Study on the development of statistical data on the European security technological and industrial base

Transcription

1 Study on the developent of statistical data on the European security technological and industrial base Security Sector Survey Analysis: France Client: European Coission DG Migration and Hoe Affairs Brussels, April 2015

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3 Study on the developent of statistical data on the European security technological and industrial base Security Sector Survey Analysis: France Client: European Coission DG Migration and Hoe Affairs Brussels, April 2015

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5 Table of contents Preface 7 1 Introduction General context Ai of this report Structure of the report 10 2 Survey overview Survey ipleentation Survey population Coverage and response rate Survey instruent and ethod Field report Field tie Length of interviews Data preparation and testing 12 3 Descriptive analysis Security threat categories Areas of econoic activity Broad segentation of security products and services Cyber security Cyber security products and services Cyber/IT business activities Other security product providers Other security products Other security products business activities Other security service providers Other security services Security arket by econoic sector (end-user) Overall all products and services Breakdown by ain broad category of security products and services Security arket by geographical region Geographical arkets all products and services Breakdown by ain broad category of security products and services Fir structure: eployent and turnover Eployent Growth perforance and prospects Past turnover growth perforance Future turnover growth prospects Future deand prospects by broad custoer group and geographical area Copetitors Geographical origin of ain copetitors all products and services Breakdown by ain broad category of security products and services Future copetition prospects by geographical origin of ain copetitors 42 Study on the developent of statistical data on the European security technological and industrial base 5

6 4 Aggregate estiates of the size of the security industry Overview of approach Method for the estiation of aggregate turnover and eployent for the survey saple Underlying assuptions Estiation of turnover for non-declaring respondents Estiation of eployent levels for eployent-size class 1000 or ore eployees Estiation of saple average values of eployent and turnover per fir Method for the initial estiation of aggregate turnover and eployent Underlying assuptions Calculation of the initial estiate of the population of security copanies Variants and sub-groups Adjustent for possible defence-related turnover and eployent (variant) Estiation of turnover and eployent by ain broad industry category (subgroups) Size of the security industry: survey estiates and aggregate (national) extrapolation Coparison of estiators 50 A.1. Product and services segentation 63 A.2. Market Segentation 67 6 Study on the developent of statistical data on the European security technological and industrial base

7 Preface This Background Report has been produced as part of the study on Developent of statistical data on the European security technological and industrial base coissioned by the European Coission within the Fraework Contract on Security (ENTR/09/050) between the European Coission and a consortiu led by Ecorys Nederland B.V. in collaboration with TNO and DECISION. The Background Report provides an overview of initial findings fro a survey of copanies active in the (civil) security sector in France. It is one of a series of reports covering findings fro surveys conducted for: Estonia, France, Italy, Poland, Spain and the United Kingdo. The survey design and subsequent data analysis has been undertaken by Ecorys, while the actual surveying of copanies has been conducted by GfK, a specialist arket research copany. The individual country surveys of copanies have been conducted over the period October 2014 to February To obtain coparable data for Gerany, Ecorys has collaborated with the Brandenburg Institute for Society and Security (BIGS) who have conducted a siilar survey based on a coon survey questionnaire design. This survey has been ipleented as a follow-up round to previous surveys of copanies active in the (civil) security sector in Gerany undertaken by BIGS. The survey findings described in this Background Report and in the other accopanying country reports ai to contribute to a better understanding the structure, size and developent of the security sector in the EU. In this regard, coents and feedback on this report are welcoed. Siilarly, if you are interested in obtaining ore inforation on this report, on the overall study or, ore broadly, on our work on the security sector, please contact the study tea. Study Tea Roelof-Jan Moleaker (Director): [email protected] Paul Baker (Associate): [email protected] Andreas Pauer (Consultant): [email protected] Olga Abraczky (Consultant): [email protected] Rachel Beeran (Consultant): [email protected] Study on the developent of statistical data on the European security technological and industrial base 7

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9 1 Introduction 1.1 General context In 2012, the European Coission set out for the first tie its vision for an industrial policy for the security sector 12. However, in presenting its proposals for action, the Coission acknowledged that developing a clear picture of the security sector in the EU is hapered by the absence of reliable data. To which, the Coission proposed to develop an epirical basis on which ore reliable figures on the security arkets can be obtained. Responding to the Counication, the European Econoic and Social Coittee (EESC) 3 also placed ephasis on the need for relevant, detailed statistics looking at security sectors copanies, not least, of their production, workforce and size. 4 In light of the above, as part of its Security Research Prograe for , the European Coission set out its intention to launch a study for Developent of statistical data on the European Security and Technological Industrial Base aied at developing statistical data that would allow to obtain a clearer picture of the technological and industrial base of the security industry in Europe. This would allow to obtain a better understanding of the strengths and weaknesses of the European security industry, as well as to better onitor the ipact of R&D activities on the European security industry. In Septeber 2013, under the Fraework Contract ENTR/09/050 the European Coission requested that Ecorys prepare a proposal for a study on the Developent of statistical Data on the European Security and Technological Base. The subsequent proposal was approved in Deceber 2013, with ipleentation of the study coencing in January The study has been divided into two ain phases: Phase I covers preparatory activities leading to an Ipleentation Plan for the developent of statistical data on the security industry; Phase II will cover the ipleentation of the tasks and activities elaborated in the Ipleentation Plan and as agreed with the Coission services. Phase I of the study was copleted and approved in Noveber Phase II of the study is planned to be copleted by the end of May (European Coission, 2012a). 2 (European Coission, 2012b). 3 (European Econoic and Social Coittee, 2013). 4 In general, the EESC also recoends setting priorities for action using a product-based, rather than sector-based, approach. 5 (European Coission, 2012c). Study on the developent of statistical data on the European security technological and industrial base 9

10 1.2 Ai of this report The ai of this report is to provide an overview of the ain patterns revealed by a survey of copanies active in the (civil) security sector in France. The Security Sector Survey for France hereafter Ecorys SSS (France) was coissioned by Ecorys and undertaken by GfK in Deceber The analysis in this report focuses, firstly, on providing a description of the structure of the security industry in ters of: supply of products and services; segentation of the security arket by econoic sector (end users); segentation of the security arket by geographical region, including the share of exports; industry structure by fir size (eployent and turnover); growth perforance and prospects; geographical coposition of ain copetitors and prospects for future copetition. In addition, a second ai of the analysis is to support efforts to extrapolate survey findings to arrive at estiates of the overall size of the French security sector in ters of eployent and turnover. 1.3 Structure of the report The structure of the report is as follows: Chapter 2 provides an overview of the survey approach and outcoes; Chapter 3 provides a descriptive analysis of the survey results; Chapter 4 provides an assessent of the overall size of the French security sector based on an extrapolation of survey results. 10 Study on the developent of statistical data on the European security technological and industrial base

11 2 Survey overview Note: the following inforation is priarily taken fro the GfK Methods Report provided to Ecorys in January Survey ipleentation Ecorys, working on behalf of the European Coission, coissioned GfK to undertake a survey - carried out via Coputer Aided Telephone Interviews (CATI) - of copanies in the security industry. 2.2 Survey population Ecorys established a list of copanies that a priori are active in the security sector. The list of copanies (including business addresses and contact details) was priarily collected fro published lists of ebers of relevant business associations available fro the internet, together with suppleentary searches of the internet based on relevant search criteria. The address list consisted of 4,435 records, which can be considered as the target group for the study. 2.3 Coverage and response rate A total of n = 507 copleted interviews could be conducted by GfK. To achieve this net saple, GfK s field organisation tried to contact all 4,435 copanies. Details of the response rate are provided below. Table 2.1 Details of the response rate Total % of total Total saple provided 4, % Survey achieved % Saple not yet dialled 0 0% Dialled saple still active 1,057 24% Screening failures 392 9% Refusals 1,723 39% Other non-response 309 7% Incorrect phone nubers % Saple conversion 7 Refusal rate 77% Response rate 11% Incidence 56% Explanation of calculations: Saple conversion: total saple provided (4,435) Dialled sapled still active (1,057)/surveys achieved (507) Refusal rate: Refusals (1,723) / [Refusals (1,723)+surveys achieved (507)] Response rate: surveys achieved (507)/total saple provided (4,435) Incidence: surveys achieved (507) [surveys achieved (507)+ Screening failures (392)] Source: GfK Study on the developent of statistical data on the European security technological and industrial base 11

12 2.4 Survey instruent and ethod All interviews were conducted via CATI (Coputer Assisted Telephone Interviews). By default GfK uses an Auto-Dialing-Syste in order to ensure an optial exploitation of the saple and a axiu of realised interviews. Especially in B2B surveys, this is of great iportance, as it allows to identify non-existent nubers technically and to anage appointents efficiently. Furtherore the CATI survey allows to ake autoated plausibility checks already during the interview, e.g. by identifying typos fro respondents entering unrealistic nuerical values. In addition, the correct sequence of the interview was ensured via prograed filter guides. This proceeding significantly reduced the cleanup effort after the survey and axiized the nuber of realized interviews. The questionnaire was developed and finally signed off by ECORYS and was prograed by GfK as CATI script. Before signing off the questionnaire it was subitted to the European Coission services for their approval. The used questionnaire was sub-divided into the following ain areas: Screening (Copany); Product portfolio; Market breakdown; Copany size (eployent and turnover); Growth perforance prospects; Copetitors. To increase the acceptance of the survey and the willingness to answer, a letter fro Ecorys and a letter of recoendation fro the European Coission was provided and sent to the copanies on deand. In these letters, the study and its objectives were explained and copanies were requested to participate in the survey. 2.5 Field report Field tie The fieldwork was conducted in the period fro Deceber 01, January 26, In general, the interviews of this B2B-survey were done on working days only Length of interviews The average duration of the 507 interviews in France was 23.8 inutes. 2.6 Data preparation and testing The collected data was provided by GfK s field organization to the project anagers at GfK as a labelled SPSS data set. In the context of GfK s standard quality assurance procedure a coprehensive plausibility check was ade. Special attention was paid to the check whether all filter questions were ipleented correctly in the prograed questionnaire. The final data was sent to ECORYS as a labelled SPSS data set. 12 Study on the developent of statistical data on the European security technological and industrial base

