RFID Economic Impact and Benefits for Malaysia

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Frost & Sullivan analysis of RFID Economic Impact and Benefits for Malaysia.

Frost & Sullivan analysis of RFID Economic Impact and Benefits for Malaysia.

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  • 1. RFID Economic Impact and Benefits for Malaysia Prepared for National RFID 2009 Roadmap Planning Workshop 2nd December 2009
  • 2. Agenda Part 1 - Economic Impact of RFID to Other National or International Level Projects • Analysis of National and International Level RFID Programmes • Financial Impact of RFID – Country or Industry • Investigation of Broadband, GDP and RFID Relationship Part 2 - Assess RFID’s Economic Impact to Malaysia • RFID Value Creation Analysis to the Malaysian Economy • RFID Investment Analysis • Analyzing ROI for Key Sectors • Evaluation of Total Factor Productivity and Labor Competitiveness • Snapshot of Socio-Economic Gains to Overall Economy Part 3 – Outlook and Conclusion 2
  • 3. Quick Introduction to RFID Stakeholders / Adopters • Increase margins • Increased efficiency • Increased productivity • Increased resource utilization • Increased flexibility and efffectiveness • Timely project execution and delivery • Improved safety • Enhanced security • Improved safety • Reduced cost • Reduced wastage Society / Public • Enhanced customer experience • Better quality of service • Improved quality of products • Safer environment & consumables • Potential cheaper products & services • Real-time, dynamic track and trace Nation / Country • Increase national competitiveness • Complete and real-time visibility • Enabler of knowledge-based economy • Creation of new jobs • Complete and real-time accuracy • Greener environment 3
  • 4. Analysis of National and International Level RFID Programmes 4
  • 5. Level of Activeness between Regional Programmes Summary of Level of Activeness for National RFID Programmes (World), 2009 Parameter / Africa & Middle Europe Asia Pacific North America South America Region East Creation & Participation of Highest High Medium Low Lowest National Level Programme Tier 1 Tier 1 • United States • Brazil • UAE • Germany • China • Argentina • South Africa • Spain • Japan • Chile • Swaziland • France • South Korea • Botswana • The Netherlands • Hong Kong • Namibia Active Countries Tier 2 Tier 2 • Austria • Australia • Finland • New Zealand • UK • Singapore • Italy • Animal Tracking • Animal • Animal Tracking • Animal Tracking • Aviation Tracking • Defense • Defense • Government / Public Services • Government / • Healthcare & Pharmaceuticals Public Areas of Focus • Hospitality Services Services • Manufacturing • Postal • Retail and Consumer Packaged Goods • Ticketing & Access Control • Transportation Note: Tier 1 refers to countries considered more active in national level RFID Source: Frost & Sullivan,2009 rollouts compared to those countries under Tier 2 5
  • 6. Lifecycle Analysis for Level of Activeness of Regional RFID Programmes Market Life Cycle Analysis on Level of Activeness of National RFID Programmes by Region (World), 2009 Activeness of National RFID Programmes • Asia Pacific has the potential to overtake Europe Europe by 2020 in level of activeness provided structured national RFID Asia Pacific programmes are implemented. • The region’s standing as the global hub for manufacturing related activities where North America RFID has tremendous potential. Latin America Middle East Africa Time Development Growth Maturity Decline Source: Frost & Sullivan,2009 6
  • 7. Financial Impact of RFID to Country, Industry or International Projects 7
  • 8. Case Study 1 Gross Value Added to Germany via RFID Initiative Model Calculation: Portion of Value Added due to RFID Technology (Germany), 2007 Retailing (Except Textile Products Communication Motor Vehicles) Manufacture of Manufacture of Manufacture of Manufacture of Health & Social Machinery & Wholesaling Chemicals & Commercial Textile and Equipment Equipment Transport, Storage & Transport Chemical Products Agents / Work Year Total Gross Value Added (EUR, 2004 73.1 37.4 45.6 67.2 89.5 84.0 116.4 141.2 654.4 billions) 2010 71.4 34.4 55.4 85.5 133.5 88.1 148.1 148.1 764.5 Percentage of RFID 2004 10.0 5.0 5.0 2.0 10.0 10.0 7.0 1.0 Adopters (%) 2010 40.0 20.0 15.0 15.0 40.0 40.0 25.0 15.0 RFID Adopter's Value 2004 7.3 1.9 2.3 1.3 9.0 8.4 8.1 1.4 39.7 Added (EUR, billion) 2010 28.6 6.9 8.3 12.8 53.4 35.2 37.0 22.2 204.5 Percentage of Output 2004 10.0 5.0 10.0 2.0 10.0 10.0 5.0 1.0 Influenced by RFID (%) 2010 35.0 30.0 20.0 20.0 30.0 30.0 40.0 20.0 Portion of Value Added 2004 0.7 0.1 0.2 0.0 0.9 0.8 0.4 0.0 3.2 Influenced by RFID (EUR, billions) 2010 10.0 2.1 1.7 2.6 16.0 10.6 14.8 4.4 62.1 Total Gross Value Added with Portion of Value 2004 73.8 37.5 45.8 67.2 90.4 84.8 116.8 141.2 657.6 Added Influenced by RFID (EUR, billions) 2010 145.2 71.9 101.2 152.7 223.9 172.9 264.9 289.3 1422.1 Source: FMET, 2007 • The CAGR for portion of value added influenced by RFID from 2004 to 2010 is expected to be 63.6% . 8
  • 9. Gross Value Added Difference with RFID in Germany Model Analysis: Gross Value Added with and without RFID (Germany), 2007 850.0 Gross Value Added (EUR billion) 800.0 750.0 Gross Value Added Influenced by RFID 700.0 Gross Value Added 650.0 600.0 2004 Year 2010 Source: FMET, 2007 • The projected value added influenced by RFID in 2010 is expected to significantly increase to EUR 62.1 billion (4.31% of total gross value added). • This translates to nearly 20 times the gross value added influenced by RFID in just 6 years. 9
