Innovative Auto-ID and LBS - Chapter Ten The Auto-ID Technology System

Chapter X: The Auto-ID Technology System

 

INTRODUCTION

This chapter analyses the findings from the case studies on bar codes, magnetic-stripe cards, smart cards, biometrics and RFID tags and transponders. Its main aim is to describe the auto-ID innovation process, especially the prevalence of patterns of migration, integration and convergence in auto-ID techniques and devices. Migration will be shown to have occurred in the transition between magnetic-stripe cards and smart cards, and the transition between bar codes and RFID transponders. Integration will be demonstrated through the example of auto-ID hybridization, especially on multi-technology cards, and the use of biometric minutiae on 2D bar codes. The third pattern to be described is that of convergence, as in the case of radio-frequency capable smart cards. The auto-ID selection environment will also be discussed from the perspective of the service provider who is increasingly facing pressure to choose the right auto-ID technique for a given application context.

 

WHO ARE THE AUTO-ID STAKEHOLDERS?

Having studied the cases of five auto-ID technologies and their respective networks, it can be seen that the interactions of stakeholders in the industry are paramount to the overall success of the innovation process. Indeed, auto-ID innovation is highly complex. The sheer number of stakeholders including private enterprise (technology and service providers), universities and consortia, government agencies (regulators and legislators), standards bodies, committees and other institutions (industry associations and forums), and end-users (consumers and employees) means that feedback to and from each stakeholder becomes integral in progressing an auto-ID application from conception to diffusion. It does therefore make sense to study auto-ID as a single technology system (TS). While Braco (1997, pp. 116-119) and Elliot and Loebbecke (1998) define lists of stakeholders for single auto-ID innovations, there definitions do not encapsulate all the stakeholders that are required to get a technique from invention to diffusion.

The stakeholders presented in the case studies can broadly be categorized into two groups, including those involved:

(i) in the invention, innovation and supply of auto-ID technological system components such as manufacturers, universities and government research bodies; and

(ii) in the provision of services that require customers to use auto-ID technological system components such as issuers, merchants and consumers.

The customer stakeholders include consumers, issuers and merchants; the technology provider stakeholders include manufacturers, system integrators and value-added resellers; and finally the service provider stakeholders, the owners of the operation, act to bring the two former groups together. Both the customers and technology providers have an infrastructure within which to operate. Customers use a physical infrastructure in the way of information technology and telecommunications (IT&T) to carry out transactions, and technology providers use a knowledge infrastructure that includes standards committees, university researchers, regulators and others. Essentially organizations are those entities that are consciously formed with an explicit purpose and institutions are those that are formed spontaneously to regulate interaction between people. The economic relationships that exist between organizations and institutions can be described as physical and knowledge infrastructures. The interplay between all these different stakeholders forms the technology system specific to auto-ID.

Noticeable in Figure 1 are the feedback loops inherent in the auto-ID innovation process. Without collaboration a given product innovation will not reach its potential and probably fade away to find a resting place in the mass of great ideas that were never realized. For example, if standards committees do not work with manufacturers to understand their requirements and learning experiences, then a default standard will most likely not be adhered. With each new major invention, a system is formed giving it the support and momentum it requires to follow a particular path. For instance, firms did not just happen to invent bar codes and then make commodity suppliers use them. There had to be some degree of interaction between the relevant actors and more importantly some mutual agreement on how to go forward. For example, suppliers of the technology had to make attempts to engage merchants, but via their commodity suppliers first.

 

THE AUTO-ID INNOVATION PROCESS

At discrete points in the innovation process (Table 1), stakeholders may find their level of active participation and contribution to oscillate between intensive and non-intensive. The innovation process is not linear, it is meshed and iterative. To that end, the feedback and interaction between the various stakeholders is also dependent on the dominant dimension(s) at any given point in time in the process. For instance, physical infrastructure problems may plague an auto-ID application early on and then the need for interoperability may become a dominant consideration. Indeed, several simultaneous interactions may be taking place, and this dynamic exchange may be incurring multiple changes throughout the development process.

