The German Biometric Strategy Platform · The German Biometric Strategy Platform Biometrics State...

The German Biometric Strategy Platform Biometrics State of the Art, Industry Strategy Development, and Platform Conception Study

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Impressum

Herausgeber: BITKOM Bundesverband Informationswirtschaft, Telekommunikation und neue Medien e.V. Albrechtstraße 10 10117 Berlin-Mitte Tel.: 030/27 576-0 Fax: 030/27 576-400 [email protected] www.bitkom.org Redaktion und Autoren beim BITKOM: Dr. Sandra Schulz, Gregor Költzsch MBA Redaktionsassistenz: Leila Ambrosio Erstveröffentlichung 31.07.2004 Stand: Mai 2005, Version 1.1 Die Inhalte dieser Studie sind sorgfältig recherchiert. Sie spiegeln die Auffassung im BIT-KOM zum Zeitpunkt der Veröffentlichung wider. Die vorliegende Publikation erhebt jedoch keinen Anspruch auf Vollständigkeit. Wir übernehmen trotz größtmöglicher Sorgfalt keine Haftung für den Inhalt. Die Studie mit ausgewählten Präsentationen kann unter www.bitkom.org/publikationen kos-tenlos bezogen werden. Alle Rechte, auch der auszugsweisen Vervielfältigung, liegen beim BITKOM. Ansprechpartnerin: Dr. Sandra Schulz, BITKOM e.V. Tel: +49 (0)30 / 27576-242 E-Mail: [email protected]

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Table of Content

TABLE OF CONTENT ............................................................................................................III

TABLE OF ACRONYMS AND ABBREVIATIONS................................................................. V

TABLE OF FIGURES ............................................................................................................ VI

TABLE OF TABLES ............................................................................................................. VII

1 INTRODUCTION.............................................................................................................1

2 METHODOLOGY............................................................................................................3 2.1 THE STRATEGIC MANAGEMENT PROCESS ................................................................3 2.2 DATA COLLECTION...................................................................................................4

FIRST PART – STATE OF THE ART AND STRATEGIC ENVIRONMENT............................6

3 BIOMETRIC BASICS AND APPLICATION FIELDS .....................................................6 3.1 DEFINITION OF BIOMETRICS .....................................................................................6 3.2 HISTORY .................................................................................................................7 3.3 BIOMETRIC TECHNOLOGIES .....................................................................................7

3.3.1 Primary Processes....................................................................................7 3.3.2 Fingerprint Recognition...........................................................................11 3.3.3 Face Recognition ....................................................................................12 3.3.4 Iris Recognition .......................................................................................14 3.3.5 Signature Recognition.............................................................................16 3.3.6 Voice Recognition ...................................................................................17

3.4 SELECTED APPLICATION FIELDS.............................................................................19 3.4.1 Overview of Applications.........................................................................19 3.4.2 Sovereign Applications ...........................................................................20 3.4.3 Non-Sovereign Public and Private Sector Applications ..........................21

4 POLITICAL AND LEGAL ENVIRONMENT..................................................................24 4.1 INTERNATIONAL STANDARDIZATION AND SECURITY POLICY.....................................24

4.1.1 International Civil Aviation Organization (ICAO) .....................................24 4.1.2 International Organization for Standardization (ISO) ..............................25 4.1.3 Other International Standardization Drivers............................................26 4.1.4 United States of America ........................................................................26 4.1.5 European Union ......................................................................................28

4.2 INTERNATIONAL BIOMETRIC PLATFORMS ................................................................30 4.2.1 Biometric Consortium..............................................................................30 4.2.2 National Biometric Security Project (NBSP) ...........................................31 4.2.3 International Biometric Industry Association (IBIA).................................31 4.2.4 Biometrics Working Group (BWG) ..........................................................31 4.2.5 International Association for Biometrics (iAfB)........................................32 4.2.6 International Biometric Foundation (IBF) ................................................33 4.2.7 European Biometrics Forum (EBF).........................................................33 4.2.8 Other Platforms.......................................................................................34

4.3 ACTIVITIES OF THE GERMAN FEDERAL AUTHORITIES...............................................35 4.3.1 Federal Ministry of the Interior (BMI) ......................................................36 4.3.2 Federal Border Police (BGS) ..................................................................37 4.3.3 Federal Office for Information Security (BSI) ..........................................37 4.3.4 Federal Criminal Police Office (BKA)......................................................39 4.3.5 Federal Ministry of Economics and Labour (BMWA) ..............................40 4.3.6 Federal Ministry of Education and Research (BMBF).............................40

4.4 NATIONAL INDUSTRY ASSOCIATIONS AND THE STANDARDIZATION INSTITUTION ........41 4.4.1 BHE.........................................................................................................41 4.4.2 BITKOM ..................................................................................................42 4.4.3 TeleTrusT Deutschland...........................................................................43 4.4.4 VfS ..........................................................................................................43 4.4.5 ZVEI ........................................................................................................43

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4.4.6 DIN..........................................................................................................44 4.5 THE NATIONAL LEGAL FRAMEWORK OF BIOMETRICS...............................................45

4.5.1 Overview of the Legal Framework ..........................................................45 4.5.2 Data Protection and Ethical Concerns ....................................................46 4.5.3 Other Applicable Law..............................................................................49

SECOND PART – MARKET AND INDUSTRY ANALYSIS, STRATEGY DEVELOPMENT.52

& PLATFORM CONCEPTION...............................................................................................52

5 MARKET AND INDUSTRY...........................................................................................52 5.1 INTERNATIONAL AND NATIONAL BIOMETRIC MARKETS.............................................52 5.2 OVERVIEW OF GERMAN BIOMETRIC RESEARCH ......................................................59 5.3 OVERVIEW OF THE GERMAN BIOMETRIC INDUSTRY .................................................63 5.4 THE INDUSTRY’S COMPETITIVE ENVIRONMENT........................................................68

5.4.1 Introduction to the Five Forces Model.....................................................68 5.4.2 Intensity of Rivalry among Competing Sellers ........................................69 5.4.3 The Threat of Entry .................................................................................69 5.4.4 Pressure from Substitute Products .........................................................70 5.4.5 Bargaining Power of Suppliers................................................................71 5.4.6 Bargaining Power of Buyers ...................................................................72

5.5 NATIONAL COMPETITIVENESS ................................................................................74 5.6 SWOT MATRIX......................................................................................................77

6 STRATEGY DEVELOPMENT FOR THE GERMAN BIOMETRIC INDUSTRY............79 6.1 STRATEGIC VISION AND BUSINESS MISSION ...........................................................79 6.2 OBJECTIVES ..........................................................................................................81 6.3 INDUSTRY STRATEGY ............................................................................................82

6.3.1 The Significance of Strategies ................................................................82 6.3.2 Business Field Strategies .......................................................................84 6.3.3 Market Entry Strategies ..........................................................................88 6.3.4 Market Participants Strategies ................................................................89 6.3.5 Strategy Summary ..................................................................................94

7 THE IMPLEMENTATION OF A GERMAN BIOMETRIC STRATEGY PLATFORM ....97 7.1 MOTIVATION AND GOALS OF THE PLATFORM...........................................................97 7.2 STRATEGIC ISSUES AND TASKS OF THE PLATFORM .................................................98 7.3 MEMBER STRUCTURE AND FOUNDATION ..............................................................103 7.4 STRATEGIC CONTROLLING ...................................................................................105 7.5 STRATEGY PLATFORM ROADMAP .........................................................................106 7.6 SUPPORT BY BITKOM.........................................................................................107

8 CONCLUSION............................................................................................................109

BIBLIOGRAPHY..................................................................................................................110

INTERNET SOURCES.........................................................................................................116

APPENDIX I: BIOMETRIC LINK LIST ................................................................................125

APPENDIX II: INTERVIEW QUESTIONS............................................................................127

APPENDIX III: INTERVIEW RESULTS ...............................................................................129

DANKSAGUNG ...................................................................................................................136