  • 10. Case Study 2 RFID in the Global Healthcare Industry Financial Impact of RFID to the Healthcare Industry based on Adoption Levels (World), 2006 Financial Gains (USD billion) 150 100 103.60 50 54.50 27.95 0 Current Adoption Levels 50% Adoption Levels 100% Adoption Levels (2006) Financial Impact of RFID • A study conducted by the University of Texas in Austin (UTA) in 2006 ROI of USD 27.95 billion based on a total RFID investment of USD 2.37 billion. • This signified a return on investment (ROI) of over 1,300%. • The 3 sectors analyzed within the healthcare industry to understand the benefits gained was: • pharmaceuticals • healthcare distribution • hospitals 10
  • 11. Investigation of Broadband, GDP and RFID Relationship 11
  • 12. Broadband and GDP Correlation Asia Pacific Broadband Penetration and GDP per Capita (Asia Pacific), 2008 More Broadband penetration (subscribers per 100 Broadband penetration, December 2008 developed inhabitants, Dec 2008) GDP per capita, 2008 (USD) GDP per capita (USD PPP, 2008) nations 100 92.8 50,000 90 85.0 45,000 78.5 80 40,000 70 66.0 63.7 62.7 Simple correlation = 0.82. 35,000 60 55.7 30,000 50 25,000 40 20,000 30 21.4 15,000 19.9 20 11.9 10,000 7.4 10 4.1 2.3 5,000 1.3 0 0 Source: Frost & Sullivan, IMF and National Sources, 2008 • Malaysia’s current broadband penetration as of end of 2008 is 21.4%. • Its till lags behind in broadband penetration compared to other more developed nations in Asia Pacific e.g. South Korea (92.8%), Hong Kong (85%), Singapore (78.5), Taiwan (66%), Australia (63.7%), Japan (62.7%) and New Zealand (55.7%). • A high correlation factor of 0.82 is found, which is in-line with previous research studies conducted by others to highlight the direct link between GDP growth and broadband penetration. 12
  • 13. Broadband and RFID Correlation Asia Pacific Broadband Penetration and RFID Market (Asia Pacific), 2008 Broadband penetration, December 2008 RFID Market, 2008 (USD million) Broadband penetration (subscribers per 100 inhabitants, Dec 2008) 100 350 92.8 RFID Market (USD million) 90 85.0 300 78.5 80 70 66.0 250 63.7 62.7 Simple correlation = 0.22. 60 55.7 200 50 150 40 30 100 21.4 19.9 20 11.9 50 10 7.4 4.1 2.3 1.3 0 0 Source: Frost & Sullivan, and IMF, 2008 • A correlation factor of only 0.22 is found between broadband penetration and the RFID market (adoption) suggesting there is minimal correlation between these two parameters. 13
  • 14. Broadband and RFID Correlation Possible Factors for Low Broadband-RFID Correlation (Asia Pacific), 2008 • Level of adoption differs greatly between each Nascent country globally technology • Sporadic levels of deployment in Asia Pacific - mostly in the early phases of deployment More closed- • Mostly closed loop projects, hence does not require need for broadband infrastructure loop projects Leveraging on • Leveraging on narrowband or other types of other forms of network for transfer of data network Source: Frost & Sullivan, 2009 14
  • 15. Agenda Part 1 - Economic Impact of RFID to Other National or International Level Projects • Analysis of National and International Level RFID Programmes • Financial Impact of RFID – Country or Industry • Investigation of Broadband, GDP and RFID Relationship Part 2 - Assess RFID’s Economic Impact to Malaysia • RFID Value Creation Analysis to the Malaysian Economy • RFID Investment Analysis • Analyzing ROI for Key Sectors • Evaluation of Total Factor Productivity and Labor Competitiveness with RFID • Snapshot of Socio-Economic Gains to Overall Economy Part 3 – Outlook and Conclusion 15
  • 16. RFID Value Creation Analysis to the Malaysian Economy 16
  • 17. Value Added Influenced by RFID Through Anticipated Level of Adoption Total Value Added Influenced by RFID Through Level of Adoption (Malaysia), 2011-2015 Wholesale Finance, Agriculture and Retail Insurance, Mining Electricity, Transport, Total , Livestock, Manufacturin Trade, Real Estate Other Government and Gas and Construction Storage and (2011 to Forestry g Accommodati and Services Services Quarrying Water Communication 2015) and Fishing on and Business Restaurants Services Nominal GDP (USD, million) 168,078 273,245 414,289 41,428 48,191 291,853 121,807 165,397 60,174 136,890 1,701,431 Total Portion of Value Added Influenced by 1,890 1,390 4,761 218 251 3,477 1,424 836 292 1,568 15,965 RFID (USD million) Total Gross Value Added with Portion of Value Added 169,968 274,636 419,050 41,646 48,442 295,330 123,231 166,233 60,467 138,458 1,717,396 Influenced by RFID (USD million) Source: Frost & Sullivan, 2009 17
  • 18. Value Added Influenced by RFID Through Anticipated Level of Adoption Value Added Influenced by RFID Through Anticipated Level of Adoption (Malaysia), 2011 - 2015 Nominal GDP Malaysia (USD million) Wholesale Finance, Agriculture, and Retail Transport, Insurance, Electricity, Less : Plus : Livestock, Mining and Manufacturi Constructio Trade, Storage and Real Estate Other Government Year Gas and Undistribute Import Total Forestry and Quarrying ng n Accommodati Communica and Services Services Water d FISIM Duties Fishing on and tion Business Restaurants Services 2011 27,273 45,658 64,958 6,519 7,672 42,303 18,424 28,330 10,855 21,381 6,744 2,908 269,536 2012 30,000 49,538 72,298 7,269 8,554 49,071 20,874 30,171 11,408 23,990 7,142 3,225 299,258 2013 33,120 53,997 81,046 8,141 9,512 56,824 23,796 32,404 11,979 26,965 7,577 3,583 333,790 Nominal GDP (USD, million) 2014 36,730 59,073 91,582 9,150 10,616 66,200 27,270 35,321 12,613 30,335 8,047 3,984 374,829 2015 40,954 64,980 104,404 10,349 11,837 77,454 31,443 39,170 13,320 34,218 8,546 4,435 424,018 Total 168,078 273,245 414,289 41,428 48,191 291,853 121,807 165,397 60,174 136,890 38,055 18,136 1,701,431 2011 0.75 0.50 0.75 