Increased use of technology
The increasingly complex security needs of clients are creating demand for complementary solutions, such as technology-enabled predictive security services, emphasizing the importance of having the right technology, data and cloud capabilities as a security services provider.This allows security services companies to offer clients more efficient and even higher-quality security solutions. The higher the labor costs in a country, the more attractive the use of technology becomes. However, countries with low labor costs are also showing greater interest in using more technology in security solutions. For instance, in 2021, the number of security cameras installed globally exceeded one billion units, corresponding to an increase of over 50 percent compared to 2018.
Software as a service (SaaS)
We also believe that integrated, software as a service (SaaS) solutions are becoming increasingly important to clients. The physical and digital worlds are becoming more intertwined, driving the development of more advanced security systems, mainly in mature markets. As these systems are integrated with technologies, such as big data and artificial intelligence (AI) through smart devices and the Internet of things (IoT), the need for skilled and highly trained security officers and employees increases. With more devices, sensors and other security equipment being sold in the market, equipment costs are decreasing. Moreover, as data networks evolve and larger, faster network systems become more connected, data storage costs are decreasing.
Due to technological improvements, there is more data available than ever, which can be transferred faster and at lower costs. In combination with the computing power and storage available, there are large amounts of historical data that can be analyzed to enable preventive security. This means that guards increasingly only need to act responsively or according to predictable patterns instead of monitoring and deterring, which have constituted traditional guarding activities.
The increased development of technological solutions is also resulting in a higher level of acquisition activity in the market, as companies are looking to expand their expertise in emerging segments.
Technology as a core complementary offering
In recent decades, the security services industry has witnessed significant growth in the use of technology as a core complementary offering to traditional guarding services. Security services and solutions may be further complemented by the addition of hosted and managed services, cloud services, AI, biometrics, IoT and other remote services.
As a result of the increasing use of technology in security installations, new data and business opportunities are being created. Data analysis is contributing to improvements in both services and technological equipment. For example, data gathered may detect access control anomalies or increase alarm accuracy through video analytics. This information can subsequently be used to design and integrate products and services to further enhance client value. Data may also contribute to the creation of entirely new opportunities such as SaaS tools, where security software products are provided on a subscription basis.
Urbanization and industrialization
Urbanization and industrialization are continuing as people continue to move into cities. The global urban population is growing by more than 1.5 million people every week, and the high population density could in turn lead to concerns about crime.The residential security market is also expected to grow rapidly in most developed countries as technological monitoring equipment becomes more common. Continued industrialization and increased global industrial production are leading to investments in production facilities, offices and other workplaces, each with specific security needs.
Securing sensitive infrastructure
Securitas has experienced a growing awareness of the need to secure sensitive infrastructure from various disruptions. Manufacturing industries, airports, data centers, ports and public transportation are examples of operations that rely on a well-functioning infrastructure and where disruptions could result in high costs and increased vulnerability.
Economic and political development
Economic growth and continued global investments in new construction are driving the demand for security services. The middle class in maturing and developing markets is expected to grow at a CAGR of 3.7 percent from 2020 through 2030.
Increased demand for security services
As global disposable income and net worth rise, there will be more to protect and more clients that can afford to do so, which we believe will fuel the demand for security services. Infrastructure investments in, for example, real estate, public transport and public logistic hubs create a need to safeguard these assets and associated flows, which increases the demand for security services. Increased privatization through the outsourcing of public security services to private security service providers is a way to control or reduce public spending or to open the market for competition.
Customized and cost-effective security
Each industry, company and operation have specific needs and requirements in terms of security. Clients expect suppliers to identify and respond to their specific challenges, providing specialist know-how and dedicated resources. If security providers can meet these challenges, companies will assign them greater security responsibility. Clients are generally prepared to pay more for a service with more comprehensive content, higher quality and relevant specialist skills.
One single point of contact
We are also seeing a willingness in certain markets to pay a premium to have one contact person in charge of the entire security solution, thus gaining more effective and better control over price changes and supply chain and sustainability issues. Furthermore, we believe that there is a general trend towards outsourcing security capabilities, especially in guarding and fire safety. Clients are seeking customized and comprehensive security solutions from a single security services provider to enable more cost-efficient and reliable security services management.
Impact of COVID-19
In our experience, the security industry has traditionally been resilient to recessions, primarily due to the perceived association between recessions and increased crime. COVID-19 negatively affected the global market for security services. For example, the cessation of large public gatherings, such as concerts, conferences and sporting events, decreased the demand for guarding services. The aviation industry and guarding services for airport security were also negatively impacted by COVID-19.
Need for new security solutions and services
Virtual working environments and changing demand for facility usage are creating a need for new security solutions and services. An increase in e-commerce has also fueled the need for tech-enabled security solutions at distribution centers and similar buildings.
IT and cyber security
The shift to e-commerce has spurred the demand for IT and cyber security, which has fundamentally changed the perception of security. COVID-19 resulted in increased demand for security services in key functions, such as essential retail and healthcare during lockdown periods, as well as in guarding and tech-enabled security services including contact tracing and crowd monitoring to support the reopening of societies.