It has been almost four years since I wrote about the possibilities for the RFID industry in this decade. I figured that now would be a good time to review whether that jabbering was making sense and see how the industry has evolved during these past years. This text focuses on RAIN RFID.

The five megatrends I previously estimated that would be important drivers for the RFID industry were:

• The development of science and technology
• Overconsumption of resources
• The amount of waste increases
• Population growth and the aging of the population
• The development of healthcare

The tag manufacturing volumes are a clear indicator of the industry moving forward. If the >20 percent annual growth for the RAIN tag manufacturing is correct, then over 50 billion were manufactured in the year 2024 and ~150 billion RAIN tags will be manufactured when we get to 2030. Not too shabby. At some point, the growth will inevitably get slower, but the market is still young and full of potential, so we can still expect quite impressive growth numbers for the industry.

As for market penetration, retail is still the leader when it comes to volume, but pretty much every relevant sector is expected to have >20 % CAGR in the coming years. The pharmaceutical/healthcare is also steadily growing and that is one of the sectors I listed as a possible driver for the RFID industry. Although the sector is growing, I did most likely overestimate the effect that the population aging, and counterfeit medicine have on the RFID industry.

Sustainability has much more impact on the volumes than the population aging. The overconsumption of resources is one of my favourite topics. I hate wasting pretty much anything: food, clothes, time, you name it. In this aspect, most companies are no different and that can be interpreted from the answers for how the customers see the value they get for buying RFID systems. Sustainability continues to be one of the biggest drivers for the RFID industry. Waste is not wanted.

Latest developments in the RFID industry

Okay, so they’re selling a lot of tags and estimate that to continue to the foreseeable future. That is no excuse to rest on your laurels; the industry needs to evolve and look for new opportunities. In that aspect, some interesting things are now on the table.

The EU is well known for its obsession with regulating every tiny little thing, and the RFID industry should take advantage of that. The upcoming Digital Product Passport (DPP) is an opportunity for the RFID industry, but it must be done right. For DPP, the value lies in sustainability. One of the things I was talking about in the previous blog was that RFID is not yet present in every step of a product life cycle, and DPP can add to it.

Thinking back on the product lifecycle and how RFID does not cover it fully, the part missing is the end user part of the life cycle. With only a couple hundred thousand handheld RAIN RFID readers sold yearly, it would be crazy to expect everyone to soon walk around with a reader in their pocket, right? Maybe not. Everyone (well, almost everyone) already carries a smartphone, and if that thing could be used as a RAIN RFID reader, there could be some nice opportunities to find ways to add value to that.

These development steps are drivers for circular economy and tags being embedded into items, not just separate labels that can be cut off. In some product categories, like car tires, some items are already tagged, so a Proof of Concept has already been done. Tagging items will bring some demands for the tag designs and testing/encoding:

• Durability: If the tags should be functional throughout the tagged item life cycle, durability can be a challenge.
• Sustainability: When a tag is part of an item, how can it be recycled? Some development steps have been taken; for example, plastic-free tags are already available.
• Chip design: Data retention is one important thing if tags are supposed to be working for years, first throughout the supply chain and then in the hands of end users. Some applications might require more memory, of course depending on what information is needed to be stored in the tag memory.
• Testing/Encoding Tagged items: It might be hard to use the same manufacturing lines for inlays and tagged items; investments for new systems are needed.

Summoning dark clouds

Last time, I didn’t talk much about possible threats to the RFID industry; it was all about the possibilities and good stuff. Let’s try something different this time. What kind of threats is the industry facing? I like investing in stocks, and sometimes, I try to come up with business-breaking scenarios when assessing the risk profile. Which kind of black swans could surprise and really hurt the RFID industry? I thought of three different scenarios:

• Other technologies replacing RFID: Some other technology or combination of technologies could solve the same problems as RFID. How do we battle that? It all lies in the value provided by the RFID technology, that value must be higher than that of the technologies competing with it. The industry must evolve to answer future needs; standing still is hardly the winning strategy.
• Radio spectrum reallocation: It’s not enough to compete against technologies trying to solve the same problems as RFID; there is a limited space in the radio spectrum, and there are other users who would love to get it. Allocating the current RFID frequencies for some totally different use would hurt a lot. Why would this ever happen? The same thing applies here as in the previous one: providing more value than the competitors is the key.
• Security and privacy: The more the markets are flooded with RFID tags and data (this is wanted), the more opportunities there are for mischief (this is unwanted). Moving forward and evolving must not happen without taking this seriously. Fortunately, many other technologies have faced similar issues, and there is no need to reinvent the wheel. Then why is this important? Because if this goes wrong even once, coming back from that and gaining customer trust won’t be easy.

Grim, that’s for sure. This is not to say that these scenarios are likely to happen, but work must be done to prevent them from happening. Maybe they’re more like grey swans, not really black ones?

All in all, I think the future is looking bright for the RFID industry, and based on the growth estimates by the RFID industry players, others do, too. The growth drivers are there; now, the industry just needs to deliver. At the same time, taking an active part in the latest technological developments and different kinds of regulatory matters should ensure that RFID stays proactively on top of things.