A new study of the European electronic security industry says the industry could undergo revolutionary change if the fragmented supply market is re-structured to be able to meet potential demand.
The i&i study, which focuses on seven European countries, estimates the industry is worth 5.4 billion Euros. It says the industry has the potential to double in size within the next five years if suppliers are able to achieve the minimum economic size to be able to invest in digital technology.

The supply market is littered with a number of small companies with few players big enough to capitalise on the potential. The i&i study concludes that business strategy must therefore focus on specialisation, alliance and consolidation, in order to service the industry adequately.

Over the last ten years, no single player has taken more than 15% of the electronic security business, and the top ten suppliers take no more than 30% of the systems business in any one country. Most suppliers have less than 1% of the market, and concentrate on supplying retrofit and replacement work locally.

However, the 2100 page report says growth across Belgium, France, Germany, Italy, Netherlands, Spain and the UK has averaged 6.23% in the last six years. It forecasts a rise to 6.8% in 2002, and further growth to 7.4% in 2003.

The study maintains the latent opportunity for growth is determined by building construction output. While an interpretation of the European Convention on Human Rights has restricted demand for CCTV and access control in some countries, this concern is said to be gradually disappearing and a pent-up demand is now being realised.

Demand is also being driven by technological developments, which have revolutionised control and remote management allowing end users to gather beneficial management and process information. Consequently more clients are retrofitting existing systems, with digital technology allowing more productive working environments and driving higher margins through total business solutions.