Figure 2 highlights some of the more probable events that may occur as a result of stakeholder interactions. The events are mapped against six categories that depict separate stages in the innovation process life cycle. The stage titled ‘Inhibitors’ indicates the concerns and barriers of introducing a new auto-ID technology into the market. For the greater part these inhibiting factors affect the organization, those firms that are involved with manufacturing the new technology. The ‘Evolution’ stage is characterized by a need for technology providers to come together to share their experiences and knowledge. An economic infrastructure, both tacit and physical begins to form providing the way forward for the patenting of new inventions and the establishment of committees. Firm-to-firm collaboration also occurs as organizations realize they are unable to offer end-to-end solutions on their own; not only are system components manufactured by different vendors but software for systems integration, and networks for communication, are required. The new auto-ID innovation is still in a state of flux as institutions scramble to introduce a common standard which can be adopted. The formation and adoption of these global standards is a ‘Sign of Stability’. The number of customers by this stage has grown, providing for a steady stream of revenue, particularly for manufacturers. Auto-ID technology providers begin to increase their headcount as the demand for their services increases and specialist skills are required.

The ‘Drivers’ stage of the innovation process is the period where technology providers and service providers partner together to introduce the auto-ID application to a mass market audience. Interoperability has now been achieved, firms have begun clustering together in geographic locations close to customers, and citizens have accepted the new technology realizing its convenience offerings. There is a healthy growth in peripheral companies linked to the technology, specializing in niche complementary and supplementary innovations. The ‘Maturation’ stage of the innovation process finds non-traditional players become involved in offering new services based on auto-ID. Specifications by this stage are well-defined and linked to vertical sectors such as banking, telecommunications and transportation. Laws, acts, and statutes are a topic of debate as the new auto-ID technology is used or misused in ways that legislation does not know how to address. It is during the maturation stage that many governments also introduce mandatory auto-ID technologies linked to social service applications. Universities continue to be involved in the incremental development of existing auto-ID devices as newer auto-ID technologies are introduced into the market. Funds are dedicated to research and development to continue to push the barrier of innovation. The ‘Trajectory’ stage is where coexistence of several auto-ID technologies is experienced but also where opportunities for integration and convergence can materialize. At the height of its proliferation, the auto-ID technology begins to be used in ways for which it was not originally intended becoming even more powerful in functionality when combined with one or more existing information technologies.

 

AUTO-ID TRENDS AND PATTERNS

Patterns of migration and integration were prevalent in the examples found in the embedded case studies in the preceding chapters. Dependent on the application in question, some customers and service providers migrated from one auto-ID device to another, seeking better security, greater functionality, a reduction in fraud and counterfeit, even a smaller device that was more convenient for the end-user to carry. Convergence was also identified but predominantly at the application-level rather than at the device level. For instance, the ability to have more than one application on a smart card is quite different to ‘true’ technological convergence, where one device seamlessly coalesces with another. Integration is also all too often confused with convergence, although both can be considered forms of creative symbiosis (i.e. recombinations). Integration is the ability to use two or more auto-ID techniques on the same device. Integration has proven quite popular as legacy card technology systems have changed with the times- from embossed numbers, to bar codes, to magnetic-stripe and microprocessor functionality all on the same card device.

Many predictions have been made about particular auto-ID technologies becoming obsolete, however, one need only to look at the widespread diffusion of devices in the market today to consider this an unlikelihood (for the conceivable future anyway). Bar codes will for a long time yet serve their purpose, albeit in developing countries which cannot afford RFID devices; and magnetic-stripe cards will maintain their niche, perhaps not in banking but in other applications such as electronic ticketing. In addition, there are continual improvements being made to all auto-ID devices, of course in differing frequencies, but nevertheless the breakthroughs enable certain weaknesses in each technology to be overcome. The diversity in auto-ID techniques also allow for an end-to-end capability such as in the case of military applications.

Table 2 identifies the relationship between different auto-ID techniques. The abbreviations used include ‘M’ for migration, ‘I’ for integration, and ‘C’ for convergence. The matrix is to be read from left to right. For instance, taking the case of bar code, one can see that both migration and integration (MI) trends occurred between it and RFID transponders. The asterisk depicts a redundant flow. Dependent on a given application scenario, some customers and service providers may choose to migrate from one auto-ID device to another, seeking better security, more storage capacity, greater functionality, a reduction in fraud and counterfeit, even a smaller device that would be more convenient for the end-user to carry. Integration of various auto-ID techniques has also proven popular and this is particularly obvious with respect to card technologies. Service provider legacy identification systems have evolved as the techniques have become available- from embossed numbers, to bar codes, to magnetic-stripe and microprocessor functionality all on the same device. Auto-ID technologies have even converged, as can be seen from the example of the contactless smart card, a recombination that brought together a RFID tag with an on-board IC.