13 3 Descriptive analysis 3.1 Security threat categories Respondents to the survey were requested to identify whether they offered products and/or service(s) for use in the following areas ( threat categories ): Protection against criinality, terroris or public disorder; Protection of critical infrastructure; Border protection and control; Preparation for or response to natural and/or an-ade disasters. Note: ultiple responses allowed. Figure 3.1 shows the nuber of respondents that indicated being active in each area of security ( threat categories ). Alost three-quarters of surveyed organisations supply products and services for protection of critical infrastructure. By contrast, only 10.5% of organisations are active in the supply of products and services to border protection and control. See Table for underlying data. Figure 3.1 Supply of products and services by 'threat category' (nuber of responses) Natural and an-ade disasters 125 Protection against criinality, terroris and public disorder 199 Border protection and control 52 Protection of critical infrastructure 350 Table Supply of products and services by 'threat category' Share of Affirative Share of affirative responses respondents responses Protection against criinality, terroris, public disorder % 40.3% Protection of critical infrastructure % 70.9% Border protection and control % 10.5% Natural and an-ade disasters % 25.3% Study on the developent of statistical data on the European security technological and industrial base 13

14 3.2 Areas of econoic activity Respondents to the survey were requested to provide inforation on: the proportion of their activities relating to the offer of security-related products and services; the proportion of their security-related activities relating to the civilian (as opposed to ilitary) sector. Note: Firs with security-related activities concerned purely with the ilitary sector are excluded fro the survey. Figure 3.2 shows a cross tabulation of the proportion of respondents business activities that relate to the supply of security-related products and services and the relative orientation of this supply between civilian and ilitary arkets. Alost 60% of the copanies are specialised exclusively in the supply of security products and services to the civil (non-ilitary) security area. More than three-quarters of surveyed organisations (77%) supply only security-related products and services, and slightly saller proportion (72%) of respondents supply their security products and services only to the civil sector. See Table for underlying data. Figure 3.2 Coposition of survey saple by area of econoic activity (nuber of respondents) Civilian only (100%) Greater than 80% 0 Security only Greater (100%) than 80%Between 60% and Between 79% 40% and 59% Between 20% and 39% Security less than 20% Between 60% and 79% Between 40% and 59% Between 20% and 39% Civilian less than 20% Table Coposition of survey saple by area of econoic activity Share of security-related products and services Share of activities related Security Greater Less 60% to 40% to 20% to Total to the civilian sector only than than 79% 59% 39% (100%) 80% 20% Civilian only (100%) 59.3% 3.2% 2.4% 2.4% 2.2% 2.4% 72.1% Greater than 80% 7.5% 0.8% 0.4% 1.0% 0.2% 0.4% 10.3% 60% to 79% 3.8% 0.4% 0.0% 0.6% 0.6% 0.4% 5.9% 40% to 59% 3.6% 0.4% 0.4% 0.6% 0.0% 0.2% 5.3% 20% to 39% 1.6% 0.0% 0.0% 0.6% 0.4% 0.2% 2.8% Less than 20% 1.4% 0.6% 0.6% 0.2% 0.0% 0.8% 3.6% Total 77.3% 5.5% 3.8% 5.5% 3.4% 4.5% 100.0% 14 Study on the developent of statistical data on the European security technological and industrial base

15 Feedback fro national stakeholders This qualifies the specialization of copanies in the security field. It is quite likely that these results, showing a fairly high specialization, are related to the results of the initial screening questions. Maybe a nuber of copanies not specialized in security did not respond positively to the screening, which would increase the average specialization of the reaining achieved interviewees. 3.3 Broad segentation of security products and services Respondents were requested to indicate the types of security products and services they offered based on the following broad categories: Cyber-security products and services; Other security products; Other security services. Note: ultiple responses allowed. Where ultiple categories were given, respondents were requested to indicate the ost iportant category. Figure 3.3 shows the nuber of respondents that indicate being active in each broad industry category. The ost coon category is other security products, with 47% of surveyed organisations indicating that they are active in this area, followed by other security services (41%). Only 12% of respondents offer cyber security products and services. Allowing for the fact that respondents ay be active in ore than one broad industry category, Figure 3.4 shows the coposition of the saple according to the scope of broad industry categories where they are active and, where relevant, their ost iportant category. Overall, 88% of respondents are active only in one segent, while the ost coon cobination of broad categories occurs between other security products and other security services (9% of respondents). More than one third of organisations (41%) are active exclusively in area of other security products, while another third of organisations are active exclusively in the area of other security services (35%), and a further 11% of respondents being active only in cyber security. See Table for underlying data. Figure 3.3 Supply of products and services by 'broad industry category' (nuber of responses) Cyber-security products and services 69 Other security services 237 Other security products 256 Study on the developent of statistical data on the European security technological and industrial base 15

16 Figure 3.4 Coposition of the saple by scope of 'broad industry categories' offered. Other security products only Other security services only Cyber security only Other security products and other security services Cyber security and other security services All categories Cyber security and other security products n= % 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% Cyber-security products and services (ain) Other security products (ain) Other security services (ain) Table Coposition of survey saple by broad industry categories (% of respondents) Main broad industry category Cyber-security Other security Other security Total products and products services services Cyber security only 11.0% 11.0% Other security products only 41.2% 41.2% Other security services only 35.5% 35.5% Cyber security and other security products 0.0% Cyber security and other security services 1.4% 0.4% 1.8% Other security products and other security services 5.5% 3.9% 9.3% All categories 0.2% 1.0% 1.2% Total 12.4% 46.9% 40.8% 100.0% Feedback fro national stakeholders It has been suggested that the structure of the saple does not correspond to what the interviewee knows about the structure of the security field in France: statistics for the security service sector show between and firs active in security services in France. There are no such statistics for the other areas of security, but estiates give between 500 and 700 copanies in cybersecurity (according to the definition), and aybe to copanies in the other security products field. 16 Study on the developent of statistical data on the European security technological and industrial base

17 3.4 Cyber security Cyber security products and services Respondents that indicated that they offer IT/cyber security products and services were requested to indicate the types of products and services offered (see Annex A.1 for the segentation of security products and services). Note: ultiple responses allowed. Where ultiple categories were given, respondents were requested to indicate the three ost iportant categories (using a ranking of ost iportant category to 3rd ost iportant category). Figure 3.5 shows the nuber of respondents offering different categories of IT/cyber security products and services while Figure 3.6 further breakdowns this inforation according to whether respondents identify the category aong the ost iportant products or services offered. The ost coon products and services are hardware security solutions, which are offered by ore than half of respondents offering IT/cyber security products and services. Over 40% of surveyed copanies offer identity and access anageent solutions, syste integration and ipleentation services, audit, planning and advisory services, anageent and operations services, application security solutions and data security solutions. Figure 3.5 Cyber-security products and services (nuber of respondents) Other/not-specified services, Governance, vulnerability and 6 cyber-security anageent systes, 20 Other/not-specified products, 2 Hardware security solutions 36 Infrastructure (network) security solutions, 25 Identity and access anageent solutions 33 Security training services, 25 Data security solutions, 29 Syste integration and ipleentation services 31 Applications security solutions, 29 Manageent and operations services, 30 Audit, planning and advisory services 31 Taking account of respondents ranking of their ain (ost iportant) cyber-security products and services, confirs the iportance of hardware security solutions, with alost one-third of respondents (28%) stating this category as ost iportant. The second ost iportant cybersecurity products and services are data security solutions (16% of respondents). By way of contrast, the category identity and access anageent solutions, which in Figure 3.5 is the second ost coon cyber-security product and service, represents the ost iportant cyber security product or service for only 7% of respondents. Study on the developent of statistical data on the European security technological and industrial base 17

18 Figure 3.6 Cyber-security products and services (% of respondents) Hardware security solutions Data security solutions Applications security solutions Governance, vulnerability and cyber-security anageent systes Manageent and operations services Identity and access anageent solutions Infrastructure (network) security solutions Audit, planning and advisory services Syste integration and ipleentation services Security training services Other/not-specified products Other/not-specified services n=69 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% Most iportant category 2nd ost iportant category 3rd ost iportant category Not in top 3 Feedback fro national stakeholders According to an interviewee, the ID anageent sees over-represented (aybe because respondents have not distinguished between products and services). Cyber Security copanies generally provide a large variety of services and products, because they realize that their clients deand ore holistic and global solutions, to answer threats that are becoing ore nuerous, diverse and coplex Cyber/IT business activities Respondents that indicated that they offer IT/cyber security products and services were requested to indicate the types of business activities that they engage in. Note: ultiple responses allowed. Where ultiple activities were given, respondents were requested to indicate the three ost iportant activities (using a ranking of ost iportant activity to 3rd ost iportant activity). Figure 3.7 and Figure 3.8 show respectively the nuber of respondents indicating that they engage in different categories of cyber security business activities and the breakdown according to their ranking of the iportance of different activities. The ost frequently cited business activities are aintenance and service (55% of respondents), research and developent (53% of respondents) and software developent and prograing (52% of respondents). The ost frequently cited ain (ost iportant) activities include distribution activities (19% of respondents), onitoring, anageent and outsourcing (19% of respondents) and software developent and prograing (17% of respondents). By contrast, while aintenance and service is the ost frequently cited business activity in Figure 3.7, only 5% of respondents rank it in their ost iportant business activities. 18 Study on the developent of statistical data on the European security technological and industrial base

19 Figure 3.7 Cyber security business activities (nuber of respondents) Manufacturing and assebly, 17 Other / not-specified, 3 Maintenance and service 32 Design and engineering, 23 Monitoring, anageent and outourcing, 23 Research and developent 31 Test and inspection, 24 Software developent and prograing 30 Installation and postproduction integration, 25 Distribution activities, 28 Syste integration (subsystes) 29 Figure 3.8 Cyber security business activities (% of respondents) Distribution activities Monitoring, anageent and outourcing Software developent and prograing Design and engineering Research and developent Installation and post-production integration Maintenance and service Syste integration (sub-systes) Manufacturing and assebly Test and inspection Other / not-specified n=58 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% Most iportant category 2nd ost iportant category 3rd ost iportant category Not in top 3 Study on the developent of statistical data on the European security technological and industrial base 19

