Awareness
We live in very dangerous times, with far more threats than previously imaginable. Kids that do not know anything about biology and chemistry can search the Internet and find recipes to make very dangerous biochemical reagents, Heyl said. “They can buy and make these with little cost, and this has created a situation where one individual can go out and do significant damage to a lot of people. This makes it difficult to keep under control these people and government radicals who live on the outside of society. The world has become a much more dangerous place.” The recent tragedy in Oslo is just another example.
The attack could have been prevented had the Norwegian authorities been more vigilant, said Joshua Sinai, Associate Professor, Center for Technology, Security and Policy, Virginia Polytechnic Institute and State University. “As an extremist, he should have been known to the authorities, identified through data mining and behavioral analysis. Once identified, he could be flagged as a potential threat and properly monitored after legal procedures.”
The increase of threats has made people more aware of their surroundings than ever before, especially when it comes to traveling. Governments are continuously educating the public to take note of anomalies and report them to the authorities. Consistent audio messages and visual reminders have people constantly aware of their surroundings, Greco said. “There are a lot of campaigns just to keep awareness high that if you see something, you need to say something. This is so that the public does not become complacent, or forget about what happened 10 years ago; we need to continue to have a heightened sense of awareness to potential risks.”
Furthermore, with the advances in global communications, significant events rarely go unnoticed. “We are living in a globalized world and in increasingly open societies, which are characterized by the interconnectedness through new media,” said Gert van Iperen, Chairman of the Board of Management, Bosch Security Systems. “Whenever a national disaster, a violent revolution or a terrorist attack takes place, the entire world gets informed about it immediately. People all over the world watch live, with ongoing pictures provided by the mass media.”
Homeland security is now increasingly regarded as personal responsibility, which was generally not the case pre-9/11, Olive said. “However, there is still a lot of education that needs to be done as to what people can do to protect their life and lifestyle. While the general public is much more resilient against these attacks, we are not yet where we need to be.” Unfortunately, many corporations still view security as an unnecessary expenditure. They do not realize that this is an investment that will be returned within several quarters, said Anthony Roman, CEO of Roman & Associates, an investigation, security and risk management consulting firm. “If security technology and the security department were coupled with corporate risk management, which is responsible for assessing accidents and incidents, as well as economic losses to crime and internal theft, savings could be made on insurance claims, tort liability losses, damage to corporate branding and regulatory fines.”
Riding Recession
The security industry has grown significantly over the past 10 years. Despite the 2008 recession and weak recovery, the market for security electronics has continued to grow, albeit at a slower pace, Sarangan said. “Obviously, customers do not have the same capital to invest in security, but the industry was still growing at 5 to 6 percent per annum even over the past three years.” Compared to other industries, ours did remarkably well and is currently proving to be recovering quickly, van Iperen said.
While many regard the security industry as “recessionproof,” it is a notion that remains a myth. There is no such thing as a recession-proof industry, Sarangan said. “When budgets are shrinking and customers can no longer afford it, they simply will not purchase. The security industry was growing at a decent rate even through the recession, but that's about as recession-proof as it gets.”
Nevertheless, countries that are more under the threat of terrorism continue to see hefty government spending in security, Sinai said. “They're purchasing a lot of counterterrorist and public-safety equipment. That is a new market and huge opportunity for technology companies.”
Striving to Innovate
One reason why it remained growing through the recession was it began to deliver more value to end users. “The industry has been innovative both technically and commercially and has produced better products at lower prices that deliver on ROI; this is why buyers are investing in new systems, said Allan McHale, Director of Memoori Business Intelligence, in a prepared statement. “This is why IP networking products have pushed ahead with a forecast growth of 35 percent this year. Those companies that have focused on IP network products have increased their market share and at the same time have increased their profitability.”
Many larger companies took a big hit through the recession, but overall growth in the security industry was maintained by a lot of new and smaller companies, Sarangan said. “In addition, many companies coming from the IT sector have been doing pretty well over the past few years. The hit to larger companies was mainly offset by the growth of these smaller companies and IT companies, which had a lot of growth within the security world. Over the past few years not only IT, but building automation and building management companies also made a play in security and saw pretty good growth.”
An advantage of these newcomers was that they were experienced in more than security. The impact of the recession was minimal for Johnson Controls because for the past three years, customers have been looking for solutions that increase efficiency and productivity, as well as reduce costs. “It makes sense for them to continue to invest because of a solid ROI model,” Greco said.
Bigger companies see security as a growth opportunity, and they are trying to expand their product lines to be able to provide more value to customers. “They have the resources to expand their offerings in a tremendous growth industry where nobody has an overwhelming market share,” Greco said.
This actually drives innovation in the industry. Larger companies generally do not innovate their products, Moss said. “The smaller, private ones innovate their products but have less resources. The normal flow for the past 30 years has been that entrepreneurs create innovative companies and products, which are ultimately purchased by much larger entities that have the capital and infrastructure to grow them.” Although innovation has slowed as a result of less money invested in R&D mainly due to less venture capital spending, it has not stopped altogether. “Things like VMS are becoming more commoditized, but there is still a big market for good, quality management software that manages surveillance and control systems,” Sarangan said. “Another example of innovation through the recession is PSIM. This is definitely an innovation that adds great value for the end user.”