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Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
Rfid Economic Impact Presentation
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Rfid Economic Impact Presentation

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  • 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%).
  • In conclusion, RFID has the potential to contribute a total value added of USD 17,070 million (RM 59,744 million) to the Malaysian nominal GDP over the 5 year period from 2011 to 2015. This is based on the anticipated value added derived from level of adoption and invested sum of USD 28.57 million (RM 100 million) into the 5 core thrust sectors. In total, this translates to approximately 1.00% of the nominal GDP contribution from value added derived from RFID initiatives during this stated period.
  • In conclusion, RFID also showcases potential to bridge the gap of earning capacity per capita for every hour worked between Malaysia and other more affluent nations. Although the labor productivity analysis does show an increase of USD 0.247 (RM 0.865) to the nominal GDP per hour worked and this increase may seem small, it should be noted that this translates to approximately USD 1.976 (RM 6.916) per 8 hour working day average in 2015. When further analyzing this data, this increase of USD 0.247 to the nominal GDP per hour worked is equivalent to an increase of USD 17,070 million (RM 59,745 million) to the nominal GDP based on an estimated working population of 20,384,000 in 2015. This significant increase will contribute towards the Malaysian Government’s aim of moving the country towards a higher economy nation.
  • A strategic roadmap for RFID usage for the short, medium and long term need to be in place to achieve overall vision and aims. Relevant government ministries and agencies driving adoption need to be well coordinated to avoid overlap of activities.Stakeholders need to work closely together to ensure all plans materialized and no areas/sectors are overlooked. Invite foreign companies specializing in RFID related technologies to initiate R&D activities.More emphasis on R&D activities to be put in universities to develop innovations and future
  • Stonger government intervention to increase traction among end user segment.Government to work more closely with other stakeholders to promote and educate people on the possibilities with RFID through funding or mandates to increase adoption rate. Benefits of RFID deployment will not be achieved without understanding and fine-tuning various processes within the enterprise to accommodate this technology.A large portion of adopters will be related to government related sectors/applications; they need to ensure all business processes have been customized when planning an RFID rollout.
  • Transcript

    1. RFID Economic Impact and Benefits for Malaysia<br />Prepared for<br />National RFID 2009 Roadmap Planning Workshop<br />2nd December 2009<br />
    2. Agenda<br /> Part 1 - Economic Impact of RFID to Other National or International Level Projects<br /><ul><li>Analysis of National and International Level RFID Programmes
    3. Financial Impact of RFID – Country or Industry
    4. Investigation of Broadband, GDP and RFID Relationship </li></ul> Part 2 - Assess RFID’s Economic Impact to Malaysia<br /><ul><li>RFID Value Creation Analysis to the Malaysian Economy
    5. RFID Investment Analysis
    6. Analyzing ROI for Key Sectors
    7. Evaluation of Total Factor Productivity and Labor Competitiveness
    8. Snapshot of Socio-Economic Gains to Overall Economy</li></ul>Part 3 – Outlook and Conclusion<br />
    9. Quick Introduction to RFID<br /><ul><li> Real-time, dynamic track and trace
    10. Complete and real-time visibility
    11. Complete and real-time accuracy</li></li></ul><li>Analysis of National and International Level RFID Programmes<br />
    12. Level of Activeness between Regional Programmes<br />Summary of Level of Activeness for National RFID Programmes (World), 2009<br />Note:<br />Tier 1 refers to countries considered more active in national level RFID rollouts compared to those countries under Tier 2<br />Source: Frost & Sullivan,2009<br />
    13. Lifecycle Analysis for Level of Activeness of Regional RFID Programmes<br />Market Life Cycle Analysis on Level of Activeness of National RFID Programmes by Region (World), 2009<br /><ul><li>Asia Pacific has the potential to overtake Europe by 2020 in level of activeness provided structured national RFID programmes are implemented.
