Showing posts with label technology. Show all posts
Showing posts with label technology. Show all posts

Wednesday, September 4, 2013

Do Cutting Edge Anti-Counterfeiting Technologies Really Work?

These are not science fiction topics.  They describe recent developments in anti-counterfeiting technologies that are capturing mainstream news headlines for their creativity in tackling a trillion dollar a year problem facing many industries, ranging from pharmaceuticals to children's toys to military hardware.

The primary purpose of these developing technologies is to assist brand owners with better detection of counterfeit products as they infiltrate the supply chain.

For example, recent studies have discovered a "flood" of fake military hardware components making their way into the U.S. armed forces' vehicles and planes.  The safety threat posed by substandard military grade parts is unimaginable.

Using the new technology, if military hardware components are counterfeit, they will not possess the correct embedded plant DNA, which can be detected with a special inspection tool.

Similarly, the pharmaceutical industry can use edible bar codes to allow for easier tracking and authentication of pills and verification of drug packaging.  Spending by pharmaceutical companies in the anti-counterfeiting tech marketplace is predicted to exceed $1B per year in coming years.

But, while they are clearly effective at detecting counterfeits, are these cutting edge technologies addressing the deeper issues behind the continuing scourge of fake products?


Because no improvements in DNA-based detection technology can change this simple mathematical equation:  When profits routinely exceed investment, there will be a steady supply of fake products.  Fakes require no research, development or marketing to succeed.  Rather, by passing off a fake product to consumers, a $10 investment can yield $100 in profit, with little or no likelihood of prosecution or penalty.  

This return on investment (ROI) exceeds that of trafficking in the narcotics trade, with less chance of being murdered by the competition or sentences that include decades in a federal penitentiary.

While advanced detection methods are part of the brand protection puzzle, international laws and norms clearly need to become increasingly effective, to deter and punish counterfeiting once it is discovered.