This year's security fair takes place at a time that is characterized by worldwide political and economic challenges. Security is an all-important factor here, meaning that our market is experiencing incredible dynamics in many regions and more subdued investment activity in others. In 2011, growth in the world market for security technology amounted to a little more than 3 percent. China, the ASEAN states, Russia and Latin America, in particular, made outstanding contributions toward this trend. In Europe, however, the financial crisis prevented several countries from achieving higher levels of growth.
This year's security fair takes place at a time that is characterized by worldwide political and economic challenges. Security is an all-important factor here, meaning that our market is experiencing incredible dynamics in many regions and more subdued investment activity in others. In 2011, growth in the world market for security technology amounted to a little more than 3 percent. China, the ASEAN states, Russia and Latin America, in particular, made outstanding contributions toward this trend. In Europe, however, the financial crisis prevented several countries from achieving higher levels of growth.
Bosch Security Systems achieved sales of US$1.865 billion in 2011, which was 5 percent more than the previous year. In 2011, sales rose by 25 percent in China where we are now well-established with a total of 31 sales offices. One project in the region was to supply the Shanghai Oriental Sports Center with a communication and security system and a public address system. We are also enjoying success in the ASEAN states. For example, we were awarded the contract to install a public address and evacuation system and to expand the video surveillance system in Changi Airport in Singapore. Our Building Integration System (BIS) is used to integrate all the systems, including access control and building management. We also saw double-digit growth in Turkey, Russia, India and Latin America.
Despite the fact that the market conditions in Southern Europe were not favorable, we were able to maintain or even improve upon our market position. An important project for this region was the flexible and reliable voice alarm, public address and interpreting system we installed at the Palacongressi in Rimini, Italy's biggest congress center. The challenge here laid in the homogeneous integration of the audio system throughout the building and with the interpreting solution.
Global Progress
In 2012, the markets continued to develop on an uneven course overall. China, Latin America, Eastern Europe and the APAC region remain the main drivers for growth. As the fourth largest global market, Germany occupies a midfield position in terms of growth, whereas various countries in Southern Europe suffer under the financial crisis. In the first three quarters of 2012, we achieved a growth of 4 percent compared to last year – again with significant regional variations.
First, we are seeing a move away from proprietary, analog-based systems toward network-based systems which can offer unlimited scalability, efficient use of resources, remote verification and control and will enable services that will enhance security and safety. Second, we are seeing an influx of new competitors in the market, which is also driving forward the speed of innovation.
What will the significant growth factors be in the coming years? I think we can say that our innovations, product portfolio and strategic partnerships will be the major factors. We will need to implement global marketing, sales and support for our customers along the total value chain.
With a high level of expenditure in R&D, amounting to around 10 percent of sales, we are bringing new, innovative products, solutions and services to the market on a regular basis. For example, “Engineered Solutions and Software” was set up to handle complex projects and supports customers around the world with a consistent approach. The business unit handles the planning, tender preparation and implementation stages of the project – services that are in demand from a wide range of industries, such as airports, energy suppliers, transport and traffic companies. The projects are implemented on site using local partner companies.
This new offering has brought us particular success in Eastern Europe, India and the Arabian peninsula. As security technology is increasingly merging with other infrastructures, we are working closely with other Bosch divisions such as Drive and Control Technology and Bosch Thermotechnology, allowing the customer to rely across-the-board on our solution expertise from different divisions. In the project for the Bolshoi Theater in Moscow, for example, Bosch Drive and Control Technology installed the stage technology, including electrical and hydraulic drives, while Bosch Security Systems supplied the entire fire detection, video surveillance, public address and evacuation system.
Growth Market
The future global market for security technology and services will continue to grow at above-average rates, as the fundamental need for security becomes intrinsically linked to the state of the economy. A reliable supply system with energy and telecommunication services and a secure transport infrastructure are essential conditions for international competition among countries. Added to that is the need to handle natural resources carefully and to use the available infrastructures very efficiently. Both conditions apply, given that there are more and more people living in our centers of population. For example, experts anticipate that the market for smart cities technologies will grow to almost $40 billion by 2016.
In the next few years, we expect average growth in the world market of around 4 percent. The demand in China, India, and Latin America in particular will contribute toward this growth. In Central and Western Europe as well as North America, growth will remain rather below average.
Video surveillance systems already make up the biggest market share today. This sector will grow at an above-average rate by around 6 percent per year over the next few years. With our resources in personnel and our worldwide presence, with our high commitment to R&D, and our resulting high levels of innovation, and thanks to the strength of the Bosch brand, we will also continue to grow in future. We will drive forward the networking of products and services and achieve our targets in the market. In this regard, we see ourselves in the tradition of the words spoken by our founder, Robert Bosch: “Anyone who stops getting better has stopped being good.”