Biometric technologies are strong identification technologies and as such influence the level of ‘trust’ in economic transactions. In other words they can help reduce fraud and thus help materialise the efficiency and equity gains of the Information Society. They help simplify things from the user’s perspective and minimise the likelihood of error. At the same time their widespread deployment in the public sector will make identification over the network easier, more secure and may bring down costs per secure transaction. This in turn will help consumers make more efficient transactions. Standards and interoperability issues, however, determine widespread adoption and shape economic challenges. The following five themes summarise the economic implications of biometrics:
The economic importance of identity is growing in a digital society, but the strongest identity protection is not necessarily the optimal one.
Identity errors and abuse may become less frequent, but when they happen, they could potentially be more dangerous. For example identity theft may become less frequent but more severe and with wider social repercussions.
There is a serious danger that the biometrics identification market – and markets that depend on identity – may fragment into clusters that will not interoperate, thus becoming vulnerable to monopolisation or dominance by a few players.
The unregulated exploitation of intellectual property rights to aspects of biometrics can significantly reduce competition in biometrics and/or distort development, direction and speed of uptake.
The use of biometrics in eGovernment initiatives and associated large-scale public procurement could be key levers to ensure open and competitive markets, and rapid and socially-productive innovation.