    14. The region’s standing as the global hub for manufacturing related activities where RFID has tremendous potential. </li></ul>Europe<br />Activeness of National RFID Programmes<br />Asia Pacific<br />North America<br />Latin America<br />Middle East<br />Africa<br />Time<br />Maturity<br />Development<br />Growth<br />Decline<br />Source: Frost & Sullivan,2009<br />
    15. Financial Impact of RFID to Country, Industry or International Projects<br />
    16. Case Study 1Gross Value Added to Germany via RFID Initiative<br />Model Calculation: Portion of Value Added due to RFID Technology (Germany), 2007<br />Source: FMET, 2007<br /><ul><li>The CAGR for portion of value added influenced by RFID from 2004 to 2010 is expected to be 63.6% . </li></li></ul><li>Gross Value Added Difference with RFID in Germany<br />Model Analysis: Gross Value Added with and without RFID (Germany), 2007<br />Gross Value Added (EURbillion)<br />Year<br />Source: FMET, 2007<br /><ul><li>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).
    17. This translates to nearly 20 times the gross value added influenced by RFID in just 6 years.</li></li></ul><li>Case Study 2RFID in the Global Healthcare Industry<br />Financial Impact of RFID to the Healthcare Industry based on Adoption Levels (World), 2006<br />Financial Gains (USD billion)<br /><ul><li>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.
    18. This signified a return on investment (ROI) of over 1,300%.
    19. The 3 sectors analyzed within the healthcare industry to understand the benefits gained was:
    20. pharmaceuticals
    21. healthcare distribution
    22. hospitals</li></li></ul><li>Investigation of Broadband, GDP and RFID Relationship <br />
    23. Broadband and GDP Correlation<br />Asia Pacific Broadband Penetration and GDP per Capita (Asia Pacific), 2008<br />More developed nations<br />Source: Frost & Sullivan, IMF and National Sources, 2008<br /><ul><li>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. </li></li></ul><li>Broadband and RFID Correlation<br />Asia Pacific Broadband Penetration and RFID Market (Asia Pacific), 2008<br />Source: Frost & Sullivan, and IMF, 2008<br /><ul><li>A correlation factor of only 0.22is found between broadband penetration and the RFID market (adoption) suggesting there is minimal correlation between these two parameters. </li></li></ul><li>Broadband and RFID Correlation<br />Possible Factors for Low Broadband-RFID Correlation (Asia Pacific), 2008<br />Source: Frost & Sullivan, 2009<br />
    24. Agenda<br /> Part 1 - Economic Impact of RFID to Other National or International Level Projects<br /><ul><li>Analysis of National and International Level RFID Programmes
    25. Financial Impact of RFID – Country or Industry
    26. Investigation of Broadband, GDP and RFID Relationship </li></ul> Part 2 - Assess RFID’s Economic Impact to Malaysia<br /><ul><li>RFID Value Creation Analysis to the Malaysian Economy
    27. RFID Investment Analysis
    28. Analyzing ROI for Key Sectors
    29. Evaluation of Total Factor Productivity and Labor Competitiveness with RFID
    30. Snapshot of Socio-Economic Gains to Overall Economy</li></ul>Part 3 – Outlook and Conclusion<br />
    31. RFID Value Creation Analysis to the Malaysian Economy<br />
    32. Value Added Influenced by RFID Through Anticipated Level of Adoption<br />Total Value Added Influenced by RFID Through Level of Adoption (Malaysia), 2011-2015<br />Source: Frost & Sullivan, 2009<br />
    33. Value Added Influenced by RFID Through Anticipated Level of Adoption<br />Comparison of Total Gross Value Added with and without RFID (Malaysia), 2011 to 2015<br />2.25% difference in 2015 = USD 9,544 million (RM33,404 million)<br />0.93% difference for total value added with and without RFID from 2011 to 2015 = USD 15,965 million (RM 55,878 million)<br />Gross Value Added (USD million)<br />Source: Frost & Sullivan, 2009<br />
    34. RFID Investment Analysis<br />
    35. Value Added Influenced by RFID Through Level of Investment<br /><ul><li>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. </li></ul>Total Value Added Influenced by RFID Through Level of Investment (Malaysia), 2011 to 2015<br />Source: Frost & Sullivan, 2009<br />
    36. Value Added Influenced by RFID Through Anticipated Level of Investment<br />Value Added Influenced by RFID Through Anticipated Level of Investment in Core Sectors (Malaysia), 2011 to 2015<br />Total portion of value added influenced by RFID from 2011 to 2015 is USD 1,105 million (RM 3,867.5 million)<br />Source: EPU, SD and Frost & Sullivan, 2009<br />
    37. Value Added Influenced by RFID Through Anticipated Level of Investment<br />Gross Value Added by Selected Core Sectors with and without RFID (Malaysia), 2011 to 2015<br /><ul><li>Each sector shows a difference with and without RFID from 0.22% to 0.40% for 2015 based on an investment of USD 5.71 million (RM 20 million) per sector in 2011.
