Early January is always an opportune point for reflection. It’s a time for assessing the recent and current state of the security business sector both here in the UK and for key territories overseas before enacting plans designed to deal with predicted scenarios. It’s fair to say that 2015 was an eventful 12 months and, in John Davies’ view, there’s no sign of matters slowing down during 2016.
One of the most welcome trends in 2015 was notable growth for the UK’s security business sector. While growth has been consistent in many markets over the past few years, the UK has taken some time to kick-start following the lengthy recession. Public sector spending has been a key factor here, with the healthcare and education markets being particularly important ones in terms of security solutions development and procurement.
At the same time, the Middle Eastern markets have fallen short of what was expected. The reasons behind this are many and complex. Obviously, the deteriorating political situation in the region has affected quite a few projects, with some being postponed and others cancelled completely. The reduction in oil prices put the brakes on a good deal of investment and, as a direct consequence, security spending has inevitably been reduced.
Equally, security spending in countries such as Saudi Arabia has been drawn towards the escalating situation in Syria, Iraq and the Yemen, with an understandable focus on containing potential terrorist aggression.
The Chinese Way
Despite last year’s dip in confidence in the Chinese economy, the region continues to be a rich zone for the security industry. Buyers in the Chinese market crave good quality security products and have an eye for British Standards and innovation. None of these trends show any sign of slowing up as we enter the New Year.
In some ways, China is one of the most straightforward markets to target. However, a word or two of caution is appropriate. China presents a highly competitive market and one which needs the help of local expertise. A local partner or distributor is a must, even if the security business decides to set up a locally-based, wholly-owned enterprise. This will not only assist with appropriate marketing, but also help with the considerable amount of paperwork required to run operations on a proper and organised basis.
While there’s a considerable amount of administration involved, Chinese import tariffs are reasonable and will not detract from the appeal of that market. However, processing shipments through customs can delay deliveries, particularly if paperwork isn’t completed correctly. Despite the bureaucracy involved, the system does work well.
The aforementioned trends are also visible in other countries across the Far East region. Places such as Malaysia and Vietnam are very interesting and promising markets which are looking to invest in the best systems the security sector has to offer. Feedback just now is hugely positive, both from security experts and those looking to procure.
Iran and Nigeria
Iran is a good example of a market which has been closed to exports for a long time now, but could soon be open to foreign imports once again. Before the United Nations (UN) and US trade sanctions were enacted back in 2006, Iran was certainly a buoyant and rewarding security market. With agreements hopefully being made between the Iranian Government and the UN and US, this could see a great resurgence in trade with the country.
Sanctions have taken their toll on Iran, with the security market not exempt from that statement. With considerable Iranian assets also frozen in banks around the world, an easing of sanctions should see these investments freed-up and ploughed into infrastructure. That would offer an opportunity for security suppliers to provide the local market with the latest solutions required.
Trading in a market that has been closed to outside suppliers for so long will mean exploring the import regulations and tariffs, not to mention currency conversion, but this has the potential to be a very exciting security market indeed. Watch this space.
Although it’s a democratic and secular country, Nigeria has suffered of late from political instability and issues around violence from the likes of Boko Haram. However, with both a sizeable population and economy, the country offers a considerable potential security market for high quality imports.
There are positive signs that the new political regime is making big changes, and particularly so in terms of dealing with issues of corruption that rendered trading somewhat more difficult.
This is an excellent market which will soon become much easier to trade with once again. Indeed, there are huge trading opportunities in Western Africa as a whole, while Nigeria shows every sign of becoming the perfect hub for making the most of commercial momentum.
Security at all levels – from national security right down to the protection of a single building – is increasingly becoming closely linked. Indeed, 2015 highlighted this point with the problems generated by unrest and conflict in the Middle East.
With campaigns based on warfare and terrorism, ISIL is testing the security sector’s capabilities to their limits. As well as the military implications, this also means public and business security is just as important.
The integration of security – something that we as an industry are heavily preoccupied by much of the time – is a key element here. While working to combat threats, integrated security is also taking centre stage when it comes to investigating attacks and following dangerous suspects. Having these extra ‘eyes and ears’ at the ready makes it easier to track potential threats and assist everyone involved with preventing further attacks.
As time passes, we’ll see even closer ties between the security business sector, the police service and the Security and Intelligence Services, with all participants in joined-up operations to further enhance public safety.
In many ways, security at all levels has never been so closely linked. As an industry cohort, we security professionals need to understand the wider situation and the needs our solutions are critical in addressing. Nobody can predict how the international security climate will change or evolve, but it’s vital that we’re in a position to anticipate and cater for the needs of customers and play an active part in protection.
Physical and cyber security
Integration between different types and levels of security also extends between physical and online services. All the signs are that 2016 will witness the co-operation of physical and cyber security to the point where the two become even more entwined. For example, the growth in big data and the Internet of Things means that Data Centres need greater security than ever before. Security systems – such as physical server access control – catering for this defined need are set to become a key offer during the course of this calendar year.
When it comes to physical security, increased investment and growth in the construction sector looks to continue being a prime driver and is helping to expand the market with many new projects. This is becoming particularly evident in the UK’s biggest cities, where new construction and a healthy amount of domestic – as well as international – investment funding is driving the burgeoning market demand.
In terms of product development and investment, the sheer pace of change is such that software is taking the spotlight when it comes to the evolution of security. Even new hardware systems are being developed alongside software enhancements, with a great emphasis now being placed on the tangible benefits to be derived by security operators and managing end users.
This also means there’s a huge recruitment need for software designers and engineers within the security sector. Building up the right team and finding the right professionals is undoubtedly a challenge, but one that no security business can conceivably ignore.
Busy year ahead
There are many big events planned for 2016. With Intersec 2016 in Dubai kicking off the security calendar this month, we will also see IFSEC International – now firmly embedded at the ExCeL venue in London – running in June and then Security Essen during September.
Early indications are that smart business and smart homes will be key topics at these forthcoming trade shows. These are excitingly fresh areas for security integration and, indeed, the industry as a whole.
Further, it’s a logical step that joined-up security will begin to pervade all sectors as it becomes more integral to our everyday lives.
John Davies is Managing Director of TDSi and Chairman of the British Security Industry Association’s Export Council