Mr Lam Chuan Leong, Chairman Infocomm Development Authority of Singapore Keynote Address - EPCglobal Asia Pacific Roadshow, Raffles City Convention Centre

Mr Lam Chuan Leong, Chairman
Infocomm Development Authority of Singapore
Keynote Address - EPCglobal Asia Pacific Roadshow, Raffles City Convention Centre
Singapore, 5 May 2004

Good morning
Mr Dick Cantwell, Chairman of EPCglobal Board
Mr Hiroshi Sakai, Member of EPCglobal Board
Ms Margaret Fitzgerald, President and CEO of EPCglobal
Mr Edwin Chew, Chairman of SANC-EAN Singapore
Dr Roger Low, Secretary-General of Singapore Manufacturers Association

It is certainly good to see so many of you present so early in the morning, especially our visitors from as far away as Latin America. It underlines the importance of RFID which is indeed my key message for today.

Key Trends and Developments in RFID World-wide

RFID is a very important development which the industry should look at seriously. It presents enormous opportunities for those involved in the business of manufacturing, logistics, distribution and economic activities in general.

The development of new standards such as EPC (Electronic Product Code) has spurred the use of RFID in supply chain applications. Falling cost of RFID tags has also open up possibilities for mass adoption. Cost of tags has dropped dramatically over the last few years from over US$1.50 per tag to less than US$0.30 today. RFID is one technology that will have tremendous impact on the import and export market. Applied Business Intelligence estimated that the RFID market will grow at a 5-year compounded growth rate of 22%, putting the market size at about US$3.1 billion (or S$5.3) billion by 2008

Trends in Europe

Key findings of the RFID Benchmark Study undertaken by LogicaCMG revealed that RFID is high on the agenda for European retailers, food manufacturers and logistics providers. Half of the 50 companies interviewed in Europe have or are planning to deploy RFID projects throughout 2004, with the vast majority planning to start implementing the technology within the next three years. A number of major retailers, like Tesco (UK) and Metro (Germany) will initiate large-scale rollout of RFID.

Trends in the US

Wal-Mart, Albertsons and Target - three of the four largest retailers in the US require their major suppliers to deliver pallets and cases with RFID tags, starting in 2005. Department of Defense has also issued a RFID policy to tag all DoD items (except bulk commodities like sand, gravel or liquids) by January next year.

The US FDA (Food and Drugs Administration) recommended use of RFID tags on controlled drugs by 2007 to counter grey-market and counterfeit drugs.

Implications for Singapore

Now what do all these developments mean for Singapore and Singapore companies?

Manufacturing and logistics are two key economic sectors for the Singapore economy, and we export goods and services internationally. Mandates like those issued by large buyers (Wal-Mart, Tesco, HP etc) Singapore because we are the world's 2nd busiest port and a key logistics hub. So Singapore cannot ignore these developments in RFID. If we do, it will result in missed opportunities and Singapore risks losing its position in the global supply chain.

Specific RFID Activities in Singapore

Singapore is the 2nd port in the world outside US (after Rotterdam) and first in Asia to participate in the US Container Security Initiative.

A*STAR (Institute of Microelectronics and Institute of Infocomm Research) and the Defence Science & Technology Agency have developed separate solutions to use RFID for SARS contact tracing in local hospitals.

Tunity Technologies, a local solutions vendor, is in the process of developing a dual/tri-band RFID tag that is EPC-compliant. This means the tag can respond to different frequencies. If the development is successful, this innovation can potentially solve the current issue of frequency interoperability.

Existing Gaps

As with any emerging technology, there are some gaps that we need to fill for Singapore to be a significant player in this space. On the global front, there is a lack of international standards, including frequency spectrum, to enable global interoperability. Locally, we do not have a sufficiently large retailer like Wal-Mart to drive large-scale adoption to stimulate demand. But we should not only think locally, we must think globally. We should look beyond the demands of our local retail community as the driver for RFID developments in Singapore. RFID is a significant development that will add value in future to the whole chain from manufacturing, distribution, and logistics right up to the retail end.

One of the ways the private sector can help to fill these gaps is to adopt open standards such as EPC rather than the proprietary ones. This will prevent Singapore players from being locked into one technology that is not interoperable. Singapore companies will have to boost their manpower capabilities and equip staff with knowledge in RFID as well as explore with partners to scope pilot projects. Singapore Infocomm companies are also encouraged to develop innovative RFID products and solutions. As a developmental and promotional agency, IDA has set out to facilitate this process in the following ways.

IDA is supportive of efforts to promote awareness of the potential uses and benefits of RFID technology. Today's event is supported by IDA along with other government agencies such as SPRING, to spread this awareness on a larger scale. Moving forward, IDA will support players who are trying to enter this industry.

IDA has set aside S$10 million over the next 3 years to promote the adoption and development of RFID in Singapore. Specifically, this will be used to align frequency spectrum for global interoperability. There are different frequencies allowed in different countries (e.g. North America - 902 - 928MHz, Europe/Singapore - 866 - 869MHz, Japan/Korea - 950 - 956MHz). The 915MHz widely used by actually conflicts with our GSM band. IDA will therefore align RF spectrum allocation and power output limits with international standards to ensure global interoperability.

We will also help build capabilities to create new intellectual property. We will do this by working with Institutes of Higher Learning and training providers to develop new courses in RFID skills training. For example, the Nanyang Technological University and National University of Singapore churn out 100 Electronic Engineering graduates a year who are equipped with specialised RFID technical knowledge. The Logistics Institute-Asia Pacific (TLI-AP) is planning to launch executive-level courses on RFID implementation. Republic Polytechnic is also developing EPC courses as part of curriculum for students and executive courses for industry. As a start, 20 students will form the first intake. Republic Poly is also conducting a survey to determine industry readiness for EPC, their concerns and gaps. This will allow us to better develop programs to cater to the industry needs. The survey will be launched today (5 May) on the RP website. I strongly encourage industry and users to participate. Findings will be made public.

We should also leverage existing expertise to undertake R&D work in RFID. For example, development of multi-frequency tags that are optimised for Singapore and key trading partner countries.

Joint research centres with global centres of excellence like MIT Auto-Labs, one of the pioneering labs in the world that developed the EPC network, will be established in Singapore. IDA is also working to form a Singapore RFID Alliance, eventually growing it into an Asia RFID Alliance to develop reference architectures, share best practices and align standards. We will also encourage companies to set up regional RFID infrastructures in Singapore, for example, RFID registries. You have heard earlier that the Singapore Article Number Council has been appointed as the sole representative in Singapore to support and promote adoption of EPCglobal standards for RFID. We would also like to encourage EPCglobal to set up Asia Pacific HQ in Singapore. I am sure that the local industry will welcome that. IDA and the relevant government agencies will lend them all the support that is necessary.

Finally, IDA will use a clustering approach to bring together groups of industry partners, infrastructure service providers and solutions providers to ensure concerted roll-out and interoperability. For a start, we will focus on the high-tech manufacturing, pharmaceutical manufacturing, consumer packaged goods manufacturing, retail and logistics. IDA will also be making known details of a Call-for-Collaboration in second half of this year. Launch cluster funding in September for adoption of RFID across supply chains. These are some of the initiatives which IDA, as industry promoter will introduce to spur the development of the RFID industry.

IDA will be most happy to receive further ideas on what we can do to help promote the success of RFID activities in Singapore.

Thank you.

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