 

Migration from Magnetic-stripe to Smart Cards

Joseph Sheppard (1999) CEO of Xico Incorporated, a magnetic-stripe equipment manufacturing company, summed up the situation well: “[i]n short, the smart card industry assertion 10 years ago that magnetic stripes were dead was premature by at least half a century.” This is graphically illustrated by the cover of the October 1997 issue of Card Technology, which tracks the trends in both magstripe and smartcard technologies and applications... “[w]hile smart card makers tout their benefits, mag-stripe card usage continues to proliferate. Don’t expect that to change anytime soon.” In 1997 “…less than 5% of smart cards worldwide [we]re issued by banks… Mass rollout of smart cards is years away because of the cost to convert magnetic-strip credit, debit and ATM card systems to chip technology” (Bank Systems, 1997, p. 21). From this it can be seen that auto-ID migration is not as simple as choosing to invest in a new card technology, the decision also has implications for existing infrastructure and investment.

While most banks and financial institutions still utilize magnetic-stripe on their customer FTCs, particularly in the U.S., all of the banks in France are reaping the benefits of smart card. “All bankcards in France have a chip imbedded in them... When a French cardholder makes a purchase, the transaction is processed at the point of service using the chip and not the magnetic stripe” (Ayer & McKenna, 1997, p. 44). Each of the French chip cards carry a payment application known as B0’. Smart cards have always been a dormant threat to magnetic-stripe but in most countries it has taken until the year 2000 for noticeable migration from the magnetic-stripe card to the smart card to happen. It took almost 40 years to distribute plastic payment cards widely; it will probably take another 10-15 years before consumers worldwide are comfortable with the multiapplication smart card.

Many banks have conducted feasibility studies on smart cards, either by doing secondary research or conducting pilot studies. It is not an uncommon practice today for banks to issue customers with hybrid technology cards until the migration from magnetic-stripe to smart cards is complete. Major banks across the world have begun marketing the smart card concept to consumers. In The Australian in 1997 (pp. 6-7) for instance, the ANZ bank advertised the change from magnetic-stripe to smart card in full-page advertisements. One of these announcements is worth noting in full- a magnetic-stripe bankcard appears on the left page and a VISA card (with IC) on the right: “October 1974. There it was in your letterbox. Whether you wanted it or not. A Bankcard. They all looked the same and their new owners likewise, were all treated the same. You were told where to use it and how much you could spend. All that changed. At ANZ it changed faster than most. To the point where you can now enjoy ANZ cards that not only provide credit… Cards that are aligned to your telecommunications company, your airline, and many other major companies you do business with on a daily basis. What next? Well, we’re currently at the forefront of smart card technology. Cards that use a microchip to record details of transactions and the balance on the card. Now won’t that be a nice change?”

In France there are even migrations occurring from smart bank cards developed in the 1980s to newer smart cards that adhere to the EMV standard and are based on the MULTOS operating system. Clearly this has been an unsettling period for banks and merchants as the costs to upgrade or replace existing ATM, EFTPOS, electronic cash registers, self-service fuel dispensers and other such terminals to make them smart card-ready are very high.

Murphy (1996, p. 80) also asserts that, “smart cards are the talk of the card manufacturing industry, but the magnetic stripe will be the bread and butter of card makers for the near term.” Yet, one cannot ignore the gravitational pull that is obviously occurring from magnetic-stripe to the chip card.  “Visa, MasterCard and other players in the smart card business contend that an ‘evolution’ or a ‘migration’ to smart card technology is under way. The pace of that evolution, though, is anybody’s guess” (Nixon, 1995, p. 22). The magnetic-stripe card was more of an enabler, a convenience card; something that would accustom people to a particular behavioral style. The smart card is being heralded as the grand solution to personalization, tailored to the specific needs of the individual. Hybrid cards may well end up facilitating the evolution and be phased out gradually as they are not required. Already the widespread use of magnetic-stripe has ensured that the size of smart cards must maintain the same ISO standard dimensions. Hybrid cards now have a physical location for microchips, magnetic-stripes, bar codes, embossed characters, holograms and photographs. Read/write equipment is even starting to become multi-technology capable (Hendry, 1997, pp. 45f).