    38. This difference in values observed is due to the number of enterprises found in each sector resulting in a difference to percentage of adopters. </li></ul>Agriculture, livestock, forestry & fishing: 0.23% difference in 2015<br />Government services: 0.40% difference in 2015<br />Transport, storage & communication: 0.22% difference in 2015<br />Source: Frost & Sullivan, 2009<br />
    39. Value Added Influenced by RFID Through Anticipated Level of Investment<br />Gross Value Added by Selected Core Sectors with and without RFID (Malaysia), 2011 to 2015<br /><ul><li>Each sector show a difference with and without RFID from 0.01% to 0.12% for 2015 based on an investment of USD 5.71 million (RM 20 million) per sector in 2011.
    40. This difference in values observed is due to the number of enterprises found in each sector resulting in a difference to percentage of adopters. </li></ul>Manufacturing: 0.12% difference in 2015<br />Wholesale & retail, trade, accommodation & restaurants: 0.01% difference in 2015<br />Source: Frost & Sullivan, 2009<br />
    41. Total Value Added Influenced by RFID (Level of Adoption + RM 100 million Investment)<br />Portion of Value Added influenced by RFID to Nominal GDP (Malaysia), 2011-2015<br />Total during 10 MP period = RM 59, 744 million<br />Total Contribution of RFID Value Added to Total Nominal GDP (Malaysia), 2011-2015<br />Source: Frost & Sullivan, 2009<br />
    42. Analyzing the ROI for Selected Sectors<br />
    43. Deriving the Total Returns Factor<br />RFID Investment Return Analysis by Sector (Malaysia), 2011 to 2015<br />Total returns factor from 2011 to 2015 by sector with the use of RFID<br />Source: Frost & Sullivan, 2009<br />
    44. ROI for Government Services<br /><ul><li>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. </li></ul>RFID Investment Return Analysis for Government Services (Malaysia), 2011 to 2015<br />Return on Investment: Approximately 5 months<br />Source: Frost & Sullivan, 2009<br />
    45. ROI for Manufacturing<br />RFID Investment Manufacturing (Malaysia), 2011 to 2015<br />Return on Investment: Approximately 5 months<br />Source: Frost & Sullivan, 2009<br />
    46. ROI for Agriculture, Livestock, Forestry and Fishing<br /><ul><li>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. </li></ul>RFID Investment Return Analysis for Agriculture, Forestry and Fishing (Malaysia), 2011 to 2015<br />Return on Investment: Approximately 6 months<br />Source: Frost & Sullivan, 2009<br />
    47. ROI for Transport, Storage and Communication<br />RFID Investment Return Analysis for Transport, Storage and Communication (Malaysia), 2011 to 2015<br />Return on Investment: Approximately 9 months<br />Source: Frost & Sullivan, 2009<br />
    48. ROI for Wholesale and Retail Trade, Accommodation and Restaurants<br />RFID Investment Return Analysis for Wholesale and Trade, Accommodation and Restaurants (Malaysia), 2011 to 2015<br />Return on Investment: Approximately 27 months or 2.3 years<br />Source: Frost & Sullivan, 2009<br />
    49. ROI for All Sectors (5 Core Sectors Average)<br />RFID Investment Return Analysis for All Sectors Average (Malaysia), 2011 to 2015<br />Return on Investment: Approximately 7 months<br />Source: Frost & Sullivan, 2009<br />
    50. Evaluation of Total Factor Productivity and Labor Competitiveness with RFID <br />
    51. TFP Model without RFID<br />TFP Model without RFID (Malaysia), 1999 to 2015<br />Source: WB, EPU, DS and Frost & Sullivan, 2009<br />
    52. TFP Model with RFID<br />TFP Model with RFID (Malaysia), 1999 to 2015<br />Incorporates usage of RFID for 10 MP period (2011 to 2015)<br />Source: WB, EPU, DS and Frost & Sullivan, 2009<br />
    53. Difference to TFP with and without RFID<br />Difference to TFP Growth with and without RFID (2001 to 2015)<br />Source: Frost & Sullivan, 2009<br /><ul><li>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.