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Table of Acronyms and Abbreviations AA Auswärtiges Amt AFIS Automated Fingerprint Identification System AGBG Gesetz zur Regelung des Rechts der Allgemeinen Geschäftsbedingungen ANSI American National Standards Institute BDSG Bundesdatenschutzgesetz BetrVG Betriebsverfassungsgesetz BGS Bundesgrenzschutz BGSG Bundesgrenzschutzgesetz BHE Bundesverband der Hersteller und Errichter von Sicherheitssystemen e.V. BITKOM Bundesverband für Informationswirtschaft, Telekommunikation und neue Medien e.V. BKA Bundeskriminalamt BMBF Bundesministerium für Bildung und Forschung BMGS Bundesministerium für Gesundheit und Soziales BMI Bundesministerium des Innern BMWA Bundesministerium für Wirtschaft und Arbeit BSC Biometrics Security Consortium BSI Bundesamt für Sicherheit in der Informationstechnik BWG Biometrics Working Group CAST Competence Center for Applied Security Technology CESG Communications Electronics Security Group DFK Deutsches Forum für Kriminalprävention DHS Department of Homeland Security DIN Deutsches Institut für Normung e.V. DNA Deoxyribonucleic Acid EBF European Biometric Forum EU European Union GFaI Gesellschaft für angewandte Informatik GG Grundgesetz für die Bundesrepublik Deutschland iAfB International Association for Biometrics IBF International Biometric Foundation IBIA International Biometric Industry Association IBIS Institut für Biometrische Identifikationssysteme IBMT Fraunhofer-Institut für Biomedizinische Technik ICAO International Civil Aviation Organization IEC International Electrotechnical Commission IGD Fraunhofer-Institut für Graphische Datenverarbeitung IIG Institut für Informatik in der Gesellschaft IIS Fraunhofer-Institut für Integrierte Schaltungen IPK Fraunhofer-Institut für Produktionsanlagen und Konstruktionstechnik ISO International Organization for Standardization JTC Joint Technical Committee LDSG Landesdatenschutzgesetz LSE Large-scale enterprises NBSP National Biometric Security Project NI Normenausschuss Informationstechnik NIST National Institute of Standards and Technology NSA National Security Agency PassG Passgesetz PAuswG Personalausweisgesetz SigG Signaturgesetz SigV Signaturverordnung SIT Fraunhofer-Institut für Sichere Telekommunikation SMEs Small and medium-sized enterprises SWOT Strengths, Weaknesses, Opportunities, Threats TBG Gesetz zur Bekämpfung des Internationalen Terrorismus TÜV Technischer Überwachungsverein U.S.A. United States of America U.S. VISIT U.S. Visitor and Immigrant Status Indication Technology System UK United Kingdom of Great Britain VfS Verband für Sicherheitstechnik e.V. WIK Wissenschaftliches Institut für Kommunikationsdienste ZVEI Zentralverband der Elektrischen und Elektrotechnischen Industrie e.V.

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Table of Figures FIGURE 2.1: THE TASKS OF STRATEGIC MANAGEMENT......................................................................... 3 FIGURE 3.1: IDENTIFICATION AND VERIFICATION ................................................................................... 9 FIGURE 3.2: VERTICAL AND HORIZONTAL BIOMETRIC MARKETS .......................................................... 20 FIGURE 5.1: TOTAL BIOMETRIC INDUSTRY REVENUE 1999-2002 ........................................................ 52 FIGURE 5.2: GEOGRAPHIC BIOMETRIC MARKETS 2002....................................................................... 53 FIGURE 5.3: BIOMETRICS REVENUE FORECAST FOR THE WORLD’S GEOGRAPHIC REGIONS UNTIL 2006 54 FIGURE 5.4: REVENUE FORECAST BY BIOMETRIC TECHNOLOGY UNTIL 2006........................................ 55 FIGURE 5.5: THE GERMAN BIOMETRIC MARKET 2004-2009 ............................................................... 58 FIGURE 5.6: GERMAN BIOMETRIC ROADMAP 2005-2010.................................................................... 59 FIGURE 5.7: THE GERMAN BIOMETRIC INDUSTRY’S VALUE CHAIN ....................................................... 64 FIGURE 5.8: THE GERMAN BIOMETRIC INDUSTRY BY VALUE CHAIN ELEMENTS .................................... 64 FIGURE 5.9: STAFF NUMBERS OF GERMAN BIOMETRIC COMPANIES .................................................... 65 FIGURE 5.10: TECHNOLOGIES OFFERED BY GERMAN BIOMETRIC COMPANIES ....................................... 66 FIGURE 5.11: GEOGRAPHICAL DISTRIBUTION OF BIOMETRIC TECHNOLOGIES IN GERMANY..................... 66 FIGURE 5.12: THE FIVE COMPETITIVE FORCES MODEL......................................................................... 68 FIGURE 5.13: THE FIVE COMPETITIVE FORCES OF THE GERMAN BIOMETRIC INDUSTRY.......................... 73 FIGURE 5.14: THE DIAMOND OF NATIONAL COMPETITIVE ADVANTAGE................................................... 74 FIGURE 5.15: THE GERMAN BIOMETRIC INDUSTRY SWOT MATRIX ....................................................... 78 FIGURE 6.1: THE STRATEGY DEVELOPMENT PROCESS....................................................................... 79 FIGURE 6.2: STRATEGY SYSTEM BY MEFFERT.................................................................................... 84 FIGURE 6.3: MARKET FIELD STRATEGIES ........................................................................................... 85 FIGURE 6.4: INNOVATION DIFFUSION CURVE ...................................................................................... 87 FIGURE 6.5: BUSINESS FIELD STRATEGIES OF THE GERMAN BIOMETRIC INDUSTRY.............................. 88 FIGURE 6.6: MARKET ENTRY STRATEGIES OF THE GERMAN BIOMETRIC INDUSTRY............................... 89 FIGURE 6.7: GENERIC COMPETITIVE STRATEGIES .............................................................................. 91 FIGURE 6.8: COMPETITIVE BEHAVIOR STRATEGIES............................................................................. 92 FIGURE 6.9: INTEREST GROUP-ORIENTED STRATEGIES...................................................................... 93 FIGURE 6.10: MARKET PARTICIPANTS STRATEGIES OF THE GERMAN BIOMETRIC INDUSTRY ................... 94 FIGURE 6.11: GERMAN BIOMETRIC INDUSTRY STRATEGY GRID............................................................. 95 FIGURE 7.1: GAP ANALYSIS............................................................................................................. 106

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Table of Tables TABLE 3.1: BIOMETRIC TECHNOLOGIES ................................................................................................ 10 TABLE 4.1: INTERNATIONAL BIOMETRIC PLATFORMS ............................................................................. 35 TABLE 4.2: BIOMETRIC PROJECTS BY THE BSI...................................................................................... 39 TABLE 4.3: LEGAL FRAMEWORK OF BIOMETRICAL APPLICATIONS........................................................... 46 TABLE 4.4: INTERVIEW RESULTS – MEASURES TO DIMINISH ETHICAL CONCERNS ................................... 49 TABLE 5.1: WORLD BIOMETRICS REVENUE FORECAST UNTIL 2006........................................................ 53 TABLE 5.2: INTERVIEW RESULTS – GERMAN BIOMETRIC MARKET BARRIERS .......................................... 57 TABLE 5.3: INTERVIEW RESULTS – STRUCTURAL DEFICIENCIES OF THE GERMAN BIOMETRIC INDUSTRY .. 67 TABLE 6.1: INTERVIEW RESULTS – STRATEGY DETAILS ......................................................................... 95 TABLE 7.1: INTERVIEW RESULTS – STRATEGIC ISSUES OF THE BIOMETRIC STRATEGY PLATFORM ........... 99 TABLE 7.2: GERMAN BIOMETRIC STRATEGY PLATFORM MEMBER STRUCTURE ..................................... 104 TABLE 7.3: GERMAN BIOMETRIC STRATEGY PLATFORM ROADMAP ...................................................... 107 TABLE 7.4: INTERVIEW RESULTS – SUPPORT BY BITKOM................................................................... 108

Introduction

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1 Introduction

Biometrics are a young and promising technology field. Triggered by public security con-

cerns, in particular on account of terror threats, the interest in this new technology has in-

creased over the last years. Governments and authorities seek for enhanced security solu-

tions to protect borders, issue secure identification documents and monitor public places.

Biometric technologies are not limited to sovereign security issues, and in the long term the

private sector demand could even exceed the demand for sovereign applications.

Many investigators have compared and evaluate biometric technologies in Germany. So far,

little attention has been paid to combine societal forces and support the German biometric

industry on a national base. To serve customer interests and succeed in international compe-

tition the industry needs a joint platform.

The aim of the present study is to develop a strategy for the German biometrics industry, and

to draft a national working group concerned with biometric issues, called German Biometric

Strategy Platform. This includes the assessment of requirements, objectives, tasks and

member structure of the German Biometric Strategy Platform.

The study is the result of the author’s work at the German Association for Information Tech-

nology, Telecommunications and New Media e.V. (BITKOM e.V.) from May to July 2004 and

has been compiled from February to July 2004.

This study is divided in two main parts. Having described the applied methodology in chapter

2, the following chapters provide the reader with the state of the art and the strategic envi-

ronment of biometric technologies. Chapter 3 gives an overview of the biometric basics, par-

ticularly technological background and application fields. Chapter 4 focuses on political and

legal issues on the international as well as the national level. Answers to the following ques-

tions will be given:

Which political and legal factors influence biometric technologies on the international and

national level?

How do ethical concerns influence the view on biometric technologies?

The second part is dedicated to market, industry, strategy development and platform concep-

tion. Chapter 5 analyzes the international and national biometric markets as well as the Ger-

man biometric industry. The following questions will be answered:

How are the biometric markets structured, and which market barriers exist?

Is the German biometric industry well-aligned, e.g. with respect to the value chain?

Introduction

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Additionally, a roadmap of the future development of the German biometric market will be

drafted.

In chapter 6 a market-oriented strategy for the German biometric industry will be developed,

answering two additional questions:

Is a joint industry strategy possible?

