How does globalisation impact the physical security marketplace?

The Internet and Social Media have accelerated globalisation and greatly increased the rate of change for technology adoption in physical security. I used to travel to Europe and Asia to get insights on new technology years before it would be commercially available in the United States. Now, however, products are launched anywhere in world and can be seen by security integrators and end-users almost instantly. New products are typically designed using standards protocols such as Web Services, JSON, ONVIF, etc., and they communicate using POE, Bluetooth, WiFi, or Cloud-to-Cloud, which makes them very easy to integrate with. This means security solution providers can quickly incorporate new products and use best of breed components without having to design everything themselves. The rate of adoption of new technology will only increase with all the new Internet of Things (IoT) devices we’re seeing on practically a daily basis.

Globalisation has had two distinct impacts on the physical security market – end users’ expectations and manufacturing. With the globalisation of the market, end users expect the highest standards and levels of choice, wherever they are. To be truly successful, manufacturers need to reach out via local expert partners and provide the support and training to match. Equally, manufacturers need to decide which products and services to develop and deliver to which territories and markets. This requires an excellent understanding of different markets and flexible products that can suit customers worldwide, or provide variance to fit demands and regulations globally. Overall, globalisation has put pressure on manufacturers to understand unknown markets. Some markets have unique characteristics that make them unattractive to supply to. However, this can lead to local producers filling the gaps, which in turn can actually encourage new competition – so local strategies can have much wider consequences!

Some 25 years ago, when I began my CCTV career, so much of what we used was designed and made in our home marketplace in the United Kingdom. The rest was European, Japanese and American. I’m guessing it was built there, too. Even when the cheap Asian segment grew to dominate the market, I stuck to my old brands, citing support and quality. These probably use Far East parts and labour, nonetheless. The makers learned to copy, then innovate on top. Falling prices contribute to the ubiquity of CCTV. Upsides include increased desire, international work, and bigger schemes to design. One downside of falling prices is a faster race to the bottom, which can drag labour rates in its slipstream. When we resist, we can appear comparatively expensive. The historic imbalances among so many countries’ economies push and pull like we’ve never known before.

Globalisation impacts the physical security industry in several profound ways. First, it’s helping to evolve the definition of “risk” in an organisation. Historically, physical security was confined to a discrete set of locations, such as an office or distribution centre. Today, globalisation is expanding the security boundaries of an organisation. When thinking about security, commercial organisations must consider any outsourced functions, such as customer service or sales, as well as their physical facilities, local weather and geopolitical situations. Globalisation has also increased international business travel, introducing new risks for employees, key executives and partners, while further extending the types of security risks organisations must monitor. Finally, globalisation is further accelerating the changing role of the physical security leader. This person’s focus is evolving from managing incidents and situations to identifying and managing risks before they occur, which emphasises business continuity and delivers shareholder value.

Manufacturing is perhaps the area where the impact of globalisation is most significant. Most U.S.-based companies manufacture all or part of their products in lower-cost countries like China. Today, even software development, integration testing, Q/A and support are being outsourced due to cost differentials, availability of labour and increasing levels of expertise in lower-cost countries. In addition, most companies now sell their products across borders. U.S.-based companies are now experiencing significant sales growth from international markets, especially India and China. The large U.S. security market has also become very attractive for foreign companies, especially those from Europe and China. Workforces are also increasingly global. Typically this is in the form of companies opening offices in other countries and either sending workers to those offices, or hiring local workers. U.S. security companies are also taking advantage of talented workers coming from abroad.

The United States is not the most discerning market when it comes to physical security, and globalisation is making that more and more clear. Other countries, such as Qatar, have created minimum standards for video surveillance systems that are similar to the NFPA imposing conformance requirements for fire safety, alarming, evacuation and extinguishing. In Qatar, new surveillance systems must now have a camera of 3 megapixels or greater as a minimum requirement. The forensic value of these systems is indisputable. But in large markets with significant legacy systems, it is difficult to economically justify transitioning to higher performance and higher forensic value systems. In the U.S., there is more of a focus on demonstrating a strong ROI before making that investment.

A major benefit of globalisation is that an organisation can use the same security equipment worldwide. For example, over 160 U.S. embassies and consulates in 130-plus countries are protected from vehicle assault with our company’s bollards, barricades and barriers. For the U.S. State Department, this leads to standardisation around the world - the same operation, the same maintenance, the same crash standards and better quantity pricing. The same goes for British embassies, international petroleum companies and many other global organisations.

With increased globalisation, any movement or change affects wide ranges and large numbers of people, goods, services and information. This is particularly true when it comes to a security breach or event. When there is a breach of security, a primary concern is that the information accessed in a cyber-attack will travel faster than one is able to respond to the event. As a result, people are becoming more cautious and are interested in boosting their physical security. Recent technical developments and resulting price developments within the security industry have made physical security products and systems accessible to more users. Now, a small business owner can, for example, buy one door controller and a camera at a reasonable cost. As globalisation continues, information and operations become more intertwined. As a result, standards such as ONVIF’s become even more important. Standards can future-proof smaller-scale product and system investments.

Large enterprises operating internationally have to control identified risks at all of their sites, anywhere in the world. You need to ensure that all of your people have a secure working environment. And that all employees, everywhere, adhere to your security policy. Standardising security gives this assurance. It minimises risk, guarantees compliance and reduces operational requirements. Consequently, maintenance costs for the entire physical security solution are minimised. This is why we will see that the need for a global security solution is rising. In contrast to other fields such as IT, however, multinationals tend to have little experience in globalising security. As it involves a large project spanning many years and involving many stakeholders, it demands a high level of project management. We believe that structured programmes with defined guidelines are needed to ensure successful global security roll out.