0.50 0.50 0.75 0.75 0.50 0.50 0.75 0.63 0.63 0.00 2012 1.50 1.00 1.50 1.00 1.00 1.50 1.50 1.00 1.00 1.50 1.25 1.25 0.00 Percentage of RFID 2013 4.00 2.25 4.00 2.25 2.25 4.00 4.00 2.25 2.25 4.00 3.13 3.13 0.00 Adopters (%) 2014 6.00 3.75 6.00 3.75 3.75 6.00 6.00 3.75 3.75 6.00 4.88 4.88 0.00 2015 10.00 5.50 10.00 5.50 5.50 10.00 10.00 5.50 5.50 10.00 7.75 7.75 0.00 2011; 1.10 225 251 536 36 42 349 152 156 60 176 46 20 1,957 2012; 1.10 495 545 1,193 80 94 810 344 332 125 396 98 44 4,360 RFID Adopter's Value Added 2013; 1.10 1,457 1,336 3,566 201 235 2,500 1,047 802 296 1,186 260 123 12,492 (USD million) 2014; 1.10 2,424 2,437 6,044 377 438 4,369 1,800 1,457 520 2,002 432 214 21,651 2015; 1.10 4,505 3,931 11,484 626 716 8,520 3,459 2,370 806 3,764 729 378 39,831 2011 5.00 4.00 5.00 4.00 4.00 5.00 5.00 4.00 4.00 5.00 4.50 4.50 0.00 2012 10.00 8.00 10.00 8.00 8.00 10.00 10.00 8.00 8.00 10.00 9.00 9.00 0.00 Percentage of Output 2013 15.00 12.00 15.00 12.00 12.00 15.00 15.00 12.00 12.00 15.00 13.50 13.50 0.00 Influenced by RFID (%) 2014 20.00 16.00 20.00 16.00 16.00 20.00 20.00 16.00 16.00 20.00 18.00 18.00 0.00 2015 25.00 20.00 25.00 20.00 20.00 25.00 25.00 20.00 20.00 25.00 22.50 22.50 0.00 2011 11 10 27 1 2 17 8 6 2 9 2 1 93 2012 50 44 119 6 8 81 34 27 10 40 9 4 413 Portion of Value Added 2013 219 160 535 24 28 375 157 96 36 178 35 17 1,790 Influenced by RFID (USD 2014 485 390 1,209 60 70 874 360 233 83 400 78 38 4,125 million) 2015 1,126 786 2,871 125 143 2,130 865 474 161 941 164 85 9,544 Total 1,890 1,390 4,761 218 251 3,477 1,424 836 292 1,568 288 145 15,965 2011 27,284 45,668 64,985 6,520 7,674 42,320 18,431 28,336 10,857 21,390 6,746 2,909 269,629 Total Gross Value Added 2012 30,050 49,582 72,417 7,275 8,562 49,152 20,908 30,198 11,418 24,030 7,150 3,229 299,671 with Portion of Value 2013 33,339 54,157 81,581 8,165 9,541 57,199 23,953 32,500 12,014 27,143 7,612 3,600 335,580 Added Influenced by RFID 2014 37,215 59,463 92,791 9,211 10,686 67,074 27,630 35,554 12,697 30,736 8,125 4,023 378,954 (USD million) 2015 42,080 65,766 107,275 10,474 11,980 79,584 32,308 39,644 13,481 35,159 8,710 4,520 433,562 Total 169,968 274,636 419,050 41,646 48,442 295,330 123,231 166,233 60,467 138,458 38,343 18,281 1,717,396 Source: EPU, SD and Frost & Sullivan, 2009 18
  • 19. Value Added Influenced by RFID Through Anticipated Level of Adoption Comparison of Total Gross Value Added with and without RFID (Malaysia), 2011 to 2015 450,000 0.93% difference for total 2.25% difference 425,000 value added with and without in 2015 = USD RFID from 2011 to 2015 = 9,544 million USD 15,965 million (RM (RM33,404 million) Gross Value Added (USD million) 400,000 55,878 million) 375,000 350,000 325,000 300,000 275,000 250,000 2011 2012 2013 2014 2015 Nominal GDP (USD million) Total Gross Value Added with Portion of Value Added Influenced by RFID (USD million) Source: Frost & Sullivan, 2009 19
  • 20. RFID Investment Analysis 20
  • 21. Value Added Influenced by RFID Through Level of Investment • The following summary can be deduced based from the model observed in the following slide for total value added influenced by RFID expected in Malaysia from 2011 to 2015 with an RM 100 million (USD 28.57 million) investment in the core sectors. Total Value Added Influenced by RFID Through Level of Investment (Malaysia), 2011 to 2015 Wholesale and Agriculture, Transport, Retail Trade, Livestock, Storage and Government Total (2011 Core Sectors Manufacturing Accommodati Forestry and Communicatio Services to 2015) on and Fishing n Restaurants Nominal GDP (USD, million) 168,078 414,289 291,853 121,807 136,890 1,132,916 Total Portion of Value Added Influenced by RFID 249 310 24 170 351 1,105 (USD million) Total Gross Value Added with Portion of Value Added 168,327 414,599 291,877 121,977 137,241 1,134,021 Influenced by RFID (USD million) Source: Frost & Sullivan, 2009 21
  • 22. Value Added Influenced by RFID Through Anticipated Level of Investment Value Added Influenced by RFID Through Anticipated Level of Investment in Core Sectors (Malaysia), 2011 to 2015 Wholesale and Agriculture, Transport, Retail Trade, Livestock, Storage and Government Year Manufacturing Accommodatio Total Forestry and Communicatio Services n and Fishing n Restaurants 2011 27,273 64,958 42,303 18,424 21,381 174,338 2012 30,000 72,298 49,071 20,874 23,990 196,233 2013 33,120 81,046 56,824 23,796 26,965 221,752 Nominal GDP (USD, million) 2014 36,730 91,582 66,200 27,270 30,335 252,119 2015 40,954 104,404 77,454 31,443 34,218 288,474 Total 168,078 414,289 291,853 121,807 136,890 1,132,916 Number of enterprises 2011 12,000 24,000 219,000 13,000 7,000 275,000 Number of Projects Deployed 2011 103 103 103 103 103 515 through Investment Percentage of RFID Adopters 2011 0.86 0.43 0.05 0.79 1.47 based on Invested Sum (%) 2011; 1.05 246 293 21 153 330 1,043 2012; 1.06 273 329 24 175 374 1,176 RFID Adopters Value Added (USD 2013; 1.07 304 372 29 202 425 1,331 million) 2014; 1.08 340 424 34 233 482 1,514 2015; 1.09 383 488 40 272 549 1,732 2011 5 5 5 5 5 2012 10 10 10 10 10 Percentage of Output Influenced 2013 15 15 15 15 15 by RFID (%) 2014 20 20 20 20 20 2015 25 25 25 25 25 2011 12 15 1 8 17 52 2012 27 33 2 18 37 118 Total portion of value Portion of Value Added Influenced 2013 46 56 4 30 64 200 added influenced by by RFID (USD million) 2014 68 85 7 47 96 303 RFID from 2011 to 2015 96 122 10 68 137 433 2015 is USD 1,105 Total 249 310 24 170 351 1,105 2011 27,285 64,973 42,304 18,431 21,398 174,391 million (RM 3,867.5 2012 30,027 72,331 49,074 20,891 24,027 196,351 million) Total Gross Value Added with 2013 33,166 81,102 56,829 23,826 27,028 221,951 Portion of Value Added Influenced 2014 36,798 91,667 66,207 27,317 30,432 252,422 by RFID (USD million) 2015 41,050 104,526 77,464 31,511 34,355 288,906 Total 168,327 414,599 291,877 121,977 137,241 1,134,021 Source: EPU, SD and Frost & Sullivan, 2009 22