In 1987 Svigals was undecided whether the pattern taking place was “magnetic stripe evolution or smart card migration”. Perhaps what can be said, in the case of magnetic stripe and smart card, is that the “migration” phase is part of a larger evolutionary process. What Svigals observed in the card technologies was equally applicable to tag technology over a decade later. Many ATM machines have already been upgraded to accept both magnetic-stripe and smart cards. Some smart cards have even been developed to emulate magnetic-stripe or bar code cards so that very costly card readers do not have to be entirely replaced, at least in the short term. This has posed a special challenge to card issuers who are attempting a seamless migration. McCrindle (1990, p. 72) stated: “[e]xisting equipment, such as ATMs, are not going to be discarded overnight. A smart card must, therefore, be capable of being used in the current generation of machines as well as in smart card based equipment… the two types of technology must coexist.” Murphy (1996, p. 83) also agrees that “...cards will be issued for many years with both mag stripes and computer chips.” Jerome Svigals attributed this trend to a global evolution from cash to electronic currency but admitted he could not predict how long the evolution would take to complete (Nixon 1995, p. 27). What is of interest to note however, is that the longer the migration phase continues, the more it will become ingrained into applications as a de-facto standard

 

Migration from Bar Codes to RFID Transponders

RFID manufacturers are starting to make inroads into the bar code market (McCathie & K. Michael, 2005). While some predict RFID will replace bar codes, it is more realistic to say (as has Phil Calderbank, general manager of Sensormatic’s RFID group) that RFID will have a market for high-cost items rather than low-cost items (Gurin, 1999). The trend is towards combining RF with EAS (electronic article surveillance), as have Sensormatic Electronics and Checkpoint Systems. Bar codes have poor readability rates in applications that are exposed to harsh environments whether it is indoors or outdoors. RFID can capitalize on this and other weaknesses, particularly where material handling and tracking of components is of the utmost importance. RF tags have many advantages over bar code (K. Michael & McCathie, 2005). First, they can be placed anywhere and can store a lot of information, whereas the bar code is limited by its own label size. Second, RFID does not require LoS (line-of-sight) and cannot be erased by strong magnetic fields. Third, the systems have almost 100 per cent accuracy. Fourth, the tag is not affected by substances such as dirt or paint which may cover the tag from time to time. Fifth, tagged objects can be mobile, without the need to stop to be identified which speeds up the process significantly. And finally, non-metallic objects can come between the tag and the reader without interfering with the system (Automatic ID, 1998, p. 2). Marsh (1998, p. 2) believes that bar codes have played an incredible role in reaching widespread productivity benefits in industry but that there time is now coming to an end: “[t]he RFID tag to replace barcodes is about to arrive from a number of different suppliers who are all working towards this goal.” There are however, numerous counter arguments for why bar code will not be replaced altogether by RFID. For the time being at least, it seems impossible that every single bar coded item in existence today will have a RFID tag or transponder attached to it. Well-known proponents of RFID such as Wal-Mart, Gillette, and Proctor & Gamble have already conducted trials for item-level tracking using the EPCglobal standard.

 

Integration- the Rise of Multi-Technology Cards

It is difficult to say whether “integration” was a consequence of an attempt at “migration” in some applications areas or an independent phenomenon. Initially integration of auto-ID techniques on the same device was born from the idea that each technique could serve its own function for different applications (this was particularly true of closed systems). In addition, as a consequence of migration patterns, multi-technology cards served as a way to transition from auto-ID legacy systems to future modes of operation. The requirement to include more than one technique on the card was a result of roll-out phases of the new technologies (i.e. different geographic regions transitioning at different times). New cardholders receive the latest cards while existing cardholders are transitioned prior to card expiration. This interim period usually requires hybrid cards to be used. Hodgson (1995, p. 19) described this incidence of multi-technology cards as an evolutionary process. “When multi-technology cards first came on the scene, many saw them as a potential solution to a sticky problem- how to eliminate the need for numerous cards or keys without going to a lot of expense to integrate whole systems. Beginning with dual technology, the cards then evolved to true multi-tech capabilities, incorporating functions such as lending items (bar code), time and attendance (magstrip) and photo ID. Now they are much more than just a temporary solution to a non-integrated system. Their evolution is just beginning, and will include not only new applications, but also new technology- specifically the smart card.”