20 3.5 Other security product providers Other security products Respondents that indicated that they offer other security products were requested to indicate the types of products offered (see Annex A.1 for the segentation of security products and services). Note: ultiple responses allowed. Where ultiple categories were given, respondents were requested to indicate the three ost iportant categories (using a ranking of ost iportant category to 3rd ost iportant category). Figure 3.9 shows the nuber of respondents offering different categories of other security products, while Figure 3.10 further breakdowns this inforation according to whether respondents identify the category aong the ost iportant products offered. The ost coon product categories are fire detection, alar and suppression, local area observation, intruder detection and alar and identification and authentication, which are all cited by ore than 40% of respondents. The ost frequently cited ain (ost iportant) product category is fire detection, alar and suppression (26% of respondents). The next ost frequently cited ain (ost iportant) product categories are intruder detection and alar (14% of respondents), echanical access control, barriers, enclosures, etc. (12% of respondents), identification and authorisation (including electronic access control) and other (both accounting for 11% of respondents). Figure 3.9 Other security products (nuber of respondents) Intelligence and inforation gathering systes, 37 Detection and screening, 26 Protective and specialised clothing, 28 Other equipent and supplies, 28 Other, 31 Tracking and tracing; positioning and localisation, 25 Vehicles and platfors, 21 Fire detection, alar and suppression 112 Local area observation (incl. video / CCTV surveillance) 101 Coand and control and decision support systes, 39 Counication equipent and systes, 56 Intruder detection and alar 101 Wide area observation and surveillance, 63 Mechanical access control, barriers, enclosures etc., 87 Identification and authentication (incl. electronic access control) Study on the developent of statistical data on the European security technological and industrial base

21 Figure 3.10 Other security products (% of respondents) Fire detection, alar and suppression Intruder detection and alar Mechanical access control, barriers, enclosures etc. Identification and authentication (incl. electronic access control) Local area observation (incl. video / CCTV surveillance) Protective and specialised clothing Other equipent and supplies Counication equipent and systes Tracking and tracing; positioning and localisation Detection and screening Wide area observation and surveillance Vehicles and platfors Intelligence and inforation gathering systes Coand and control and decision support systes Other n=248 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Most iportant category 2nd ost iportant category 3rd ost iportant category Not in top Other security products business activities Respondents that indicated that they offer other security products were requested to indicate the types of business activities that they engage in. Note: ultiple responses allowed. Where ultiple activities were given, respondents were requested to indicate the three ost iportant activities (using a ranking of ost iportant activity to 3rd ost iportant activity). For respondents offering other security products the ost coon business activities are wholesale or retail distribution and installation, which are all cited by alost 60% of respondents. The picture is not uch changed when taking into account responses on the ost iportant business activities, with installation as the ost frequently cited (26% of respondents) followed by wholesale or retail distribution (25% of respondents). This is followed by anufacturing and assebly with 17% of respondents and research and developent with 14% of copanies saying that this category is their ost iportant business activitiy. Study on the developent of statistical data on the European security technological and industrial base 21

22 Figure 3.11 Other security products business activities (nuber of respondents) Monitoring services, 38 Integration, 66 Other, 7 Wholesale or retail distribution 148 Design and engineering, 78 Test and inspection, 87 Installation 146 Manufacturing and assebly, 97 Research and developent 102 Maintenance and servicing 114 Figure 3.12 Other security products business activities (% of respondents) Installation Wholesale or retail distribution Manufacturing and assebly Research and developent Design and engineering Monitoring services Integration Maintenance and servicing Test and inspection Other n= % 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% Most iportant category 2nd ost iportant category 3rd ost iportant category Not in top 3 22 Study on the developent of statistical data on the European security technological and industrial base

23 3.6 Other security service providers Other security services Respondents that indicated that they offer other security services were requested to indicate the types of services offered (see Annex A.1 for the segentation of security products and services. Note: ultiple responses allowed. Where ultiple categories were given, respondents were requested to indicate the three ost iportant categories (using a ranking of ost iportant category to 3rd ost iportant category). Figure 3.13 shows the nuber of respondents offering different categories of other security services while Figure 3.14 further breaks down this inforation according to whether respondents identify the category aong the ost iportant services offered. The ost coon service category is guarding and anning, which is indicated by alost two-third of respondents (64%) offering other security services and constitutes the ost iportant service offered by ore than a half of respondents (53%). The second ost coon other service offered is security of persons, which is indicated by 41% of respondents. In ters of the ost iportant service category, the second ranked ost iportant categories are reote onitoring and security training services, which are both the ost iportant services for 10% of respondents. Figure 3.13 Other security services (nuber of respondents) Detective and investigation, 16 Other services, 7 Other anpower-based services, 7 Research (socio-econoic and other), 27 Research (technological/technical), 52 Guarding and anning 145 Security training services, 67 Security of persons 94 Reote onitoring 89 Security consulting and advisory services 90 Study on the developent of statistical data on the European security technological and industrial base 23

24 Figure 3.14 Other security services (% of respondents) Guarding and anning Reote onitoring Security consulting and advisory services Security of persons Research (technological/technical) Security training services Detective and investigation Research (socio-econoic and other) Other anpower-based services Other services n= % 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% Most iportant category 2nd ost iportant category 3rd ost iportant category Not in top 3 Feedback fro national stakeholders Regarding the Figure 3.13, it has been suggested that the breakdown in nuber of respondents by type of service ight not correspond to the breakdown of the French security service field presented in the French OMPS survey and the European survey: French OMPS survey European survey Nuber of % share Nuber of % share copanies respondents Guarding and anning % % Reote onitoring % 89 39% Security of persons 150 5% 94 41% Training 200 5% 67 30% Consulting, research, other % % Total copanies (non cuulative) This would affect the results for turnover per eployee (105 k ), that do indeed appear twice as high as those given by DECISION (51 k ) or Eurostat (48 k ). 24 Study on the developent of statistical data on the European security technological and industrial base

25 3.7 Security arket by econoic sector (end-user) Overall all products and services Respondents to the survey were requested to indicate fro which arket segents (sectors) their custoers coe fro (see Annex A.2 for the segentation of the security arket). Note: ultiple responses allowed. Where ultiple segents were given, respondents were requested to indicate the three ost iportant segents (using a ranking of ost iportant category to 3rd ost iportant category). Figure 3.15 shows the nuber of respondents indicating having custoers fro each of the arket segents. The ost frequently cited arket segents are public adinistrations and other security services, which were identified by ore than half of respondents. The next ost frequently entioned arket segents are public security service providers (46% of respondents), followed by private individuals and households (42% of respondents). Figure 3.16 provides a further breakdown, taking into account respondents ranking of the iportance of different arket segents. The sector ost frequently cited by as being the ost iportant arket segent are other security services (21% of respondents), followed by private individuals and households (13% of respondents) and public adinistrations (9% of respondents). Figure 3.15 Market segentation (nuber of respondents) Other, 51 Cyber security industry, 36 Defence, 94 Priary sectors, 100 Counications and inforation services, 104 Other security industry, 107 Public adinistrations 266 Other security services 266 Financial services, 117 Energy and water, 122 Public security service providers 224 Other arket services, 123 Health and education, 148 Private individuals and households 205 Real estate and property anageent, 157 Hotels, restaurants and leisure, 199 Transport, 158 Construction, 176 Manufacturing, 181 Wholesale and retail distribution, 186 Study on the developent of statistical data on the European security technological and industrial base 25

26 Figure 3.16 Market segentation (% of respondents) Other security services Private individuals and households Public adinistrations Wholesale and retail distribution Public security service providers Manufacturing Defence Other security industry Construction Hotels, restaurants and leisure Health and education Cyber security industry Real estate and property anageent Other arket services Energy and water Transport Financial services Priary sectors Counications and inforation services Other n= % 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% Most iportant category 2nd ost iportant category 3rd ost iportant category Not in top Breakdown by ain broad category of security products and services To exaine differences in custoer base for different broad categories of security products and services, respondents can be categorised according to their ain broad industry category (see Section 3.3). For respondents whose ain (ost iportant) security business relates to the offer of cyber-security products and services, Figure 3.17 shows the share of respondents with custoers in each arket segent (with the breakdown according to their ranking of the iportance of the segent); Figure 3.18 and Figure 3.19 show, respectively, the corresponding data for other security products and other security services. Cyber-security products and services As shown in Figure 3.17, ore than two-thirds of respondents (71%) whose ain security-related activities are in the area of cyber-security indicate having custoers in the public adinistrations sector, however, this arket segent constitutes the ost iportant category only for 9% of surveyed copanies. Therefore, the ost iportant arket segent is private individuals and households, with 16% of respondents stating that this is their ost iportant custoer segent. The second ost frequently cited ost iportant segent is cyber security industry (12% of respondents), followed by anufacturing (10% of respondents). Other security products As shown in Figure 3.18, the ost frequently entioned arket segents for suppliers of other security products is other security services (54% of respondents), followed by private adinistrators (53% or ore of respondents). In ters of the ost the ost iportant arket segent, other security services is ranked first with 23% of respondents having indicated it as the ost iportant custoer segent, followed by private individuals and households (14% of respondents). By way of contrast, public adinistrators was the ost often entioned arket segent, however, only 9% of surveyed copanies regard it as their ost iportant category. 26 Study on the developent of statistical data on the European security technological and industrial base

27 Other security services As shown in Figure 3.19, the ost frequently entioned arket sectors for respondents whose ain security activities relate to the supply of other security services are other security services (57% of respondents) and public adinistrators (53% of respondents). As with other security products, the ost frequently identified ain (ost iportant) custoer segent is other security services, identified by 27% of respondents, followed by private individuals and households (9% of respondents), public adinistrators and wholesale and retail distribution (both cited by 8% of respondents). Figure 3.17 Market segentation - cyber security (% of respondents) Private individuals and households Cyber security industry Manufacturing Public adinistrations Other security services Real estate and property anageent Construction Health and education Wholesale and retail distribution Public security service providers Counications and inforation services Energy and water Financial services Hotels, restaurants and leisure Defence Other arket services Priary sectors Transport Other security industry Other n=58 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% Most iportant category 2nd ost iportant category 3rd ost iportant category Not in top 3 Figure 3.18 Market segentation - other security products (% of respondents) Other security services Private individuals and households Public adinistrations Wholesale and retail distribution Defence Other security industry Manufacturing Public security service providers Transport Other arket services Construction Health and education Hotels, restaurants and leisure Energy and water Financial services Real estate and property anageent Priary sectors Cyber security industry Counications and inforation services Other n= % 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% Most iportant category 2nd ost iportant category 3rd ost iportant category Not in top 3 Study on the developent of statistical data on the European security technological and industrial base 27

28 Figure 3.19 Market segentation - other security services (% of respondents) Other security services Private individuals and households Public adinistrations Wholesale and retail distribution Public security service providers Other security industry Manufacturing Hotels, restaurants and leisure Defence Construction Real estate and property anageent Energy and water Other arket services Priary sectors Financial services Transport Health and education Counications and inforation services Cyber security industry Other n= % 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% Most iportant category 2nd ost iportant category 3rd ost iportant category Not in top Security arket by geographical region Respondents to the survey were requested to indicate the geographical arkets in which they sell their security products and services using the following classification: Local/regional arkets (i.e. sub-national level); EU Meber States; Outside the EU. In addition, respondents were requested to indicate (approxiately) the share of each geographical arket in the total sales of security products and services Geographical arkets all products and services Overall, as show in Figure 3.20, 65% of respondents indicate that they supply products and services only on the doestic arket, of which 29% are active only at a regional level. Of the 35% of respondents that also arket their products and services internationally, the ajority (21% of respondents) indicate that they export both to the EU and outside the EU. 28 Study on the developent of statistical data on the European security technological and industrial base