  • 23. Value Added Influenced by RFID Through Anticipated Level of Investment Gross Value Added by Selected Core Sectors with and without RFID (Malaysia), 2011 to 2015 42,000 • Each sector show a difference Agriculture, livestock, for with and without RFID from estry & fishing: 0.23% 0.22% to 0.40% for 2015 based difference in 2015 on an investment of USD 5.71 million (RM 20 million) per sector 37,000 in 2011. Government services: • This difference in values Gross Value Added (USD million) 0.40% difference in 2015 observed is due to the number of enterprises found in each sector 32,000 Transport, storage & resulting in a difference to communication: 0.22% percentage of adopters. difference in 2015 27,000 22,000 17,000 2011 2012 2013 2014 2015 Agriculture, Livestock, Forestry and Fishing 27,273 30,000 33,120 36,730 40,954 Agriculture, Livestock, Forestry, and Fishing with RFID 27,285 30,027 33,166 36,798 41,050 Transport, Storage and Communication 18,424 20,874 23,796 27,270 31,443 Transport, Storage and Communication with RFID 18,431 20,891 23,826 27,317 31,511 Government Services 21,381 23,990 26,965 30,335 34,218 Government Services with RFID 21,398 24,027 27,028 30,432 34,355 Source: Frost & Sullivan, 2009 23
  • 24. Value Added Influenced by RFID Through Anticipated Level of Investment Gross Value Added by Selected Core Sectors with and without RFID (Malaysia), 2011 to 2015 • Each sector show a difference 110,000 with and without RFID from Manufacturing: 0.12% 0.01% to 0.12% for 2015 based difference in 2015 on an investment of USD 5.71 100,000 million (RM 20 million) per sector in 2011. • This difference in values 90,000 observed is due to the number of Gross Value Added (USD million) enterprises found in each sector Wholesale & resulting in a difference to retail, trade, accommoda 80,000 percentage of adopters. tion & restaurants: 0.01% difference in 2015 70,000 60,000 50,000 40,000 2011 2012 2013 2014 2015 Manufacturing 64,958 72,298 81,046 91,582 104,404 Manufacturing with RFID 64,973 72,331 81,102 91,667 104,526 Wholesale and Retail Trade, Accommodation and Restaurants 42,303 49,071 56,824 66,200 77,454 Wholesale and Retail, Trade, Accommodation and Restaurants with RFID 42,304 49,074 56,829 66,207 77,464 Source: Frost & Sullivan, 2009 24
  • 25. Value Added Influenced by RFID Through Anticipated Level of Investment Gross Value Added by Core Sectors with RFID Investment (Malaysia), 2011 to 2015 150 • The Government Services sector show the largest returns. This is followed by the Manufacturing sector, Agriculture, Livestock, Forestry & Fishing sector, and Transport, Storage & Communication sector. • The Wholesale & Retail Portion of Value Added Influenced by RFID (USD million) Trade, Accommodation & Restaurants 100 sector showcases the lowest returns. • Each sector highlights a difference in returns due the number of enterprises found for the corresponding sectors which will influence the overall percentage of adoption through the planned sum of investment of USD 5.71 million (RM 20 million) per sector. 50 0 2011 2012 2013 2014 2015 Agriculture, Livestock, Forestry and Fishing Manufacturing Wholesale and Retail Trade, Accommodation and Restaurants Transport, Storage and Communication Government Services Source: Frost & Sullivan, 2009 25
  • 26. Value Added Influenced by RFID Through Anticipated Level of Investment Total Value Added Influenced by RFID Through Level of Investment (Malaysia), 2011 to 2015 Wholesale Finance, Agricultur and Retail Transport Insurance e, Less : Mining Electricity Trade, , Storage , Real Governm Plus : Livestock, Manufact Construct Other Undistrib Year and , Gas and Accommod and Estate ent Import Total Forestry uring ion Services uted Quarrying Water ation and Communi and Services Duties and FISIM Restaurant cation Business Fishing s Services 2011 27,273 45,658 64,958 6,519 7,672 42,303 18,424 28,330 10,855 21,381 6,744 2,908 269,536 2012 30,000 49,538 72,298 7,269 8,554 49,071 20,874 30,171 11,408 23,990 7,142 3,225 299,258 Nominal GDP (USD, 2013 33,120 53,997 81,046 8,141 9,512 56,824 23,796 32,404 11,979 26,965 7,577 3,583 333,790 million) 2014 36,730 59,073 91,582 9,150 10,616 66,200 27,270 35,321 12,613 30,335 8,047 3,984 374,829 2015 40,954 64,980 104,404 10,349 11,837 77,454 31,443 39,170 13,320 34,218 8,546 4,435 424,018 Total 168,078 273,245 414,289 41,428 48,191 291,853 121,807 165,397 60,174 136,890 38,055 18,136 1,701,431 Total portion 2011 24 10 41 1 2 18 15 6 2 25 2 1 145 of value 2012 77 44 152 6 8 83 52 27 10 77 9 4 531 added Portion of Value 2013 264 160 591 24 28 379 187 96 36 242 35 17 1,989 influenced Added Influenced by RFID by RFID (USD 2014 553 390 1,294 60 70 881 407 233 83 497 78 38 4,428 from 2011 to million) 2015 1,222 786 2,993 125 143 2,140 933 474 161 1,078 164 85 9,977 2015 is USD Total 2,140 1,390 5,071 218 251 3,502 1,594 836 292 1,919 288 145 17,070 17,070 2011 27,296 45,668 64,999 6,520 7,674 42,321 18,439 28,336 10,857 21,407 6,746 2,909 269,681 million (RM Total Gross Value 59,745 2012 30,077 49,582 72,450 7,275 8,562 49,155 20,926 30,198 11,418 24,067 7,150 3,229 299,788 Added with Portion million) 2013 33,384 54,157 81,637 8,165 9,541 57,204 23,984 32,500 12,014 27,206 7,612 3,600 335,780 of Value Added Influenced by RFID 2014 37,283 59,463 92,876 9,211 10,686 67,081 27,677 35,554 12,697 30,832 8,125 4,023 379,257 (USD million) 2015 42,176 65,766 107,397 10,474 11,980 79,594 32,375 39,644 13,481 35,296 8,710 4,520 433,995 Total 170,217 274,636 419,360 41,646 48,442 295,355 123,401 166,233 60,467 138,809 38,343 18,281 1,718,501 Source: Frost & Sullivan, 2009 26
