Today, “security and safety” is important in all areas of life – whether it’s safeguarding state infrastructure, protecting company data, or ensuring consumer confidence in products.
The trend is supported by more stringent regulations and growing consumer awareness of product quality, data security, environmental protection, and social responsibility.
According to our experts, cybersecurity; testing, inspection and certification (TIC) services; life science tools; and secure commercial and residential property are the most promising areas in this value chain. Each of these areas is impacted by the long-term trend toward urbanization, which is a result of higher population density and increasing social inequality.
The issue of cybersecurity is relevant for individuals, companies and governments. The number of security incidents is increasing year on year, and greater use of devices like smart phones and tablets makes these cyber-threats all the more dangerous, for end-users as well.
Our experts have observed the following developments:
- Market volume in 2014: USD 95 billion
- Growth of 6–8% over the past three years, with future growth projected to reach 8–10% annually
- Estimated market volume at the end of 2020: USD 160 billion
- Around the world, companies are making huge investments in improving their security infrastructure
- Demand is being driven by new regulations on minimum cybersecurity requirements in the US and Europe
- Limited risk given the importance
- Security software in particular is expected to generate solid margin growth and high recurring revenue
Testing, inspection and certification – TIC
Companies in the TIC sector ensure that products and processes meet the standards and regulatory requirements governing security and performance.
- Estimated market volume: > EUR 80 billion
- With an annual growth rate of 9%, the TIC sector has outperformed nominal global gross domestic product (GDP) growth over the last two decades
- The expected annual growth rate is 8% over the long term, and under 5% over the short term (due to falling investments in oil and gas)
- An expanding middle class in emerging markets should boost demand for consumer goods and increase the need for TIC services
Life science tools
The safe development of new drugs and tests to determine water, soil and air quality (life science tools) also comes under the banner of "security and safety".
- Estimated market volume: USD 100 billion
- Trend in line with global GDP growth
- High barriers to entry and a stable business model
- The manufacture of devices, consumables and services to safeguard the food supply chain and the environment remains a current issue
Secure commercial and residential property
Ongoing urbanization and the growing middle class in emerging markets are increasing demand for secure commercial and residential property as well as improved home security.
- Estimated market volume: USD 200 billion
- Regional growth in emerging markets is expected to reach a maximum of 10%
- In recent years, the market for electromechanical locking systems has grown three to four times faster that of purely mechanical locking systems
The market is buoyed by the following trends:
- Increasing awareness of energy-efficient applications in the home and "intelligent living"
- Ongoing urbanization in emerging markets and demand for home-security solutions
- Building renovation and fire-protection systems in industrialized countries
- Improved security technologies at airports, e.g. biometrics, video surveillance, access control systems
Corporate earnings per share (EPS) growth in the security sector versus MSCI World.
Annual EPS growth in %
The “security and safety” area offers solid growth and lower profit volatility. Spending in this area is generally less dependent on cycles.
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