The U.S. market position has great potential for further growth as Italian security consumers consider the U.S. security equipment industry to be a world leader in advanced and sophisticated security technology.
Market Highlights Demand for security equipment and services continues to be significant and remains a primary area of focus for the Italian Government. In Italy and across Europe major challenges include enhancing homeland security, and combating illegal immigration and crime. Opportunities may be found in the aviation, maritime, supply chain and rail security areas as a result of security measures mandated by regulatory bodies.

This year an important area of focus has been airport security following attempted terrorist attacks in Europe.
While in Toledo (Spain) for an informal meeting of European ministers and U.S. Secretary for Homeland Security,

Janet Napolitano, Italy’s Interior Minister Maroni announced Italy’s intention to proceed with tests of body
scanning technology in major airports. Tests are in the final stages in Palermo, and it was planned for CISA
(Interdepartmental Italian Committee for the Aeronautical and Airports Safety) to decide upon the best technology for Italian airports, choosing between those used in the four tests. The President of the Italian Civil Aviation Authority ENAC recently released a noncommittal statement in which he agreed that a decision would be made in September, but hinted at the possibility of selecting one, some, or none of the available body scanners. In the Western Mediterranean region, Italy is one of the countries under the most pressure from illegal immigration. Italy's right-wing government has made cracking down on illegal immigration a top priority. To combat a growing wave of illegal immigrants, Italy has sought bilateral agreements with countries where the immigrants are coming from in order to devise a common Mediterranean plan shared and supported by EU institutions such as Frontex (EU border agency). Last year, as part of a pact signed with the Libyan Government,
Italy began returning migrants intercepted in international waters back to Libya. A new law imposes harsh
penalties on illegal immigrants. Possible penalties include a fine of $14,000 and three years imprisonment, and it provides for unarmed civilian patrols -- similar to the Minuteman Program in the U.S. -- to work alongside immigration enforcement officers.

Urban security has been strengthened by the adoption of special security agreements (“‘Patti per la sicurezza”) concluded by state and local authorities. These are solidarity instruments aimed at identifying more appropriate solutions to combat ordinary crime. The first agreements were established in 2007 in Rome and Milan. Many other pacts were signed subsequently in other cities. This has become the answer to insufficient funding available to the Ministry of the Interior to combat crime, and the objective is to increase funding available through the participation of regional and municipal authorities. Resources from the municipal authorities and additional contributions on behalf of the provinces are gathered to create a special “security fund” that is transferred to the Ministry of the Interior and managed by the prefecture. Funds are utilized by the National Security Council particularly to increase the number of officers in several law enforcement agencies.

A special program aimed at improving security in Southern Italy is the National Operational Safety Program
Development (Programma Operativo Nazionale Sicurezza per lo Sviluppo). Security, development and law are the three pillars on which the program rests. The Program has a budget of about 1.15 million euro and is partly financed by the European Union (EU) (50 percent European Regional Development Fund) and the Italian State. Italy has a fairly strong domestic safety and security industry with a reputation for high quality products. Italian production is well distributed across the various security equipment product categories. The industry is comprised of a sizable number of small and mid-sized locally based concerns. The Italian access control (AC) market is the fourth largest in Europe after France and the U.K.. The AC segment represents a vital part of the security industry, comprising 40 percent of the entire market. With the growing threat from illegal immigration and rising crime levels, access control is being accepted as a crucial security measure. The Italian market for access control equipment is highly competitive with more than 1000 manufacturers/suppliers/installers of access controls present in the market. Predictions are for a fairly stable market in the next several years.

The closed-circuit television (CCTV) and video surveillance market is another segment that gained importance since 2005 as a crime-fighting tool. The trend in this area has been toward IP technology that saw consistent growth, offset by a decline in the analogue camera and DVR market segments.
Market Data

The safety market registered an overall decrease last year. The personal protective equipment (PPE) segment saw a ten percent drop in production, while the second half of 2009 showed signals of recovery in spending that bolsters hope that production levels will pick up again. Exports saw a substantial decrease (17.6 percent) in 2009. The fire safety equipment segment also registered negative results in 2009 with production down, although the decrease (-7.2%) was milder than expected. Notwithstanding a strong Euro, exports have remained stable and should continue to remain at the same levels during the current year, while investments are expected to decrease by 3.8 percent.
Sales in the security and building automation industries saw a six percent increase in 2008. The leading segment continues to be anti-intrusion systems, up 8.1 percent over the previous year, thanks to the continued demand for CCTV equipment that is particularly spurred by government incentives regarding upgrades to video surveillance systems by municipalities and commercial enterprises. Continued tensions on the social front seem to be providing additional impetus to the demand for security systems. The building automation and fire safety equipment segments are stable, benefitting from tax deductions for restructuring that will continue through 2012.

Imports show a one percent increase across the board, with imports from the Americas holding a four percent
share in 2008, down 3.2 percent over the previous year.

Best Prospects
Equipment with the greatest sales potential includes airport passenger and baggage screening equipment,
cargo/container scanning equipment, access control systems (including CCTV systems), perimeter protection systems, fire-fighting equipment and systems, personal protection equipment, anti-intrusion systems, burglar alarms, and automated home protection solutions.
The access control and CCTV sectors represent the most promising areas in both the public and private sectors.
Many government organizations and private sector firms are enhancing their facility security by implementing access control measures. The best selling products are centralized (online) access control systems, and the identification technology that is mostly requested is Radio Frequency (RFID).
Demand for biometric technology should also see an increase within the next several years. In 2004, the Italian

Government created a working group to establish guidelines for the use of biometric technologies in the public sector, and a competence center was also established to assist public administrations in the biometric area. The use of biometric technology to reinforce security can be seen in international programs such as e-Passport and other border control initiatives that call for the use of biometric technologies and inclusion of biometric identifiers in travel documents. The European Visa Information System (VIS) is destined to become the world's largest biometric
database. The European Border Fund, providing for an estimated €1.8 billion for the period 2007-2013, will assist

Member States to invest in new equipment and systems for border management. With regard to Italy, programs are in the works including the electronic identity card (Carta d’Identità Elettronica - CIE) and the electronic residence permit (Permesso di Soggiorno Elettronico – PSE). In terms of physical and logistical security within the public administration, increased investment may be expected in biometric technologies to enhance facility security measures and to control access to critical information applications and sensitive data.

Port and maritime security will remain a national priority, and port authorities will make appropriate equipment
upgrades when mandated by the International Maritime Organization (IMO) and EU maritime authority.
Increased awareness of worker safety requirements needed to diminish the number of on-the-job injuries and
work-related deaths may present opportunities in the safety sector for personal protection equipment.
Italian end-users are generally receptive to U.S. technology. The U.S. market position in the sector has improved and has great potential for further growth as Italian security consumers consider the U.S. security equipment industry to be a world leader in advanced and sophisticated security technology. Security products with new, innovative and sophisticated features are in demand, but should be supported by strong after-sales service.

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