Multi-technology cards form a strong argument and present us with a compelling reason of why individual auto-ID techniques will continue to co-exist independent of a declining adoption rate. In Portugal for instance, the SIBS (Sociedade Interbancaria de Servicos) have introduced the Multibanco electronic purse, yet another hybrid card incorporating a microprocessor for purse applications and magnetic-stripe for credit facilities. Close to 7000 smart card terminals have been introduced, the majority are off-line and about one-third can read both magnetic-stripe and smart card technology.

 

Converging Auto-ID Technologies

The convergence of auto-ID technologies is now starting to become evident at different levels such as standards, regulations, infrastructure and applications. True convergence however at the auto-ID device level is not as common as it is often portrayed. It all depends on the definition one uses to describe what they mean by convergence. Greenstein and Khanna (1997, p. 203) identify two types of industry convergence: convergence in substitutes and convergence in complements. “Two products converge in substitutes when users consider either product interchangeable with the other. Convergence in substitutes occurs when different firms develop products with features that become increasingly similar to the features of certain other products… Two products converge in complements when the products work better together than separately or when they work better together now than they worked together formerly. Convergence in complements occurs when different firms develop products or subsystems within a standard bundle that can increasingly work together to form a larger system…”

Depending on the perspective taken, the selection environment of automatic identification can be considered to fit into either classification. The most authentic example in auto-ID of convergence in complements at the present is that between the contact smart card and RFID card capabilities (i.e. contactless). Smart cards once required to make contact with a reader, today a RF smart card can either be utilized by inserting it in a reader or by presenting it close to a RF field. Companies like AT&T and GEC have demonstrated smart cards which communicate using radio frequency signals (Monk & Dreifus, 1997). The ability to store biometric templates on a bar code or magnetic-stripe is another example of convergence in complements. In the case of the bar code, the biometric replaces the need for a unique ID number to be stored, with an ID derived from a fingerprint or other unique human characteristic. Biometric techniques can be used seamlessly in just about any type of card or transponder-based technology making it highly versatile. Multimodal biometrics also encourages the use of more than one type of biometric match for authentication. Biometrics has been responsible for revitalizing the prospects of stand-alone magnetic-stripe cards given the additional security embedded in the technique itself

 

AUTO-ID TECHNOLOGIES SHARE IN THE SAME TRAJECTORY

Upon their introduction, individual auto-ID technologies underwent a process of continual refinement until a dominant design materialized in each case. Once a dominant design emerged, widespread diffusion was experienced by each of the technologies, initially through niche industry applications and later through respective mass market applications. Auto-ID innovation was traditionally understood as consisting of separate life cycle curves, one for each device. This pattern resembled a number of continuous waves, depicting that each technology was a likely successor to the one before it (Figure 3). Auto-ID technologies however are much more complex and do not fit the traditional product life cycle curve (compare with figure 4). Roughly a five to ten year period has separated the diffusion of the auto-ID techniques studied in this investigation, starting with bar code and ending with RFID transponder implants. With each successive window (i.e. the period of time between one technology’s diffusion and the next), companies considered new opportunities that would leverage upon their existing knowledge. Apart from incremental innovation that continued on frontline products to match market requirements, cross-pollenization began to occur between companies specializing in different auto-ID techniques. For instance, bar codes appeared on magnetic-stripe cards, and biometrics was used in smart cards for added security, among many other examples. This recombination of existing knowledge is what sparked collaborative relationships and began a whole new set of interactions between various actors- the auto-ID technology system was born. With the phenomenon of integration and convergence of technologies comes one common shared auto-ID industry life cycle curve (figure 4).

While recombinations and mutations of auto-ID technologies are continually being invented, it does not mean that existing markets for particular techniques will suddenly disappear. On the contrary meeting requirements to new business problems increases the range and depth of auto-ID innovations and should be understood as an evolutionary step in the development of the industry at large. It is through this interaction and feedback- between service providers that require EC applications and auto-ID technology providers that assist in designing solutions for them- that end-user needs are met and on-going innovation is assured. In this manner, coexistence can be put forward as a plausible model of the future for the auto-ID industry (Figure 5). Examples of coexistence can be found especially in peripheral devices like readers and printers. Some readers are able to read both magnetic-stripe cards and smart cards, and some printers can print dual-mode bar codes and RFID labels. “Today, many of us see Auto ID technologies as “complementary,” with each filling a space in the market defined by the fit between its strengths and weaknesses, and the requirements of target applications. And looking forward, I believe we’ll evolve from a “coexistence” model to one that leverages the many converging opportunities around the intersections and in the gaps between those technologies” (Swartz, 1999, p. 22).

