The size, breakdown and turnover of the private security sector

Assessing the size of private security in Italy is a hard task. The reason lies in the fact that very few studies have been conducted on the matter, with the first data set available only at the end of the past century, thanks to the work of De Waard (1999). For what regards other sources, such as the National Institute of Statistics30_{, or Confcommercio, (the Confederation of} Italian Businesses) no current data about private security is available. Moreover, the highly scattered industry representation, which is divided into many associations31, does not help in building a clear understanding of the amount of personnel and companies involved in the sector. Since some industry associations present their own data, which are often the only ones available (and thus not easy to cross-check), it is very hard to assess the size of the sector and who is representing whom, leading to potential double counting of the members active in the field.

Due to such complications, we will consider the numbers given by two sources which can provide a wider and more reliable scenario.

The first is FederSicurezza, the largest Italian private security industry association. For what concerns the numbers provided to this day, there are 1326 active companies, “with about 3 billion and 300 million Euro in turnover, and about 70.000 employees, (of which 41.000 are private armed guards)” (FederSicurezza 2016, 5). In their last report, FederSicurezza has underlined how the financial and economic crisis of 2008 is still partially influencing the sector. Indeed, after a good turnover in 2007, the industry has been subject to a constant decline, reaching losses of about 60 million Euro in 2016, and eventually reaching a point of stagnation in the last years. Adding on the difficulties given by the financial crisis, the sector has undergone important changes in the recent years, leading many companies to invest more

30 _{Despite the wide and deep researches conducted by this institution run by the Italian state, only in 2009}

“ISTAT has included the sector of private security” in its researches, “which was previously excluded from the field of observation of the survey” (FederSicurezza 2009, 9).

31 _{Several associations represent the Italian private security companies. The largest is FederSicurezza, founded} in 2005, which claims to represent more than 50% of the industry companies (FederSicurezza n.d.). A.S.S.I.V is another major one, which along with A.N.I.V.P. represent privately contracted armed personnel. For what concerns the private investigation sector, the main association is FEDERPOL, established in 1957 (FederPol). Finally, regarding unarmed security services, A.I.S.S. claims to be the main association in the field, as they

sustain to represent workers employed in “general subsidiary unarmed services” (A.I.S.S. 2011). In addition to such scattered representation, most of these associations do not represent only one sector, overlapping their representativeness (A.I.S.S. and A.N.I.V.P. cases).

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capital in order to be up to date, although the Ministry of the Interior has recently underlined the disregard of the new norms by many PSIs, lowering the number of institutes that abide by the law from 1326, to just 405 (2016, 5) (Ecorys 2015, 75). In relation to the profits of the sector, their study has highlighted interesting differences. Indeed, the North is accounting for 1/3 of the total amount of revenues, and just two regions (Lazio and Lombardia) are accounting for the 44% of the total revenues while employing about the 60% of the total personnel involved in private security (FederSicurezza 2016, 5-6). However, these data contrast with the higher presence of companies in the South and the Islands, as shown in the chart below.

Number of companies active in private security and their territorial subdivision

Source: FederSicurezza 2016, 15

Concerning the number of employees, about 80% of the companies have 50 or less employees, with a 65% of these that are considered ‘micro-businesses’, with less than 10 employees, and only 45 companies are considered large size, employing more than 250 people. Large companies hire about 80% of the employees, and present revenues that count for half of the grossed industry income, in contrast to the fact that, “700 micro-businesses in the field give a job to less than the 3% of the overall employees” (FederSicurezza 2016, 6).

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Finally, in general, three companies out of four were established in the past 15 years, with one company out of five established less than 2 years ago, forming a very young market (FederSicurezza 2016, 19-21).

Revenues for micro, small, medium and large companies (FederSicurezza 2016, 38).

However, FederSicurezza’s researches lack in several other aspects, such as the subdivision of the sector, its driving forces, and the kind of services provided. Therefore, the Dutch consulting firm Ecorys will provide more information about the subdivision of the Italian market given their study on the size of the European private security sector.

To start, their data suggest that the Italian market is almost evenly divided between companies that provide ‘private security activities’ and those which provide ‘investigation activities’ as shown below (Ecorys 2015, Figure 3.4,50 ).

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Differently to this general division of the market, almost the entirety of personnel is occupied in ‘private security activities’ and very small shares are distributed between the investigation and security systems activities, while regarding the turnover, companies involved in the provision of ‘private security activities’ hold the bigger stake of the market, whereas ‘investigation activities’ and ‘security systems services’ account just for a small share (Ecorys 2015, Figure 3.7, Figure 3.8, 52). More in detail, under the heading of ‘other security products’, the most important categories are deemed to be intruder detection, identification and alarm systems (Ecorys 2015, Figure 4.5, 66). While regarding ‘other security services’, the Dutch firm has accounted ‘security of persons’, ‘remote monitoring’ and above all ‘detective and investigation’ as the most important categories in Italy (following image).

44 Source: Ecorys 2015, Figure 4.8, 69.

Finally, in the market segmentation focused on end-users, an important consideration stems from the fact that public security service providers’ (e.g. law enforcement agencies) consider products and services from the private sector as ‘not in top 3’, which is the least important of the categories present in the study. In contrast to the institutional perception of private services, ‘private individuals and households’ regard private security services the ‘most important category’ (Ecorys 2015, Figure 4.9, 70-71).

The lack of further data has impeded a better understanding of the size and revenue of the sector. Nevertheless, as shown below, one can notice a slow but steady increase in the

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number of businesses active in private security, as even underlined by Federsicurezza’s president (L.Gabriele 2018, personal interview), although the overall number in the last decade has not shown any particular rise nor fall, reaching a point of stagnation.

The evolution of the sector from 2009 to October 2016

Source: FederSicurezza 2016, 18.

In the next subchapters the legislation on PSCs will be presented along with the most recent changes.