These cases provide neither a recipe for creating new RFID applications nor a road map to the future of RFID. What they do provide is evidence that it is possible to use RFID in areas outside of the supply chain.

Creating Innovative RFID Applications

If RFID does offer lucrative business opportunities outside of the supply chain, an important question becomes: How does one go about creating new RFID-based business models? There is no straight answer to this question. After all, many innovations are a result of serendipity. But an innovation can also be a result of directed intellectual pursuit, as was the case with many of Thomas Edison's inventions.

Given the latter possibility, two starting points for thinking about new RFID applications can be proposed: an "object-oriented approach" and a "visionary approach." The object-oriented approach is a "bottom-up" approach—it starts from the basic capabilities offered by RFID technology and attempts to determine how it can be used to create a new RFID application. The core capability of RFID is the ability to automatically and wirelessly identify an object together with its properties. The visionary approach is a "top-down" approach—it starts by assuming that RFID technology has reached its peak in terms of breadth of adoption and technical capabilities, and it then tries to determine what business models might be possible given this development scenario.

Object-Oriented Approach

The object-oriented approach uses the object-oriented programming paradigm to organize thinking toward new RFID applications. The approach requires looking at an object—a human, animal or physical item—in terms of its properties and methods. Properties, in this case, are characteristics of an object that are relevant for a particular transaction. A method is what an object "can do"—that is, the transactions it may participate in: for example, an object-oriented approach to the "smart office," using Ms. Smith as the object.

This type of analysis proceeds as follows. First, select an object. Then think about properties that the object may have. Next, determine how RFID can help to extract and use these properties either to enhance a transaction that the object participates in or to create a new transaction. New value propositions can be built either by improving existing transactions or creating new ones.

Ms. Smith has a property of location—she can be either in or out of her office. If Ms. Smith has a unique RFID tag, then this property can be automatically identified by an RFID reader installed in her office. If the tag is in the reader's range, it means she is in the office; if not, she stepped out. This property can be used to enhance (automate) a number of transactions in which she participates. As Ms. Smith approaches her office, the RFID system can automatically unlock the door, turn on the lights in the office, unlock her computer and log her in to the network. As she leaves the office, the system can automatically log her out of the network, lock the computer, turn off the lights and lock the door. The location property can trigger a number of other responses from the "smart office," such as downloading e-mail, playing voice mail or starting the coffee machine (if it's morning) when she enters her "smart office."

Starting With a Vision

Another way to invent new RFID applications is to start with a vision. Microsoft, for example, was largely founded on the vision of a computer on every desk and in every home. This vision allowed Microsoft to profit in the PC software market—an area where companies like IBM initially saw no opportunity.

In the case of RFID, one can begin by imagining a world where each individual, animal and physical object has an RFID tag. Imagine a ubiquitous wireless network that can identify the location and retrieve properties of every physical, animal or human object. With this vision in mind, answer the following questions:

• What new forms of knowledge can this data produce?
• What improvements to existing business models can be made by using this knowledge?
• Which new business models can be created with this newly available knowledge?