  • 27. Value Added Influenced by RFID Through Anticipated Level of Investment Total Value Added with and without RFID (Malaysia), 2011 to 2015 450,000 2.25% difference 425,000 0.99% difference for total in 2015 = USD value added with and without 9,544 million (USD RFID from 2011 to 2015 = 33,404 million) 400,000 USD 17,070 million (RM Gross Value Added (USD million) 59,745 million) 375,000 350,000 325,000 300,000 275,000 250,000 2011 2012 2013 2014 2015 Nominal GDP (USD million) Total Gross Value Added with Portion of Value Added Influenced by RFID (USD million) Source: Frost & Sullivan, 2009 27
  • 28. RFID Generates Value Added to the National GDP Portion of Value Added influenced by RFID to Nominal GDP (Malaysia), 2011-2015 450,000 400,000 350,000 300,000 Total Contribution of RFID Value Added to Total Nominal 250,000 GDP (Malaysia), 2011-2015 2011 2012 2013 2014 2015 Portion of Value Added Influenced by RFID (USD million) Nominal GDP (USD, million) Total Portion of Total Nominal Value Added GDP; 99% Influenced by RFID; 1% Source: Frost & Sullivan, 2009 28
  • 29. Analyzing the ROI for Selected Sectors 29
  • 30. Deriving the Total Returns Factor RFID Investment Return Analysis by Sector (Malaysia), 2011 to 2015 Wholesale Agriculture, and Retail Transport, Livestock, Manufacturin Trade, Storage and Government Year Total Forestry and g Accommodati Communicati Services Fishing on and on Restaurants RM 20 million Investment per 2011 5.71 5.71 5.71 5.71 5.71 28.57 Sector in USD million 2011 12.3 14.6 1.0 7.7 16.5 52.2 2012 27.3 32.9 2.4 17.5 37.4 117.6 Portion of Value Added 2013 45.6 55.8 4.3 30.3 63.7 199.7 Influenced by RFID (USD million) 2014 68.1 84.9 6.7 46.7 96.4 302.8 2015 95.8 122.1 9.9 67.9 137.2 432.9 Total 249.1 310.3 24.4 170.0 351.2 1,105.1 2011; year 1 2.15 2.56 0.18 1.34 2.89 1.83 Total Returns Factor for USD 2012; year 2 4.78 5.76 0.43 3.07 6.55 4.12 Total returns 5.7 million Initial Investment 2013; year 3 7.98 9.77 0.75 5.30 11.14 6.99 factor from per Sector (Returns for every 1 2014; year 4 11.92 14.86 1.18 8.17 16.87 10.60 2011 to 2015 USD spent) 2015; year 5 16.76 21.37 1.74 11.88 24.01 15.15 by sector with Total 43.59 54.31 4.28 29.75 61.47 38.68 the use of Total Returns Factor for RM 100 million (USD RFID 28.6 million) initial investment after end of Year 38.68 5 Source: Frost & Sullivan, 2009 30
  • 31. Investment Returns Factor by Sector RFID Investment Return Analysis by Sector (Malaysia), 2011 to 2015 25.00 Total Returns Factor for USD 5.7 million Initial Investment per Sector (Returns for every 1 • The factor return value derived from each sector is influenced by the number of enterprises found in the corresponding sector. • The number of enterprises found within the Government 20.00 Services sector is lower, hence a higher factor return value is observed as compared to the Wholesale & Retail, Accommodation & Restaurants sector which has more number of enterprises, hence a lower factor return value is obtained. 15.00 USD spent) 10.00 5.00 0.00 2011 2012 2013 2014 2015 Agriculture, Livestock, Forestry and Fishing Manufacturing Wholesale and Retail Trade, Accommodation and Restaurants Transport, Storage and Communication Government Services Total Source: Frost & Sullivan, 2009 31
  • 32. ROI for Government Services • This section will evaluate the potential return on investment based on the identified investment factor for each of the 5 core thrust sectors as per observed in the following chart. RFID Investment Return Analysis for Government Services (Malaysia), 2011 to 2015 Investmen RM 50 100.00 150.0 200.0 300.0 500.0 t in 2011 USD (million) 14.29 28.57 42.86 57.14 85.71 142.86 2011; year 2.89 2.89 2.89 2.89 2.89 2.89 1 Total 2012; year Returns 6.55 6.55 6.55 6.55 6.55 6.55 4,000.0 2 Factor for 2013; year based on 3 11.14 11.14 11.14 11.14 11.14 11.14 3,500.0 Return on Investment: Initial Approximately 5 months 2014; year Return on Investment (USD million) Investmen 16.87 16.87 16.87 16.87 16.87 16.87 4 3,000.0 t (Returns 2015; year for every 24.01 24.01 24.01 24.01 24.01 24.01 5 2,500.0 1 USD spent) Total from 61.47 61.47 61.47 61.47 61.47 61.47 2011-2015 2,000.0 2011 41.3 82.6 123.9 165.2 247.8 412.9 2012 93.5 187.1 280.6 374.2 561.3 935.4 1,500.0 Total 2013 159.2 318.4 477.6 636.8 955.2 1,592.0 Expected 2014 241.0 482.1 723.1 964.1 1,446.2 2,410.4 1,000.0 Returns 2015 343.0 686.0 1,029.0 1,372.0 2,058.0 3,430.1 (USD million) Total from 500.0 878.1 1,756.2 2,634.2 3,512.3 5,268.5 8,780.8 2011-2015 0.0 2011 2012 2013 2014 2015 USD 14.29 million Investment USD 28.57 million Investment USD 42.86 million Investment USD 57.14 million Investment USD 85.17 million Investment USD 142.86 million Investment Source: Frost & Sullivan, 2009 32
  • 33. ROI for Manufacturing RFID Investment Manufacturing (Malaysia), 2011 to 2015 Investmen RM 50 100.00 150.0 200.0 300.0 500.0 t in 2011 USD (million) 14.29 28.57 42.86 57.14 85.71 142.86 2011; year 2.56 2.56 2.56 2.56 2.56 2.56 Total 1 Returns 2012; year 5.76 5.76 5.76 5.76 5.76 5.76 Factor for 2 based on 2013; year 9.77 9.77 9.77 9.77 9.77 9.77 Initial 3 Investmen 2014; year 14.86 14.86 14.86 14.86 14.86 14.86 t (Returns 4 for every 2015; year 21.37 21.37 21.37 21.37 21.37 21.37 3,500.0 1 USD 5 spent) Total from 54.31 54.31 54.31 54.31 54.31 54.31 3,000.0 Return on Investment: 2011-2015 Approximately 5 months Return on Investment (USD million) 2011 36.6 73.2 109.8 146.4 219.5 365.9 Total 2012 82.2 164.4 246.7 328.9 493.3 822.2 2,500.0 Expected 2013 139.6 279.1 418.7 558.3 837.4 1,395.6 Returns 2014 212.2 424.5 636.7 849.0 1,273.5 2,122.4 2,000.0 (USD 2015 305.2 610.5 915.7 1,221.0 1,831.5 3,052.5 million) Total from 775.9 1,551.7 2,327.6 3,103.5 4,655.2 7,758.7 1,500.0 2011-2015 1,000.0 500.0 0.0 2011 2012 2013 2014 2015 USD 14.29 million Investment USD 28.57 million Investment USD 42.86 million Investment USD 57.14 million Investment USD 85.17 million Investment USD 142.86 million Investment Source: Frost & Sullivan, 2009 33
