THE MAGAZINE

Assessing the State of the Security Industry

By Sherry Harowitz

Compared to a decade ago, three times as many top security leaders (24 percent) in the United States report directly to the CEO. Despite that progress, at organizations with a formalized risk-analysis process, security was not given a seat at the table from the beginning of that process 41 percent of the time. Those are some of the striking findings in a new study of the U.S. security industry.

Globalization, coupled with an increasingly challenging threat environment for U.S. businesses, has put security in the headlines with growing frequency, especially since the September 11, 2001, terrorist attacks. Yet there has not been a major study of the scope and size of the security industry in more than three decades. To shed some light on this important issue, ASIS International collaborated with the Institute of Finance & Management (IOFM). Over the past year, the organizations gathered data about the industry through a combination of joint original research and analysis of various existing studies. The result of those efforts is “The United States Security Industry: Size and Scope, Insights, Trends, and Data.”

Because the report takes the long view, it supplements its original research by with data from studies dating back several years that include projections well into the future. The report offers some caveats—including that much security spending is hard to quantify or crosses over into other sectors, such as business continuity and fire/life-safety and is, therefore, not included. But it takes on the difficult task of extrapolating from available data and trying to put some numbers to what can be quantified.

Chief among the top line number findings is that the U.S. security market, inclusive of operational and IT security, is about $351 billion—$282 billion of which is the private sector and $69 billion of which is federal government spending on homeland security. Homeland security spending is expected to grow at about 4 to 5 percent annually to 2020.

As for the remaining $282 billion, $202 billion is operational security, inclusive of physical and other broader traditional aspects of private security (comprising $39 billion for equipment, $141 billion for security services, and $22 billion for administrative costs) and $80 billion is IT-related (of which $29 billion is equipment, $22 billion is services, and $29 billion is administrative). The operational/physical security market is expected to grow about 5.5 percent in 2013, while IT is expected to grow about 9 percent.

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