TOKYO (Nikkei)--Costs and the speed of business development were addressed at a panel discussion on the commercialization of digital ID technologies held Tuesday as part of the Global Information Summit 2004.

The panel discussion, "Digital ID Revolution and the Business Model," ended the session with an agreement that stressing customer benefits is essential when introducing digital ID technologies.

On the subject of introductory costs, Lee Kang-tae, chief information officer (CIO) at Samsung Tesco Co., a joint venture between South Korea's Samsung group and Tesco Plc of the U.K., said that massive investments in servers and storage terminals, as well as in the smart tags themselves, are needed to introduce smart-tag-based inventory management systems. He emphasized that this could pose problems for small and midsize firms.

The daunting initial investments mean that only giant retailers such as Wal-Mart Stores Inc. will be in a position to gain enough benefits to justify the expense, Lee added.

Robert Carter, CIO of FedEx Corp., said that smart-tag technologies may prove disappointing in two years' time because cost and privacy protection issues may not be resolved by then. He added, however, that the technologies will produce amazing results in a decade or so.

As for consumer benefits, Glover Ferguson Jr., chief scientist at Accenture of the U.S., said that using smart tags will enable retailers to clearly show the freshness of their foods. Junji Nomura, executive senior managing director at Matsushita Electric Works Ltd. (6991), predicted that smart tags will be used to finely control air conditioning and lighting systems to individual preferences.