Ignoring China, how successful have smart card national ID schemes really been? And what does the future hold?

The Chinese Citizen ID project was so vast compared to anything else that’s been occurring in this market, it’s been difficult for observers to gauge just how successful other national ID projects have been and to what extent the recession and the recovery really impacted the wider market.
By Alex Green, Senior Research Director, IMS Research September 7, 2011

IMS research: excellence in market intelligneceFor the last few years it’s been difficult to talk about smart card-based national ID projects without China blurring the picture. The Chinese Citizen ID project was so vast compared to anything else that’s been occurring in this market, it’s been difficult for observers to gauge just how successful other national ID projects have been and to what extent the recession and the recovery really impacted the wider market.

We continually assess this at IMS Research, tracking over 150 individual government/healthcare projects. However, I’ve recently had to give it extra attention as we published our latest market report on this topic “Electronic Government and Healthcare ID Cards – World – 2011”.

With the exception of China large smart card-based national ID projects have been seen in countries such as Spain, Malaysia, Thailand, Egypt, Belgium, Netherlands, Saudi Arabia, Morocco and Portugal. Together, these and a number of other countries, have rolled out more than 250 million smart card-based national ID cards. As I say though, this relatively small compared to the billion or so Citizen ID cards rolled out in China! The issue is, unless you’re Chinese, the China project may as well have not existed, as all the card and IC contracts went to Chinese suppliers.  

Unfortunately, the recession and continued government spending cuts have resulted in this market (excluding China) struggling during the last three years with unit shipments hovering around the same sub-50 million per annum level.

As I started the research for this report I was concerned that this could be a long term problem for the industry. However, after spending the last five months digging into the details of future projects, I ended up with a much more positive view.

This much more positive view was the direct result of what IMS Research has concluded will happen in Russia, Turkey, Brazil, Mexico, India, Indonesia, Germany and Italy. All are countries with big populations, and all are planning on rolling out large national ID card schemes using smart card technology.  Just these eight countries alone are forecast to account for approaching 900 million smart cards installed by the end of 2016…assuming all projects go ahead as planned.

However, perhaps this is a dangerous assumption!

To be honest, I have applied a certain level of pessimism in our forecasts and have already assumed that projects will suffer delays. However, as we know here in the UK, projects can quite easily be cancelled with a change in government.

Within our research we have attempted to “class” projects on whether they are high, medium or low risk. High risk being those that we believe there is a chance for significant delay or cancellation.  The results did help reinforce my more positive view on the future for this market. If I just count what we have classed as the “low risk” projects, the last three years of stagnation will soon be a distant memory.