Announcement: Human Augmentation—New Technology Area

Explorer introduces a new technology area: Human Augmentation. Emerging human-augmentation technologies will aid healthy people as well as people with reduced abilities, and are poised to be highly disruptive across society and many industries—but their use will raise many questions over how the law, regulations, and ethics should apply. Read more

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About This Technology

Radio-frequency-identification technology is an automated data-capture technology that uses low-power radio waves to communicate between readers and tags or contactless cards. Tags can attach to items such as components, products, packaging, or bulk batches of products to provide access to additional information for, for example, manufacturing, supply-chain, and asset-tracking applications. Contactless cards find use in passports, smart cards, and badges for authorization, identification, and payment applications. The technology promises to create and share information about the movement and status of objects accurately and reliably. RFID technology, in contrast to bar-code technology, requires neither line of sight nor alignment between reader and tags. Moreover, RFID tags are sturdier than bar codes, enabling their use in adverse manufacturing conditions (such as hot or dirty environments). Some types of tags—rewritable tags—allow for changes of information directly on the tag, whereas write-once tags establish a reference point for finding information in databases. A major driver of the technology is the need for real-time Internet-enabled information access. Though RFID has been available for quite some time, the technology is still at an early stage of development and commercialization.

Early use of RFID has demonstrated benefits for supply-chain management and logistics, and RFID has seen wide use in contactless cards and near-field communication features in smartphones. However, RFID technology faces a number of technical and institutional challenges. The technology's accuracy and reliability need to improve. Existing infrastructures are still limited—with an insufficient number of readers and middleware connecting RFID-captured data to other software modules—in contrast to infrastructures for bar-code technology. Implementation of an infrastructure that enables seamless use of the technology across all supply-chain partners is expensive because of the need for new hardware and software and additional costs for middleware and systems integration. Costs of individual tags, which manufacturers will produce in the billions if the RFID market lives up to its promise, are still too high for ubiquitous tagging of individual items in most commercial product categories. In addition, other forms of tags—from QR codes to acoustic bar codes to biodegradable RFID tags—offer competition to conventional RFID technology.

Although RFID technology emerged in various guises during and after World War II, the technology became mainstream only as a result of initiatives such as Metro's introduction of RFID systems in November 2004, Wal-Mart's 2005 mandate that its suppliers adopt RFID tags, and the US Department of Defense's initiatives to implement RFID technology. Government installation of RFID readers in customs and security systems and the distribution of RFID-enabled contactless passports continue to be an important RFID deployment; a growing number of companies are using RFID to manage their inventories, supply chains, and equipment; and RFID is in use to identify individuals in workplaces, resorts, schools, and amusement parks. According to a 2012 market report by ABI Research, the RFID market will reach some $70 billion sometime between 2012 and 2017, with 20% year-over-year growth. Nonetheless, although the idea of using tags to bind digital information to objects is now well accepted by industries and the public, we are clearly moving away from the dream of having an Internet of Things with transparent self-reporting objects whose identities are globally stable and centrally managed to a more decentralized and episodic Internet in Things.

Nearly a decade after the first commercial and government mandates, RFID technology has demonstrated its value as a market enabler for manufacturing, supply-chain, and logistics operations; tracking; and security and identification applications. Adoption of RFID technology in manufacturing, supply-chain management, and identification applications is only the first step. Once a sufficient infrastructure is in place—in response to ROI and security considerations—a wide variety of other commercial opportunities will emerge, much as products and services proliferated in the internet arena. New products and services will emerge that use the RFID infrastructure as a base. Among the applications with potential for market success are products that combine RFID technology with sensors, RFID-enabled end-consumer products and services, and new types of payment systems for mobile commerce. As they discovered with the internet, entrepreneurs are likely to discover many other potential RFID applications, and market optimists (and industry hype) envision a gold-rush mentality similar to the one that occurred during the dot-com period. In reality, RFID technology is already demonstrating benefits. Use of RFID provides opportunities for virtually every industry, offering extremely high potential for productivity gains and bottom-line results. But the technology still faces a number of challenges and obstacles that require resolution before the industry can realize the road to widespread commercialization. Developers, users, and investors need to take a realistic look at remaining RFID-technology–related issues not only to avoid making strategic business mistakes but also to identify genuine opportunities in a wide range of applications.