29 Figure 3.20 Geographical arket for security products and services (nuber and % of respondents) International: extra-eu export only, 17, 3% International: EU and extra- EU export, 103, 21% Doestic: regional only, 143, 29% International: EU export only, 52, 11% Doestic: regional and national, 74, 15% Doestic: national, 105, 21% With regard to the iportance of international arkets, Figure 3.21 indicates that 12% of respondents arket their products and services internationally, but with exports representing less than 25 percent of sales. Overall, 15% of respondents indicate that exports represent the ajority of their sales and for about half of these respondents (i.e. 7% of all respondents), exports account for three-quarters or ore of their total sales of security products and services. Figure 3.21 Share of international arkets in total sales of security products and services (nuber and % of respondents) Export share: >=75%, 35, 7% Export share: unknown or not declared, 7, 1% Export share: >=50%, <75%, 37, 8% Export share: >=25%, <50%, 35, 7% Doestic only (no exports), 321, 65% Export share: >0%, <25%, 58, 12% Study on the developent of statistical data on the European security technological and industrial base 29

30 3.8.2 Breakdown by ain broad category of security products and services To exaine differences in custoer base for different broad categories of security products and services, respondents can be categorised according to their ain broad industry category (see Section 3.3). Figure 3.22 cobines inforation on the geographical coverage (within country) and export share for respondents whose ain security-related activities are in the area of cyber-security products and services, and siilarly, Figure 3.23 and Figure 3.24 provide this breakdown for respondents whose ain security-related activities are in the area of other security products and other security services, respectively. Coparing across the three figures, the greatest outward orientation is observed aong suppliers of cyber security products and services copared to suppliers of other security products and other security services. Alost half of respondents whose ain activity relates to the supply of cyber security products and services are active in international arkets (46%), followed by respondents whose ain activity is in the supply of other security products (36%), copared to only 28% of respondents whose ain activity is in the supply of other security services. Moreover, the cyber security products and services suppliers indicate also the highest export shares of ore than 50% (13%), copared to 7% of other product suppliers and 5% other service suppliers. Figure 3.22 Cyber security products and services: geographical arket and share of international arkets in total sales of security products (nuber and % of respondents) Export share: >=75%, 8, 13% Export share: unknown or not declared, 1, 2% Doestic: regional only, 18, 29% Export share: >=50%, <75%, 8, 13% Doestic: regional and national, 2, 3% Export share: >=25%, <50%, 6, 10% Export share: >0%, <25%, 6, 10% Doestic: national, 12, 20% 30 Study on the developent of statistical data on the European security technological and industrial base

31 Figure 3.23 'Other' security products: geographical arket and share of international arkets in total sales of security products (nuber and % of respondents) Export share: >=75%, 17, 7% Export share: unknown or not declared, 5, 2% Export share: >=50%, <75%, 20, 9% Doestic: regional only, 62, 27% Export share: >=25%, <50%, 18, 8% Export share: >0%, <25%, 28, 12% Doestic: regional and national, 33, 14% Doestic: national, 48, 21% Figure 3.24 'Other' security services: geographical arket and share of international arkets in total sales of security products (nuber and % of respondents) Export share: >=75%, 10, 5% Export share: unknown or not declared, 1, 1% Export share: >=50%, <75%, 9, 5% Export share: >=25%, <50%, 11, 6% Doestic: regional only, 61, 30% Export share: >0%, <25%, 24, 12% Doestic: national, 45, 22% Doestic: regional and national, 39, 19% Feedback fro national stakeholders Regarding Figure 3.22, it was entioned that the French Cyber Security industry exports an iportant part of its production especially around ID anageent systes, such as bioetrics, ID anageent chips or software. This trend sees to have accelerated since the Snowden revelations. Study on the developent of statistical data on the European security technological and industrial base 31

32 3.9 Fir structure: eployent and turnover Respondents to the survey were requested to indicate the nuber of eployees in their copany, with a distinction ade between: - Total nuber of eployees (in France and abroad); - Eployees in France; - Eployees in France working in the field of security. In addition, respondents were requested to indicate their copany s turnover fro the sale of security products and services Eployent Figure 3.25 shows the distribution of respondents according to their nuber of eployees. The ost frequent eployee size category for France security eployees is 10 to 49 eployees, which covers 38% of respondents. Categorising respondents according to their ain broad industry category (see Section 3.3), Figure 3.26 shows the distribution of respondents by eployee size class. The data indicate that the proportion of respondents in the top eployent size classes (cf. 250 to 999 eployees and 1000 or ore eployees ) is highest for those respondents whose ain (ost iportant) security business concerns the offer of cyber security products and services. Respondents whose ain security business concerns the offer of other security products have the highest proportion of copanies in the lower eployent size classes (cf. 5 to 9 eployees ), while other security services providers have the highest proportion of copanies in the iddle eployent categories ( 10 to 49 eployees and 50 to 249 eployees ) Figure 3.27 shows the distribution of respondents according to turnover fro the sale of security products and services. More than one-third of respondents (36%) were unable or unwilling to provide inforation on the value of their sales. For those that did respond to the question, the ost frequently cited turnover range was 1 illion to 5 illion, which was indicated by 28% of respondents that provided inforation on their turnover. Categorising respondents based on their ain broad industry category (see Section 3.3), siilar to eployent, Figure 3.28 indicates that respondents whose ain security business relates to the supply of cyber security products and services are proportionally ore prevalent in the top three turnover sales classes (cf. 50 illion to 100 illion, 100 illion to 500 illion and ore than 500 illion ). At the sae tie, copanies offering cyber security products and services have also the highest percentage in the turnover sales class of less than 250 thousand. Other security products are proportionally ost prevalent in the iddle turnover classes (cf. 1 illion to 5 illion, 10 illion to 25 illion and 25 illion to 50 illion ). Looking as a whole, copanies whose ain business is in the supply of other security services are ost prevalent in the lower turnover classes (cf. below 250 thousand, 250 thousand and 500 thousand, 500 thousand and 1 illion and 1 illion to 5 illion ). 32 Study on the developent of statistical data on the European security technological and industrial base

33 Figure 3.25 Fir size based on nuber of eployees (nuber of respondents) Eployees in France Eployees in France working in security Figure 3.26 Distribution of nuber of eployees in France working in security by ain broad industry category (% of respondents in broad industry category) 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% All respondents Cyber security Other security products Other security services Study on the developent of statistical data on the European security technological and industrial base 33

34 Figure 3.27 Fir size based on turnover fro sales of security products and services (nuber of respondents) Figure 3.28 Distribution of turnover fro sales of security products and services by ain broad industry category (% of respondents in broad industry category, excluding no answer / don't know) 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% All respondents Cyber security Other security products Other security services Feedback fro national stakeholders Regarding Figure 3.28, it was entioned the cyber security ecosyste is characterized in France by a handful of large copanies that ake the large ajority of their revenues abroad, and by a large nuber of sall copanies, ostly IT Service copanies and software start-ups. 34 Study on the developent of statistical data on the European security technological and industrial base

35 3.10 Growth perforance and prospects Respondents to the survey were requested to indicate the growth in their turnover fro the supply of security products and services over the last 5 years and their expectations for growth in turnover for the next 5 years. In addition, respondents were requested to indicate their expectations for the developent of deand for security products and services in the foreseeable future for different broad custoer groups (cf. public sector, critical infrastructure sectors, business sector, and private individuals and households) and by geographical area (cf. national arket, Europe, outside Europe) Past turnover growth perforance Figure 3.29 and Figure 3.30 display data on the distribution of respondents according to their growth on turnover over the past 5 years. The ost frequent growth range is reained ore or less the sae [+/- 2%], which is indicated by one third of respondents that gave an answer to this question (34%). The data indicates that growth in the cyber security area as well as other security services has been stronger than for other security products; for exaple, 20% of respondents whose ain security activities are in the area of cyber security and other security services report growth of ore than 25%, copared to only 16% of respondents whose ain business is in the area of other security products, respectively. 6 At the other end of the growth distribution, only 6% of respondents whose ain area of business is in the supply of cyber security products and services reported negative growth in the last 5 years, while a siilar picture arises for suppliers of other security services (5% of respondents), copared with 8% of respondents whose ain area of business is in the area of other security products Future turnover growth prospects Respondents offer a oderately positive outlook for turnover growth for the next 5 years, as shown in Figure 3.31 and Figure Overall, a total of 60% of respondents 7 indicate that they expect turnover to increase over the next 5 years (i.e. increase by ore than 25%, increase by between 11% and 25%, increase by between 3% and 10% ). As with past growth perforance, cyber security is associated with the strongest turnover expectations, with over half of respondents (60%) whose ain security activities are in the area of cyber-security indicating that they expect turnover to increase by ore than 10% (i.e. increase by ore than 25% or increase by between 11% and 25% ), over the next 5 years, copared to 35% aong respondents whose ain security business relates to other security services and 30% aong other security products providers. At the sae tie, there appears to be a positive outlook for both cyber security products and services. In fact, taking account of responses on past turnover perforance copared with future turnover expectation shows that aong those respondents whose ain security business relates to cyber security products and services 73% expect future turnover growth to exceed that of the past 5 years, and only 4% expect it to decrease. 8 By contrast, providers of other security services appear to have lower expectations on future turnover growth copared to past turnover perforance, with 59% of respondents expecting future growth to exceed that of the past 5 years, and 6% expecting a decrease. The corresponding percentages for other security products are 57% and 8%. 6 Excluding respondents that did not provide inforation on their turnover growth for the past 5 years. 7 Excluding respondents that did not provide inforation on their turnover growth expectations for the next 5 years. 8 These percentages are calculated on the saple of respondents that provided both inforation on their turnover growth for the past 5 years and on their expectations for turnover growth the next 5 years. The percentage reflects the proportion of respondents that indicate a higher future turnover growth class than they do for their turnover growth over the past 5 years. Study on the developent of statistical data on the European security technological and industrial base 35

36 Figure 3.29 growth over past 5 years (nuber of respondents) Figure 3.30 Distribution of turnover growth by ain broad industry category (% of respondents in broad industry category, excluding no answer / don't know) 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% All respondents Cyber security Other security products Other security services 36 Study on the developent of statistical data on the European security technological and industrial base

