Asia in the Rearview Mirror

By Mark Roberti

The region has lagged behind the United States and Europe in mandating RFID tagging, but governments in the region are putting up the money to change.

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Last week, we wrote about a new project in Asia, in which the Hong Kong government is funding a major supply chain visibility pilot (see H.K. Launches RFID Supply Chain Project). The goal of the project is to develop the EPCglobal Network infrastructure needed to track goods from the time they are manufactured in China until they reach a retail store in Europe or the United States. We also broke the news that the Hong Kong government is funding a middleware development project (see Hong Kong Begins RFID Middleware Project).

These are two examples of governments in Asia supporting projects aimed at enabling Asian companies to leapfrog competitors in the U.S. and Europe. But these are not the only examples. The South Korean government is supporting an RFID project at the Port of Busan (see Korean Seaport Tests RFID Tracking), and it is encouraging companies to invest in an RFID research park.

The Singapore government has put up US$5.8 million to support the development of the RFID industry in the island republic (see Singapore Seeks Leading RFID Role), while the Chinese government has been encouraging the use of RFID for mass transit tickets and other applications to stimulate adoption. If history is any gauge, this government-industry partnership in Asia is likely to catapult the region to the forefront of RFID adoption.

I have long believed that governments can play an important role in helping to foster the adoption of new technologies such as RFID. Why should they? Several reasons. RFID could play an important role in protecting the public health by reducing counterfeit drugs and securing the food supply from such dangers as mad cow disease and bioterrorism. It could be used to secure ports and borders to prevent terrorists from sneaking weapons of mass destruction into a country. And it could be used to boost efficiencies in the government’s own supply chain. Governments that fund RFID projects give local companies an edge while helping to promote technology that can benefit society at large.

A couple of years ago, the British government seized the opportunity to test how RFID could reduce theft in the supply chain (which hurts all consumers) and give British companies an edge by helping them get early insights into the potential of RFID. It put up roughly US$9 million to support a number of RFID pilots under its Chipping of Goods initiative (see U.K. Chips In). Unfortunately, it hasn’t followed up on that with more funding for additional projects, and many of the original projects have not been taken to another level because the cost of the technology was not considered justified, at that early stage, by the benefits.

The United States has been even more shortsighted. The U.S. Department of Defense is seeking to use RFID to transform its supply chain. The U.S. Department of Homeland Security is looking at RFID to secure the nation’s ports and borders. And the U.S. Food & Drug Administration is encouraging pharmaceutical companies to use RFID to reduce counterfeiting and secure the country’s drug supply. Yet, the U.S. government does not have a national plan to coordinate public and private research—or to fund such research, for that matter—that could promote not just adoption but the development of advanced RFID technology.

I’m a big believer in the free-enterprise system. The vast majority of innovation in the RFID industry is going to come from private companies. Universities are also playing an important role in doing primary research and working with private companies to develop RFID solutions. But governments that provide funding can encourage private industry to come into the RFID market, develop products and begin to jumpstart the process of innovation. I applaud what the Asian governments are doing. Their investment won’t pay off immediately, but I expect that Asia is eventually going to take the lead in RFID adoption and innovation.

Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below.