WASHINGTON, D.C. -- The greatest obstacles to global RFID adoption are the public's fear of the new, unknown technology, privacy concerns and the lack of a global RFID communication standard, said participants at a RFID conference held here.

"The industry has focused on the technology, but suddenly we are having tough pressure from the privacy area. This is a serious concern. If we do not address the privacy concerns, it will be a stopper for the use of RFID," said Claus Heinrich, executive board member at SAP AG, in his opening remarks at The Global Potential of Radio Frequency Identification conference. Heinrich, whose company cosponsored the event along with the U.S. Chamber of Commerce's National Chamber Foundation, later added during a panel session on privacy and security: "Trust and transparency is everything. People do not have anything against RFID, they have an issue with the information" that RFID generates.

If the industry does not educate the public and regulators about RFID technology, a backlash based on RFID half-truths and rumors could ensue, warned panel members. If regulators and the general public don't understand RFID, "over regulation could stifle innovation and investment in RFID technology," said Paul Martino of Alston & Bird LLP, a business law firm. "The time is on our side to educate consumers, regulators, the media and all stakeholders on RFID. But it is hard to describe to a consumer what RFID is and what it does because they do not see it in the stores yet. It's absolutely critical to start now."

However, since RFID has many different applications and formats, educating the general public about its benefits and dispelling rumors could be difficult. "RFID is complicated. There are many types of RFID technology," Heinrich said. "Some RFID tags are passive, others are active. Some [tags] have a long [read] range, others can only be read within a few inches. The privacy issue is just as complicated."

And the privacy issue is even larger in Europe, Heinrich acknowledged in an interview with Managing Automation. "The priority on privacy is much higher in Europe than it is in the U.S.," he said. "In Europe, the privacy issue is a larger discussion point than the technology or the benefits that RFID can provide. But that is a cultural thing that is happening. In the United States, people are thinking about the value that RFID can provide, then they are thinking about privacy. I am very encouraged about how the U.S. is approaching RFID."

According to Heinrich and Amar Singh, vice president, solutions management for BSG manufacturing at SAP, many U.S. manufacturing companies are taking a "business value" approach to RFID. "There is a very individual approach and companies are tagging products only where they see value, rather than tagging ever single product," said Singh in an interview with Managing Automation. For instance, Singh cited Gillette which only places RFID tags on its expensive, and frequently stolen, Mach 3 Turbo razors. Other manufacturers taking a similar approach include: Pacific Cycle, which is tagging certain bicycles from China; Perdue Pharma, which is tagging its often stolen Oxycontin; Airbus, which is tagging certain assemblies on its new A380 superjumbo; and the U.S. Postal Service, which is using RFID for labor scheduling and mail sorting, Singh noted.

However, many European manufacturers are still focused on privacy issues and are not yet considering the business value of RFID, said Florent Frederix, a scientific officer for network and communication technology at the European Commission. "Europe is looking at RFID from a legislative perspective. Maybe [the European Commission] should look at it from a practical standpoint, the way the U.S. is approaching RFID," Frederix said. "The relationship between the U.S. and Europe is growing. There is a need to have compatibility," both with privacy concerns and RFID communication standards, he added.

Without a single, global RFID communication standard, such as the EPCglobal Generation 2 proposed standard, the value of RFID would be diminished. "Open standards are very important," said David Sampson, acting deputy secretary, U.S. Department of Commerce. "RFID companies, standards bodies, regulators and academia need to establish intelligent dialogues to discuss ... RFID," communication standards and privacy concerns. "Multiple standards create huge costs and make global use of RFID very difficult."

For instance, said Badri Younes, director of spectrum management at the U.S. Department of Defense, tracking military supplies globally would be expensive and difficult if different regions used various RFID standards. "By January 2007, all items shipped to the Department of Defense will have RFID. Because of the fact that we operate globally, we are very interested in having interoperability. We do not wish to carry more than one RFID tag per item."

The standardization process is underway, commented Ajit Jillavenkatesa, standards specialist at the National Institute of Standards and Technology, during a conference session on global RFID standards. "We are moving in baby steps. People recognize that the standards stumbling block is large. It will be a long path of dialogue" before a single RFID standard is finalized, he said. "Standards work on openness, transparency, due process and consensus. You don't need 100% agreement, but a consensus is needed."