Editorial: Chaos Theory and RFID
Tuesday, July 26, 2005 - AIM Global

How does chaos theory apply to RFID? More importantly, what is the "Butterfly Effect" and how does it affect RFID?

 

The term "chaos theory" suggests that systems are apparently disordered and disparate, but chaos theory is really about finding the underlying order in apparently random data -- or, in the case of RFID, events.  The "Butterfly Effect", or more technically the "sensitive dependence on initial conditions," is the essence of chaos.  [As quoted in “Chaos and Nonlinear Dynamics” by R.C.Hilborn (Oxford University Press, 1994.]

 

What is the Butterfly Effect?  "The flapping of a single butterfly's wing today produces a tiny change in the state of the atmosphere.  Over a period of time, what the atmosphere actually does diverges from what it would have done. So, in a month's time, a tornado that would have devastated the Indonesian coast doesn't happen.  Or maybe one that wasn't going to happen, does." (Ian Stewart, Does God Play Dice? The Mathematics of Chaos, pg. 141.)

 

Most reports tend to look at RFID in a fairly limited context: market demands, customer mandates, and standards.  The truth is, RFID is just as susceptible (if not more so) to the "butterfly effect" of seemingly unrelated events as everything else in today's global economy. 

 

The articles in this issue "The China Card" and "Cheaper RFID Tags?" clearly show the effect of chaos theory on the RFID market.

 

Will China's economic power create a crack the EPCglobal company ID scheme or make Wal*Mart blink?  If so, what will that mean to global trade?  Will the decision to unlink China's and the U.S.'s currencies weaken China's bargaining power?  Or will it increase the cost of Chinese imports to the point where it hurts the economies of other countries in such a way that they don't invest in RFID as projected?  Or will it encourage companies to find other sources -- even to the extent of bringing production home from offshore which could reduce unemployment and stimulate the economies?

 

Will the ability to produce smaller IC (integrated circuit) features lead to cheaper RFID transponders or more capable ones for the same price?  Or will plastic (printed) ICs be feasible before these benefits can be realized?  Will RFID chip makers even invest in the new equipment?

 

And, of course, all the other issues we normally cover also apply.

 

In short, there are many more forces at work than customer mandates and standards, many more questions than answers, many more variables than we suspect. It's comforting, therefore, to look at tangibles such as mandates and standards and patent problems.  Comforting, yes.  But to understand the RFID market and where it will go, we must also try to recognize that the butterfly effect is also at work.

 

What that means is that we have to stay flexible and not get locked into a single perspective.  RFID is a fact of business life today but the exact shape and form it will eventually adopt is still evolving.

 

Note: introductory material on chaos theory used in this editorial may be found on the following websites:

www.imho.com/grae/chaos/chaos.html

www.cmp.caltech.edu/~mcc/chaos_new/Lorenz.html

 

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