Radio frequency identification (RFID), the technology of the future, has long established itself in our everyday lives. It is already deployed in various areas ranging from efficient inventory management and road toll collection through to timing the performance of individual participants in mass sporting events. Given RFID's enormous potential it is only right that it is on everyone's lips.

RFID chips combine the physical world of a product with the virtual world of digital data. The technology meets the needs of companies cooperating in a closely knit value chain. RFID will soon be considered an indispensable part of the chain.

Inefficiencies in the value chain and efforts to shore up internal security are driving demand for RFID. The retail trade is playing a decisive part in the broad-based roll-out of RFID projects.

RFID represents an all-encompassing structural business concept that far transcends simply superseding the bar code. Speed of processing, reading error frequency, data protection and privacy issues, progress in standardisation, and investment costs are still challenges that will ultimately decide the potential of RFID. RFID projects focused on transparency, reliability or speed of processing are particularly successful.

RFID systems will rapidly continue to gain significance. This holds especially in areas where they can be used to manage processes within the value chain. All told, the market for RFID systems is likely to grow globally from EUR 1.5 bn to EUR 22 bn between 2004 and 2010 (average growth rate: 57% p.a.). During the same period, the RFID market in the EU-15 is expected to expand from EUR 0.4 bn to EUR 4 bn ( 47% p.a.).