Cool heads needed for RFID debate

Trade unions, lawyers and privacy campaigners worried about “Big Brother spychips” should not be allowed to dictate the RFID agenda.

In a little noticed move earlier this month, Bain Capital, a private equity company, paid $3bn in cash for the sensors and controls business of Texas Instruments. The business has sales of more than $1bn a year, and offers products that monitor appliances, air conditioning units and vehicles. It’s growing at what Texas Instruments reckons is too slow a pace, compared with the company’s chips: at seven percent a year, not 17 percent.

That doesn’t look like a bad rate to Bain. It’s one more piece of evidence to suggest that sensors, and in particular RFID wireless tags, are going to have a tremendous decade. Already Wal-Mart plans to move more than a quarter of its US outlets over to pallets covered by RFID by December. A conference last year held by the Wharton School of Business heard how the Holy Grail of RFID will be the ability to track and monitor every part of a product from assembly in China to packaging in Japan, shipping through Europe, and distribution in the US.

But wait a minute. Already trade unions and lawyers, anxious to find business for themselves, want to attack RFID tags as a kind of fascist technology. Perhaps most significantly, Consumers Against Supermarket Privacy Invasion and Numbering (Caspian), a pressure group founded by Harvard doctoral candidate Katherine Albrecht, has set much of the media agenda about RFID.

Tags, Caspian explains, are Big Brother devices. They could be bad for health, continually bombarding people with electromagnetic energy, and they could be used to spam consumers with personalised advertising. Caspian’s tone is well captured by the title of Albrecht’s 2005 book, co-written with Liz McIntyre. It’s called Spychips: how major corporations and government plan to track your every move with RFID. It’s the work of “two suburban moms who’ve taken on some of the largest corporations in the world because we care about the future our children will inherit”. And in case you didn’t get the point about th e “terrifying” world that’s to come, Spychips discusses “What if Hitler had RFID?”

Caspian has called for a moratorium on the use of RFID chips in consumer products “until the societal implications can be addressed”. A great recipe for innovation. As Wharton professor of operations and information management Gerard Cachon observes, RFID can tell us where a part is in a supply chain, “but it’s really hard to take advantage of that information. You don’t have to be smarter; you have to be faster.” There’s still an enormous amount of work to be done before any of the nightmare invoked by Caspian leaves the drawing-board.

But what will dominate public discussion of sensors and tags? Will it be the difficulty of storing, processing and gaining workable insights from data, and then turning those insights into shorter lead-times that can benefit producers and consumers around today’s global supply chains? Don’t count on it.