The global physical security market was valued at approximately USD 127.01 billion in 2022 and is projected to experience a compound annual growth rate (CAGR) of 6.8% from 2023 to 2030. A significant driver of this market is the increasing necessity to protect physical environments against various threats, including crime, vandalism, potential burglaries, theft, and fire incidents. Additionally, rising expenditures aimed at safeguarding critical organizational assets, the adoption of cloud-based data storage, advanced analytics, and technological advancements in access control and video surveillance are key trends anticipated to propel market growth. Furthermore, there is a notable transition from traditional security solutions—such as badge readers, alarm systems, and conventional door locks—to more advanced logical security systems. These newer systems encompass breach detection, threat management, and intrusion prevention, which assist organizations and government agencies in effectively deterring criminal activity and breaches.

For example, in September 2022, Axis Communications introduced two multidirectional, dual-sensor cameras designed for continuous operation in challenging lighting conditions. These cameras provide both expansive wide-angle views and detailed zoomed-in coverage. They utilize a deep learning processing unit based on ARTPEC-8 (DLPU), enhancing data collection and analysis capabilities, as well as processing and storage capacities. This technology enables precise communication of emergency information, detailing the severity, nature of the threat, and specific locations within affected buildings, all before the arrival of first responders. Various governments are initiating smart city projects to improve infrastructure, which involves deploying upgraded security systems. Moreover, the modernization of existing infrastructures with robust security measures and strengthening security in government agencies remain top priorities for governments in developed nations.

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Organizations are increasingly prioritizing employee safety, leading to the implementation of systems designed to prevent unauthorized access, thereby driving demand for physical security solutions. The global physical security landscape continues to evolve, with numerous sectors—such as banking, financial services, insurance (BFSI), residential, government, and transportation—experiencing a marked increase in security breaches over recent years.

End-User Insights

The government sector was the leading segment in the market in 2022, capturing over 18% of the revenue share. In a rapidly evolving and complex landscape, government agencies face the challenge of upgrading their security measures while managing legacy equipment and adhering to budget constraints. For example, in July 2022, the European Parliament, the European Commission, and the European Union (EU) reached an agreement on a European guideline for critical entity resilience. This directive aims to enhance the stability and resilience of essential service providers, thereby ensuring more reliable operations.

The residential segment is expected to experience significant growth during the forecast period, driven by the high incidence of property damage during thefts and other attacks. Security applications in residential areas have improved user experience while protecting assets from potential threats. Enhanced safety is achieved through the integration of comprehensive video surveillance systems, smart access controls, and rapid intrusion detection systems. Currently, the U.S. holds the largest market share for physical security equipment in the residential sector. This growth is linked to the rise of smart home technologies and the increased implementation of advanced video surveillance and access control systems. For instance, in April 2022, Knightscope, Inc., a U.S.-based robotics and physical security camera company, unveiled the Knightscope K5 Autonomous Security Robot (ASR). Various companies across the U.S. have begun utilizing the K5 ASR in their outdoor spaces for residential and business premises, enhancing security programs and fostering a safer environment for employees and customers.

Advancements in physical security technology, particularly through the Internet of Things (IoT), alongside a growing awareness of cyber threats among consumers, are driving demand for physical security systems designed to protect government and financial institutions. Additionally, remote monitoring capabilities through cloud-based services facilitate easier supervision and management of physical environments. The transportation sector is also expected to exhibit considerable growth during the forecast period, driven by a heightened demand for surveillance equipment, traffic congestion monitoring, and crowd oversight. The increasing frequency of incidents such as accidents and terrorist attacks worldwide has led to heightened investment in safety and physical security measures.

As the physical security landscape continues to evolve, it remains vulnerable to cybercrime. In recent years, various industries—including BFSI, residential, government, and transportation—have experienced numerous security breaches. These factors are projected to further amplify the demand for physical security systems. For instance, in March 2022, Edge360, a security solutions provider, formed a partnership with Quanergy Systems, Inc., an AI-driven LiDAR platform. This collaboration allows Edge360 to offer LiDAR-based video surveillance, enhancing business intelligence and physical security in residential buildings and financial institutions. The partnership also introduces unique features, including real-world 3D representations of personnel, active tracking of objects, analytical data, and high-definition IP video.

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