What strategy should the German biometric industry pursue?

These strategic recommendations are supposed to be discussed and further worked out by

the German Biometric Strategy Platform, which is the strategy implementation tool. The plat-

form conception will be based on the results of the previous sections. Chapter 7 suggests

objectives and tasks of the platform and answers some more questions:

Which strategic decisions have to be made to support the industry?

How should the German Biometric Strategy Platform position itself against foreign biomet-

ric platforms?

Who should participate in the platform?

How should BITKOM support both industry and platform?

Finally, milestones regarding the platform formation process will be set. All suggestions con-

cerning the German Biometric Strategy Platform are intended to be used as a guideline dur-

ing the establishment of the German Biometric Strategy Platform.

In compliance with these requirements, the study aims to provide a broad picture of the tech-

nologic basics, the biometric environment and markets, the German biometric industry and

strategic issues.

Methodology

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2 Methodology

2.1 The Strategic Management Process

This study orientates in the strategic management process, which is concerned with charac-

ter, direction and long-term future of an organization or industry.1 Strategic management has

developed since the late 1970s as a holistic approach to support companies’ adaption to in-

creasingly fast changes in the business environment.2

On the one hand, strategic management can be systematic and condition-driven - vision

and mission are developed based on strategic analysis.3 On the other hand, strategies can

be developed in an informal and ambition-driven fashion. In this case, strategy develop-

ment starts with a vision independent from analysis, and the gap to reality has to be analyzed

and closed subsequently.4

Since in this study the strategic management process will be applied to the German biomet-

ric industry as a whole for the first time, the condition-driven approach is chosen. It may pro-

vide a substantial basis for future informal strategy development initiatives.

The study is structured according to the six major tasks of condition-driven strategic man-

agement. Five of them are accomplished consecutively: conducting a strategic analysis, de-

veloping a strategic vision and business mission, setting objectives, crafting a strategy and

implementing it.5 This process is supported by strategic controlling, which has to establish

and maintain a planning, monitoring, controlling and information system creating and pre-

serving the strategic success potentials.6

Figure 2.1: The Tasks of Strategic Management Source: According to Thompson, Arthur A./ Strickland, A.J. (1996), p. 4. and Pearce, John/ Robinson, Richard (2000), p. 12.

1 Cf. Olbrich, Rainer (2001), S. 23. 2 Cf. Kreikebaum (1997), pp. 22-24. 3 Cf. Morden, Tony (1999), pp. 2 f. 4 Cf. Internet Source 1 – Arthur D. Little. 5 Cf. Thompson, Arthur A./ Strickland, A.J. (1996), p. 4. 6 Cf. Eggers, Bernd/ Eickhoff, Martin (1996), pp. 3-5.

DevelopingVision & Mission

Controlling (Evaluating, Reviewing Process etc.)

StrategicAnalysis

SettingObjectives

CraftingStrategy

ImplementingStrategy

DevelopingVision & Mission

Controlling (Evaluating, Reviewing Process etc.)

StrategicAnalysis

SettingObjectives

CraftingStrategy

ImplementingStrategy

Methodology

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As a prerequisite for a substantiated strategic analysis, this study describes the technologi-

cal state of the art, including a discussion of selected technologies and a listing of application

fields.

As part of the strategic analysis, the biometric environment is analyzed in consideration of

issues significant for the German biometric industry and Strategy Platform. This includes the

following aspects:

The political and legal biometric environment on the international level, comprising stan-

dardization, security policy, international biometric platforms and their relation to the Ger-

man biometric industry and Strategy Platform.

The national biometric environment, including political, legal and ethical influence factors.

Subsequently, international and national biometric markets are analyzed as well as the Ger-

man biometric industry. The industry analysis includes Porter’s five forces model, and the

analysis results are summarized by Porter’s diamond of national competitive advantage and

a SWOT matrix.

Based on the analysis results, vision, mission, objectives and strategy for the German

biometric industry are suggested. Strategy development for the German biometric industry

will concentrate on market-strategies. Strategy literature provides several partial and integra-

tive strategy systems, for example by Ansoff, Porter, Backhaus and Becker. This study will

follow Meffert, who integrates these approaches.

The strategy implementation tool is the German Biometric Strategy Platform, and the stra-

tegic management process is completed by the platform conception and recommendations

regarding strategic controlling.

2.2 Data collection

The study is based on detailed screening of secondary and primary sources. Secondary

sources include the German Biometrics Guide by BITKOM, project reports, market re-

searches, newspaper and magazine articles etc. Additionally, primary data were collected by

interviewing 20 selected biometric companies in Germany. Several of the interviewed experts

have also published literature referred to in this study. The results of the open interview

questions will be introduced in the corresponding sections. A complete list of the interview

questions and the summarized results are attached as appendices II and III.

It was not necessary to obtain primary statistical data of the German biometric industry be-

cause it was already surveyed by BITKOM in the German Biometrics Guide project in 2003.

Even more required was information on the opinions and positions of biometric companies

Methodology

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regarding the industry and market situation as well as ideas concerning the German Biomet-

ric Strategy Platform. Open interviews were the ideal tool to collect this information because

they allowed broader and more individualized information gathering.

Finally, some primary data was obtained during informal talks and meetings with public au-

thorities, particularly about the activities of the German federal government.

Biometric Basics and Application Fields

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First Part – State of the Art and Strategic Environment

The first part of this study describes the technological state of the art and analyzes the stra-

tegic environment of the German biometric industry. Particularly, chapter 3 provides an over-

view of biometric basics and application fields, and chapter 4 analyzes political and legal in-

fluence factors on the international as well as the national level.

3 Biometric Basics and Application Fields

Chapter 3 starts with a definition and the history of biometrics, then continues with a discus-

sion of selected technologies and, finally, lists application fields.

3.1 Definition of Biometrics

The term biometrics is derived from the Greek words “bios” (life) and “metron” (measure). In

the broader sense, biometrics can be defined as the measurement of body characteristics, in

other words, biological statistics.7 With this non-technological meaning this term has been

used in medicine, biology, agriculture and pharmacy. However, the rise of new technologies

since the 1980s to measure and evaluate physical or behavioral characteristics of living or-

ganisms automatically has given the word a second meaning. In the present study, the term

biometrics refers to the following definition: “Biometrics are automated methods of recogniz-

ing a person based on a physiological or behavioral characteristic.”8

To facilitate understanding there are some frequently used expressions to be defined.9

Biometric characteristics are measurable physical or personal behavioral patterns used to

recognize a human being.

Biometric samples or data are biometric information presented by the user and captured by

the biometric system.

A biometric template is the individual mathematic data set calculated from a biometric sam-

ple. Biometric systems need templates for comparison.

A biometric system is an automated system capable of capturing a biometric sample, ex-

tracting biometric data, comparing it with other biometric data and deciding whether or not

the recognition process has been successful.

In the present study the term biometric technologies refers to all computer-based methods

to recognize human beings using biometric characteristics.

7 Cf. Nolde, Veronika (2002), p. 20. 8 Cf. Internet Source 2 – European Biometric Forum. 9 Cf. Ibid.


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3.2 History

Although biometrics are a new technology, methods to use physical characteristics for identi-

fication purposes have been practiced for centuries. For example, in ancient Babylon, As-

syria, China and Japan, fingerprints were used to sign contracts.

In modern times, criminal prosecution, identity management and police records have used

pictures, body height and finger prints for a long time.10 In the 1890s Alphonse Bertillon de-

veloped a method of multiple body measurements (Bertillonage). His system was used by

police authorities until it failed because some people shared the same measures.11

In the following years, a scientific system of fingerprint analysis, the so-called dactyloscopy

developed by Edward R. Henry and Francis Galton, gained more importance.12 It was first

introduced for police purposes in India (1877) and England (1901). In 1903, Saxonian au-

thorities were the first to introduce these methods in Germany.13

During World War II, military conducted research to recognize aircraft pilots with their voice.14

Since the 1960s the FBI has used computer-based Automated Fingerprint Identification Sys-

tems (AFIS) to analyze and compare fingerprints but the fingerprints were still enrolled using

ink, and not automated by sensors.15

Research on computer-based, automated recognition started in the 1960s, and the first

commercial use, a fingerprint application, took place in 1968.16 However, biometric technolo-

gies did not gain economic importance until the 1980s and 1990s. Following a stagnation

phase, the terrorist attacks of September 11, 2001 have reinforced efforts to use biometric

technologies.

3.3 Biometric Technologies

This section provides an overview on the most important biometric processes and technolo-

gies. Additionally the three most promising technologies and two niche technologies will be

analyzed regarding functionality, drivers, barriers and perspectives.

3.3.1 Primary Processes Most biometric systems follow the same processes:

10 Cf. Albrecht, Astrid/ Probst, Thomas (2001), p. 31. 11 Cf. Internet Source 3 – National Center for State Courts. 12 Cf. Schiffhauer, Nils (2004), p. T 1. 13 Cf. Künzer, Frank, pp. 283 f. 14 Cf. Internet Source 4 – Heise Online. 15 Cf. Behrens, Michael/ Heumann, Björn (2001), p. 82. 16 Cf. Amberg, Michael et al. (2003), p. 5.


