The global physical security market size was valued at USD 113.54 billion in 2021 and is projected to reach USD 195.60 billion by 2030 at a CAGR of 6.23% from 2022 to 2030. The objective of physical security measures is to protect buildings and their contents. In a nutshell, they restrict access to unauthorized individuals while denying access to undesirables. While network and cybersecurity are important, preventing physical security breaches and threats is the key to protecting technology and data, as well as all staff and faculty with building access. It provides defence against natural disasters, fire, theft, vandalism, and terrorism. It consists of multiple layers of interdependent systems, such as security guards, CCTV surveillance, locks, protective barriers, access control protocols, and other similar methods.
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Concerns about the safety and security of assets, people, and processes have increased as a result of rising crime and terrorist activity. Several lives have been lost, and infrastructure has been severely damaged as a result of these escalating attacks, highlighting the need for physical security solutions. According to the United States Department of State, terrorist activities have been on the rise throughout the world. Even though there has been a decline in attacks in the United States since 2004, following the September 11 attacks, the number of attacks has increased significantly since 2012. The table below details attacks that occurred in the United States between 1995 and 2019.
Due to an increase in thefts and robberies, the household and organizational awareness of physical security measures have grown over time. Automated home security solutions for door locking, intruder detection, fire detection, and LPG gas leakage detection experienced a substantial increase in demand. This is a result of stakeholders' rapid adoption of security systems to protect their assets, possessions, and human capital from any type of threat or unauthorized access. These factors are anticipated to contribute to physical security. During the forecast period, the market is expected to expand.
Due to the integration of high-quality hardware, the initial investment and ongoing costs of employing physical security systems are substantial. Due to financial constraints, small and medium-sized enterprises (SMEs) are hesitant to adopt newer technologies and continue to employ conventional security software. In addition, organisations give priority to securing only mission-critical servers and pay little attention to database data that is not actively being accessed. For physical security professionals to effectively carry out their IT security operations, a lack of adequate funding continues to be a significant concern.
Various civil liberties groups and activists oppose surveillance systems in locations such as highways, parking lots, parks, transportation modes, retail stores, financial institutions, and offices because they are viewed as an invasion of privacy. Concerns have been raised regarding who watches the video and how the video may be used or abused, as people expect that their personal information will only be used for legitimate and specific purposes.
Guidelines should be issued by governments and private sector organizations to reduce the impact of video surveillance systems on the privacy of individuals. For instance, with the introduction of the General Data Protection Regulation (GDPR) or the California Consumer Protection Act (CCPA), any public or private organization employing CCTV to monitor publicly-accessible areas must adhere to the regulatory requirements; otherwise, they face severe penalties. The authorities that monitor on-premises video surveillance, access control, or Automatic Number Plate Recognition (ANPR) systems are subject to EU GDPR compliance, which includes securing access to the information-storing systems and servers. A number of citizens are protesting against the use of video surveillance and facial recognition due to the risk of their identities being misappropriated. This is acting as a restraint on the growth of the local security market because misuse of data can result in privacy breaches, but it creates new opportunities for the physical security market.
This market can be segmented on the basis of components, organisation size, end-users, regions and competitors. The market has been divided into systems and services based on the constituents. In 2021, the systems segment dominated the market and accounted for over 65.0% of global revenue. The segment is subdivided further into Physical Access Control Systems (PACS), video surveillance systems, perimeter intrusion detection and prevention, Physical Security Information Management (PSIM), Physical Identity And Access Management (PIAM), and fire and life safety. In 2021, the submarket for video surveillance systems dominated the systems market. Analogue cameras, axis network cameras, video encoders, monitors, and storage solutions are included in video surveillance systems.
In order to improve remote monitoring and physical security, the adoption of video surveillance systems has increased as a result of technological advancements, such as UHD, and a decline in equipment costs. Increasing physical security & safety concerns, as well as stringent regulatory compliances, are potential growth drivers for this segment. In addition, the rapid growth of commercial and institutional infrastructure in a number of regions has increased the demand for video surveillance, thereby boosting the growth of the segment.
The segment of small and medium-sized enterprises is anticipated to experience the highest CAGR over the forecast period, at 8.2 per cent. The segment expansion can be attributed to theft, environmental hazards, and intruders, as small businesses have a lot of resources and people to safeguard.
Over the forecast period, the large enterprise segment is also expected to record a significant CAGR. The segment is driven by factors such as a larger infrastructure to protect, more vital data to secure, and an increase in spending revenue. Consequently, they are the pioneers of physical security. Moreover, protecting their data from thefts, cyberattacks, and unauthorised access enables the segment to shift to physical security solutions. Cyberthreats are most likely to target businesses that store sensitive and essential personal data. In addition, these threats result in financial losses, information security breaches, and data breaches.
On the basis of end-users, the market has been segmented into transportation, government, banking and finance, utility, and energy, residential, manufacturing and industrial, retail, commercial, and hospitality. Due to the high number of property and resource damages caused by thefts and other attacks, the residential segment is expected to grow at the fastest rate over the forecast period, at a CAGR of 6.9%. In addition to enhancing the user experience and safeguarding property from potential threats, the application of smart technology in residential properties has enhanced the user experience. Integrating comprehensive video surveillance systems, intelligent access control, and a rapid intrusion detection system creates a safe environment. The United States is currently the largest market for residential physical security equipment on a global scale.
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In 2021, North America dominated the market with a share of over 38.5% and was anticipated to continue to do so throughout the forecast period. North America has the highest rate of advanced physical security system adoption. The regional market is propelled by factors such as robust economic growth, regulatory reforms, and rising SME investments in physical security solutions. In addition, a number of public facilities and transportation systems, such as airports, seaports, railways, and bus stations, are focusing on protecting their infrastructure with security layers.
During the forecast period, the Asia-Pacific market is expected to record the highest CAGR. This expansion can be attributed to India and China's increasing demand for intelligent security solutions. It is anticipated that substantial investments by the Chinese government in safe city projects, which primarily focus on city surveillance and traffic monitoring, will stimulate market growth.
In order to gain a larger market share, market leaders concentrate on offering a variety of solutions for a variety of applications. Additionally, businesses concentrate on strategic alliances, mergers, and acquisitions to expand their product offerings and increase their market share. Some of the prominent players in the global physical security market include Hangzhou Hikvision Digital Technology Co., Ltd., Honeywell International, Inc., Genetec, Inc., Cisco Systems, Inc., Axis Communications AB, Pelco, Robert Bosch GmbH, Johnson Controls, ADT LLC.