    54. This translates to a increase of 19.71% to the TFP by leveraging on RFID technology. </li></li></ul><li>RFID Contributes to TFP and Real GDP Growth<br /><ul><li>In conclusion, value added generated from RFID will also bring positive effects to both the TFP and real GDP growth.
    55. 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. </li></ul>GDP and TFP Growth with RFID (Malaysia), 2000 - 2015<br />0.55% difference to TFP with and without RFID translates to 19.71% increase<br />Growth (%)<br />Source: UNSD,WB, EPU, DS and Frost & Sullivan, 2009<br />
    56. Labor Productivity Level with and without RFID <br />Labor Productivity Level without RFID (Malaysia), 2011 - 2015<br />Labor Productivity Level with RFID (Malaysia), 2011 - 2015<br />. <br />USD 0.247 (RM 0.865) difference or equivalent to an increase of 2.36% to the nominal GDP per hour worked observed for 2015<br />Source: Frost & Sullivan, 2009<br />
    57. RFID Contributes to Labor Productivity Level<br />GDP and TFP Growth with RFID (Malaysia), 2000 - 2015<br />USD 0.247 (RM 0.865) to the nominal GDP per hour Worked = USD 1.967 (RM 6.916) per 8 hour work day = USD 17,070 million (RM 59,745 million) to the nominal GDP of Malaysia <br />Source: WB, EPU, DS and Frost & Sullivan, 2009<br />
    58. Snapshot of Socio-Economic Gains to Overall Economy<br />
    59. Socio Economic Benefits through Wider Scale Deployment of RFID<br />Socio Economic Benefits of RFID to the Nation (Malaysia), 2000 - 2015<br /><ul><li>Over USD 13 billion market by 2015 globally
    60. Huge potential for domestic & international markets
    61. Reduce dependency on foreign products
    62. 75% of process innovations in EU enabled through IT usage
    63. RFID will boost innovation of products and services
    64. Optimize & streamline entire supply chain and enable greater end user satisfaction
    65. Aid in producing more K-workers with creation of more skill-based and high-tech related jobs
    66. Increased transparency in supply chain for higher efficiency in distributing & monitoring goods
    67. Increase competitiveness
    68. RFID ensures the 5 R’s are achieved
    69. Increase of TFP
    70. Increase of labor productivity</li></ul>Source: Frost & Sullivan,2009<br />
    71. Strategic Recommendations<br />Strategic Recommendations for National Level RFID Programme (Malaysia), 2009<br />Source: Frost & Sullivan, 2009<br />
    72. Strategic Recommendations<br />Strategic Recommendations for National Level RFID Programme (Malaysia), 2009<br />Source: Frost & Sullivan, 2009<br />
    73. Agenda<br /> Part 1 - Economic Impact of RFID to Other National or International Level Projects<br /><ul><li>Analysis of National and International Level RFID Programmes
    74. Financial Impact of RFID to Country, Industry or International Projects
    75. Investigation of Broadband, GDP and RFID Relationship </li></ul> Part 2 - Assess RFID’s Economic Impact to Malaysia<br /><ul><li>RFID Value Creation Analysis to the Malaysian Economy
    76. RFID Investment Analysis
    77. Analyzing ROI for Key Sectors
    78. Evaluation of Total Factor Productivity and Labor Competitiveness with RFID
    79. Snapshot of Socio-Economic Gains to Overall Economy</li></ul>Part 3 – Outlook and Conclusion<br />
    80. Summary & Conclusion<br />Government<br />
    81. Thank You<br />

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