Physical Security Market Size, Share & COVID-19 Impact Analysis, By Component (Hardware, Software, and Services), By End-user (Residential and Commercial/Industrial), By Type (Video Surveillance Systems, Biometrics & Access Control Systems, Intrusion Detection and Prevention Systems, Fire Detection Systems, Physical Security Information Management (PSIM), and Others), By Vertical (BFSI, Government, Healthcare, Manufacturing, Retail, Transportation & Logistics, Energy & Utilities, and Others), and Regional Forecast, 2023-2030

The global physical security market size was valued at USD 108.83 billion in 2022 and is projected to grow from USD 117.70 billion in 2023 to USD 211.67 billion by 2030, exhibiting a CAGR of 8.7%. North America dominated the global market with a share of 45.06% in 2022.

Physical security encompasses the protection of personnel, property, information, and equipment from diverse physical threats such as theft, natural disasters, espionage, terrorism, and burglary. Advanced surveillance cameras, intrusion detection systems, fire alarms, and physical access control systems are among the popular physical security systems.

The physical security market growth is primarily attributed to the increasing concern for public safety and critical infrastructure protection, rapid advancements in video surveillance, biometrics, analytics, and the integration of technologies such as Artificial Intelligence (AI) and the Internet of Things (IoT). According to the 'State of Physical Security Entering 2023' report by Pro-Vigil, a video surveillance company, approximately one-third of the surveyed businesses (28%) reported an increase in physical security incidents in 2022.

Furthermore, 48% of respondents stated that theft was the most common security incident they encountered in 2022, followed by vandalism. With a rise in security incidents across various sectors, the demand for security solutions such as video surveillance systems and access control systems is significantly increasing.

Governments worldwide are making substantial investments in various security solutions to bolster the security of public infrastructure. For instance:

• In September 2023, Indian Railways signed a Memorandum of Understanding (MoU) with RailTel Corporation to install 6,122 CCTV cameras across 364 central railway stations. Out of these, 3,652 cameras will feature a face recognition system to strengthen the security system.

COVID-19 IMPACT

COVID-19 Pandemic had Varying Impacts on Market Owing to a Combination of Factors

The COVID-19 pandemic had a mixed impact on the market. Stringent health and security measures imposed by governments across the globe propelled the demand for contactless access control and temperature screening systems. The demand for remote monitoring and management also soared due to lockdowns and social distancing measures. High-resolution cameras, cloud-based storage, and analytics became crucial for organizations to strengthen their security postures during the pandemic.

However, supply chain disruptions and the cancellation of various events, such as Wimbledon and the 2020 Tokyo Olympics, alongside economic uncertainty, affected the demand for security solutions in some sectors, including retail, media & entertainment, and manufacturing. Labor and raw material shortages in China during the initial phases of the outbreak significantly affected companies that depended on factories in China for raw materials. This resulted in delays in the production and installation of video surveillance systems.

Post-pandemic, rising awareness regarding the importance of robust security systems, technological advancements, and favorable regulatory changes are expected to augment market growth.

LATEST TRENDS

Rapid Technological Advancements in Surveillance Systems and Biometrics to Boost Market Growth

Ongoing advancements in surveillance systems, biometrics, and access control systems are propelling market growth. Innovations such as smart facial recognition, IoT connectivity, cloud computing, high-resolution cameras, and video analytics enable better monitoring and threat detection. AI-integrated surveillance systems enable predictive analytics, helping security operators anticipate security threats and proactively prepare for them.

As individuals and organizations aim to bolster their security measures against various physical actions and events, the demand for surveillance systems with advanced features is anticipated to significantly increase.

Key players in the market continue to invest in and develop advanced video surveillance systems and services to enhance the accuracy of threat detection and offer real-time monitoring. For instance:

• In June 2023, Motive Technologies, Inc., a company focused on enhancing the security and productivity of businesses, launched an Artificial Intelligence (AI)-integrated 360° camera for vehicle and cargo monitoring. This innovation aims to improve road and job site safety while resolving cargo disputes related to the transportation and handling of valuable goods.

DRIVING FACTORS

Rising Security Threats Coupled with Smart City Initiatives to Fuel Market Growth

Security threats across various sectors are rapidly rising due to increasing risk events such as war, civil unrest, homicides, gun violence, and catastrophic weather. To strengthen security measures, businesses are significantly increasing security budgets, adopting new operational strategies, and incorporating advanced security solutions to proactively protect their organizations. According to the ‘World Security Report 2023,’ 46% of respondent businesses noted an increase in security budgets due to rising operational costs, an uncertain economic landscape, and escalating domestic security concerns.

Additionally, another key factor contributing to market growth is the rise of smart cities, which is anticipated to further augment the market during the forecast period. According to industry experts, by 2026, there will be approximately 300 million smart homes within the global smart city initiative. The increasing smart city initiatives underscore the necessity for cutting-edge security infrastructure to safeguard people and critical infrastructure.