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1) Reference generation or enrollment is the first acquisition of data later used for com-

parison, e.g. the facial image at the registration office to issue a passport.

2) Data acquisition means to measure biometric data when a person subsequently uses the

biometric system, e.g., uses the facial image for border control.

3) Preprocessing is usually necessary to enhance the recorded data quality, e.g., the facial

image by a graphic program.

4) Extraction of characteristics means to filter typical attributes from the recorded data,

e.g., the face geometry.

5) Comparison and Classification is to form groups of data, e.g., approved or rejected to

cross the border.17

Speaking of biometric recognition, two procedures have to be distinguished:

Verification means to compare the captured data of an individual one-to-one matching pro-

cess to only one reference record, which is taken from the originally enrolled biometric data

of the person whose identity is now claimed. Data can either be stored in a data base or on a

token such as a chip card. The aim is to verify an identity, i.e. to prove authorization of the

identity claim.18 For example, a biometric system could prove if the user of a computer is

authorized to enter the system. Biometric verification replaces the former password or PIN.

Identification is to recognize an individual out of a given quantity of stored data sets. For

that, the captured biometric data have to be compared in a one-to-many matching process

with the data of all users that are enrolled in the system, i.e. whose reference data are al-

ready stored. The goal of this process is to find the identity of an unknown person, and the

user does not claim a specific identity.19 For example, a biometric system could identify

wanted criminals out of a crowd of people.

Identification requires centralized data storage, whereas verification data can be stored de-

centralized, e.g. on a chip card which is under control of the user. This difference is funda-

mental because decentralized storage avoids some ethical and legal problems concerning

data protection.

In the present study the term recognition will be used as a general expression covering both

identification and verification processes.

17 Cf. TeleTrusT (2002), pp. 2 f. 18 Cf. Nolde, Veronika (2002), p. 22. 19 Cf. Ibid. and Internet Source 5 – Biometrics Working Group.


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Figure 3.1: Identification and Verification Source: According to Jain, Anil K. et al. (2004), p. 3.

The most common biometric characteristics are:

Fingerprint

Face

Iris (ring in the eyes surrounding the pupil)

Signature/ Handwriting

Voice

Hand geometry

Retina (structure in the back of the eye)

Keystroke (computer keyboard typing) 20

DNA

Other technologies are still in an early development stage or are of less commercial impor-

tance:

Finger geometry (shape and structure of fingers)

Veins (on back of hand or beneath palm)

Ear shape

Gait recognition (manner of walking)

Nailbed identification (ridges in fingernails)

Odor (human scent)

20 Cf. Internet Source 6 – International Biometric Group, BIOVISION Consortium (2003), p. 125.


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Skin reflectivity

Gestures

Facial play, e.g. lip movement21

As mentioned in section 3.1 biometric technologies can be classified by physiological and

behavioral characteristics.22

Biometric Technology Evaluated Data

Based on physiology

Fingerprint recognition Skin patterns on fingertip Face recognition Geometrical attributes of nose, eyes, mouth etc. Iris recognition Tissue patterns around pupil Hand geometry recognition Size and form of hand Retinal recognition Blood vessel patterns in eye background Finger geometry recognition Size and form of fingers Vein scan Vein patterns on back of hand or palm Ear shape recognition Size and form of ear Nailbed scan Size and form of nailbed Odor recognition Body odor DNA recognition DNA Skin recognition Reflectivity and patterns of skin Based predominantly on behavior

Voice recognition Voice characteristics, e.g. frequency, pauses, speed Signature/ Handwriting recognition E.g., speed, pressure, acceleration of writing Keystroke recognition E.g., duration, pauses, speed and acceleration of typing Gait recognition Manner of walking Gesture recognition Movements of hands and arms Facial play recognition Movement of face, e.g. lips

Table 3.1: Biometric Technologies Source: According to Behrens, Michael/ Roth, Richard (2001), p. 13, TeleTrusT (2002) p. 6.

However, the distinction of physiological and behavioral biometrics is artificial because be-

havior is partly based on physiology, and vice versa physiological characteristics are influ-

enced by behavior. Some characteristic such as voice and signature comprise a mixture of

physiological and behavioral influences. For example, the voice is very much influenced by

physiological structures but the technology strongly focuses on behavioral characteristics

such as speed and pauses. Nevertheless, the value of the distinction is to support functional

understanding of biometric technologies.

21 Cf. Ibid. 22 Cf. Internet Source 7 – International Biometric Group.


11

3.3.2 Fingerprint Recognition Fingerprint recognition is based on the comparison of finger tip skin patterns, and there is

evidence that no two human beings have identical patterns.

There are two widely used techniques. The microscopic technique extracts and compares

the minutiae, which are those minuscule points where the fingerprint ridges terminate and

split. Usually people have up to 80 minutiae on each finger.23 The macroscopic technique

measures and compares the course of the finger lines (e.g., loops, bifurcations or arches),

their width and depths, and typical knots, ends or other points.24

A fingerprint system follows the typical steps mentioned in section 3.3.1:

1) Enrollment: A sensor captures the fingerprint picture, and a reference record is created.

Available sensor categories are optical (camera-based), capacitive or electrical (based on

the electrical micro-charge of humans), thermal (based on infrared radiation of the finger),

ultrasonic (based on the distance between finger patterns and sensor), pressure-based and

other sensors.25 Furthermore, one has to distinguish between contact and contactless sen-

sors.

2) Data acquisition: If the user needs to be verified or identified, a sensor again captures

the fingerprint. Sensors can be implemented in the secured object or in tokens such as smart

cards.26

3) Preprocessing: The digitalized picture is transferred to a computer, and is enhanced and

evaluated by graphics software.27

4) Extraction of characteristics: The typical microscopic or macroscopic characteristics are

filtered.

5) Comparison and Classification: The new data is matched to the reference data in a veri-

fication or identification procedure, and the user is either approved or rejected.

Fingerprint Drivers28

Fingerprint technology is expected to profit from eCommerce growth because it is particu-

larly suited for desktop applications.

The long history of this technology has resulted in technical accuracy and trust by public.

The fingerprint is an innate distinctive feature, and there is almost no possibility of a false

match.

23 Cf. Breitenstein, Marco (2002), p. 38. 24 Cf. Behrens, Michael/ Heumann, Björn (2001), p. 83. 25 Cf. Künzer, Frank (2002), p. 284, Breitenstein, Marco (2002), pp. 36 f., BIOVISON Consortium (2003) p. 100. 26 Cf. Petermann, Thomas et al. (2004), p. 163: Smart Cards are plastic cards with a microchip that can be used to store or process data.

27 Cf. Behrens, Michael/ Heumann, Björn (2001), pp. 86 ff. 28 Cf. Breitenstein, Marco (2002), p. 39, Elsevier Science (2002), p. 22, Internet Source 8 – International Biometric Group.


12

Compared to other biometric technologies, fingerprint devices are quite small, require less

power and are less vulnerable to environmental changes, e.g. light and temperature.

Therefore, it is flexible to operate in difficult environments, and it is suited for mass mar-

kets.

Fingerprint systems are easy to handle.

The technology is accepted by most governments.

The costs of fingerprint sensors have decreased significantly over the last years.

Fingerprint barriers: 29

It can be difficult to recognize dusty, dry, wet or oily fingers. Other difficulties arise de-

pending on the angle and pressure of placement.

Moreover, finger lines are often influenced by human activities which result in soiling,

abrasion or injuries of finger lines. For example, there are many professions such as con-

struction in which people use their hand intensively.

It is also known that the finger lines of old people become blurred and, thus, are more dif-

ficult to recognize by the sensor.

As a result, up to 2 percent of users have deficient finger lines.

People might be reluctant to give their fingerprints as they associate criminal prosecution

with this technology.

Perspectives:

Despite some barriers, fingerprint recognition is the leading biometric technology on account

of safety, low costs and long-term application experience. It is expected to keep playing a

dominating role in future.

3.3.3 Face Recognition The face plays an important role in human communication and identification processes, and

humans identify faces within a fraction of seconds. Therefore, it seems natural to use the

face for biometric purposes.

Face recognition is based on face characteristics, for example the outlines of the eye sock-

ets, the cheekbones, the mouth, the nose and the eyes. The hairline and its surrounding area

are rarely used because they are influenced by changes in hairstyle.30

Face recognition systems follow the primary steps of biometric recognition:31

29 Cf. Elsevier Science (2002), p. 23, Behrens, Michael/ Heumann, Björn (2001), p. 93, Breitenstein, Marco (2002), p. 39.

30 Cf. Internet Source 9 – International Biometric Group. 31 Cf. Weber, Frank (2001), pp. 113.


13

1) Enrollment: A camera takes a picture, detects a face and recognizes the position, seize

and orientation of a face, using either visible or infrared light. A reference record is gener-

ated.

2) Data acquisition: If the user needs to be identified or verified, the face is again detected

and recognized.

