The global physical security market was valued at USD 127.01 billion in 2022 and is projected to grow at a compound annual growth rate (CAGR) of 6.8% from 2023 to 2030. The increasing need to secure physical environments from threats such as crime, vandalism, theft, fire, and burglaries is one of the main factors expected to drive the market. Furthermore, trends such as increased investments in safeguarding critical assets, the adoption of cloud-based data storage, advanced analytics, and technological advancements in access control and video surveillance are key contributors to market growth.

In addition, there has been a shift from legacy security solutions like badge readers, alarm systems, and door locks to advanced logical security, which includes breach detection, threat management, and intrusion prevention. These newer technologies have enabled organizations and government agencies to more effectively prevent crime and security breaches.

Gather more insights about the market drivers, restrains and growth of the Global Physical Security Market

For example, in September 2022, Axis Communications launched two multidirectional, dual-sensor cameras designed for 24/7 operation in challenging lighting conditions, offering both wide-angle overviews and detailed zoom coverage. These cameras feature a deep learning processing unit based on ARTPEC-8, which enhances data collection, processing, and storage capacities.

Such advancements help communicate accurate information about emergencies, such as the type and severity of a threat, before first responders arrive. Governments around the world are increasingly adopting smart city initiatives to improve infrastructure, which includes deploying advanced security systems. Additionally, modernizing existing infrastructures with robust security measures and bolstering security for government agencies have become top priorities, especially in developed countries.

Organizations are also focusing more on employee safety by installing systems to prevent unauthorized access, further fueling the demand for physical security solutions. In recent years, sectors like BFSI (Banking, Financial Services, and Insurance), residential, government, and transport have experienced a rise in security breaches, further pushing the need for enhanced physical security systems.

Component Insights

In 2022, the system segment led the market, accounting for over 65.0% of global revenue. This segment includes physical access control systems (PACS), video surveillance systems, perimeter intrusion detection and prevention, physical security information management (PSIM), physical identity and access management (PIAM), and fire and life safety systems.

The video surveillance system segment dominated the market in 2021 with a share of over 52.0%. This includes analog cameras, axis network cameras, video encoders, monitors, and storage solutions. Technological advancements, such as ultra-high-definition (UHD) surveillance, and decreasing equipment costs have led to greater adoption of video surveillance systems for remote monitoring and enhanced physical security. Increasing safety concerns and regulatory compliance requirements are also driving this segment's growth.

For instance, in March 2022, Ouster Inc. and Hexagon AB launched Ouster×Accur8vision, a video surveillance solution for critical infrastructure such as residential properties, airports, and commercial buildings, aimed at detecting future threats early.

The services component is expected to experience significant growth during the forecast period. Services include system deployment, maintenance, and upgrades, which enhance performance and improve control of security infrastructure. The demand for additional services has been driven by infrastructure development in emerging economies and advancements in technologies like UHD surveillance.

System integration services are a key subsegment, accounting for 48.0% of the market in 2021. This segment is growing due to technological advancements, changing customer preferences, regulatory compliance, and the rapid expansion of enterprises.

Organization Size

In 2022, large enterprises dominated the market, accounting for over 60% of global revenue. Large enterprises require robust security due to their extensive infrastructures, critical information, and higher budgets. This makes them early adopters of physical security solutions. Protection against cyber threats and unauthorized access is a major factor driving the adoption of these solutions by large enterprises.

Small and medium-sized enterprises (SMEs) are expected to see significant growth due to increasing threats, thefts, and the need to protect resources and people. For example, in February 2022, the U.S. Small Business Administration (SBA) provided USD 3 million in funding to help SMEs develop physical security infrastructure, addressing the rising threats faced by small businesses.

End-User Insights

The government sector led the market in 2022, accounting for over 18% of the revenue share. Government agencies are focused on upgrading security defenses while working within budget constraints. For instance, in July 2022, the European Parliament agreed on new guidelines for critical entity resilience, aiming to safeguard essential services and improve their stability.

The residential sector is expected to see substantial growth, driven by increasing damages to assets and resources due to theft and attacks. Integration of advanced video surveillance, smart access control, and intrusion detection systems in residential properties enhances safety.

In the U.S., the physical security market for residential properties is the largest, supported by the rise of smart homes and the use of advanced surveillance systems. For instance, in April 2022, Knightscope launched the K5 Autonomous Security Robot, which has already been implemented by companies for outdoor surveillance and security programs.

Additionally, the transportation sector is expected to see significant growth as security measures are needed for monitoring traffic congestion, crowds, and preventing accidents and terror attacks.

With the growing number of security breaches, sectors such as BFSI, government, residential, and transportation have all been implementing advanced physical security measures. Partnerships like that between Edge360 and Quanergy Systems in March 2022, which combined AI-driven LiDAR platforms with video surveillance, reflect the trend toward using advanced technologies to bolster physical security across various industries.

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