37 Figure 3.31 growth expectation for next 5 years (nuber of respondents) Figure 3.32 Distribution of turnover growth expectations for next 5 years by ain broad industry category (% of respondents in broad industry category, excluding no answer / don't know) 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% All respondents Cyber security Other security products Other security services Study on the developent of statistical data on the European security technological and industrial base 37

38 Future deand prospects by broad custoer group and geographical area Respondents offer a positive outlook for future deand prospects for security products and services in ters of expected geographical distribution, with at least 50% indicating that they expect positive growth in deand across all geographical regions; see Figure Overall, deand expectations appear to be strongest for international arkets Europe and outside Europe and weakest for the doestic arket (i.e. national arket as a whole ). At the sae tie, looking at the balance of expectations for different custoer groups, all the custoer groups have rather positive expectations of growth deand. Thereby, the expectations for positive growth for the critical infrastructure sector are bit stronger (52% of respondents overall) then for other custoer groups. Figure 3.34 and Figure 3.35 provide a breakdown based on respondents ain broad industry category (see Section 3.3). As with turnover growth expectations (overall, not taking account of future growth expectations relative to past growth perforance), respondents whose ain security activities are in the area of cyber-security have (on balance) a slightly stronger positive expectations for future deand growth, with at least 50% indicating that they expect positive growth in deand across all geographical areas and all broad custoer groups, with the exception of public sector (44% of respondents). Although it is necessary to be cautious in interpreting findings for respondents in the area of cyber-security due to the sall saple for this question, it nevertheless appears that cyber-security respondents have (on balance) a relatively positive outlook on future deand prospects. The patterns of deand expectations for other security products and other security services are very siilar across broad custoer groups, but there appears to be a slightly stronger expectation for future growth, particularly outside Europe, for respondents whose ain activities are other security products (ore than 70% of respondents, copared with ore than 56% of respondents for other security services). Figure 3.33 Distribution of deand growth expectations by custoer groups and geographical area (% of respondents, excluding no answer / don't know) Public sector Critical infrastructure sectors Business sector Private individuals and households National arket as a whole Europe Outside Europe 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Increase strongly Increase slightly Stay roughly the sae Decrease slightly Decrease strongly 9 Excludes respondents that did not provide an opinion on deand prospects. Non-response rates vary significantly for different custoer groups and geographical areas; for the saple as a whole, the percentage of respondents that did not offer an opinion on specific custoer groups and geographical areas are as follows: public sector 24%, critical infrastructure sectors 34%, business sector 25%, private individuals and households 40%, national arket as a whole 30%, Europe 59%, outside Europe 63%. 38 Study on the developent of statistical data on the European security technological and industrial base

39 Figure 3.34 Distribution of deand growth expectations by custoer groups and by ain broad industry category (% of respondents, excluding no answer / don't know) Cyber security Cyber security Public sector Critical infrastructure sectors Business sector Private individuals and households Other Other security products Public sector Critical infrastructure sectors Business sector Private individuals and households Other Other security services Public sector Critical infrastructure sectors Business sector Private individuals and households 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Increase strongly Increase slightly Stay roughly the sae Decrease slightly Decrease strongly Figure 3.35 Distribution of deand growth expectations by geographical area and by ain broad industry category (% of respondents, excluding no answer / don't know) Cyber security Cyber security National arket as a whole Europe Outside Europe Other Other security security products National arket as a whole Europe Outside Europe Other Other security services National arket as a whole Europe Outside Europe 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Increase strongly Increase slightly Stay roughly the sae Decrease slightly Decrease strongly Study on the developent of statistical data on the European security technological and industrial base 39

40 3.11 Copetitors Respondents to the survey were requested to indicate the geographical region fro which their ain copetitors coe fro, using the following classification: Local/regional area (i.e. sub-national level); National area (i.e. fro within the country as a whole); European countries (EU and non-eu); Outside of Europe. In addition, where respondents indicated that they faced copetition fro copanies fro a particular geographical region they were requested to indicate their expectations for developent of copetition fro that geographical region in the future (i.e., over the next 5 years) Geographical origin of ain copetitors all products and services Overall, as show in Figure 3.36, two-thirds (68%) of respondents indicate that their ain copetitors coe fro within the doestic sector only, of which 23% indicate that their ain copetitors are only at a local (sub-national) level (i.e. doestic: regional only ). Just 17% of respondents indicate that their ain copetitors coe fro both the doestic sector and fro abroad (i.e. doestic and international sub-categories), while 15% of copanies indicate that their ain copetitors coe exclusively fro outside the doestic sector. Figure 3.36 Geographical origin of ain copetitors (nuber and % of respondents, excluding no answer / don't knows) International: Europe and outside Europe, 35, 7% International: outside Europe only, 17, 3% International: Europe only, 24, 5% Doestic: regional only, 112, 23% Doestic & International (outside Europe only), 10, 2% Doestic & International (Europe and outside Europe), 47, 9% Doestic: regional and national, 62, 13% Doestic & International (Europe only), 30, 6% Doestic: national, 157, 32% Breakdown by ain broad category of security products and services Figure 3.37, Figure 3.38 and Figure 3.39 provide a breakdown of ain copetitors for, respectively, respondents whose ain security-related activities are in the areas of cyber-security products and services, other security products and other security services. Coparing across the three groups, while 77% of respondents whose ain security-related activities are in the area of other security services indicate that their ain copetitors coe only fro the doestic arket (either at regional or national level, or both), the corresponding share for other security products is 60%, and 59% for cyber-security products and services. In ters of international copetition, 26% of respondents whose ain security-related activities are in the area of cyber-security indicate that their ain copetitors coe only fro abroad, copared to 19% of respondents whose ain activity relates 40 Study on the developent of statistical data on the European security technological and industrial base

41 to the supply of other security products and just 8% of respondents offering other security services. Figure 3.37 Cyber-security products and services: geographical origin of ain copetitors (nuber and % of respondents, excluding no answer / don't knows) International: Europe and outside Europe, 6, 10% International: outside Europe only, 4, 6% Doestic: regional only, 10, 16% International: Europe only, 6, 10% Doestic: regional and national, 6, 10% Doestic & International (outside Europe only), 1, 2% Doestic & International (Europe and outside Europe), 7, 11% Doestic & International (Europe only), 1, 2% Doestic: national, 20, 33% Figure 3.38 'Other' security products: geographical origin of ain copetitors (nuber and % of respondents, excluding no answer / don't knows) International: Europe only, 13, 6% International: Europe and outside Europe, 20, 9% International: outside Europe only, 10, 4% Doestic: regional only, 49, 21% Doestic & International (outside Europe only), 7, 3% Doestic & International (Europe and outside Europe), 26, 11% Doestic: regional and national, 23, 10% Doestic & International (Europe only), 16, 7% Doestic: national, 67, 29% Study on the developent of statistical data on the European security technological and industrial base 41

42 Figure 3.39 'Other' security services: geographical origin of ain copetitors (nuber and % of respondents, excluding no answer / don't knows) Doestic & International (outside Europe only), 2, 1% International only, 17, 8% Doestic & International (Europe and outside Europe), 14, 7% Doestic: regional only, 53, 26% Doestic & International (Europe only), 13, 7% Doestic: regional and national, 32, 16% Doestic: national, 70, 35% Feedback fro national stakeholders Regarding Figure 3.37, it was stated that the sall share of copetition fro outside Europe is not typical of the cyber products, but ore of the cyber service field, which is a ore locally organized arket Future copetition prospects by geographical origin of ain copetitors Conditional on respondents identification of the geographical origin of their ain copetitors, Figure 3.40 and Figure 3.41 show the distribution of respondents expectation for the future developent of copetition based on the geographical origin of copetitors. Overall, the general pattern is that respondents expect (on balance) stronger increases in copetition fro foreign copanies particularly fro outside Europe than fro doestic rivals. This is especially the case for other security products and other security services; however given the sall saple size of respondents and low response-rate aong respondents, these finding should be interpreted cautiously. The sae is true for cyber security regarding expectations on copetition fro abroad. Looking at expectations on regional copetition, 43% of respondents whose ain security related activities are in cyber security expect regional copetition to increase in the future. The corresponding figure for other security services is 52% and for other security products is 50%. 42 Study on the developent of statistical data on the European security technological and industrial base

43 Figure 3.40 Distribution of expectations of change in copetition by geographical origin of copetitors (% of respondents, excluding no answer / don't know) Regional National International (Europe) International (outside Europe) 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Increase strongly Increase slightly Stay roughly the sae Decrease slightly Decrease strongly Figure 3.41 Distribution of expectations of change in copetition by geographical origin of copetitors and by ain broad industry category (% of respondents, excluding no answer / don't know) Cyber security Cyber security Regional National International (Europe) International (outside Europe) Other Other security products Regional National International (Europe) International (outside Europe) Other Other security services Regional National International (Europe) International (outside Europe) 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Increase strongly Increase slightly Stay roughly the sae Decrease slightly Decrease strongly Study on the developent of statistical data on the European security technological and industrial base 43

44

45 4 Aggregate estiates of the size of the security industry 4.1 Overview of approach In this section we outline the approach used to extrapolate findings fro the survey so as to obtain estiates of the overall size of the security sector in ters of turnover and eployent. Briefly, the basic approach involves the following ain steps (with breakdowns by ain industry categories): 1. Estiation of turnover levels for non-declaring survey respondents. 2. Estiation of total turnover and eployent levels for the survey saple. 3. Estiation of the average size of security firs (in ters of turnover and eployent) derived fro the survey results. 4. Estiation of the population of security firs derived fro the list of copanies established for the survey and on the incidence level of the survey. 5. Cobination of estiated average size of security firs and estiated population of firs to derive initial estiates of aggregate turnover and eployent levels. 6. Review of initial aggregate estiates through consultation with national stakeholders and sector experts and through cross-country coparisons of iplied relative industry size. 7. Revision of initial aggregate estiates, ipleented through revisions to estiated size of the population of security firs. For reference, Table 4.1 shows the underlying coposition of the survey saple using a crosstabulation of turnover and nuber of eployees working in security. Table 4.1 Coposition of the survey saple by eployee and turnover-size classes Nuber of eployees working in security to 50 to 250 to Total Zero 1 to 4 5 to 9 or ore Below 250 k k to More than Don't know Total Method for the estiation of aggregate turnover and eployent for the survey saple Underlying assuptions The following underlying assuptions are used in the calculation of aggregate turnover and eployent for the survey saple: Study on the developent of statistical data on the European security technological and industrial base 45

