This document analyzes the potential economic impact and benefits of RFID adoption in Malaysia. It discusses analyzing RFID's economic impact through assessing value creation, investment analysis, and return on investment for key sectors. It also evaluates the impact on total factor productivity, labor competitiveness, and overall socio-economic gains. The document presents case studies on the financial impact of RFID programs in countries like Germany and on the global healthcare industry. It finds RFID adoption could significantly increase Malaysia's gross value added and competitiveness by 2015 through increased efficiency, productivity and socio-economic benefits across various industries.
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RFID Economic Impact and Benefits for Malaysia
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
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
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
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
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
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
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
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