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High growth expected for the security market

by Andy Clutton

marketgrowth16The estimates of independent market researchers indicate that the worldwide market volume in the security industry will probably grow to well over US $500 billion by 2020.

Since time immemorial, the economic situation in the building trade has been an important indicator for security investments. According to the estimation of the market analysis entitled “Global Construction 2030“, the annual growth of the construction volume should, at 3.9 percent, be more than one percentage point above the forecast GDP growth in the next 15 years. China, the USA and India will have the highest rates of increase in this respect. However, it is foreseeable that, for a wide variety of reasons, the economic situation in the security industry will increasingly develop independently of the economic situation in the building trade.

The new growth factors for the security markets are really similar worldwide. In addition to a positive investment climate, the following aspects are specified most frequently: the global danger of terrorism which is making states invest in public security, urbanisation, regulatory obligations for state or private infrastructures and, to an increasing extent, also the willingness and ability of the private households to spend money on security measures for protection from criminal threats.

Another factor relates to technological developments which are desired by society and can hardly be implemented without raising the security level: Internet of Things (IoT), Smart Buildings and Industry 4.0 (or IIot – Industrial Internet of Things) will only result in the often hoped-for cost reductions if the processes are sufficiently secure.

Because of these influences, the growth rates specified by market analysts are regularly considerably above the growth rates for the global “gross domestic product“. More than twice as high growth corridors are specified in nearly all the fields of the sector. For example, the global investments for public security which are estimated at approx. US $220 billion for 2015 will grow by 10.9 percent per year on average until the end of 2020.

In the partial segment of the security industry with the highest turnover (the IT or cyber security field), the analysts are expecting an annual growth rate of 9.8 percent up to US $170 billion worldwide until 2020. The classic electronic security (video surveillance, access control and intruder alarm technology) should reach US $42 billion worldwide by 2020 (average rise: eight percent).

An average annual growth rate of 11.5 percent is assumed in the fire prevention market. With fire and gas alarms, sprinkler technology, fire extinguishers and transmission technology, a global turnover of US $79.2 billion should be reached in 2020. The driving forces are, above all, not only increasing normative or statutory requirements but also the technical level which has been achieved in the meantime and suggests substitute investments in older installations in many places. Smoke alarms constitute a subject which has strengthened the market particularly in Germany in recent years (not least due to statutory stipulations) but is lagging a little behind here. Worldwide, analysts are estimating the average annual growth at 5.3 percent until 2020.

Video surveillance is clearly at the top of the sources of turnover in the global market for security technology in the classic security segment, unlike in Germany where it is intruder alarm technology. According to a current market analysis, 54 percent of the manufacturers’ turnover in the three most important fields of classic security (video surveillance, intruder alarm technology and access control) in 2015 was accounted for by video surveillance, 23.5 percent by the intruder alarm sector and 22.5 percent by access control.

Article source: Security Essen

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