In open systems especially, it is highly unlikely that a single auto-ID device could ever cater for the needs of a complete end-to-end application, rather auto-ID technologies usually work in concert to fulfill large-scale initiatives. And while some have a vision that every single non-living thing will eventually be ‘smart’ or ‘intelligent’, as put forward by the development of the Electronic Product Code (EPC), consumers will probably insist that certain items remain ‘dumb’. In understanding the auto-ID selection environment, the paradigm has shifted from an economy that seeks the domination of one auto-ID device, towards an economy that accepts (if not welcomes) the coexistence of numerous auto-ID devices. While the relative shares of production for each auto-ID device may vary over time, and some devices will address particular market needs better than others, overall several technologies will continue to coexist.

 

EVOLUTION OR REVOLUTION?

When auto-ID technologies first made their presence felt in retail and banking they were considered revolutionary innovations. They made sweeping changes to the way people worked, lived, and interacted with each other. Before their inception, both living and nonliving things were identified manually; auto-ID devices automated the identification process, allowing for an increase in the level of accuracy and reliability. Supermarket employees could check-out non-perishable items just by swiping a bar code over a scanner, and suppliers could distribute their goods using unique codes.  Consumers could withdraw cash without walking into a bank branch and purchase goods at the point-of-sale (POS). And subsequently banks no longer required the same number of staff to serve customers directly. Auto-ID enacted radical change. This cluster of related innovations differed considerably from any others. Though most auto-ID technologies had their foundations in the early 1900s, all of these required other breakthroughs in system components to take place first before they could proliferate.

Up until the 1970s, consumers were largely disconnected from computer equipment. About the most sophisticated household item was the television set. While ordinary people knew computers were changing the face of business, their first-hand experience of these technologies was limited. Mainframe computers at the time were large, occupying considerable floor space and there was a great mystique surrounding the capabilities of these machines. One must remember that the personal computer did not officially arrive until 1984. Meanwhile, bar codes and scanner equipment were being deployed to supermarket chains and credit card companies were distributing magnetic-stripe cards in mass mail-outs. Consumers were encouraged to visit automatic teller machines (ATMs), and for many this was their first encounter with some form of computer. No matter how elementary it may seem to us today typing a PIN and selecting the “withdraw”, “amount”, and “enter” buttons was an experience for first-time users who had most likely never touched a terminal keypad before. By the time the 1990s had arrived, so had other technologies like the laptop, mobile phone and personal digital assistants (PDAs). The range of available auto-ID devices had now grown in quantity, shape and sophistication including the use of smart cards that could store more information, biometric techniques that ensured an even greater level of security, and wireless methods such as radio-frequency identification tags and transponders that required little human intervention. By this time, consumers were also more experienced users. Auto-ID had reached ubiquitous proportions in a period of just over thirty years.

The changes brought about by auto-ID were not only widespread but propelling in nature. No sooner had one technology become established than another was seeking entry into the market. The technical drawbacks of magnetic-stripe cards for instance led to the idea that smart cards may be more suitable for particular applications (Shelfer & Procaccino, 2002). A pattern of migration from one technology to the other seemed logical until biometric techniques increased security not only in magnetic-stripe cards but bar code cards as well. There was also the movement from contact cards to contactless cards and bar codes to RFID but by no means were the technologies making one another obsolete but spurring on even more research and development and an even greater number of new applications and uses (Michael, 2002, pp. 135-152). Diagram 5 shows the different types of changes that occurred between auto-ID devices. The three main flows that are depicted in the diagram are migration, integration and convergence.

The recombination of existing auto-ID techniques flourished in the 1990s with integrated cards and combinatory reader technologies (e.g. 4p-Mobile, 1999). These new product innovations indicated that coexistence of auto-ID devices was not only possible but important for the success of the industry at large. A few techniques even converged as was the case of contactless smart cards and RFID systems. Auto-ID had proven it maintained a driving force of its own while still piggybacking on the breakthroughs in microchip processing speeds, storage capacity, software programs, encryption techniques, networks and other peripheral requirements that are generally considered auto-ID system enablers. The State of Connecticut ID card uses biometric data stored in a bar code, some student cards carry both a microchip and bar code as well as a photograph for identification, some tickets use both bar codes and RFID transponders, and some applications using biometrics take advantage of magnetic-stripe technology for verification purposes.

