United Kingdom - Safety and Security

Safety and Security

Last published date: 2023-11-03

Overview

The UK security and resilience market is valued at approximately $29 billion and growing. The market benefits from the focus on national security and counterterrorism, new post-Brexit infrastructure, the need to guard against the increased threat of crime, and the general demand for security products and services.

The UK physical security market was valued at $14 billion in 2022. It is expected to be relatively stable over the next few years with growth due to digitization. The sector will benefit from the strong performance of security for infrastructure. Surveillance technologies and managed services play a particularly important role. Border security and major events are anticipated to require significant investments in security in the coming years and will outperform other subsegments.

The UK faces a substantial threat from terrorism, with transport infrastructure dealing with higher levels of threat. Higher levels of effective and visible protective security at national infrastructure sites are likely to act as a deterrent to terrorists, who increasingly favor ‘soft’ targets. Nevertheless, with the continual diversification of the threat, the ambition and capability of terrorist groups to target UK infrastructure is likely to continue to evolve.

Cyber security concerns and digitization of current processes offer great opportunities in the expanding marketplace. Online ransomware attacks are considered a tier 1 national security threat by the UK government due to its impact on public and private institutions and its increasingly common nature. Border security digitization is also an area of interest for the UK government through the Nationality and Borders Act and the Illegal Migration Act. The UK government’s national security technology procurement strategy emphasizes the need for commercial, off-the-shelf solutions from well-established suppliers that can be deployed quickly, suggesting a good opportunity for U.S. companies with a strong existing track record in the U.S. Although the demand for security services such as consultancy, training, guarding, and risk analysis is also growing, the UK market is highly competitive and can represent challenges for U.S. businesses, as local companies include some of the world leaders in this sub-sector.

Established U.S. suppliers typically do well in the UK, but newcomers must consider the scale of the competition. There are an estimated 9,000 security companies in the UK. British companies operating in the market vary in size from small niche companies to a handful of major UK-owned global operators such as BAE Systems and Smith Group. Major foreign players active in the UK include Ansell, Draeger, EADS, Thales and Finmeccanica and many others.

Projections for the security market vary based on end-users and particular sub-sectors. Public spending is expected to increase in 2023, especially for critical infrastructure protection, but private sector spending is likely to continue contracting. Manpower levels are being cut and costs carefully considered. Spending focus in the coming period is on business continuity rather than investments in capability improvements.

The departure of the UK from the EU has increased the requirement for investment in UK border crossings. The UK government allocated over $910 million for border infrastructure, technology, and new staff to ensure British border systems are fully operational at the end of the transition period through the Nationality and Borders Act (see Opportunities below). While it did not allocate additional funding, the 2023 Illegal Migration Act further indicates the government’s commitment to border security and the opportunities in this sector.

The illegal Russian invasion of Ukraine has increased focus on UK security. Further, ransomware attacks are on the rise in the UK, increasing the need for strong cyber security precautions.

While the UK market is substantial, mature, and growing rapidly, there can be significant challenges to newcomers with no previous track record in the UK. For that reason, it is strongly advised to consider partnering with an established local partner. For UK government-related opportunities, it is often important to have a UK incorporated presence.

Leading Sub-Sectors

Access Control and Identity Management – There has been an increase in the call for solutions to combat the growing threat of identity theft. Demand for solutions that help enhance retail, property and personal security remains. Biometrics are at the forefront of opportunities in this sub-segment.

Screening and Detection – As a result of the threat of international terrorism in Europe, there is a call for investments in national security and counterterrorism, which indicate steady growth for this market in coming years. In addition, the need for increased security at high-profile national locations continues to drive the demand for better and more sophisticated screening solutions, creating potential benefits for U.S. companies offering advanced technologies in this sub-sector.

Surveillance – In the area of surveillance systems, the demand is for innovation; increased complex risks mean that customers require more agile solutions. Customer demand dictates that analog CCTV be replaced by IP surveillance systems with added functionalities such as facial recognition and incorporation of interface with smartphone technologies. The UK is following the global trend of tailoring solutions for security products customers. The thermal imaging market is also expected to grow significantly, with video surveillance representing the largest growth.

Opportunities

The UK government has dedicated additional spending on post-Brexit border crossings, with the aim to create “the world’s most effective border by 2025”. The focus is on infrastructure such as border control posts, IT systems and staffing, and seamless screening and scanning of cargo and personnel. Funds have been allocated to develop His Majesty’s Revenue and Customs (HMRC) systems in order to reduce the burden on traders, alongside additional investment in technology to ensure that new controls can be fully implemented.

Large investments in critical national infrastructure also create opportunities, particularly for the following types of products: security screening and detection (improved speed and convenience), biometric, connectivity, crowd management, hostile vehicle protection, security solution for soft targets, physical protection of assets, intelligent surveillance, anti-drone systems, blast proofing, containment, and predictive strategic security.

Contactless technologies and remote-controlled equipment that combine requirements of security and safety are in high demand. Opportunities with First Responders in the UK include Personal Protective Equipment (PPE) and integration systems and platforms.

Fire Equipment is a Safety market sub-segment that is experiencing a rise in demand in the aftermath of the widely publicized 2017 Grenfell Tower fire disaster.