Few new technologies have triggered so much attention from consumer organisations and politicians around the world as Radio Frequency Identification Devices. The place taken by RFID in the public debate today largely derives from the fact that this technology is moving rapidly from the research lab to mass applications in a similar way to GSM mobile phones in the 1990s.

First of all, the Commission welcomes the fact that RFID is an emerging technology that has great potential for many economic operators in Europe – and also for European citizens. Research must be pursued in this area to build and maintain Europe's leadership in the next generation of the RFID technology and its applications. However, RFID technology development should not be considered an end in itself. We expect RFID to be the forerunner of many increasingly "intelligent" objects that interact with each other and help humans in ever more sophisticated ways.

The RFID market is expected to grow fast over the next ten years. Cumulative sales of RFID tags for sixty years until the beginning of 2006 amount to 2.4 billion, with 600 million tags being sold in 2005 alone! The number of tags delivered in 2016 could be over 450 times the number delivered in 2006. If the main technical and economic challenges are resolved in the near future (e.g. yield vs. cost, frequency acceptance, required performance levels), the global RFID market might grow exponentially to be almost ten times the size in 2016 that it will be this year.

In Europe, RFID take-up growth for the next 7 years is expected to be significant in terms of the number of tags (multiplied by a factor of 6), the number of readers (multiplied by a factor of 15), and the number of locations (multiplied by a factor of 15).

The deployment of RFID technology should make a major contribution to growth and jobs. Indeed it will significantly improve product quality, reduce fixed asset costs and stocks by 5%, improve sales by 3%, reduce labour costs in physical product movement by 65%, and generate a 45% annual growth for RFID technology and application providers. Furthermore, RFID implementations are expected to become a source of new business models and a creator of high-tech quality jobs.