46 1. To provide an aggregate turnover estiate, the id-point of each turnover interval (i.e. turnover-size class) is used 10, with the exception of the top turnover interval (cf. More than 500 illion ) for which the turnover is set at the lower bound of the interval (i.e. 500 illion) 11 ; 2. To provide an aggregate eployent estiate, the id-point of each eployent interval (eployent-class size) is used 12, with the exception of the top eployent interval (cf or ore eployees ) for which each copanies eployent is set at the axiu of either (i) the lower bound eployent level (i.e eployees) or (ii) an estiated nuber of eployees calculated under the assuption that their turnover per eployee is equivalent to the average turnover per eployee of firs with less than 1000 eployees 13 ; see Section 4.2.3; 3. Irrespective of their declared eployent size class, all copanies indicating that they are in the top turnover interval (cf. More than 500 illion ) are assued to be in the top eployent size class (cf or ore eployees ) Estiation of turnover for non-declaring respondents As noted in Section 3.9.2, ore than one-third of survey respondents (36%) were unable or unwilling to provide inforation on the value of their turnover. The basic approach used to correct for non-declaration of turnover is as follows: For copanies in all eployent-size classes except for the eployent-size class of 1000 or ore eployees we assue that turnover of non-declaring copanies corresponds to the average turnover of copanies belonging to the sae eployent-size class; For non-declaring copanies in the eployent-size class of 1000 or ore eployees a odified approach is used whereby: o An allocation of non-declaring copanies between the turnover-size class of More than 500 illion and other (i.e. less than 500 illion) is ade on the basis of the corresponding proportion aong declaring copanies (with ore than 1000 eployees) that indicate belonging to the turnover-size class of More than 500 illion. o Those copanies allocated to the turnover-size class of More than 500 illion are assued to have a turnover of 500 illion. The turnover of the reaining other non-declaring copanies is assued to be equivalent to the average turnover of declaring copanies with ore than 1000 eployees, excluding copanies in the turnover-size class of More than 500 illion Estiation of eployent levels for eployent-size class 1000 or ore eployees To provide an estiate of eployent levels for copanies in the highest eployent-size class (cf or ore eployees ), a hypothetical estiate of each copany s nuber of eployees is ade under the assuption that their turnover per eployee is equal to the average turnover per 10 In other words, firs are assued to be equally distributed within the turnover interval. 11 Estiation of the average size of security firs (in ters of turnover and eployent) is particularly sensitive to the approach applied to those copanies that identify theselves as being in the highest eployent-size and turnover-size classes (cf or ore eployees and More than 500 illion ). In particular, the estiation of the nuber of firs with turnover of More than 500 illion and the level of turnover attributed to these firs has a large ipact on the estiation of aggregate turnover of the security industry. In this regard, a cautious approach is adopted for the estiation of the contribution of copanies at the higher end of the turnover distribution to the aggregate turnover of the security industry. To this end, the turnover of copanies that indicate a turnover of More than 500 illion is assued to be liited to the lower bound of 500 illion. At the sae tie, a breakdown of aggregate turnover (and eployent) estiates is provided for copanies with a turnover of less than 500 illion and copanies with a turnover above 500 illion. 12 In other words, firs are assued to be equally distributed within the eployent interval. 13 Excluding copanies with zero eployees. 14 For France, this adjustent affects a single copany that indicates being in the eployent-size class of 10 to 49 eployees and having turnover of ore than 500 illion. 46 Study on the developent of statistical data on the European security technological and industrial base

47 eployee for copanies having between 1 and 999 eployees 15 ; i.e. the hypothetical estiate of the nuber of eployees equals the copany s turnover 16 divided by the calculated average turnover per eployee for copanies having between 1 and 999 eployees. If the hypothetical eployent estiate is greater than one thousand then it is taken as the copany s eployent level, otherwise the eployent level is set at 1,000 (i.e. the lower bound of the interval 1000 or ore eployees ) Estiation of saple average values of eployent and turnover per fir To calculate average values of eployent and turnover per fir, two approaches have been used: Siple (noral) arithetic ean. The first approach is to siply use the arithetic ean values fro the survey saple. These are derived by suing estiated copany eployent or turnover levels for all copanies and divided by the nuber of firs in the survey. Log-noral arithetic ean. A feature of fir data, which can be clearly be observed in our survey findings, is that the distribution of firs by size tends to be highly skewed with a high proportion of sall firs (i.e. few eployees and/or low turnover) and relatively few large firs (i.e. with any eployees and/or high turnover). 17 Accordingly, the second approach used is to calculate alternative estiators under the assuption that the distribution of firs by size (i.e. eployent or turnover) is log-noral. 18 In general, the estiation of average eployent and turnover per fir using the siple (noral) arithetic ean provides higher values than under the assuption of a log-noral distribution. Following fro this, we use the two approaches to provide an upper and lower level estiator of average eployent and turnover per fir. 4.3 Method for the initial estiation of aggregate turnover and eployent Underlying assuptions The following underlying assuptions are used in the extrapolation of survey data to obtain estiates of the aggregate (national) turnover and eployent: 1. The list of security copanies established as the basis for the survey (i.e. the copany list) is assued to constitute the broad population of potentially relevant copanies within the country; The incidence level 20 of the survey is assued to be applicable for the broad population of potentially relevant copanies (i.e. the copany list). In other words, aong for the broad 15 Copanies with zero eployees are excluded fro the calculation of the average turnover per eployee. 16 The turnover is set at the id-point of the copany s turnover-size class if below the class More than 500 illion and 500 for the class More than 500 illion. 17 See also Section A log-noral (or Pareto) distribution is reasonably well accepted as providing an epirical approxiation for the size distribution of firs, where the distribution is skewed. The observation that the distribution of fir size can be approxiated by a log-noral distribution is originally attributed to Gibrat (1931) who proposed his Law of proportionate effect according to which the size distribution of firs becoes positively skewed and approaches a lognoral distribution over tie. [Gibrat (1931), "Les Inégalités éconoiques", Paris, France, 1931] 19 The list of copanies established for the survey is priarily collected fro published lists of ebers of relevant business associations available fro the internet, together with suppleentary searches of the internet based on relevant search criteria. We ake the strong assuption that the list is sufficiently coplete to encopass the full population of copanies in the security industry. To the extent that the initial copany list does not capture the full population of relevant copanies in the security industry then ceteris paribus the extrapolation to an aggregate level will tend towards an underestiation of the size of the security industry. 20 The incidence level is easured by the ratio of the nuber of successfully surveyed copanies to the total nuber of successfully contacted firs (i.e. the su of successfully surveyed copanies and contacted firs that fail to eet the Study on the developent of statistical data on the European security technological and industrial base 47

48 population of potentially relevant copanies as a whole (i.e. the copany list), we assue that the proportion of copanies falling outside the scope of the security industry will be the sae as the proportion of screening failures relative to the total nuber of successfully contacted copanies (i.e. both surveyed copanies and contacted copanies that did not eet the screening criteria) observed for the survey saple; 3. The distribution of surveyed copanies notably, in ters of distribution by turnover-size and eployent-size class is assued to atch the distribution of copanies within the security industry as a whole Calculation of the initial estiate of the population of security copanies For France, the incidence rate for the survey is calculated as follows: 21 Incidence = Surveys achieved (494) [Surveys achieved (494) + Screening failures (405) ] = 54.9% Applying the incidence rate to the initial list of security copanies yields a relevant population estiate, as follows: Relevant population = Initial list (4,435) 54.9% = 2,437 Essentially, this iplies that the saple of surveyed copanies (494) accounts for approxiately 20% of the estiated relevant population of copanies in the security sector in France Calculation of initial estiates of aggregate (national) turnover and eployent To obtain an extrapolation of the survey data to obtain initial estiates of aggregate (national) turnover and eployent, the estiated saple average values of eployent and turnover per fir (see Section 4.2.4) are ultiplied by the estiated relevant population of security copanies (see Section 4.3.2). 4.4 Variants and sub-groups Adjustent for possible defence-related turnover and eployent (variant) Although the survey has been designed to exclude copanies that supply security-related products and services exclusively to the defence sector, copanies that are active in both civil and defence arkets are included (see Section 3.2). Further, copanies are requested to indicate the level of their eployent (cf. nuber of eployees working in the field of security ) and turnover (cf. turnover fro the sale of security products and services ) without any specific separation between civil and defence-related activities. This leaves open the possibility that declared turnover and eployent levels ay encopass a part that is attributable to defence-related activities. 22 screening criteria): Incidence = nuber of surveyed copanies / [nuber of surveyed copanies + nuber of screening failures]. 21 It should be noted that the nubers for survey achieved and screening failures applied here are different fro those indicated in the description of the survey coverage and response rate described in Section 2.3. This reflects the fact 13 firs have been excluded fro the saple during the data analysis phase. The ain reason for exclusion is due to the fact that the responses of excluded copanies indicated that they were active in the supply of safety products and services not falling within the definition of (civil) security. Consequently, these excluded copanies have been treated as additional screening failures. 22 See also Section 3.7 which identifies the role of defence in the custoer base (arket segentation) of copanies covered by the survey. 48 Study on the developent of statistical data on the European security technological and industrial base

49 As a variant on the basic aggregation and extrapolation approach outlined above, estiates have been ade that include an additional adjustent to take account of possible defence-related turnover and eployent. Essentially, this involves adjusting individual copanies eployent and turnover data based on the declared proportion of their business activities that relate to the supply of security-related products and services to civilian arkets (see Section 3.2); conversely, this iplies reducing their turnover and eployent by the proportion of non-civilian related business activities. Practically, the adjustent of individual copanies eployent and turnover data is ipleented as the initial step in the estiation of aggregate turnover and eployent for the survey saple. Thereafter, the ethod for calculation of aggregate turnover and eployent for the survey saple and the extrapolation to provide aggregate (national) turnover and eployent estiates is the sae as outlined in the previous sub-sections. The following (additional) underlying assuptions are used in the calculation of defence-adjusted aggregate turnover and eployent for the survey saple: 1. The proportion of civilian-related activities is estiated using the id-point of each civilianshare interval (i.e. civilian-share-size class), with the exception of Civilian only (100%) for which the proportion is set to 1 (i.e. 100%); 2. The civilian-share applies equally to both eployent and turnover, which iplies de facto that for each individual copany their turnover per eployee is the sae for both civilian and defence-related activities Estiation of turnover and eployent by ain broad industry category (sub-groups) To provide an indication of the breakdown of aggregate turnover and eployent by ain broad industry category (i.e. cyber security products and services, other security products and other security services, see Section 3.3), the ethodology outlined above for whole survey saple is applied separately for the three sub-saples of copanies based on their indicated ain broad category of security activity. In this regard, the obtained estiates of aggregate turnover and eployent for each broad industry category reflect copanies own selection of their ain broad industry category and are not adjusted to take into account the possibility that copanies ay be active in ore than one broad industry category. The following underlying assuptions are used in the extrapolation of survey data to obtain estiates of the aggregate (national) turnover and eployent for each broad industry category: 1. The distribution of copanies between broad industry categories observed in the survey saple is assued to be representative of the distribution of copanies in the relevant population of copanies (see Section 4.3.2). 2. The extrapolation ultiplier estiated for the survey saple as a whole is assued to be applicable for each of the sub-saples of copanies based on their indicated ain broad category of security activity (see Section 4.3.2). It should be noted that the survey saple contains relatively few copanies that indicate that their ain broad area of security activity is in cyber security products and services (see Section 3.3) and that, consequently, the estiation of aggregate turnover and eployent for cyber security is based on a sall underlying saple of surveyed copanies. Accordingly, appropriate caution should be exercised when evaluating the aggregate estiates of turnover and eployent for cyber security products and services. 23 Note, this does not ean that average turnover per eployee at an aggregate level is the sae for both civilian and defencerelated activities. Study on the developent of statistical data on the European security technological and industrial base 49

