Silver linings

REFUGEES arriving on Aegean islands are whisked to “hotspots”—registration centres run by the European Asylum Support Office. It is often a traumatic moment. Those who fear being sent back to Turkey can turn angry or violent. “We have had a number of riots, staff have had to be evacuated quickly,” says an EASO spokesman, Jean-Pierre Schembri. So, for the first time, a private-security firm, G4S, has been contracted to guard the hotspots, backing up the Greek police. “We felt we needed additional security,” Mr Schembri adds.

Austrian officials, struggling with a refugee influx late in 2015, brought in ORS Services, a Swiss firm that was already running some of its camps, to take control of all of them. ORS also runs asylum centres across Switzerland. In Germany, where security firms employ 235,000 people, business is booming after over a million refugees arrived last year. Revenues for German security firms reached €7 billion ($7.9 billion) last year, up by 15% from 2014 as staff were hired for refugee shelters. This year will be a bumper one, too.

“More missions previously done by the police, or by public authorities, are now given to private companies,” says Catherine Piana, head of COESS, a pan-European industry lobby group based in Brussels. She estimates there are 2.2m licensed guards in Europe, roughly as many as there are police. Infrastructure, such as airports, ports, nuclear plants and hospitals, is mostly protected by privately contracted firms these days.

Migration is not the only reason why such firms are flourishing. Anxiety over terrorism is a second explanation for a recent upsurge in demand—and, perhaps counter-intuitively, for why more people seek jobs as guards, despite low pay. Olivier Duran of SNES, a body representing small French security companies, suggests that after a privately employed guard foiled a bomb attack at Stade de France during the terrorist assaults in November, there has been a surge in job applications—mostly from immigrants, who say they want to serve their new country.

CNAPS, the French regulatory body of the private security sector, calls this an exceptional “year of maximum mobilisation”, because of the terror attacks and because France is hosting the Euro 2016 football tournament, which has brought hundreds of thousands of fans to French cities. Among 90,000 extra security personnel deployed to police the football, around 15,000 are private staff, working for around 60 firms.

Whether or not this turns out to be a good year, the long-term growth prospects for the private security industry are helped by lower public spending in Europe. James Kelly, who heads BSIA, an association for 450 private-security firms in Britain, says austerity has lifted demand for their services. He says that G4S, for example, conducts “street to suite” operations: its staff collects suspects arrested by the police, takes them into custody and processes paperwork. He predicts that private contractors, operating under the police code, will conduct arrests before too long.

Such intimate co-operation between police and private firms is less common elsewhere in Europe but is on the rise. Mr Duran says that private guards operating side by side with police at the Euro 2016 tournament will spread “the concept of co-working”. He points to courts, ministries and public offices that are now largely guarded by private operators, often under the authority of a policeman. He also suggests that counter-terrorism efforts would be boosted if France’s 150,000 private guards—mostly drawn from immigrant communities—were encouraged to be extra “eyes and ears” for the police.

Private security firms can find other ways to expand. Diversification is one possibility, as they supply receptionists, maintenance workers and other staff in roles other than security. In security itself, customers increasingly demand technology rather than more human guards, says Ms Piana, so bigger companies, with access to capital, may be better placed to grow. Such firms offer hardware, like surveillance cameras and electronic gates, as well as algorithms and analytics to assess the huge quantities of data that are gathered. In Britain some equipment is mostly deployed by private firms: an industry body estimates that 96% of CCTV cameras are privately owned and operated.

What hampers growth, at least according to bigger firms, is a lack of harmonisation that makes it harder for firms to operate across borders. They also want stricter rules to raise standards by, for example, requiring more training for guards. “We want more regulation, we champion it, to remove cowboys,” says Mr Kelly, who foresees industry consolidation as firms such as G4S and Securitas look for more economies of scale.

Not all rules are welcome. Companies in France, for example, complain that strong unions and strict labour laws make it costly to hire staff. But with no let-up in sight to migration, terrorism and austerity, a gloomy continent makes the prospects for Europe’s private security firms look reassuringly bright.

Correction: This article previously referred to CNAPS as “a French organisation of bigger contractors”. In fact, it is a regulatory body. This has been changed