Opening Keynote by Mr. Stephen Mak, Deputy Government Chief Information Officer, at the Executive Forum on Introduction to EPC/RFID
09 - 01 - 2006

Mr. Adcock, Anna, Distinguished Guests, Ladies and Gentlemen,

Good morning! I am very pleased to be here to address you at this Executive Forum on the Introduction to EPC and RFID, and would like to share with you how the Government of Hong Kong SAR supports industry’s vision on these strategic technologies and what actions we are taking with industry to create value from them.

[What is RFID and why it is so important]

RFID, or Radio Frequency Identification, is by no means a new technology. Its history can be traced back to the Second World War, when it was used by the military to identify friendly aircraft. RFID is an automatic identification technology that doesn’t require line-of-sight reading like bar-codes. We are all very familiar with bar codes in our everyday life, and there is no doubt that this technology has greatly improved the efficiency of many day-to-day operations. RFID will no doubt inherit the success of bar-code technology, and could go far beyond a bar-code replacement. RFID can store more data, such as the 96-bit EPC that enables unique identification of an item globally. In certain kinds of RFID tags, data can also be updated so that it can carry interim process data or be reused. Examples include the electronic seals that are currently being used in pioneer projects such as the Smart and Secure Tradelane pilot for securing cross-border containerised cargo shipments. Besides overcoming the line-of-sight limitation of bar-codes, RFID also allows high-speed, simultaneous, multiple readings at a distance. This capability has provided new and better ways of doing things, resulting in automatic item identification and data capture, and reducing human intervention and geographical constraints.

The recent hype surrounding RFID technology implementation was driven by the mandate from big buyers such as the Wal-Mart, Target and the US Department of Defense. These early adopters will have discovered favourable ROI before jumping on the RFID bandwagon. On the 14th of October last year, Wal-Mart announced the results of research showing that customers found items they wanted in stock more often in stores that use RFID technology with embedded electronic product codes than in stores that do not. The researchers at the University of Arkansas found a 16 percent drop in out-of-stock merchandise at RFID-equipped stores due to better in-store stock management. This may be the business case for Wal-Mart’s RFID mandate. Benefits of the technology can be manifold depending on the applications. Security, value of critical articles, law enforcement, a visible and more manageable supply chain and healthcare are just some of benefits for business.

[Applications of RFID]

RFID technology is readily applicable in numerous conventional business scenarios, such as access control; critical object surveillance in retail store; sports activities, including race timing and searching for golf balls; patient care and monitoring; library asset management; the tracking of critical items such as court document, evidence and hazardous waste; automatic toll collection in HK and electronic road pricing in Singapore; mass transit in HK; food pedigree and animal identification; and so on. All these applications that are specific to a particular vertical market or even to a particular enterprise are increasingly doable today. However, we see the value of RFID in the coming years lying largely in its ability to interoperate with a wide variety of heterogeneous devices and systems. With the emergence and adoption on the international standards, system interfaces as well as schema for data exchange, we will see more and more inter-enterprise RFID applications flourish. For example, member airlines of the International Air Transport Association (IATA) at its Joint Passenger Services Conference held in Geneva November last year, unanimously endorsed the use of RFID tags and interrogators compliant with ISO's 18000-6C candidate standard for baggage-tracking systems. This result paves the way for widespread use of RFID for baggage management by airports and airlines,

[Roles of Government]

The Government has a multifaceted role to play regarding the emerging RFID technology:

Firstly, we are users of the technology, actively exploring its adoption. In fact, several government departments have pioneered the use of RFID. They include the training library of the ICAC and EMSD, the training school of the Fire Services Department, the IT Development Centre and Learning Resources Centre of OGCIO, and the Heritage Discovery Centre Reference Library of the LCSD (to be opened in 2006). OGCIO is also leading a Task Force on Facilitating the Adoption of Wireless and Mobile Services and Technology (FAWMST) formed by user organisations, government bureaux and departments, academic institutions and industry support bodies to facilitate the wider adoption of wireless and mobile services and technology, including RFID, in Hong Kong.

Secondly, we are regulating the technology to facilitate the market. In April 2005, the Office of the Telecommunications Authority approved the exemption of licensing for use of RFID equipment running in two Ultra High Frequency bands.

Thirdly, we are funding research into the promotion of the technology. Via the Innovation and Technology Fund scheme (ITF), six projects have been undertaken by a number of academic institutions and GS1, with a total fund allocation of about HK$49 million. All these projects will be completed by mid-2007. In the 7th Plenary of the Hong Kong/Guangdong Cooperation Joint Conference held in August 2004, the Government of the HKSAR and the Guangdong Provincial Government agreed to co-operate in the development of six key technology areas, RFID is one of the six key technology areas. In addition, the Government has also sponsored HK$300 million for HKU, CUHK and HKUST to co-host the HK R&D Centre for Logistics and Supply Chain (LSCM) Enabling Technologies.

[Standards]

On the standards front, OGCIO have been closely monitoring the development and adoption of RFID related standards. The suite of RFID related specifications from EPCglobal are enlisted as “standards for future consideration under observation?in the HKSARG Interoperability Framework (HKSARG IF) Recommendations Version 4.0 released in last November. We also see the importance of the emerging RFID standards in the Mainland. The Mainland and Hong Kong Science and Technology Co-operation Committee, co-chaired by the Secretary for Commerce, Industry and Technology and the Vice-Minister of Science and Technology of the Central People's Government, was established in 2004. RFID technology is one of the four technologies agreed to strengthen the co-operation. Following the re-activation of the China RFID standardisation working group in Oct 2005, now being led by the Ministry of Information Industry, we will maintain regular dialogue with our Mainland counterpart to update ourselves on the progress of national standardisation.

[Conclusion]

RFID and EPC are strategic technologies that are going to have widespread application to and implication for our businesses, operations and daily lives. It is essential for executives in both the public and private sectors to have a good understanding of the technology, its potential and its implementation concerns. An executive forum like the one today will surely be a good opportunity for participants to share experiences and exchange views on the subject. I congratulate the organiser for staging this event, and wish the forum every success.

Thank you.

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