3) Preprocessing: During so-called normalization, the face is cut out, scaled and turned into

the required dimensions.

4) Extraction of characteristics: Typical attributes are extracted using different techniques.

For example, face metrics focuses on position, seize and relation between specific character-

istics such as eyes, nose and mouth. Elastic Bunch Graph Matching applies a reticule to the

face. Prominent spots, so-called landmarks, are marked by knots of the graph, and length

and angle of all edges are measured.32 The typical patterns of the user can be stored as a

digital template, i.e. the extracted mathematical data are stored instead of the whole facial

picture. However, it is also possible to use the picture, for example in jpeg formats. Techni-

cally, templates are the more sophisticated solution and allow no conclusions on the actual

picture of the person.

5) Comparison and Classification: This could be either verification or identification.

Most systems provide a live check to ensure that a living person is being recorded, i.e. they

record a sequence of pictures and search for movements in the face. They tolerate a rotation

of up to 20% and can compensate interferences like hair, beard, glasses and make-up.33

Face recognition drivers: 34

The facial image is socially and culturally accepted, and people already use it regularly for

recognition purposes, e.g. applying for a passport and using it at a border checkpoint.

Face recognition is contactless and non-intrusive, i.e. users do not have to wait or take a

certain position for a longer time (so-called pause-and-declare procedure).

The face can be captured even if the person is not present, e.g. using a picture.

In criminal prosecution the facial picture is often the only available biometric characteristic.

There are synergies with existing infrastructure such as video surveillance systems, other

video technology and web cams at the workplace.

In case of system failure humans can replace the system, which is not possible, for exam-

ple, with fingerprint.

Faces of other cultures (e.g., Asians) can be distinguished more easily by technology than

by humans.

32 Cf. Amberg, Michael et al. (2003), p. 22. 33 Cf. Petermann, Thomas et al. (2004), p. 65. 34 Cf. Internet Source 10 - International Civil Aviation Organization, p. 15, Weber, Frank (2001), pp. 109 f., Breitenstein, Marco (2002), pp. 45 f., Elsevier Science (2002), pp. 34 f.


14

Face recognition has been given high attention by authorities since September 11 be-

cause no other biometric technology is comparably successful in recognizing people from

a distance.

U.S., European and German legislation have strongly supported face recognition.

Face recognition Barriers35

Inaccuracies may still occur due to poor camera resolution, facial play, movement by the

person and external influences such as light conditions. Furthermore, failure rates can be

higher than those of other technologies because the face has to be found from a distance.

Public perception of face recognition is negatively influenced due to fears of being moni-

tored by cameras.

If face recognition uses existing passport photographs for comparison, the success de-

pends on picture quality. This can be problematic in countries that do not pay attention to

this quality in official documents.

Perspectives:

Enhanced technologies are likely to improve the performance and application scope of face

recognition systems. In the long term, higher sensor resolution will allow a bigger distance

between cameras and face while securing high reliability. Eventually, high picture quality will

be guaranteed even under bad light conditions, and growing speed will reduce the process-

ing time.36 This would trigger the use of cameras in devices such as mobile phones or elec-

tronic keys. Face recognition will also play a major role in ID documents and border security.

3.3.4 Iris Recognition The eyes take an outstanding role among the human sense organs for both complexity and

relevance in human life, and similar to the face, humans constantly use them for communica-

tion purposes.

Iris is the colored ring that surrounds the pupil. One of the typical characteristics is the trabe-

cular meshwork, a tissue which appears to divide the iris in a radial fashion. Furthermore,

there are rings, colors, arches, furrows, freckles bridges, points etc.37

Iris recognition follows four steps:38

1) Enrollment: The user has to look into a camera, which takes a picture of the iris to gene-

rate reference data.

35 Cf. Behrens, Michael/ Roth, Richard (2001), p. 14, Weber, Frank (2001), p. 29, Bundesamt für Sicherheit in der Informationstechnik (2004), p. 91, Cf. Elsevier Science (2002), pp. 35 f.

36 Weber, Frank (2001), S. 125. 37 Cf. Internet Source 11. 38 Cf. Breitenstein, Marco (2002), pp. 48 f.


15

2) Data acquisition: If the user needs to be identified or verified, the same procedure is re-

peated.

3) Preprocessing: The picture is digitalized and enhanced.

4) Extraction of characteristics: A template is extracted from the picture. This is called the

iris code.

5) Comparison and Classification: This could be either verification or identification.

Iris Recognition Drivers:39

The iris is a distinctive, innate and stable physical characteristic, with only few exceptions

such as rare illnesses. Even the patterns of identical twins are different from each other.

Due to the variability of iris patterns, the technology provides high accuracy and security.

Since the iris is flat it is relatively independent against the viewing angle.

Acceptance is influenced positively by the contactless procedure.

Iris recognition has been supported by international authorities since September 11, 2001.

Iris Recognition Barriers40

The unit costs of iris recognition systems are still high, particularly the camera.

Colored contact lenses, scratches on glasses or movement of eye lashes can cause fail-

ure of recognition.

Iris recognition depends on light conditions.

The distance between sensor and eye has to be short, typically 1 meter or less.

Due to the necessary pause-and-declare procedure, the technology is not suitable for

recognition of large groups of people.

Iris recognition can be problematic for people suffering from epilepsy, glaucoma or wet

eyes. Furthermore, blind people might have difficulties to find the camera to look at.

User acceptance is not yet sufficient. The common misunderstanding is that a laser scans

the eye. In fact, light is only used to illuminate the iris.

Iris recognition is still protected by a patent, which causes licensing costs.

Perspectives:

Since iris recognition is a very safe biometric technology but requires the user to interact with

the system, it will mainly be used in high-security solutions with a small user group. In most

cases these would be verification solutions because the technology is not capable to identify

large groups of people simultaneously or within a short time.

39 Cf. Ibid. pp. 47, Daugman, John (2004), pp. 10 ff., Elsevier Science (2002), p. 51. 40 Cf. Breitenstein, Marco (2002), pp. 50 f., BIOVISION Consortium (2003), p. 109, Elsevier Science (2002), pp. 51 f.


16

3.3.5 Signature Recognition Signature comparison has a long non-technological history. For millenniums people have

used signatures to secure identities, e.g. in contracts or declaration of intentions. It is still the

most relevant legal prove and indication of a declaration of intention. Signatures have also

been widely analyzed by physicians, psychologists and graphologists. However, automated

signature recognition is a very young field.41

Individual handwriting style is the result of anatomical characteristics (e.g., finger and arm

muscles), personal training, and characteristics of pen and padding.42 Additionally, emotional

and psychological factors such as the sensation of stress also influence the individual writing

style.

Unlike traditional signature comparison, automated signature recognition also measures the

physical activity of signing. The technology analyzes both static handwriting characteristics

(e.g., number of loops or the slant of writing) and writing movement patterns (e.g. speed or

velocity).43 Basically, the technology could also compare any other piece of handwriting.

However, the legal importance of signing has caused the focus on signatures.

Signature recognition follows the primary biometric processes:44

1) Enrollment: The signature is either recorded by graphic table/ pen pad or by special sen-

sor pens. These sensors can measure speed, acceleration, pressure etc.

2) Data acquisition: If the user needs to be identified or verified, the same procedure is re-

peated.

3) Preprocessing: The data is transferred to a computer and enhanced if necessary.

4) Extraction of characteristics: A biometric template is generated.

5) Comparison and Classification: This could either be verification or identification.

Alternatively, automated systems can analyze signatures written earlier, for example on

banks checks.45

Signature Recognition Drivers46

No handwriting is similar to another; even identical twin’s handwriting can always be dis-

tinguished.

41 Cf. Schmidt, Christiane/ Lenz, Jörg (2001), p. 180. 42 Cf. Ibid., pp. 182 f. 43 Cf. Internet Source 12 – International Biometric Group. 44 Cf. BIOVISION Consortium (2003), p. 118. 45 Cf. Schmidt, Christiane/ Lenz, Jörg (2001), p. 192. 46 Cf. Breitenstein, Marco (2002), p. 59, Elsevier Science (2002), pp. 46 f., Internet Source 13 – International Biometric Group


17

Signature recognition provides high security due to the large amount of data present in a

signature template and the difficulty to imitate the behavior of signing in the same short

time frame.

The signature is a very active biometric characteristic given by purpose and with the

know-ledge of the individual.

The technology could leverage existing processes and hardware, such as signature cap-

ture tablets used during package delivery.

It is also supported by the demand for document management solutions and increasing

sales of tablet PCs

Banks and insurances have high interest in signature recognition.

The costs of signature capturing devices have decreased over the last years.

Since the signature has been used for centuries it is socially accepted.

Signature Recognition Barriers47

Not everybody is able to write, especially in less developed countries.

High signature variability: The signature may vary depending on whether the person is

sitting or standing, whether they are under time pressure or relaxed etc.

Persons that do not use their signature very often or who suffer from muscular illnesses

may have a high variability of signature patterns.