Now having said that auto-ID belonged to that cluster of IT&T innovations that can be considered revolutionary, the process of innovation was in fact evolutionary. There is no doubt that auto-ID techniques were influenced by manual methods of identification, whether it was labels that were stuck onto objects, plain or embossed cards, comparing signatures or methods for fingerprint pattern matching. Early breakthroughs in mechanical calculators, infrared, electro-magnetic principles, magnetic tape encoding and integrated circuits also aided the advancement of auto-ID technologies. Allen and Kutler (1997, p. 11) called this the “evolving computing” phenomenon. McCrindle (1990, ch. 2) even discussed the “evolution of the smart card”, tracing the historical route all the way back from French philosopher Blaise Pascal (1623-1662).

The development of auto-ID followed an evolutionary path, yet the technologies themselves were revolutionary when considered as part of that cluster known as information technologies. From devices that one could carry to devices one could implant in themselves. The advancement of auto-ID technology, since its inception, has been so great that even the earliest pioneers would have found the changes that have taken place since the 1970s inconceivable. For the first time, service providers could put in place mechanisms to identify their customer base and also to collect data on patterns of customer behavior and product/services traffic. Mass market applications once affected or ‘infected’ by auto-ID continue to push the bounds of what this technology can or cannot do. Technology has progressed from purely manual techniques to automatic identification techniques. Furthermore auto-ID continues to grow in sophistication towards full-proof ways for identification. The above auto-ID cases show that major development efforts continue both for traditional and newer technologies. Even the humble bar code has been resurrected as a means of secure ID, revamped with the aid of biometric templates stored using a 2D symbology.

In addition, the lessons learned from the widespread introduction of each distinct technique are shaping the trajectory of the whole industry. For instance, the smart card has not neglected to take advantage of other auto-ID techniques such as biometrics and RFID. Thus, new combinations of auto-ID technologies are being introduced as a result of a cross-pollenization process in the industry at large. These new innovations (that could be classified as either mutations or recombinations) are acting to thrust the whole industry forward. The importance of this chapter is that it has established that auto-ID is more than just bar code and magnetic-stripe card and that coexistence and convergence of auto-ID technologies is occurring.

 

MAJOR FINDINGS

The auto-ID case studies have uncovered a number of significant evolving trends and patterns related to auto-ID innovation (Figure 6). First, that auto-ID devices independent of type, share a similar generic innovation process. Their journey from invention to diffusion is one that traverses like themes involving like stakeholders and infrastructures. This stands as the foundation premise for an auto-ID technology system (TS). It is therefore correct to refer to an “auto-ID industry” which collectively espouses auto-ID techniques from bar codes to biometrics. Second, that the selection environment for auto-ID is one where alternate or substitute technologies are available, specific to an application. A customer interested in card technologies for instance, can choose from a range of auto-ID card types as is the case with tag devices. Third, that over time a pattern of migration, integration and convergence has occurred between devices in the auto-ID industry- these trends are apparent in some devices more than others. When considered together these interactive forces point to a common auto-ID trajectory. Fourth, that despite the creative symbiosis taking place, the individual auto-ID technologies will continue to co-exist serving a variety of needs. The hypothesis that one super-device will render all other devices obsolete is highly unlikely given the diverse requirements of customers and their applications throughout the world.  Fifth, the pervasiveness of auto-ID has acted to result in changes to mass market applications that have continued to evolve since the 1970s especially. Sixth, that the ultimate trajectory of auto-ID is electrophoresis. In the future it is likely that humans will be bearers of automatic technology for a variety of applications such as drug delivery and emergency services. Seventh, that it is possible, if not probable, that in our lifetime, neural implants will be used to enhance human functionality.

 

The Auto-ID Industry as a Technology System (TS)

The auto-ID industry is a technology system (TS) that is bringing diverse stakeholders together to innovate by enabling interaction and sharing resources. Whether it is in the establishment of new research centers that embrace multiple auto-ID techniques, the use of common network infrastructure, system integrators that are increasingly conversant with generic auto-ID topologies or the formation of associations that encourage joint collaboration, the notion of an auto-ID industry is beginning to prevail. Previous studies have mainly focused on one auto-ID technology and to this end it has been difficult to identify patterns or trends common to all techniques. Rather than seeing auto-ID as one larger structure embodying numerous technologies, usually one auto-ID device was highlighted by authors at the neglect of others. But auto-ID is more than just bar code or RFID. The case studies in this study present an unbiased and balanced view of numerous technologies from the innovation perspective, and how each plays an important role in the overall success of the auto-ID TS.