  • 34. ROI for Agriculture, Livestock, Forestry and Fishing • This section will evaluate the potential return on investment based on the identified investment factor for each of the 5 core thrust sectors as per observed in the following chart. RFID Investment Return Analysis for Agriculture, Forestry and Fishing (Malaysia), 2011 to 2015 Investment in RM 50 100.00 150.0 200.0 300.0 500.0 2011 (million) USD 14.29 28.57 42.86 57.14 85.71 142.86 2011; year 2.15 2.15 2.15 2.15 2.15 2.15 1 2012; year 4.78 4.78 4.78 4.78 4.78 4.78 Total Returns 2 Factor for based 2013; year 7.98 7.98 7.98 7.98 7.98 7.98 on Initial 3 Investment 2014; year 11.92 11.92 11.92 11.92 11.92 11.92 3,000.0 (Returns for every 4 1 USD spent) 2015; year 16.76 16.76 16.76 16.76 16.76 16.76 5 2,500.0 Return on Investment: Total from Return on Investment (USD million) 43.59 43.59 43.59 43.59 43.59 43.59 Approximately 6 months 2011-2015 2011 30.7 61.4 92.2 122.9 184.3 307.2 2,000.0 2012 68.2 136.5 204.7 273.0 409.4 682.4 Total Expected 2013 114.1 228.1 342.2 456.3 684.4 1,140.7 Returns (USD 2014 170.2 340.5 510.7 681.0 1,021.5 1,702.4 1,500.0 million) 2015 239.5 479.0 718.4 957.9 1,436.9 2,394.8 Total from 622.8 1,245.5 1,868.3 2,491.0 3,736.5 6,227.5 1,000.0 2011-2015 500.0 0.0 2011 2012 2013 2014 2015 USD 14.29 million Investment USD 28.57 million Investment USD 42.86 million Investment USD 57.14 million Investment USD 85.17 million Investment USD 142.86 million Investment Source: Frost & Sullivan, 2009 34
  • 35. ROI for Transport, Storage and Communication RFID Investment Return Analysis for Transport, Storage and Communication (Malaysia), 2011 to 2015 Investmen RM 50 100.00 150.0 200.0 300.0 500.0 t in 2011 USD (million) 14.29 28.57 42.86 57.14 85.71 142.86 2011; year 1 1.34 1.34 1.34 1.34 1.34 1.34 Total Returns 2012; year 2 3.07 3.07 3.07 3.07 3.07 3.07 Factor for based on 2013; year 5.30 5.30 5.30 5.30 5.30 5.30 Initial 3 Investmen 2014; year 1,800.0 4 8.17 8.17 8.17 8.17 8.17 8.17 t (Returns for every 1 2015; year 1,600.0 USD 5 11.88 11.88 11.88 11.88 11.88 11.88 Return on Investment: Return on Investment (USD million) spent) Total from 1,400.0 Approximately 9 months 2011-2015 29.75 29.75 29.75 29.75 29.75 29.75 1,200.0 2011 19.2 38.3 57.5 76.6 115.0 191.6 Total 2012 43.8 87.7 131.5 175.3 263.0 438.3 1,000.0 Expected 2013 75.7 151.3 227.0 302.6 453.9 756.5 Returns 2014 116.7 233.4 350.0 466.7 700.1 1,166.8 800.0 (USD 2015 169.7 339.4 509.1 678.9 1,018.3 1,697.2 million) 600.0 Total from 2011-2015 425.0 850.1 1,275.1 1,700.1 2,550.2 4,250.3 400.0 200.0 0.0 2011 2012 2013 2014 2015 USD 14.29 million Investment USD 28.57 million Investment USD 42.86 million Investment USD 57.14 million Investment USD 85.17 million Investment USD 142.86 million Investment Source: Frost & Sullivan, 2009 35
  • 36. ROI for Wholesale and Retail Trade, Accommodation and Restaurants RFID Investment Return Analysis for Wholesale and Trade, Accommodation and Restaurants (Malaysia), 2011 to 2015 Investme RM 50 100.00 150.0 200.0 300.0 500.0 nt in 2011 USD (million) 14.29 28.57 42.86 57.14 85.71 142.86 2011; year Total 0.18 0.18 0.18 0.18 0.18 0.18 1 Returns 2012; year Factor for 0.43 0.43 0.43 0.43 0.43 0.43 2 based on 2013; year 300.0 Initial 0.75 0.75 0.75 0.75 0.75 0.75 3 Investme 2014; year nt 1.18 1.18 1.18 1.18 1.18 1.18 Return on Investment: 4 250.0 (Returns Return on Investment (USD million) 2015; year Approximately 27 months or for every 1.74 1.74 1.74 1.74 1.74 1.74 1 USD 5 2.3 years spent) Total from 200.0 4.28 4.28 4.28 4.28 4.28 4.28 2011-2015 2011 2.6 5.2 7.8 10.4 15.7 26.1 Total 2012 6.1 12.2 18.3 24.5 36.7 61.2 150.0 Expected 2013 10.7 21.4 32.2 42.9 64.3 107.2 Returns 2014 16.8 33.6 50.4 67.3 100.9 168.1 100.0 (USD 2015 24.8 49.6 74.5 99.3 148.9 248.2 million) Total from 61.1 122.2 183.2 244.3 366.5 610.8 2011-2015 50.0 0.0 2011 2012 2013 2014 2015 USD 14.29 million Investment USD 28.57 million Investment USD 42.86 million Investment USD 57.14 million Investment USD 85.17 million Investment USD 142.86 million Investment Source: Frost & Sullivan, 2009 36
  • 37. ROI for All Sectors (5 Core Sectors Average) RFID Investment Return Analysis for All Sectors Average (Malaysia), 2011 to 2015 Investmen RM 50 100.00 150.0 200.0 300.0 500.0 t in 2011 USD (million) 14.29 28.57 42.86 57.14 85.71 142.86 2011; year 1.83 1.83 1.83 1.83 1.83 1.83 1 Total 2012; year Returns 4.12 4.12 4.12 4.12 4.12 4.12 2 Factor for based on 2013; year 6.99 6.99 6.99 6.99 6.99 6.99 Initial 3 Investmen 2014; year 10.60 10.60 10.60 10.60 10.60 10.60 2,500.0 t (Returns 4 for every 1 2015; year 15.15 15.15 15.15 15.15 15.15 15.15 Return on Investment: USD 5 Approximately 7 months Return on Investment (USD million) spent) Total from 2,000.0 38.68 38.68 38.68 38.68 38.68 38.68 2011-2015 2011 26.1 52.2 78.2 104.3 156.5 260.8 1,500.0 Total 2012 58.8 117.6 176.4 235.2 352.7 587.9 Expected 2013 99.8 199.7 299.5 399.4 599.1 998.4 Returns 2014 151.4 302.8 454.2 605.6 908.4 1,514.0 2015 216.5 432.9 649.4 865.8 1,298.7 2,164.5 1,000.0 (USD million) Total from 552.6 1,105.1 1,657.7 2,210.2 3,315.4 5,525.6 2011-2015 500.0 0.0 2011 2012 2013 2014 2015 USD 14.29 million Investment USD 28.57 million Investment USD 42.86 million Investment USD 57.14 million Investment USD 85.17 million Investment USD 142.86 million Investment Source: Frost & Sullivan, 2009 37