Signature recognition competes with technologies such as the digital signature48

The paperless office has not become reality as expected, and the traditional signature still

dominates legal relations. This diminishes the need for electronic solutions.

Perspectives

Signature Recognition is expected to profit from the increased security requirements for elec-

tronic devices such as mobile phones, notebooks or Personal Desktop Assistants (PDAs).

However, it is not likely to gain a large market volume immediately because it is a niche mar-

ket technology, and competes with non-biometric signature technologies.

3.3.6 Voice Recognition Comparable to face recognition, people are used to recognizing each other with their voice,

particularly if a visual contact is not possible, e.g. at the phone. Therefore, it seems natural to

use the voice in biometric applications. Voice recognition is used to recognize who is saying

47 Cf. Elsevier Science (2002), p. 47, Internet Source 12 – International Biometric Group. 48 Cf. Internet Source 14 – Legal Definitions: The digital signature is an encryption technology used to

authenticate the identity of the sender of a message or the signer of a document as a substitute for a written signature and to ensure that the original content of the document is unchanged.


18

something and, therefore, must not be confused with speech recognition, which recognizes

what someone is saying.49

The voice is produced by the voice apparatus and strongly influenced by individual charac-

teristics of the vocal tract, the oral cavity, the mouth, the nasal cavity etc. It is a combination

of physiological and behavioral characteristics depending on individual training, habits, age

and medical conditions.50

The technology works according to the processes described in section 3.3.1:

1) Enrollment: The voice is recorded to train the system and create a reference record.

2) Data acquisition: If the user needs to be identified or verified, the system again captures

the voice.

3) Preprocessing: The record is transferred to a computer and enhanced if necessary.

4) Extraction of characteristics: Typical speech patterns are extracted.

5) Comparison and Classification: The system has to decide if the speaker is admitted or

refused (verification), or who the speaker is (identification).51

Voice Recognition Drivers52

Existing infrastructure can be used, for example telephone systems.

Voice recognition technologies are highly secure because it is hardly possible to be admit-

ted by imitating another person’s voice.

Increasing popularity of call centers among companies and pressure to cut call centre op-

eration costs promote voice recognition technology for user verification.

There are synergies expected with mobile commerce applications.

Voice Recognition Barriers53

Not everyone is able to speak.

Voice recognition performance depends on noise conditions.

The system has to be trained on the voice before it can be evaluated, which is time-

intensive for the speaker and disqualifies the technology for mass usage.

Accuracy is dependent on infrastructure quality, e.g. the phone.

Other biometric technologies such as fingerprint recognition compete with voice recogni-

tion in mobile commerce markets.

49 Cf. Internet Source 15 – International Biometric Group. 50 Cf. Breitenstein, Marco (2002), p. 60. 51 Cf. Zinke, Joachim (2001), pp. 160 f. 52 Cf. Elsevier Science (2002), pp. 40 f., Internet Source 16 – International Biometric Group. 53 Cf. Breitenstein, Marco (2002), p. 62, Zinke Joachim (2001), pp. 176 f., Elsevier Science (2002), p. 41.


19

Perspectives

Since it is difficult to distinguish voices within large groups of people, voice recognition is

suited to verification rather than identification. Growth will concentrate on the telephony and

m-commerce niche, and voice recognition is not likely to outperform more established tech-

nologies such as fingerprint or face recognition in the next years.

The weaknesses of single biometric technologies can be balanced using multimodal biomet-

ric systems, or multibiometrics, which means to use more than one biometric characteristic.

Multimodal systems allow an increase in performance compared to systems using only a

single biometric characteristic and are likely to be increasingly used in future.54 Similar to sig-

nature technology, voice recognition serves a niche market and will not outperform finger,

face and iris recognition in the next years.

3.4 Selected Application Fields

Having described the technological background, this section examines how the technology is

used in practice.

3.4.1 Overview of Applications Literature and public perception of biometrics often focus on security applications. For exam-

ple, governments seek to prevent terrorist attacks, and public is concerned about the danger

of surveillance.

However, the application scope of biometric technologies is much wider and can be classi-

fied in vertical and horizontal segments. Whereas the vertical sovereign segment (govern-

ment and authorities) is driven by the security benefit, other applications are driven by secu-

rity and convenience, e.g. the customization of services.55 These vertical segments are the

non-sovereign public sector, the private sector (investment goods) and consumer sec-

tor (consumer goods). This vertical distinction will be used to structure the following sections.

Additionally, in this study application fields are structured horizontally. Horizontal segments

such as electronic access can spread across different vertical segments such as non-

sovereign public or consumer applications.

Most of the applications are based on cooperative processes, i.e. the affected person has

to cooperate with the system, mostly for verification purposes. Non-cooperative processes

do not require actions by the individual and are mainly based on identification processes.

The following list provides examples and is not considered to be complete.

54 Cf. BIOVISION Consortium (2003), p. 127. 55 Cf. Booz Allen Hamilton et al. (2003), p. 106.


20

Figure 3.2: Vertical and Horizontal Biometric Markets

3.4.2 Sovereign Applications Sovereign biometric applications evolve from a government’s or other authority’s security

requirements.

Identification Documents and Border Control

Together with criminal prevention and prosecution this is the only area where non-

cooperative applications play a major role.

Counterfeit protection of sovereign documents such as passports, ID cards, driver’s li-

censes, visas, voting cards etc. (document holder verification)56

Doublet search, e.g. of visa application (applicant verification, identification of wanted per-

sons)

Border crossing, e.g. at Frankfurt Airport (document holder verification, potentially identifi-

cation of criminals).57

Criminal Prevention and Prosecution

Tracing and investigation, police surveillance, criminal identification, e.g. test face recogni-

tion of criminals in Vienna (identification)58

Surveillance and screening of public places, events etc. (identification of criminals etc.)59

Other forensic applications, e.g. identification of crime or accident victims (identification)

56 E.g., cf. Petermann, Thomas et al. (2004), pp. 39 f. 57 E.g., cf. Ritter, Markus (2004), p. 143. 58 E.g., cf. Benda, Richard (2003), p. 120. 59 Cf. Booz Allen Hamilton et al. (2003), p. 107.

ID Documents & Border

Criminal Prosecution

Government Services

Electronic Access/ IT Security

E-Commerce, M-Commerce, Telephony

Physical Access & Attendance

Retail/ Point of Sale/ ATM

Customization

Sovereign Non-Sovereign Public Private Sector Consumer

ID Documents & Border

Criminal Prosecution

Government Services





Customization

Sovereign Non-Sovereign Public Private Sector Consumer


21

3.4.3 Non-Sovereign Public and Private Sector Applications The second vertical category includes all non-sovereign governmental applications, private

sector and consumer applications fields. Due to the horizontal character of the concrete ap-

pication fields, many applications could be used by both public and private customers.

As to the benefits of these applications, they are driven by security, convenience or both.

Convenience would be any problem solution which is not mainly used for security reasons.60

Depending on the application the intended degree of security has to be harmonized with the

actual benefits, costs and application speed - the higher security, the higher costs and the

lower speed.

Concerning convenience, biometrics are used to authorize for customized service, i.e. the

system recognizes the user and adapts to his/ her needs. Most of the following applications

are still under development or in the testing phase:

Governmental Services

E-Government such as e-Voting, document application, on-line access to forms (verifica-

tion), e.g. in the future German ID card.61

Social security cards, e.g. health card, pension card, job card, e.g. on social security cards

in the U.S. (verification)62

Other transactions by government, public authorities, military etc. (verification)


Information and telecommunications processes are to be protected because they are vulner-

able to abuse and other hostile attacks. Conventional identification in IT systems requires a

password or a PIN but the system is not able to judge whether the user actually the individual

this knowledge belongs to. The introduction of the digital signature was a very important step

towards more security in electronic communication.63 Biometrical applications can close the

gap between the digital signature and the person - a biometric system can verify if the user is

actually the one the signature belongs to. The reference can either be stored within the sys-

tem or on a token such as a chip card.64 Possible Applications are:

Network and workstation access, e.g. a fingerprint-based computer mouse (verification)65

Authentication to encrypt data, e.g. e-mails (verification)

Document management solutions (verification)

60 Cf. BIOVISION Consortium (2003), p. 34, Behrens, Michael/ Roth, Richard (2001), p. 23 f. 61 E.g., cf. Internet Source 17 – Silicon.de. 62 E.g., cf. Petermann, Thomas et al. (2004), p. 40. 63 Refer to footnote 42. 64 Cf. Reimer, Helmut (2001), p. 2. 65 E.g., cf. Internet Source 18 – Network Computing.


