling capacity and reduced travel times by up to 35%. Schindler also developed the Robotic Installation System for Elevators (Schindler RISE), which coupled advanced automation with elevator technology. The robot executes installation steps autonomously, which provides many benefits, including a safe and high-quality installation of elevators.
Schindler RISE complements other digitization solutions in the tall building industry, such as Building Information Modeling (BIM). With Schindler RISE, the robot can obtain data directly from the digital building model. Such incremental upgrades to the elevator technology led the domestic revenues from modernization to grow. As per the company's 2020 annual report, the new installations business of Northern Europe witnessed the residential segment with more resilience than the commercial segment. Such trends are expected to boost the growth of the regional market.
North America is the third-largest region. The smart city projects gained momentum over the last decade as more municipalities across the region launched a wide variety of digital transformation initiatives. The United States has been one of the major markets, owing to the rising adoption of smart technologies. The country has a strong foothold of vendors, contributing to the market's growth. Smart building is a vital part of smart city infrastructure developments. Hence, the growing smart city initiatives within the region, coupled with the ever-increasing smart city infrastructure developments, are expected to act as catalysts for the growth of the market studied.
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