The manufacture of secure documents – be they banknotes, passports, product packaging or identification cards – provides modern financial and political institutions with the security they require to function efficiently. It also ensures each country’s and each individual’s right to secure documentation and currency.
At this moment in time, secure document manufacturers face a number of challenges but are also presented with a host of opportunities. Perhaps chief amongst these is the increased use of digital technologies and the growing importance of South American nations and other emerging markets. To understand the future direction of the industry, particular attention needs to be paid to both of these factors.
Importance of Developing Markets
Emerging nations are now the secure printing industry's most significant customers by a large margin. Asia alone represents 50% of the global market. Though this can't be said to be an enormous surprise – considering the world's two most populous countries are situated on the continent – it is an indication of where the industry will focus its attention in the coming years.
While countries like India and China can make the most of economies of scale to manufacture some secure documents in-house, other smaller nations don’t have this privilege. This might account for why Africa is currently the world’s most rapidly expanding market.
As nations modernize, they face a new set of challenges that require intelligent security solutions. Increased travel demands more stringent security checks and the use of more complex document designs. Improved access to luxury goods – which are often the target of fakes and forgeries – requires a means of guaranteeing legitimacy and safeguarding brand reputation.
A rapidly expanding economy needs a secure financial infrastructure to ensure its continued success and to protect its integrity. While emerging nations continue to experience substantial population growth and increased economic power, they're likely to maintain their position as the most critical markets for secure document manufacturers.
Future Economic Powerhouse
South America is already home to a number of the world’s largest economies and is beginning to wield more considerable influence on the international stage. For instance, nations like Brazil and Argentina have firmly established themselves as prominent and influential global economies.
However, the potential of many emerging economies in the region is also obscured by the large shadow economies currently operating outside state authority. The IMF recently released data that demonstrates that Bolivia maintains the largest shadow economy in the world. As these informal sectors are brought into the state-sanctioned economy and are regulated and legitimized, they will only increase the economic power of emerging nations.
Economic development also depends on safe and efficient financial infrastructure. Corruption, counterfeiting, smuggling, and waste often result in reduced economic growth and less state control. The security documents manufacturing industry is ideally positioned to provide this infrastructure to emerging nations across the globe.
For smaller countries, the economies of scale a global manufacturer can harness make them an attractive, cost-effective solution to their secure printing concerns. Similarly, the industry can make use of a great deal of experience that state institutions simply do not have access to.
Finally, private companies are comfortable with delivering products to strict deadlines and timescales. This was most aptly demonstrated by the ability of De La Rue (who have recently expanded operations in South America) to deliver vast quantities of new Iraqi Dinar in an incredibly short period.
Digital Identities and New Manufacturing Techniques
One of the critical changes to the industry globally is the increasing importance of digital documents and identities. While this may appear a threat to traditional print manufacturers, it could also be an opportunity. In the near future, it seems unlikely that digital identification and biometric technologies will be employed without a corresponding physical document.
Rapidly developing nations – who need to upgrade their existing identification systems and are doing so at a time when this new technology is ready to be implemented – will first utilize this new type of document. A perfect example of this is Uruguay, whose innovative ID cards attempt to integrate various functions into a single document and to streamline access to government services.
Ensuring the legitimacy of consumer goods is also of growing concern in South America and other emerging markets. Increased purchasing power has resulted in both manufacturers and consumers demanding improved guarantees of quality. At the same time, governments are also aware of the loss of tax revenue, political control and economic growth that results from a large black market.
By some estimates, governments lose as much as $100 billion in revenue annually due to smuggling.Such activity is far easier in those regions in which adequate safeguards are not yet in place, making emerging markets an enticing target for those businesses that can provide security solutions. Thomas Greg & Sons have already demonstrated the importance of such activity with their brand protection and tax stamp work.
While the secure document printing industry has a significant role to play in providing countries with the efficient infrastructure necessary to grow and develop, it's also relevant in other, less concrete ways. In regions with a recent history of colonialism, nation-building, and issues of national identity are incredibly important. Secure documentation, particularly currency and passports, are a vital part of developing or reclaiming a national identity and give countries a chance to write their own historical and cultural narratives. In essence, they're an opportunity to self-identify and unite citizens in a collective ‘belonging.'
The strength of feeling aroused by the use of national symbols and the introduction of new secure documents is apparent in the level of debate and discourse surrounding mocked up designs for the Kenyan Modern Shilling. It also goes some way to explaining the impact the idea of reintroducing navy-blue passports has had in the UK’s Brexit debate. On continents where many nations are working hard to define their collective identity, secure document manufacturers can offer a way to do so.
In conclusion, South America and other emerging nations will be key markets for the industry in the near future. Substantial population growth, strong drives towards modernization and greater economic power are likely to increase demand for more complex and secure financial infrastructure and document printing.
It also appears as though these regions will be some of the first to utilize and experiment with new technologies and manufacturing techniques. If the industry is to succeed in the coming years, it will be its ability to innovate and adapt, along with its ability to meet the demands of increasingly powerful emerging economies, that will allow it to thrive.