Two sectors, one complement

By: Duván Chaverra A.

There are two very important segments within the industry that in their own way contribute to its development: physical security and electronic security. In this opportunity we will analyze both markets, the way in which they complement each other, how they differ technologically speaking and which is currently registering better dividends in Latin America.

And to have a better reference on this analysis we consulted two companies in the security industry that market both services; from Mexico we have Jorge Del Bosque, manager of the communications area of TSN Security & Telecom, a distribution company of telecommunications, security and technology equipment; and we also invited from Colombia Víctor Hugo López, general manager of Metroalarmas, a firm that complements electronic security services with physical.

From the experience of both companies we will know the movement of these markets; it is necessary to clarify that our intention is not to generate competition between both sectors, but to publicize their behavior within the security industry in Latin America through two companies that have experience in the area.

Market development
Initially it is important to know which of the two segments is presenting better economic results at present; for this we go to our invited sources, which from the experience of their companies agree that the market that best results represents for their coffers is the electronic.

This is stated by Víctor López, from Metroalarmas. "The market that is generating the best numbers is undoubtedly electronic, with annual growth of more than 30% in Latin America, but it is also a more atomized market with the implications of the case."

Jorge Del Bosque, from TSN, revealed some figures on the growth of electronic security in his country: "The market that is growing the most in the security industry is electronics. In Mexico it is estimated that it generates around 15 billion pesos (about US$1.19 billion) annually and with a growth of more than 4 percentage points above GDP."

He added that the Central American country leads the implementation of this type of products in the region: "Mexico, according to reports from organizations dedicated to the security industry, is the Latin American country with the highest growth rate in the consumption of electronic security products."

This does not mean that the private security sector does not generate considerable profits, since a recent report revealed by the OAS indicated that during the last 15 years the market for private security goods and services in Latin America has grown by around 12%, as a result of the high homicide rates that are occurring in the region; led in the world by the Americas with 25.6 cases per 100,000 inhabitants in recent years, followed by Europe with 8.9 homicides.

Regarding which of the two markets has a more difficult competition, our sources gave answers with a different inclination, which can be sustained according to the social and economic state of each country.

"I consider that competition in the physical market is more difficult, due to the profit margin and the added values requested by customers, which in many cases harm the electronic security market," López said.

The weaknesses of both options
Our sources recognize that within these two segments there are still weaknesses that will surely be overcome if the necessary correctives are taken.

For example, Víctor Hugo López, general manager of Metroalarmas, gave his point of view highlighting the advantages and disadvantages currently offered by both segments: "The disadvantages of the physical sector go for the human element that is susceptible to being permeated by crime; the advantage is the deterrence presented by a well-presented and equipped human being. In the electronics sector, the biggest threat is future telecommunications hakers; and has the advantage that as a non-thinking electronic element, it is incorruptible and is more economical in the medium term".

Meanwhile, the representative of TSN Security & Telecom, referred to competition as the main threat, since "it faces unfair competition in price, quality and service."

There is a risk of saturating the market and collapsing it as has happened in other industrial branches that have succumbed or have been greatly affected by the onslaught of Asian producers, such is the case of footwear.

Also, in many of the cases, international trade laws are violated, as these producers plagiarize the technology without the slightest respect for intellectual property laws. There is a risk of sacrificing quality, since many of its products do not conform to the quality standards of the countries that receive them or to the international ones.

Regarding the private security market, Del Bosque highlighted the following weaknesses that the sector still presents:

- There are not enough or qualified personnel for the performance of this delicate activity.
- There is a risk of infiltration by organized crime as happens in many public security corporations.
- We work in parallel with public security and not in a coordinated manner.
- Training is deficient and it is forced to resort to the offer of foreign training.
- Professionalism is lacking and charlatans abound.
- In a pragmatic effort, there is a lack of a theoretical framework when it comes to what scholars call "The Risk Society", as the German sociologist Ulrich Beck points out. Therefore the offer is reduced, in general, to control access, prepare some reports and as groups of immediate reaction, (almost always late and inefficient).
- No intelligence and counterintelligence work is done.
- No contingency plans or manuals are generated to deal with crisis situations. These jobs are usually very expensive and few companies can do them.

Complementary segments
For both guests the two sectors complement each other perfectly, it is more in a good analysis of needs for the client is the success so that the two security solutions work together and properly.

"I am convinced that they are complementary and not supplementary and that it is the specific circumstances that demand the emphasis on one or the other. The important thing is to weigh the precise mix between technology and human factor," said the TSN representative.

While the representative of Metroalarmas in Colombia said on this same issue that "they complement each other, for the qualities or advantages that each one possesses. On the subject of competition, it is necessary to mention the costs vs. benefits of one solution and another."

Jorge Del Bosque, from TSN Security & Telecom, reflected on the need for governments to increase social participation in order to improve and facilitate the achievement of security objectives, as a complement to the services provided by physical and electronic security systems, which would mean an improvement in sales for the industry.

"It is clear that the crime rate is lower in countries with greater equity, such as in Scandinavian societies. There are also documented experiences of 'communitarian' schemes and mutualist groups in some segments of U.S. and Canadian societies that report lower incidence of crime," said the representative of the Mexican firm.

Del Bosque explained that in Mexico they are already carrying out actions of this kind to improve social and security news. "The thesis of involvement of civil society to alleviate the phenomenon of violence is beginning to take shape. I have proposed the convenience and urgency of the various government agencies supporting groups of people and institutions that organize in their communities, neighborhoods or neighborhoods by facilitating and promoting their alliance so that they can get their own security, monitoring and information teams."

He added that "in this way, groups of neighbors in collaboration with the churches of the sector, shops, companies, schools, etc. will be organized to have their own CCTV systems, monitoring, emergency buttons, neighborhood censuses and other tools that the Government can provide or facilitate their acquisition and operation through trusts or other financial schemes."