 

The Auto-ID Selection Environment

The embedded case studies have acted to show the diverse applicability of auto-ID technologies in their many shapes and forms. What came through these cases is just how pervasive the technologies have become, important in almost every facet of life, independent of jurisdiction. Comparisons between technologies applied to the same application also showed that some techniques were more suitable in particular situations. This however, does not mean that all service providers or customers opt for one type of solution in a given scenario. It is entirely a decision that is based on factors that go beyond the need for ‘the most secure device’ or the one device that is considered by most to be the “optimum” choice or that ‘which is the most cost-effective’. A selection environment is just that, an environment from which people can “make a selection” based on a number of criteria that are personalized to a specific problem in a specific market. In all the case studies that were conducted, it was shown that auto-ID devices can be used interchangeably with one another in any given scenario. For instance, auto-ID card solutions were in abundance, as were combinations of devices on the same card (i.e. hybrid cards).

Numerous auto-ID vendor solutions were also presented, showing the subtlety of differentiation between supplier products. The market for auto-ID continues to grow replacing manual ways of performing transactions. Traditionally it has been business-to-business (B2B) and business-to-consumer (B2C) transactions that have made use of auto-ID, but more recently, governments worldwide are beginning to realize the vast benefits auto-ID have over legacy methods in servicing an entire population (i.e. G2C). Proposals for national ID schemes using multiapplication smart cards are now commonplace (K. Michael, 1997). Some stakeholders are predicting the elimination of several government-centric cards for one “everything” card that is focused on social security applications and has other peripheral functions. Commercial applications are set to remain separate to national ID cards however. It also looks inevitable that the banking sector will undergo major changes in the provision of services as telecommunication providers attempt to enter the same market space. It does seem probable that numerous commercial organizations will begin to form alliances with one another so that they are able to build super-brand images using smart transaction cards.  Multi-purpose smart card systems, for instance, are becoming widespread, especially at the campus level. Affiliations between major players are already starting to surface as the potential returns get higher and higher (Michael, 2003, pp. 135-152)..

 

The Need to Forecast Auto-ID Innovation

Forecasting and determining potential patterns and rates of change offer important insights for the future. Even if predictions turn out to be short-lived or blatantly wrong, they are still a vehicle for considering all the possibilities. It provides a stimulus for discussion and debate. In some situations forecasting may be said to be pre-emptive of actual events in the future. In other instances, the forecast depicted is considered unfavorable, and events that would have led to an expected outcome are redirected in scope and focus. Given that evolutionary theory underpins the SI framework, the forecasting or predictive nature of this study has been based almost solely on current research and development (i.e. history). Incremental changes in innovations have pointed to a path dependency. The shorter term the predictions are, the higher the likelihood that they will eventuate as they are based on “known” factors and not on wild assumptions. For instance, it is easier to forecast what will happen in the next year or two, rather than what will happen in twenty, fifty or one hundred years. Having said that, longer-term visions are equally important; science fiction has provided much in the way of future possibilities. Many do not acknowledge these contributions as important however few would dispute that predictions made by Arthur C. Clarke years in advance of their happening were unimportant or entirely coincidental.

 

CONCLUSION

The auto-ID industry is a technology system (TS) that is bringing diverse stakeholders together to innovate by enabling interaction and sharing resources. Whether it is in the establishment of new research centers that embrace multiple auto-ID techniques, the use of common network infrastructure, system integrators that are increasingly conversant with generic auto-ID topologies or the formation of associations that encourage joint collaboration, the notion of an auto-ID industry is beginning to prevail. Previous studies have mainly focused on one auto-ID technology and to this end it has been difficult to identify patterns or trends common to all techniques. Rather than seeing auto-ID as one larger system embodying numerous technologies, usually one auto-ID device was highlighted by authors at the neglect of others. But auto-ID is more than just bar code or RFID. The case studies in this study present an unbiased and balanced view of numerous technologies from the innovation perspective, and how each plays an important role in the overall success of the auto-ID technology system. Auto-ID technologies thus share in the one common trajectory.

 

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