50 4.5 Size of the security industry: survey estiates and aggregate (national) extrapolation Estiates of the population of security copanies In the following sub-sections we outline the ain findings on the estiated overall size of the security sector in ters of turnover and eployent. As described above, initial estiates of the overall size of the security sector have been derived through the application of a relatively echanical extrapolation approach to the underlying survey data. These initial estiates have been reviewed through consultation with national stakeholders and sector experts and through cross-country coparisons of iplied relative industry size. On this basis, revision of the initial aggregate estiates has been ipleented through adjustents to the estiated size of the population of security firs and corresponding breakdown by broad industry categories; the coparison of these estiates is shown in Table 4.2. Table 4.2 Coparison of initial and final estiates of the population of security copanies (nuber of copanies) Cyber security Other security Other security Total products services Initial estiates 301 1, ,437 Final estiates 250 1,600 1,500 3, Coparison of estiators As noted in Section 4.2.4, two approaches have been used to calculate average turnover and eployent per copany, which are subsequently used to derive aggregate estiates. The first approach is based on the siple arithetic ean (hereafter, referred to as linear extrapolation ) and the second approach is derived under the assuption the distribution of firs by size is lognoral (hereafter, referred to as log noral extrapolation ). The estiates derived using the two approaches are treated as if they represent upper and lower aggregate easures, while the idpoint between the two easures is treated as a single representative estiate of aggregate size. Baseline (full saple) estiates Based on a relevant population estiate of 3,350 copanies, Table 4.4 provides a suary of underlying key data calculated fro the whole survey saple of copanies with a breakdown by eployee-size class together with the corresponding estiates for the extrapolation to the aggregate national level. the extrapolation yields the following id-point estiates for total turnover and nuber of eployees for the French security industry (approx.): : 32 billion; Eployees: 300 thousand. Table 4.5 provides the data estiates obtained after adjustent to exclude possible defencerelated activities. The overall aggregate id-point estiates for turnover and eployees are (approx.): : 28 billion; Eployees: 274 thousand. Sub-group (ain broad industry category) estiates Table 4.6 to Table 4.11 provide details on the data estiates obtained using separate estiations for the three sub-saples of copanies based on their indicated ain broad category of security 50 Study on the developent of statistical data on the European security technological and industrial base

51 activity. Suing the estiates for each sub-saple yields the following id-point estiates for turnover and eployees (approx.): : 36 billion; Eployees: 290 thousand. After adjustent to exclude possible defence-related activities, the corresponding id-point estiates are (approx.): : 29 billion; Eployees: 265 thousand. Table 4.3 provides an overview of the id-point estiates of turnover and eployees. It should be noted that the su of the estiates for the broad industry categories does not atch the aggregate figures estiated fro the whole saple of firs described in the previous subsections. Table 4.3 Estiated size of the security industry (turnover and eployees) by sub-group Baseline Sub-group (ain broad industry category) estiates (full saple) estiates Cyber security Other security products Other security services Total (su of sub-groups) Unadjusted 32.0 billion 5.0 billion 17.9 billion 12.6 billion 35.5 billion Eployees 300 thousand 46 thousand 109 thousand 135 thousand 290 thousand Adjusted for defence 27.7 billion 4.3 billion 13.6 billion 11.5 billion 29.4 billion Eployees 274 thousand 38 thousand 101 thousand 125 thousand 265 thousand Study on the developent of statistical data on the European security technological and industrial base 51

52 Table 4.4 Estiated size of the security industry (turnover and eployees) Base ethod SURVEY (by eployee-size class) BASE ESTIMATES Zero 1 to 4 5 to 9 10 to to to 999 Nuber of copanies Eployees per copany per copany ( illion) per eployee ( thousand) Total eployees ,610 11,700 8,750 Total turnover ( illion) , SURVEY (ALL) EXTRAPOLATION EXTRAPOLATION EXTRAPOLATION 1000 or ore LINEAR LOG NORMAL MID-POINT < 500 > 500 < 500 > 500 < ,350 > , , ,320 4, , , ,949 50, ,500 6,602 17,347 33,587 17, , ,640 2,500 5,802 39, ,000 3,802 2,000 25,790 13,570 3, , ,500 24,500 32, Study on the developent of statistical data on the European security technological and industrial base

53 Table 4.5 Estiated size of the security industry (turnover and eployees) Base ethod (adjusted for defence) BASE ESTIMATES (ADJUSTED FOR DEFENCE) SURVEY (by eployee-size class) Zero 1 to 4 5 to 9 10 to to to 999 Nuber of copanies EXTRAPOLATION EXTRAPOLATION SURVEY (ALL) EXTRAPOLATION 1000 or ore LOG NORMAL MID-POINT < 500 > 500 < 500 > 500 < ,350 > , ,350 Eployees per copany per copany ( illion) per eployee ( thousand) Total eployees ,046 9,945 8,125 Total turnover ( illion) , , ,097 4, , , ,294 47, ,400 5,485 17,810 29,434 17, , ,780 2,203 4,960 33, ,825 3,135 1,825 21,270 12, , ,300 21,700 27,700 Study on the developent of statistical data on the European security technological and industrial base 53

54 Table 4.6 Estiated size of supply of cyber security products and services (turnover and eployees) Sub-group ethod SURVEY (by eployee-size class) CYBER ESTIMATES Zero 1 to 4 5 to 9 10 to to to 999 Nuber of copanies Eployees per copany per copany ( illion) per eployee ( thousand) Total eployees ,500 1,875 Total turnover ( illion) SURVEY (ALL) EXTRAPOLATION EXTRAPOLATION EXTRAPOLATION 1000 or ore LINEAR LOG NORMAL MID-POINT < 500 > 500 < 500 > 500 < > , ,709 4, , , ,451 11,549 47,400 3,419 4,032 7,517 4,032 30,810 16, ,309 5, ,320 2, ,700 45,600 4,600 5, Study on the developent of statistical data on the European security technological and industrial base

55 Table 4.7 Estiated size of supply of cyber security products and services (turnover and eployees) Sub-group ethod (adjusted for defence) CYBER ESTIMATES (ADJUSTED FOR DEFENCE) SURVEY (by eployee-size class) Zero 1 to 4 5 to 9 10 to to to 999 Nuber of copanies EXTRAPOLATION EXTRAPOLATION SURVEY (ALL) EXTRAPOLATION 1000 or ore LOG NORMAL MID-POINT < 500 > 500 < 500 > 500 < > Eployees per copany per copany ( illion) per eployee ( thousand) Total eployees ,365 1,438 Total turnover ( illion) , ,318 4, , , ,335 10,800 44,300 2,637 4,698 6,102 4,698 25,010 19, ,191 4, ,840 2, ,300 38,300 3,700 4,300 Study on the developent of statistical data on the European security technological and industrial base 55

56 Table 4.8 Estiated size of supply of other security products (turnover and eployees) Sub-group ethod SURVEY (by eployee-size class) OTHER SECURITY PRODUCTS ESTIMATES Zero 1 to 4 5 to 9 10 to to to 999 Nuber of copanies Eployees per copany per copany ( illion) per eployee ( thousand) Total eployees ,640 4,950 4,375 Total turnover ( illion) SURVEY (ALL) EXTRAPOLATION EXTRAPOLATION EXTRAPOLATION 1000 or ore LINEAR LOG NORMAL MID-POINT < 500 > 500 < 500 > 500 < ,600 > , , ,000 4, , , ,005 17, ,300 1,000 4,005 13,427 4,005 92,600 27, ,594 17, , ,440 3,450 1, , ,400 17,800 17, Study on the developent of statistical data on the European security technological and industrial base

57 Table 4.9 Estiated size of supply of other security products (turnover and eployees) Sub-group ethod (adjusted for defence) OTHER SECURITY PRODUCTS ESTIMATES (ADJUSTED FOR DEFENCE) SURVEY (by eployee-size class) Zero 1 to 4 5 to 9 10 to to to 999 Nuber of copanies EXTRAPOLATION EXTRAPOLATION SURVEY (ALL) EXTRAPOLATION 1000 or ore LOG NORMAL MID-POINT < 500 > 500 < 500 > 500 < ,600 > , ,600 Eployees per copany per copany ( illion) per eployee ( thousand) Total eployees ,262 3,990 4,188 Total turnover ( illion) , ,000 4, , , ,928 16, ,700 1,000 4,928 11,837 4,928 81,640 33, ,678 11, , ,480 3, , ,300 15,500 13,600 Study on the developent of statistical data on the European security technological and industrial base 57

58 Table 4.10 Estiated size of supply of other security services (turnover and eployees) Sub-group ethod SURVEY (by eployee-size class) OTHER SECURITY SERVICES ESTIMATES Zero 1 to 4 5 to 9 10 to to to 999 Nuber of copanies Eployees per copany per copany ( illion) per eployee ( thousand) Total eployees ,340 5,250 2,500 Total turnover ( illion) SURVEY (ALL) EXTRAPOLATION EXTRAPOLATION EXTRAPOLATION 1000 or ore LINEAR LOG NORMAL MID-POINT < 500 > 500 < 500 > 500 < ,500 > , , ,000 4, , , ,756 21, ,400 2,000 8,756 12,460 8,756 92,990 65,350 1,083 2,180 16, ,000 1,180 1,000 8,810 7,470 1, , ,200 8,800 12, Study on the developent of statistical data on the European security technological and industrial base