22

Other Information and Telecommunication-based services, e.g. Application Service Pro-

viding (verification)66

Device security, e.g. access, e.g. to cell phones, PDAs, notebooks, medical devices, arms

and weapons etc., e.g. signature-based cell phone access (verification)67


Information access (verification)

Call center services (verification)

Order and payment systems (verification)

Financial transactions, e.g. electronic banking or brokerage, on fingerprint-based payment

systems in mobile phones in Japan (verification)68


Retail, e.g. payment systems at the point of sale on a fingerprint-based payment in a

computer store in Offenburg (verification)69

Automated Teller Machines (ATM), e.g. authentication for withdrawal (verification)70

Intelligent shopping, e.g. customized shopping lists, shop directories at shopping malls,

automated purchasing (verification)


Private houses and apartments e.g. fingerprint-based door systems (verification)71

Airports, e.g. check-in, boarding, employee access to security areas (verification)

Aviation, e.g. passenger, crew, visitor access, (verification)72

Nuclear power plants (verification)

Hospitals, e.g. iris-based access system at the Newborn Station of the Helios hospital in

Borna (verification)73

Leisure parks, e.g. face recognition at Zoo Hannover74

Casinos, e.g. identification of suspected individuals in American casinos (identification)75

Military areas (verification)

Companies and agencies, e.g. employee service cards (verification)

Computer & data centers (verification)

Time recording systems for employees (verification)

66 E.g., cf. Internet Source 19 – Silicon.de. 67 E.g., cf. Internet Source 20 – René Baltus. 68 E.g., cf. Internet Source 21 – Silicon.de. 69 E.g., cf. Ziegler, Peter-Michael (2003), p. 38. 70 Cf. Stobbe, Anke (2002), p. 1: On account of the integration complexity, biometric ATMs will not be generally introduced in the next years. 71 E.g., cf. Dürand, Dieter/ Hohensee, Matthias (2004), pp. 79 f. 72 E.g., cf. Daugman, John (2004), p. 10. 73 E.g., cf. Niggl, Peter (2003), p. 124. 74 E.g., cf. Internet Source 22 – Heise Online. 75 E.g., cf. Dürand, Dieter/ Hohensee, Matthias (2004), p. 79.


23

Transportation, e.g. opening car doors, starting the engine (verification)

Events, e.g. VIP access at to soccer stadiums (verification)

Other Customization Applications

Mobile devices, e.g. personalization of security settings, ring tones, colors (verification)

Housing: “Intelligent” buildings, e.g. heat and light regulation, self-adapting furniture, cus-

tomized shower, TV and music program, automated coffee machine etc. (verification)76

Transportation, e.g. customization of seats, heating, air condition, mirrors, door locks in

cars etc., e.g. the fingerprint-based system at Audi A 8 (verification)77

The examples illustrate that the majority of applications are based on verification. Identifica-

tion processes are mainly used by the government and public authorities to fulfill sovereign

tasks.

As a prerequisite for the strategic analysis, chapter 3 has explained the primary biometric

processes, discussed selected technologies and listed application fields. The technological

and application scope of biometric technologies is wide and covers several vertical and hori-

zontal market segments. It will be one task of the German Biometric Strategy Platform to

create public awareness of these potentials to support the German biometric industry.

76 Cf. Behrens, Michael/ Roth, Richard (2001), p. 23 . 77 E.g., cf. Dürand, Dieter/ Hohensee, Matthias (2004), p. 80.

Political and Legal Environment

24

4 Political and Legal Environment

Awareness of the political and legal environment in which biometric technologies operate is

crucial for successful sales of biometric products and solutions. Moreover, the analysis of the

remote environment is one requirement for the development of a biometric industry strategy

and the conception of the German Biometric Strategy Platform. It is determined by factors

that are difficult to control by the biometric industry, for example economic, social, ethical,

political, technological and ecological issues.78 Furthermore, public perception of biometrics

in Germany is strongly influenced by ethical questions.

This chapter describes the international and national political and legal framework of biomet-

rics, discusses ethical issues and provides suggestions how to enhance user trust.

4.1 International Standardization and Security Policy

The two most important international factors influencing the German biometric industry are

international standardization and security policy efforts. Since both aspects influence each

other, they form a single section of this study.

Standardization is primarily driven by the International Civil Aviation Organization (ICAO) and

the International Standardization Organization (ISO), which simultaneously have high politi-

cal influence. The most important players in security policy are the United States of America

and the European Union, whose security policy interests also result in biometric standardiza-

tion efforts. Furthermore, these political players are responsible for legal regulations that indi-

rectly and directly influence the German biometric industry.

4.1.1 International Civil Aviation Organization (ICAO) The International Civil Aviation Organization (ICAO) was founded in 1947 as a sub-

organization of the United Nations and today comprises 188 countries. Although the ICAO

has no sovereignty to force any country to apply its recommendations, they have developed

internationally accepted standards and influence the development of national standards.

Beside other topics, the ICAO works on the establishment of international standards in avia-

tion and aviation security.79 Since international airports act as air borders and aviation secu-

rity starts at the airports, the ICAO’s activities are associated with border security and travel

documents.

Since 1997 the ICAO has assessed biometric technologies on their suitability for a high-

volume air passenger clearance, providing high security and low error rates.80 Furthermore,

78 Cf. Pearce, John/ Robinson, Richard (2000), p. 71. 79 Cf. Internet Source 23 – International Civil Aviation Organization. 80 Cf. Schiffhauer, Nils (2004), p. T 1.


25

they cooperate with the International Standardization Organization (ISO) on worldwide stan-

dardization for travel documents.

In May 2003, the ICAO issued a technical report to harmonize international travel documents

(Biometrics Deployment of Machine Readable Travel Documents). Face recognition is men-

tioned as the preferred biometric technology, and the facial image is recommended as the

primary identifier to be integrated mandatory in all travel documents. Fingerprint and Iris re-

cognition are recommended as additional voluntary options for verification and or identifica-

tion purposes. The biometric data should be stored on RFID81 chips which are integrated in

the document. Another important recommendation is to store images (e.g., jpegs) rather than

templates to avoid dependency on manufacturers and technical development, and prevent a

potential monopoly by the algorithm manufacturer.82

Nevertheless, some ICAO suggestions are being criticized by data protectionists. For exam-

ple, in March 2004 the ICAO in Cairo discussed plans to store biometric passport data of up

to one billion people in an international data base by 2015. Data protectionists from 39 Non-

Governmental Organizations (NGOs) have protested in a public letter to the ICAO.83 React-

ing to these concerns, the ICAO in Montreal from May 17 to 21 2004 agreed on measures to

protect biometric data from abuse.

The ICAO’s becomes visible in the fact, for example, that the G8 countries officially support

the ICAO standards.84 Germany has committed to issue all travel documents such as pass-

ports, according to ICAO standards.85 Hence, the ICAO is indirectly initiating large-scale bio-

metric projects such as the integration of biometric data in all German passports and consti-

tutes a primary driver for the German biometric industry. The German Biometric Strategy

Platform should support further ICAO activities by observing the standardization process and

communicating information to the platform members.

4.1.2 International Organization for Standardization (ISO) The name ISO is derived from the Greek isos, (equal), and ISO is the most important interna-

tional standardization organization, based in Geneva, Switzerland. It comprises the network

of 148 countries’ national standardization organizations (national bodies). In the case of

Germany, this is the DIN (cf. section 4.4.6). ISO intends to take a bridge function between

public and private interests because some of their members are delegated by governments,

whereas others represent industry standardization groups.86

81 Internet Source 24 – Word IQ: “Radio frequency identification (RFID) is a method of remotely storing and retrieving data using devices called RFID tags … RFID tags contain antennas to enable them to receive and respond to radio-frequency queries from an RFID transceiver. 82 Cf. Internet Source 25 – International Civil Aviation Organization, pp. 17 and 48. 83 Cf. Internet Source 26 – Silicon.de 84 Cf. Internet Source 27 – G 8, p. 2. 85 Cf. Petermann, Thomas et al (2004), p. 30. 86 Cf. Internet Source 28 – International Organization for Standardization.


26

The issuance of an ISO standard is market-driven and based on consensus. Usually, the

national bodies make suggestions which are then discussed by technical committees or sub-

committees, and negotiated with the countries. Finally, the ISO members vote on the draft,

which is then issued as an international standard.87

In cooperation with the International Electrotechnical Commission (IEC) ISO has established

the Joint Technical Committee 1 (JTC 1) whose subcommittees (SC) work on information

technology issues. Since 2002, ISO’s biometric standardization activities are covered by the

subcommittees ISO/IEC JTC1 SC 37 (file frameworks; programming interfaces; data inter-

change formats; related biometric profiles; evaluation criteria; performance testing and re-

porting, jurisdictional and societal aspects), SC 17 (application of biometric technologies to

cards and personal identification) and SC 27 (data protection, security testing, evaluations

and evaluations methodologies).88 ISO also cooperates with the ICAO. As a result of thes

activities, ISO influences the environment in which German biometric companies operate.

Similar to the ICAO, the German Biometric Strategy Platform should observe and communi-

cate ISO’s activities.

4.1.3 Other International Standardization Drivers There some other organizations working on international standardization.

The National Institute of Standards and Technology (NIST) is a federal agency at the

U.S. Department of Commerce.

The American National Standards Institute (ANSI) is a private, non-profit organization in-

volved in voluntary American industry standards. NIST and ANSI work closely together. ANSI

is the corresponding national body in ISO, comparable to the German DIN.89 ANSI made the

initial proposal to found ISO’s SC 37 on biometrics.