RESTRAINING FACTORS

High Initial Cost along with Privacy Concerns to Limit Market Growth

The initial and maintenance costs of advanced security solutions, including high-resolution cameras, biometric devices, fire alarm systems, and access control systems, pose significant challenges for Small and Medium-sized Enterprises (SMEs) and individuals. These solutions often entail ongoing expenses such as software updates and equipment servicing. Moreover, existing security systems frequently need upgrades, such as network enhancements and robust power supply, further adding to the costs. Additionally, implementing a surveillance system raises privacy concerns, potentially leading to resistance from legal entities regarding the collection and utilization of personal data.

SEGMENTATION

By Component Analysis

Increasing Demand for Security of Critical Infrastructure and People to Boost Hardware Segment Growth

Based on component, the market is divided into hardware, software, and services.

In 2022, the hardware segment held the largest market share. Commonly used security hardware includes surveillance cameras, access control systems, and intrusion detection systems. As businesses and individuals aim to strengthen security for critical infrastructure and people, the demand for these systems is rapidly growing. Furthermore, ongoing innovations in security technology are further fueling market growth.

The services segment is estimated to witness the highest CAGR during the forecast period due to increasing awareness of various security threats. Moreover, rapid urbanization and corporate expansion in developing economies are among the major factors contributing to the growth of the services segment in the forecast period.

By End-user Analysis

Commercial/Industrial Segment Growth Driven by Increased Security Challenges

Based on end-user, the market is segmented into residential and commercial/industrial.

The commercial/industrial segment dominated the market with the highest market share. Commercial/industrial end-users encompass SMEs and large enterprises. Large enterprises often encounter diverse risks, including physical threats. Security solutions aid these organizations in identifying and mitigating these risks, given the critical nature of continuous business operations for them. Additionally, SMEs are increasingly embracing security solutions to ensure employee safety and for more effective risk management.

The residential segment is poised to experience the highest CAGR during the forecast period. This is due to the growing awareness among individuals regarding personal security and the increasing adoption of smart home technologies worldwide. Furthermore, urbanization contributes to the heightened demand for residential security solutions.

By Type Analysis

Growing Emphasis on Security by Organizations and Individuals Fuel Video Surveillance Systems Segment Growth

Based on type, the market is divided into video surveillance systems, biometrics & access control systems, intrusion detection and prevention systems, fire detection systems, physical security information management (PSIM), and others.

The video surveillance systems segment commands the largest physical security market share due to the affordability of these systems, which drives their adoption among residential end-users. Furthermore, video surveillance plays a pivotal role in securing ATMs and financial institutions within the banking and finance sector.

The intrusion detection and prevention systems segment is projected to experience the highest CAGR during the forecast period. These systems are critical components of cybersecurity as they prevent unauthorized access and detect intrusions.

By Vertical Analysis

Government Segment Growth Boosted by Evolving Security Threats

Based on vertical, the market is segmented into BFSI, government, healthcare, manufacturing, retail, transportation & logistics, energy & utilities, and others.

The government segment has dominated the market with the highest share, as governments across countries are heavily investing in security solutions in response to an increase in criminal activities and the implementation of smart city initiatives. A smart city necessitates effective access control, surveillance, and fire safety systems to bolster public safety and urban security.

The retail segment is expected to exhibit the highest CAGR during the forecast period. This is due to the retail sector increasingly demands security solutions to comply with regulations, safeguard assets, and address theft concerns.

REGIONAL INSIGHTS

Geographically, the market is fragmented into five major regions, including North America, South America, Europe, the Middle East & Africa, and Asia Pacific. They are further categorized into countries.

In 2022, North America generated the maximum revenue, attributed to heightened awareness of security threats, a stringent regulatory environment, and technological advancements in the region. The U.S. has consistently maintained its leadership position, largely due to robust investments in research and development (R&D) and the fostering of technological innovations. Key players in the region are implementing strategies such as acquisitions, product launches, collaborations, and partnerships, driving market growth.

For instance:

In July 2023, Honeywell International Inc. introduced Morley-IAS Max, a new fire detection and alarm system designed to enhance building and occupant safety. This system features cutting-edge 7-inch highly ergonomic touchscreen panels and caters to various end-users in commercial, residential, education, healthcare, and hospitality sectors.

Asia Pacific is expected to showcase the highest CAGR during the forecast period due to several factors: growing smart city initiatives, the presence of key players, rapid urbanization, a high crime rate, and the expansion of the Internet of Things (IoT). Robust economic growth and a rising population in India, China, and ASEAN countries are driving investments in infrastructure development, including advanced security systems.

Market growth in Europe is propelled by ongoing security concerns, stringent regulatory compliance, rapid digital transformation, and smart city initiatives. Governments in Europe make significant investments in ensuring the safety of public and critical infrastructure.

In South America, market growth is driven by increasing security challenges arising from political instability and high crime rates.