  • 38. Evaluation of Total Factor Productivity and Labor Competitiveness with RFID 38
  • 39. TFP Model without RFID TFP Model without RFID (Malaysia), 1999 to 2015 Gross Capital Stock Capital Labor Force in constant GDP at 2000 Formation Share (15- Labor GDP TFP Population Participation prices at 2000 TFP Constant Prices at 2000 64) Input Growth Growth Rate Constant Constant Prices Prices Year Y I L D P K H A CD gY gA CD 1999 327272.8 21851.0 22752.3 0.63 0.649 249452.00 9238.00 6.82 - - 2000 356399.0 29307.1 23275.0 0.63 0.644 263792.02 9417.77 7.15 0.09 0.05 2001 358247.0 26629.5 24013.0 0.63 0.652 274594.03 9838.45 6.89 0.01 -0.04 2002 377559.0 29052.3 24527.0 0.63 0.644 287170.70 9974.71 7.05 0.05 0.02 2003 399412.0 28666.6 25048.0 0.63 0.633 298607.06 10067.90 7.28 0.06 0.03 2004 426508.0 30504.4 25581.0 0.64 0.631 311195.07 10310.43 7.53 0.07 0.03 2005 449250.0 29801.7 26127.0 0.64 0.632 322325.06 10609.75 7.68 0.05 0.02 2006 475525.0 31544.7 26640.1 0.64 0.632 334530.23 10818.11 7.90 0.06 0.03 2007 504918.0 33494.5 27173.5 0.64 0.632 347952.93 11034.71 8.15 0.06 0.03 2008 528310.0 35046.3 27728.8 0.64 0.632 362122.01 11260.21 8.27 0.05 0.02 2009 528265.1 35043.3 28301.5 0.64 0.632 375437.96 11492.76 8.04 0.00 -0.03 2010 542464.5 35985.2 28897.0 0.64 0.632 388896.90 11734.59 8.03 0.03 0.00 2011 566117.6 37554.3 29525.5 0.64 0.632 403117.37 11989.80 8.14 0.04 0.01 2012 594838.2 39459.5 30160.5 0.64 0.632 418389.83 12247.70 8.31 0.05 0.02 2013 628086.9 41665.1 30839.0 0.64 0.632 434951.55 12523.22 8.51 0.05 0.02 2014 668438.8 44341.9 31541.8 0.64 0.632 453196.37 12808.61 8.77 0.06 0.03 2015 717533.3 47598.7 32253.3 0.64 0.632 473603.26 13097.53 9.11 0.07 0.04 Source: WB, EPU, DS and Frost & Sullivan, 2009 39
  • 40. TFP Model with RFID TFP Model with RFID (Malaysia), 1999 to 2015 Gross Capital Stock Capital Labor in constant GDP at 2000 Data for Formation Share Force prices at Labour GDP TFP Constant Population TFP Malaysia at 2000 (15-64) Participati 2000 Input Growth Growth Prices Constant on Rate Constant Prices Prices Year Y I L D P K H A CD gY gA CD 1999 327272.8 21851.0 22752.3 0.63 0.649 249452.00 9238.00 6.82 - - 2000 356399.0 29307.1 23275.0 0.63 0.644 263792.02 9417.77 7.15 0.09 0.05 2001 358247.0 26629.5 24013.0 0.63 0.652 274594.03 9838.45 6.89 0.01 -0.04 2002 377559.0 29052.3 24527.0 0.63 0.644 287170.70 9974.71 7.05 0.05 0.02 2003 399412.0 28666.6 25048.0 0.63 0.633 298607.06 10067.90 7.28 0.06 0.03 2004 426508.0 30504.4 25581.0 0.64 0.631 311195.07 10310.43 7.53 0.07 0.03 2005 449250.0 29801.7 26127.0 0.64 0.632 322325.06 10609.75 7.68 0.05 0.02 2006 475525.0 31544.7 26640.1 0.64 0.632 334530.23 10818.11 7.90 0.06 0.03 2007 504918.0 33494.5 27173.5 0.64 0.632 347952.93 11034.71 8.15 0.06 0.03 2008 528310.0 35046.3 27728.8 0.64 0.632 362122.01 11260.21 8.27 0.05 0.02 2009 528265.1 35043.3 28301.5 0.64 0.632 375437.96 11492.76 8.04 0.00 -0.03 2010 542464.5 35985.2 28897.0 0.64 0.632 388896.90 11734.59 8.03 0.03 0.00 2011 566424.3 37554.3 29525.5 0.64 0.632 403117.37 11989.80 8.15 0.04 0.01 Incorporates 2012 595900.0 39459.5 30160.5 0.64 0.632 418389.83 12247.70 8.32 0.05 0.02 usage of 2013 631841.4 41665.1 30839.0 0.64 0.632 434951.55 12523.22 8.56 0.06 0.03 RFID for 10 2014 676328.0 44341.9 31541.8 0.64 0.632 453196.37 12808.61 8.88 0.07 0.04 MP period (2011 to 2015 734310.5 47598.7 32253.3 0.64 0.632 473603.26 13097.53 9.32 0.08 0.05 2015) Source: WB, EPU, DS and Frost & Sullivan, 2009 40
  • 41. Difference to TFP with and without RFID Difference to TFP Growth with and without RFID (2001 to 2015) Labor Growth Capital Growth TFP GDP Growth Period (%) (%) Growth (%) (%) 2001-2005 1.84 4.01 2.82 5.75 2006-2010 Without RFID 2.03 3.77 0.18 3.09 2011-2015 2.22 4.02 2.79 5.91 2001-2005 1.84 4.01 2.82 5.75 2006-2010 With RFID 2.03 3.77 0.18 3.09 2011-2015 2.22 4.02 3.34 6.46 2001-2005 0.00 0.00 0.00 0.00 2006-2010 Difference 0.00 0.00 0.00 0.00 2011-2015 0.00 0.00 0.55 0.55 Source: Frost & Sullivan, 2009 • The results obtained on the difference between with and without the use of RFID for TFP contribution is an increase of 0.55% observed during the period of 2011 to 2015. • This translates to a increase of 19.71% to the TFP by leveraging on RFID technology. 41
  • 42. RFID Contributes to TFP and Real GDP Growth • In conclusion, value added generated from RFID will also bring positive effects to both the TFP and real GDP growth. • An increase of 0.55% is observed to Malaysia’s TFP and real GDP growth as per illustrated in this study for the corresponding periods of 2011 to 2015 with and without leveraging on RFID. GDP and TFP Growth with RFID (Malaysia), 2000 - 2015 10.00 GDP Growth GDP Growth with RFID 8.00 TFP Growth TFP Growth with RFID 0.55% difference 6.00 to TFP with and without RFID translates to 4.00 19.71% increase Growth (%) 2.00 0.00 -2.00 -4.00 -6.00 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: UNSD,WB, EPU, DS and Frost & Sullivan, 2009 42
