Frost & Sullivan’s recent analysis, Post-Pandemic Growth Opportunity in the Global Security Industry, finds that the security industry has tremendous investment opportunities despite the economic slowdown witnessed due to COVID-19. Under an aspirational recovery scenario, the global security industry is likely to grow at a compound annual growth rate (CAGR) of 4.3 percent, garnering revenue of $140.6 billion by 2025 from $109.3 billion in 2019. The conservative forecast scenario predicts that the industry will generate $131.01 billion between 2019 and 2025, at a CAGR of 3.1 percent. In the pre-COVID-19 forecast, the industry was estimated to increase at a CAGR of 7.1 percent, generating revenue of $164.97 billion over the forecast period.
“COVID-19 will cause a brief slowdown in the security market after almost a decade of uninhibited progress,” said Danielle VanZandt, aerospace, defense and security industry analyst at Frost & Sullivan. “Additionally, while some security sectors may find themselves experiencing a slower recovery than others, much of the industry will witness a shift to more service-based solution offerings after years of hesitance by customers to adopt these solutions.”
VanZandt added, “The key security markets such as disaster management, banking and finance, and airport security will recover at a different pace, and the time taken to return to pre-crisis spending levels will also vary significantly. Markets that will record higher-than-average CAGRs during the recovery period include ports (4.5 percent), disaster management (4 percent), first responders (4 percent) and mass transit (4 percent).”
Despite a marginal slowdown expected in 2020 and 2021, strong demand-side trends will present immense development potential for security market participants. The following trends are forecast to generate growth opportunities in this sector:
- Digitalization priorities: Remote/cloud-connected access to security systems and monitoring tools will witness a drastic rise in demand as manned guarding will become extremely limited due to stay-at-home orders issued by state or federal governments, and likely not recover once those orders expire.
- Emphasis on contactless technologies: In the post-pandemic period, contactless technologies such as biometrics, remote access and authentication, and multi-use analytics solutions will attract investments.
- Plug-and-play surveillance: Customer willingness to deploy plug-and-play surveillance equipment over permanent system additions due to cost-effectiveness will offer vendors repeat business opportunities.
- Sensors-to-action: Vendors must prioritize the development/enhancement of data analytics and sensor networks’ capabilities to provide increased value to customers without having to purchase new solutions or equipment.