Smart city technology not only promises to improve city life for residents, but stands to make investors loads of money in the process.

ValueWalk sums up the upbeat findings of a new report by Bank of America Merrill Lynch (BAML) on smart city investment.

The report, entitled “21st Century Cities: Global Smart Cities Primer Picks” identifies huge opportunities in “smart” technologies that is predicted to balloon to a market worth up to $1.6 trillion by 2020.

This follows a January report by Persistence Market Research that anticipates the worldwide smart cities market will grow to a phenomenal $3.48 trillion by 2026.

The BAML report sees this trend driven by the increasing dominance of smart cities in the global economy. While home to only 55% of the world’s population, smart cities nonetheless generate 85% of the world’s Gross Domestic Product.

This is largely due to the global trend toward urbanization that has been gaining speed over recent decades.  However, along with the huge numbers of people flocking to cities have come equally large challenges in infrastructure management, pollution and crime.

BAML identifies six key areas where huge investment opportunities are expected to be driven by smart cities and related smart technologies.

Infrastructure leads the way

Leading the pack is the global smart infrastructure market, which Technavio predicts will be worth an eye-watering $712 billion by 2020.

An area closely related to infrastructure is the smart energy space, which Navigant Research sees growing to $137 billion by 2024.

Cutting across all areas of future city tech is the smart safety and security market, which Homeland Security Research Corporation sees growing to a $226 billion addressable market by 2021.

In the realm of the built infrastructure Navigant sees smart buildings becoming a $101 billion market by 2021. And AT Kearney sees the smart housing market doing equally peachy, growing to $405 billion by 2030.

And smart mobility makes up the remainder of the market, which McKinsey sees growing into $1.5 billion segment by 2030.