  • 43. Labor Productivity Level with and without RFID Labor Productivity Level without RFID (Malaysia), 2011 - 2015 11.000 Malaysia Average Total Nominal . 'th n Hours Total Hours GDP per 10.000 Nominal Employm Malaysia Year Worked Worked Hour GDP ent Nominal GDP per Capita (USD) Plan per ('000,000 Worked 9.000 (USD ('000) Person ) (USD) million) 8.000 2011 269,536 1,984 18,660 37,022 7.281 2012 299,258 1,984 19,061 37,818 7.913 7.000 10 MP 2013 333,790 1,984 19,490 38,669 8.632 2014 374,829 1,984 19,934 39,550 9.477 6.000 2011 2012 2013 2014 2015 2015 424,018 1,984 20,384 40,442 10.485 Nominal GDP per Hour Worked (USD) Source: Frost & Sullivan, 2009 Labor Productivity Level with RFID (Malaysia), 2011 - 2015 11.000 Malaysia Average Total Nominal n Total 'th Hours Hours GDP per 10.000 Nominal Employm Malaysia Year Worked Worked Hour Nominal GDP per Capita (USD) GDP ent Plan per ('000,000 Worked 9.000 (USD ('000) Person ) (USD) million) 8.000 2011 269,681 1,984 18,660 37,022 7.284 2012 299,788 1,984 19,061 37,818 7.927 7.000 10 MP 2013 335,780 1,984 19,490 38,669 8.684 2014 379,257 1,984 19,934 39,550 9.589 6.000 2011 2012 2013 2014 2015 2015 433,995 1,984 20,384 40,442 10.731 Nominal GDP per Hour Worked with RFID (USD) Source: Frost & Sullivan, 2009 43
  • 44. Labor Productivity Level Difference of Labor Productivity Level with and without RFID (Malaysia), 2011 - 2015 11.000 USD 0.247 (RM 0.865) difference or equivalent to an increase of 2.36% 10.000 to the nominal GDP per hour worked observed Nominal GDP per Hour (USD) for 2015 9.000 8.000 7.000 2011 2012 2013 2014 2015 Nominal GDP per Hour Worked (USD) Nominal GDP per Hour Worked with RFID (USD) Source: Frost & Sullivan, 2009 44
  • 45. RFID Contributes to Labor Productivity Level GDP and TFP Growth with RFID (Malaysia), 2000 - 2015 0.300 USD 0.247 to the nominal GDP per hour Worked = USD 17,070 million to the 0.250 nominal GDP of Malaysia 0.247 0.200 USD 0.150 0.112 0.100 0.050 0.051 0.014 0.000 0.004 2011 2012 2013 2014 2015 Nominal GDP per Hour Worked Difference with and without RFID (USD) Source: WB, EPU, DS and Frost & Sullivan, 2009 45
  • 46. Snapshot of Socio-Economic Gains to Overall Economy 46
  • 47. Socio Economic Benefits through Wider Scale Deployment of RFID Socio Economic Benefits of RFID to the Nation (Malaysia), 2000 - 2015 • Over USD 13,000 million market by 2015 globally • 75% of the process • Huge potential for domestic & innovations within the EU Development of Local RFID international markets was enabled through the Ecosystem • Reduce dependency on usage of IT foreign products • Applications leveraging on RFID will boost innovation of products and services to a new Upgradation • Aid in producing more Accelerated level of the K-workers with the Product and • Will not only optimize & Knowledge creation of more skill- Service streamline entire supply Economy and based and high-tech Innovation chain but to also enable Job Creation related jobs greater end user satisfaction RFID • Increase of transparency in the supply chain through RFID enables • Increase of TFP to the higher efficiency of distribution & Platform for Increase of nation monitoring of goods New Markets Productivity • Increase of labor • Will increase competitiveness of productivity to the nation local companies • RFID ensures the 5 R’s are achieved Source: Frost & Sullivan,2009 47
  • 48. Strategic Recommendations Strategic Recommendations for National Level RFID Programme (Malaysia), 2009 Set Direction for RFID • A strategic roadmap for RFID usage in Malaysia from a national level for short, medium and long term will need to be in place to ensure overall Deployments in vision and aims are achieved. Malaysia Coordination • All relevant government ministries and agencies driving adoption in and related sectors will need to ensure their work is well coordinated to avoid Collaboration overlap of activities. with Key • Stakeholders will also need to work closely with each other to ensure all plans are materialized and no areas or sectors are overlooked. Stakeholders • Malaysia could invite foreign companies specializing in RFID related Develop Local technologies to initiate R&D activities by providing special grants and RFID R&D incentives . Activities • More emphasis on R&D activities needs to be put for universities to develop and cultivate innovations and future talents in this field. Source: Frost & Sullivan, 2009 48
  • 49. Strategic Recommendations Strategic Recommendations for National Level RFID Programme (Malaysia), 2009 • Stronger Government intervention in promotions and education is crucial Support to increase traction among the end user segment Promotion • The Government will need to work more closely with other stakeholders currently pushing to promote and educate people on the possibilities with and RFID by either funding their activities or possibly even pushing for mandates in critical areas to increase the adoption rate of this Education technology Ensure all • The expected benefits gained through an RFID deployment will not be Business achieved without thoroughly understanding and fine-tuning various processes within the enterprise to accommodate this technology. Processes • Considering a large portion of adoptions for the national RFID are programme will be related to government related sectors or applications, they will need to ensure that all business processes have been Sufficiently customized when planning an RFID rollout. Re-designed Source: Frost & Sullivan, 2009 49
  • 50. Agenda Part 1 - Economic Impact of RFID to Other National or International Level Projects • Analysis of National and International Level RFID Programmes • Financial Impact of RFID to Country, Industry or International Projects • Investigation of Broadband, GDP and RFID Relationship Part 2 - Assess RFID’s Economic Impact to Malaysia • RFID Value Creation Analysis to the Malaysian Economy • RFID Investment Analysis • Analyzing ROI for Key Sectors • Evaluation of Total Factor Productivity and Labor Competitiveness with RFID • Snapshot of Socio-Economic Gains to Overall Economy Part 3 – Outlook and Conclusion 50
  • 51. RFID Contributes to Various Economic Indicators Pre 10 MP 10 MP (2011-2015) Beyond 10 MP Without With RFID RFID 51
  • 52. Thank You 52