But RFID initiatives alarm privacy advocates, as well as some federal government officials and state legislators, who understand the benefits but worry about the possibility of abuse in the tracking of goods and people.
For example, an RFID tag on a medication bottle might one day be used to alert a relative at another location that an elderly father forgot to take his pills. But electronic readers in office buildings might detect the types of medicines being carried around by employees, which many would regard as an invasion of privacy.
The Food and Drug Administration is in fact encouraging adoption of RFID in the pharmaceutical industry to attack counterfeit drugs, pushing for widespread tagging of medicines by 2007.
Other uses are proliferating as well. One California company has developed a soap dispenser capable of reading employee tags to let restaurant managers know whether their workers washed their hands while in the bathroom. A charter school in Buffalo uses tags on its students as a way of taking attendance in the mornings.
"RFID has tremendous potential for improving productivity and security, but it also will become one of the touchstone privacy issues of our times," said Sen. Patrick J. Leahy (D-Vt.), who foresees congressional hearings on the issue. "Before RFID becomes ubiquitous throughout our society and economy, we need to start paying more attention to the privacy side of the equation."
That view is shared by the Federal Trade Commission, which held an all-day seminar on the issue Monday to examine the tradeoffs.
Privacy activists have not waited, conducting high-profile boycotts in the past two years against such firms as Benetton Group SpA and Gillette Co. after learning they were considering, or testing, tags in their products.
A consortium of more than 40 public-interest groups has called for strict public-notification rules, the right to demand deactivation of the tag when people leave stores, and overall limits on the technology's use until privacy concerns have been better addressed.
Their fears were particularly stoked by the early ambitions of leaders of the RFID movement, who envisioned a world in which every product had a unique identifier that could be electronically tracked.
Kevin Ashton, former executive director of a joint corporate and academic RFID research center at the Massachusetts Institute of Technology, said in a promotional video that the organization's mission was to "create a single global technology that will enable computers to identify any object, anywhere, automatically."