What Impact Did The Larger Economy Have On Security In 2020?
16 Dec 2020
As a subset of the larger economy, the security industry is bound to feel the effects of an economic downturn. Such was the case in 2020 when the COVID-19 pandemic undermined economic growth and presented a brand new set of challenges to business. The security industry has been able to pivot toward emerging opportunities, but that success has been offset by broader economic challenges. We asked this week’s Expert Panel Roundtable: What impact, positive or negative, has the larger economy had on the security marketplace in 2020?
When I started in the security industry 20 years ago, someone told me that I had made a great choice “because in bad economic times companies invest in their business and in good times companies always have money to invest.” Companies need to invest in new security technology to ensure their workplace and employees are safe. However, the impact of COVID-19 has caused businesses to reevaluate their budgets and overall expenditures. As such, the larger economy has made it paramount to demonstrate both the short-term and long-term ROI on security technology investments. In fact, in a recent survey of Axis partners in the U.S, security leaders cited that cost of ownership for long-term investments (25%) and ROI for short term investments (21%) were concerned for customers. It’s imperative that security manufacturers, integrators, and end-users take a pragmatic, customized approach to invest in integrated technology to ensure customers’ needs are met.
COVID-19 and its impact on the global economy have been felt by countless people across the globe. North America is no exception. With the unemployment rate at record highs, businesses shutting down, the resurgence of COIVD cases, and the recent presidential election, the U.S. economy is in a fragile, volatile, and unpredictable state. The combination of these factors has negatively impacted the security and surveillance market. And while there is a moderate demand for social distancing, COVID, and AI-related products and solutions, we have seen a decrease in demand in traditional security in markets such as retail, transportation, education, and hospitality. The continued state and local mandates for social distancing and travel restrictions certainly put more strain on the prospect of an economic recovery in the short term.
In short, the larger economy has negatively impacted the security marketplace as the most business has declined. The need for security technology hasn’t disappeared, but now there are difficulties in installing it. Additionally, throughout the Western world, entertainment, hospitality, and restaurants have taken a huge hit and won’t be investing in security. However, the current state of affairs has also spurred some new, innovative ways of using an existing technology – such as temperature detection, crowd detection, and smart city solutions including occupancy detection and social distancing. Touchless technology is another area of development where you see frictionless solutions coming into higher demand. These existing technologies are being used in a different way, bringing with them a renewed utilization that might not have existed without the COVID-19 pandemic. This has given the security industry an opportunity to pivot and innovate existing solutions for pandemic and non-pandemic related uses.
As reported by the analysts at Memoori, the events this year have seen an overall contraction of 7% in the security industry globally, breaking a 10-year positive growth running streak. However, all signs are that 2021 will see a return to growth, and whilst the downturn has affected our industry, it has been to a lesser scale than say retail or hospitality. On the positive side, the pandemic has really shown how adept our industry is in responding to outside events in a very rapid fashion. Look at the uptake in the use of thermal cameras for elevated temperature screening, the development of Face Detection and thermal readers in the access control space, and the release of Track and Trace and Occupancy Management tools for access control software, to assist a more worry-free return to a socially distanced working environment. I have every faith that the security industry will continue to be just as productive and innovative as we carry on defeating the Pandemic.
COVID-19 has presented a weighty challenge to the overall economy in 2020 although there were bright spots for the security market. In the end, the slowing economy took a toll on the business of security, even as new opportunities emerged for industry growth in years to come.
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