Physical security market to reach $85 billion by 2018

New applications for video surveillance, biometrics and access control expected to drive growth in North America
Tuesday, September 10, 2013

PUNE, India—Demand among government agencies, large enterprises and tech establishments is expected to push the global physical security market, currently worth about $55 billion, to a value of $85 billion by 2018, according to a new report by the research company MarketsandMarkets.

The report, “Physical Security Market by Products and Services Worldwide Market Forecasts and Analysis (2013-2018),” projects the North American market will grow as a result of greater demand for video surveillance, access control, intrusion detection and, most recently, biometrics, Manvi Garg, a research analyst at MarketsandMarkets, told Security Systems News.

“Biometrics is expected to grow in a significant manner in the next five years,” Garg said. “There are a significant amount of research and development investments being done by the tier-1 accounts in this market."

Growth for biometrics technology—which includes fingerprint recognition, facial recognition and iris recognition, as well as other technologies—is projected to be most pronounced in the enterprise, government, defense and transportation verticals. Currently, biometrics technology holds a 10 percent global market share, according to the report.

In the current North American market, however, video surveillance holds the leading position, “both in terms of installed base and accounted revenues,” Garg said.

Other catalysts of growth in the North American market include the rising incidence of terrorist attacks on American soil, both in very recent history and over the past two decades, as well as increased leeriness regarding “insider threats” in government agencies, Garg explains, and the potential of such threats to compromise critical and enterprise infrastructure.

Not entirely unrelated to the rise in terrorism on North American soil is another driver of growth: greater market acceptance—a commercial phenomenon with social, political and ideological roots.

“There have been higher levels of awareness and forthcoming consent to security products and solutions in all the major cities, states and nations,” Garg said, adding that high-profile incidents of violence, especially when covered intensely by the media, have a major impact on “the thoughts of people, enterprises and government agencies alike,” leading to a state of so-called “market acceptance” of physical security systems.

While the report projects the North American market will remain robust, it anticipates that that market, which currently holds between 30-40 percent of the global market share, will lose some of the share to the Asia Pacific market, which is less developed now but expected to grow appreciably during the five-year forecasted period.

Growth constraints in North America include the endemic challenges of integrating new technology with existing security infrastructure. And the tendency of certain niche verticals, such as health care, to struggle to keep pace with ever-changing federal norms and mandates is another factor that could impede growth, Garg said. 

Over the five-year forecasted period, Garg expects the broad array of applications for video surveillance and biometrics to ensure those technologies, in particular, remain cornerstones of the North American market.

“In North America, such installations are happening in building premises, out in the streets, in the border areas, in strict vigilance zones, [and] in military and defense camps, amongst others,” she said.