RFID goes mainstream

Manufacturers, event organisers, theme park operators – even Government departments; everyone seems to be heralding the potential of radio frequency identification these days. But what exactly is the rather cryptically monikered RFID and why should growing businesses care about it?

Address the former of these questions and the answer to the latter rapidly snaps into focus. In its most basic form RFID acts rather like a conventional barcode, offering up a wealth of information about an object to anyone in possession of a suitable reader. But, rather than using a printed image to convey this information, the technology utilises tiny radio ‘tags’. The benefit being that, while barcodes need to be swept in front of a laser reader to surrender their information, radio waves can be used to glean the presence, description and exact location of hundreds of objects marked with RFID tags almost instantaneously.

The implications are potentially limitless and research group I-Stat even predicts that the RFID market will grow from $300 million to $2.8 billion in value between 2004 and 2009.

The control of supply chains – from manufacturer to wholesaler and retailer – is perhaps the most obvious use but there are much wider applications. ‘The key to RFID is imagination,’ ventures Raymond Chu, chief executive of AIM-listed technology group RC. ‘If you consider a laptop computer in an office, for instance, you could use RFID to prevent theft, because as soon as someone tries to carry that computer beyond a certain point it would trigger an alarm or subsequently use GPRS to track its location.’

To reiterate the flexibility of the technology Chu points out that RC has already won deals relating to evidence management, weapon management, visitors’ check-in, document tracking and car parking. Many familiar with the London transport system, meanwhile, will already be carrying around an RFID chip in an Oyster Card, as will anyone in possession of a ticket for this summer’s football World Cup.

Venue Solutions, meanwhile, has recently announced a contract with leisure group Tussauds, which will see it and its partners install a new system at Alton Towers to enable families to record and purchase a ‘movie-style’ video of their day, with RFID bracelets triggering cameras as they move around the park.

But while the technology is highly flexible, it does have drawbacks. Some, for instance, have questioned the privacy issues surrounding RFID. After all, it may be one thing to track objects, yet take those items out of a store and suddenly there is the potential to trace people’s movements, too. Chu highlights one of his company’s projects in which the technology is used to trace occupants in an old people’s home in case they wander off or have some form of accident. On many levels this makes sense, but it treads a thin ethical line.

Others have drawn attention to the possibility that computer viruses could be spread using RFID chips. As the technology becomes more widespread these fears will only escalate.

Last, but by no means least, there are issues of protocols. Different radio frequencies can be used to provide the spine of the system, which means there is no guarantee that a wholesaler’s reading system will be compatible with the type of chip a manufacturer uses in its products. However, steps have recently been taken to overcome this issue and agree a common platform.

What of the future? Whether we realise it or not, RFID appears set to play a significant role in our lives, as consumers. The challenge for businesses will be to find ingenious methods of using the technology without impinging on civil liberties.

Marc Barber

Raven Connelly

Marc was editor of GrowthBusiness from 2006 to 2010. He specialised in writing about entrepreneurs, private equity and venture capital, mid-market M&A, small caps and high-growth businesses.

Related Topics

Tech Jobs & Careers