The Middle East & Africa (MEA) is expected to exhibit significant growth as governments in this region increase spending on public safety and security.

KEY INDUSTRY PLAYERS

Key Players are focused on Strengthening their Market Positions with Continuous Developments

The global market is dominated by key players including Honeywell International Inc., Axis Communications AB, Bosch Sicherheitssysteme GmbH, Hangzhou Hikvision Digital Technology Co., Ltd., Dahua Technology Co., Ltd, Johnson Controls, Cisco Systems, Inc., SECOM CO., LTD., ADT, Genetec Inc., among others. These leaders expand their operations through strategies such as mergers, acquisitions, product launches, collaborations, and partnerships. For instance:

• In January 2022, Johnson Controls partnered with Alcatraz AI, a developer of facial authentication platforms, to introduce an enterprise-grade frictionless access control system. This system integrates Alcatraz AI’s 3D facial authentication edge device to prevent security breaches and reduce risks.

List of Key Companies Profiled:

• Honeywell International Inc. (U.S.)


• Axis Communications AB (Sweden)


• Bosch Sicherheitssysteme GmbH (Germany)


• Hangzhou Hikvision Digital Technology Co., Ltd. (China)


• Dahua Technology Co., Ltd (China)


• Johnson Controls (U.S.)


• Cisco Systems, Inc. (U.S.)


• SECOM CO., LTD. (Japan)


• ADT (U.S.)


• Genetec Inc. (Canada)

KEY INDUSTRY DEVELOPMENTS:

• August 2023: Fingerprint Cards AB, a biometrics company, and BenjiLock, a premium biometric lock solutions firm, partnered to promote premium biometric access control systems across the globe.


• March 2023: Rhombus, Inc., a provider of cloud-managed enterprise physical security, announced ‘Rhombus Access Control,’ which enables enterprises to manage access control, security alarms, video security, and sensors from a unified web-based console or mobile application. 


• July 2023: Solink Corp, a cloud-based video surveillance company, raised USD 60 million in a Series C round. This round was led by Goldman Sachs with participation from BDC IT and Omers Ventures.


• December 2022: Hexagon AB acquired Qognify, a security solutions provider. Qognify’s video management software (VMS) and enterprise incident management (EIM) solutions are used globally to mitigate security risks and minimize the impact of security incidents.


• March 2020: Quantum Corporation, a data management, storage, and protection company, expanded its video surveillance and security product portfolio. A new product portfolio includes network video recording servers, analytics and application servers, and improvements to VS-HCI products.

REPORT COVERAGE

The report presents qualitative and quantitative insights into the market, offering a detailed analysis of the size and growth rate for all possible segments within the market. It comprehensively examines market dynamics, emerging trends, and the competitive landscape. Additionally, it provides key insights, including the implementation of automation in specific market segments, recent industry developments such as partnerships, mergers, funding, acquisitions, consolidated SWOT analysis of key players, business strategies of leading market players, macro and microeconomic indicators, and major industry trends. This thorough analysis offers a comprehensive view of the market and its potential for growth and development.

REPORT SCOPE & SEGMENTATION

ATTRIBUTE	DETAILS
Study Period	2017 - 2030
Base Year	2022
Estimated Year	2023
Forecast Period	2023 – 2030
Historical Period	2017 - 2021
Growth Rate	CAGR of 8.7% from 2023 to 2030
Unit	Value (USD Billion)
Segmentation	By Component Hardware Software Services By End-user Residential Commercial/Industrial Small and Medium-sized Enterprises Large Enterprises By Type Video Surveillance Systems Biometrics & Access Control Systems Intrusion Detection and Prevention Systems Fire Detection Systems Physical Security Information Management (PSIM) Others (Physical Identity and Access Management) By Vertical BFSI Government Healthcare Manufacturing Retail Transportation & Logistics Energy & Utilities Others (Education and Sports) By Region North America (By Component, End-user, Type, Vertical, and Country) U.S. (By Vertical) Canada (By Vertical) Mexico (By Vertical) South America (By Component, End-user, Type, Vertical, and Country) Brazil (By Vertical) Argentina (By Vertical) Rest of South America Europe (By Component, End-user, Type, Vertical, and Country) U.K. (By Vertical) Germany (By Vertical) France (By Vertical) Italy (By Vertical) Spain (By Vertical) Russia (By Vertical) Benelux (By Vertical) Nordics (By Vertical) Rest of Europe Middle East & Africa (By Component, End-user, Type, Vertical, and Country) Turkey (By Vertical) Israel (By Vertical) GCC (By Vertical) North Africa (By Vertical) South Africa (By Vertical) Rest of the Middle East & Africa Asia Pacific (By Component, End-user, Type, Vertical, and Country) China (By Vertical) India (By Vertical) Japan (By Vertical) South Korea (By Vertical) ASEAN (By Vertical) Oceania (By Vertical) Rest of Asia Pacific