59 Table 4.11 Estiated size of supply of other security services (turnover and eployees) Sub-group ethod (adjusted for defence) OTHER SECURITYSERVICES ESTIMATES (ADJUSTED FOR DEFENCE) SURVEY (by eployee-size class) Zero 1 to 4 5 to 9 10 to to to 999 Nuber of copanies EXTRAPOLATION EXTRAPOLATION SURVEY (ALL) EXTRAPOLATION 1000 or ore LOG NORMAL MID-POINT < 500 > 500 < 500 > 500 < ,500 > , ,500 Eployees per copany per copany ( illion) per eployee ( thousand) Total eployees ,208 4,590 2,500 Total turnover ( illion) , , , , ,385 19, ,100 1,750 7,635 11,397 7,635 85,060 56, ,940 14, , ,950 6, , ,000 8,400 11,500 Study on the developent of statistical data on the European security technological and industrial base 59

60

61 Annexes Study on the developent of statistical data on the European security technological and industrial base 61

62

63 A.1. Product and services segentation Cyber Security: broad segentation of products, technologies and services Cyber security products and solutions Exaples: Governance, vulnerability and cyber-security anageent Identity and access anageent Data security Applications security Infrastructure security Hardware (device/endpoint) security Inforation security anageent systes SIEMS (security inforation and event anageent) systes Electronic access control (identification and authentication) for IT and counications equipent (hardware), systes and networks Encryption, cryptography and digital signature solutions Public key infrastructure solutions Digital rights anageent solutions Inforation rights anageent solutions Data loss/leak prevention, secure data deletion, secure archiving, data recovery solutions Content filtering and anti-spa solutions Security of IT software and applications (design, coding developent and testing) Syste and network security software (e.g. firewalls, antivirus, anti- DDoS24, intrusion detection, tracking and tracing) Unified Threat Manageent (UTM) solutions Terinal (fixed or obile) security solutions and endpoint hardening solutions Vulnerability scanners Internet/network counications security solutions (e.g. secure phone, video conferencing, e-ail and essaging systes) Secure personal portable devices and identity docuents Hardware security odules Enroleent and issuance equipent/systes for access control and identify anageent Bioetric-based security equipent/systes Network encryption equipent/systes Special casings etc. for IT hardware Cyber security services Exaples Audit, planning and advisory services Syste integration and ipleentation services Manageent and operations Security audit, vulnerability and intrusion testing, and risk and threat assessent Security strategy, planning and anageent advice Security certification and confority/copliance assessent Digital forensics: post event (incident / intrusion) analysis, investigation and proof preservation Other IT/cyber security consultancy services Security engineering, design and architecture developent Security project anageent Ipleentation and integration, interoperability testing Ipleentation support (technical assistance/expert support services) Security syste anageent and operations Operational support (technical assistance/expert support services) 24 Distributed Denial of Service (DDoS) Study on the developent of statistical data on the European security technological and industrial base 63

64 services Managed security services Secure outsourcing Continuity and recovery anageent Trusted third party services / E-content and e-reputation services Security training services IT / cyber-security education and training Other Security Products: broad segentation of products, technologies and services Other security products Exaples: Mechanical access control, barriers, enclosures and physical resilience Identification and authentication Intruder detection and alar Fire detection, alar and suppression Detection and screening for dangerous or illicit ites or concealed persons Observation and surveillance (localised) Observation and surveillance (wide area) Tracking and, tracing, positioning and localisation Counications Locks and locking systes Safes, strongboxes etc. Aroured and fire-resistant doors Mechanical seals (and electronic seals without tracking) Physical perieter barriers (e.g. fencing and other security barriers) Other aterials and products to enhance physical resilience to security threats (e.g. blast proofing, hardening, strengthening etc.) Electronic access control systes for buildings and other designated areas (sites and places), including with sartcards or bioetric identification and authentication. Other identification, accreditation and authentication systes for persons (including with bioetrics); e.g. PIN and chip cards, identity cards, passport systes, etc. Identification and authentication of aterials, goods and equipent (e.g. vehicle recognition, protection against forgery and counterfeiting) Intruder detection and alar systes (with or without reote onitoring) Fire, soke and explosion detection and alar systes (with or without reote onitoring) Fire suppression systes Detection capabilities for dangerous/hazardous or illicit ites and substances (e.g. screening of persons, baggage, cargo, etc.) Detection capabilities for concealed persons Specialised detection for CBRNE (cheical, biological, radiological, nuclear, and explosives) and other risks. Video and other observation and surveillance systes (e.g. CCTV) including video analytics etc. (with or without reote onitoring). Includes surveillance systes for facilities, infrastructure and specified locations (e.g. urban areas, transport hubs, etc.) Large area (specialised environent) observation and surveillance systes (e.g. air, aritie and land border surveillance) for civil security purposes Tagging and tracing devices and systes (e.g. bar code, RFID, Wi-Fi based ) Tracking, localisation and positioning devices and systes (e.g. for cargo containers, land vehicles, ships and aircraft; such as AIS, LRIT etc.) Tracking, localisation and positioning of persons, equipent, supplies etc. in crisis situations Tracking, localisation and positioning of hazardous substances and devices (e.g. radioactive aterials, hazardous cheicals, etc.) Electronic seals with tracking/positioning (e.g. GPS, RFID) Counication systes for use by civil security service providers (e.g. police, fire fighters, private security services), particularly secure counication systes Public inforation and situation alert counication systes 64 Study on the developent of statistical data on the European security technological and industrial base

65 Coand, control and decision support Intelligence and inforation gathering Vehicles and platfors Protective clothing Equipent and supplies for security services Security systes integration Coand and control systes for use in security situations (e.g. eergency response and rescue, special security issions and crisis anageent) Inforation anageent and decision support systes for use in security situations Other tools and systes to support planning and organisation and aintaining of security (functional) capabilities; including tools for siulation, odelling, apping etc. for security purposes Intelligence and inforation gathering systes for security-related purposes; Equipent and aterials for security forensics Special land vehicles for use by civil security service providers (e.g. police, fire fighters, private security services) such as aroured vehicles, water cannon systes etc. Aircraft (planes, helicopters) and un-anned flight systes (UAVs) for use by civil security service providers Ships and boats for use by coastguards Robotic platfors for use in civil security operations (e.g. bob disaraent and disposal, search and rescue) Protective and specialised clothing for use by public and private security service providers (police, fire fighters, security guards, etc.) (Other) specialised gear, equipent and supplies for law enforceent, public order and safety services, other eergency services and private security service providers (including weapons and aunition) Specific activities related to the integration of functional security systes (as separate fro the supply of associated equipent and platfors) Private security services sector: broad segentation Private security services Manpower based security services Guarding and anning Reote onitoring Security of persons Detection and investigation Guarding and anning services (e.g. securing buildings, infrastructure, spaces and environents through the deployent of persons, including with anials). Security patrol services Protection of valuables (e.g. cash-in-transit services) Reote onitoring and surveillance services Protection of individuals or groups of persons (e.g. VIP protection services) Security investigation and detective service activities Security consultancy services Consultancy, advisory and training services Security consulting and advisory services Security training services Risk assessent and advisory services Threat assessent and analysis Security engineering and design services Other security related consultancy and advisory services Specialised security training services Note: excludes IT security training services Security research Public and private institutions engaged in security-related research activities Study on the developent of statistical data on the European security technological and industrial base 65

66 services Technologies and technical solutions Other research Educational, acadeic and private institutions engaged in securityrelated research activities concerning the developent of technologies and technical solutions. Educational, acadeic and private institutions engaged in securityrelated research activities concerning, for exaple, social, behavioural, organisational, econoic and legal aspects of security 66 Study on the developent of statistical data on the European security technological and industrial base

67 A.2. Market Segentation Security arket: broad segentation Security industry (supply chain) Providers of security systes, sub-systes, products, equipent and technologies and associated services* Cyber security industry Other security industry Private security services sector Providers of products used for the security of IT systes, electronic data storage, and electronically processed or counicated inforation Providers of products used for the (physical) security of persons, tangible property and assets, infrastructures and environents Private security services, security consultancy services and security research services Public adinistrations and services * Concerns intra-industry supply of products whereby a copany sells products or services to other copanies active in the security industry (e.g. acts as a sub-contractor or supplier of coponents or sub-systes for inclusion within integrated systes delivered by prie contractors) Public adinistrations and service providers (including education and health services) NACE Defence Adinistration, supervision and operation of ilitary defence affairs and land, sea, air and space defence forces Public security service providers Public security services, public security intelligence and preparedness services See List 4 Public adinistrations Public adinistrations (central, regional or local) other than defence, public order, safety and fire service activities (above) 84 (ex , 84.24, 84.25) Health and education Huan health services whether public or private (hospitals etc.) Education services whether public or private (schools, universities etc.) 85, 86 Critical infrastructure sectors Econoic sectors providing assets and systes deeed to essential for the aintenance of vital societal functions NACE Transport Aviation sector (airports and air transport services) Maritie sector (ports and arine transport services) Inter-urban and urban ass transit systes (public transport hubs, networks and services) 49.1, 49.2, 49.31, 50.1, 50.2, 51 (ex ) Other transport sectors and related activities associated to the preservation of the security of supply chains 49.4, 49.5, 50.4, 52, 53 Energy and water Electricity generation and distribution Gas transport, storage and distribution Water capture, storage, treatent and distribution 35, 36, 37 Counications and inforation Telecounication infrastructure and systes Public broadcasting (radio and television) 60, 61 Finance Banking, securities and investent services Insurance and reinsurance Study on the developent of statistical data on the European security technological and industrial base 67

68 Other econoic sectors Other econoic sectors NACE Priary sectors Agriculture, forestry, fishing, Mining and quarrying Manufacturing Construction Real estate and property anageent Manufacturing sectors other than: o Physical security industry (above) o Cyber security (hardware) industry (above) Construction of buildings Civil engineering Specialised construction activities Buying, selling, renting and operating real estate 68 Wholesale and retail distribution Wholesale and retail sale (i.e. sale without transforation) of goods Hotels, restaurants and leisure services Short-stay accoodation for visitors and travellers; food and beverage services; arts, entertainent and recreation services 55, 56; 90, 91, 93; Professional, business and other arket services Professional and other business services other than: o Cyber security services (above) o Private security services (above) Other arkets services (i.e. services not covered elsewhere): 62-63; 69-75; 77-79; Private citizens and households Private citizens and households acting in individual/personal capacity NACE Citizens and households Private individuals and households N.A. 68 Study on the developent of statistical data on the European security technological and industrial base

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