The BioApi Consortium consists of more than 50 companies and other organizations, de-

veloping a biometric Application Programming Interface (API) for biometric applications.90

4.1.4 United States of America The United States of America are a primary driver to the international development of bio-

metrics for two reasons. First, on the account of the American economy’s weight in the world

economy, American biometric activities have a comparably significant influence on interna-

87 Cf. Internet Source 29 – International Organization for Standardization. 88 Cf. Internet Source 30 – International Organization for Standardization. 89 Cf. Internet Source 31 – International Organization for Standardization 90 Cf. Internet Source 32 – BioAPI Consortium.


27

tional standards. Second, the terrorist attacks of September 11, 2001 have caused higher

security needs that are expressed in the American security policy, comprising border, avia-

tion and ID document security. As described in chapter 2, these are important biometric ap-

plication fields. In response to the terrorist threats, the United States (U.S.) have issued two

regulations relevant for the international and German biometric industry:

The Patriot Act beside other aspects is concerned with the installation of a new secure bor-

der entry and exit system, based on machine readable, biometric visas and passports.91

This entry and exit system is further described by the Enhanced Border Security and Visa

Entry Reform Act. From October 26, 2004 the United States will only issue biometric visas

to foreigners, and corresponding readers for verification purposes will be installed at all U.S.

border control points and in the U.S. consulates worldwide.

Furthermore, the act requires all Visa Waiver Program92 members such as Germany to issue

machine readable travel documents including biometric data to those of their citizens that

wish to enter the U.S. from October 26, 2004. Biometric passports have been declared a re-

quirement for further participation in the Waiver Program.93

To implement these legislative regulations the U.S. Department of Homeland Security (DHS)

has developed the U.S. Visitor and Immigrant Status Indication Technology System (U.S.

VISIT). This Entry-Exit-System became effective on January 1, 2004 at 115 airports and

cruise ship terminals at 14 seaports. Citizens of those countries that have not issued biomet-

ric passports are required to give a facial image and two fingerprints at the port of entry, ex-

cept for the Visa Waiver program citizens.94 The U.S. threatened to extend to the Visa Waiver

Program members such as Germany if they would not issue biometric passports by October

26, 2004.95 However, it is intended to postpone the deadline to 2006 because most countries

will not be able to issue biometric passports in time.

These regulations directly and indirectly affect the German biometric industry. Direct influ-

ence comes from new biometric developments in the frame of U.S. VISIT, which may de-

velop into world standards. German companies also participate in the American biometric

market growth by selling their products. Furthermore, the German industry is affected indi-

rectly because German travelers need biometric products to fulfill American biometric re-

quirements. European authorities have to adapt their travel documents to these require-

91 Cf. Internet Source 33 – Patriot Act, p. 215 f. 92 Cf. Internet Source 34 – U.S. Embassy in Germany: The Visa Waiver Program relieves tourists and business travellers from certain countries from the obligation to have a visa to enter the United States. 93 Cf. Internet Source 35 – Enhanced Border Security and Visa Entry Reform Act, pp. 15 ff. 94 Cf. Internet Source 36 – Department of Homeland Security. 95 Cf. Internet Source 37 – Silicon.de


28

ments, and the biometric industry will develop, manufacture and integrate the corresponding

products. Finally, the experiences of international travelers at American borders and media

reports on the American biometric programs also intensify public discussion about German

biometrics. The German Biometric Strategy Platform should influence this discussion and

use American experiences to increase knowledge, awareness and acceptance of biometric

technologies in Germany.

4.1.5 European Union The European Union’s biometric activities comprise three areas: visas & residence permits,

passports, and a central register for third-country citizens, i.e. from countries outside of the

European Union.

In 2003, the members of the European Union agreed to develop a joint solution for integrat-

ing biometrics into visas and residence permits as well as passports. In September 2003, the

European Commission published two proposals suggesting a regulation by the Council of the

European Union to harmonize visa and residence permit issuance. It is intended to oblige the

EU members to integrate a facial image and two fingerprints in visas and residence per-

mits, which fulfils the upper limit of the ICAO recommendations.96 The Council agreed on

these proposals on November 27, 2003. After the technical specifications are worked out, the

member states will have two years to implement the regulations.97

In February 2004, the European Commission published a proposal to the Council of the

European Union concerning harmonization of security features in EU passports, including

biometric data. These proposals also comply with the ICAO recommendations.98 It is in-

tended to adapt the passport regulations to the ones agreed on with visas and residence

permits to prevent double work. However, in the case of passports only the facial image will

be mandatory, and the fingerprint will be voluntarily for the member states.99

On June 8, the Council of the European Union agreed on these proposals. Final agreement

on legal and technical aspects is expected to be achieved by the end of 2004, and the first

biometric passports are expected be issued at the end of 2005.100 A decision concerning a

central register for third country citizens has not yet been made.

The European Union also supports biometric technologies by research promotion. The 6th

Framework program from 2002 to 2006 is the European Union’s instrument to promote

European research. One part of the 6th Framework program is Information Society Technolo-

96 Cf. Kommission der Europäischen Gemeinschaften (2003), pp. 3 ff. 97 Cf. Internet Source 38 – BMI. 98 Cf. Bundesregierung (2004), pp. 2 and 7. 99 Cf. Ibid., p. 15. 100 Cf. Anon. (2004), p. 2.


29

gies (IST), which covers information technology and telecommunication. Exemplary projects

including biometric technologies have been:101

E-POLL (Electronic polling system for remote voting operations, September 2000 to No-

vember 2002)

BANCA (Biometric Access Control for Networked and e-Commerce Applications, Febru-

ary 2000 to March 2003)

BEE (Business Environment of biometrics involved in Electronic commerce, December

2000 to June 2002)

FINGERCARD (Biometric matching and authentication system on smart cards, January

2001 to June 2002)

VIPBOB (Virtual Pin Based On Biometrics, March 2002 to February 2004)

S-TRAVEL (Standard solutions for secure border control, November 2002 to April 2004)

U-FACE (Face access control system for physical access and healthcare applications,

April 2000 to October 2002)

BioSec (Biometric technologies for security applications; Consortium by 23 European

Companies; since December 2003)

The EU’s project executing organization in Germany is the German Aerospace Center

(Deutsches Zentrum für Luft- und Raumfahrt, DLR).102

Furthermore, the European Union facilitated the European BIOVISION project from June

2002 to July 2003, which comprised organizations from Great Britain, Ireland, Italy, Ger-

many, Denmark and the Netherlands. In the frame of this project, a roadmap for the future

development of the European biometric industry, biometric technologies and urgent research

topics was drafted.103

It can be stated that the European Union is an important player in the international biometric

environment and strongly influences the German biometric industry. Since it is difficult to in-

fluence European politics only by national activities, the German Biometric Strategy Platform

should decide whether to conduct lobbying activities on the European level.

Regarding international standardization and security politics, the ICAO, ISO, the United

States of America and the European Union are primary drivers for the biometric industry

worldwide. The German biometric industry is particularly influenced by the European Union’s

biometric activities because Germany is a member state and must comply with the regula-

101 Cf. Internet Source 39 – CORDIS. For the full range of projects search for “biometrics” or “biometric” 102 Cf. Internet Source 40 – German Aerospace Center. 103 Cf. BIOVISON Consortium (2003), p. 5.


30

tions. Other countries do not play a comparable important role in the international biometric

environment. For the German Biometric Strategy Platform, the possibilities to influence inter-

national security policy are low. Platform activities should focus on standardization and not

exceed the European borders.

4.2 International Biometric Platforms

The biometric environment is also influenced by international biometric platforms. On ac-

count of their relations to governments and the support by economic and security policy, they

constitute an important political factor.

4.2.1 Biometric Consortium The U.S.-based Biometric Consortium was founded in 1992 on initiative of the intelligence

service National Security Agency (NSA). The Consortium’s mission is to “serve as a Gov-

ernment focal point for research, development, test, evaluation, and application of biometric-

based personal identification/authentication technology […] maximizing performance, mini-

mizing cost, and avoiding duplication of effort within the Government community.”104 The

Consortium pursues their mission by

Promoting biometrics, sharing information and advice

Coordinating and developing biometric processing, testing, and evaluation within the US

Government.

Supporting information exchange between the Government, private industry, and acade-

mia

Hosting symposia and workshops with academia and private industry

Establishing a feedback mechanism for customers and users

Addressing safety, performance, legal, and ethical issues

Supporting agencies concerning the selection and application of biometric devices.

Increasing public awareness of biometrics

Establishing ad hoc bodies to address specific issues

Providing copies of all invitations, agendas, proceedings etc. to relevant agencies105

The Biometric Consortium comprises representatives from six U.S. Government departments

and one of each military service, meeting one to two times a year. Private industry and aca-

demia are only invited if necessary. The chairperson is appointed by the NSA.106

104 Internet Source 41 – Biometric Consortium. 105 Cf. Ibid. 106 Cf. Ibid.


31

All this demonstrates how much this platform is focused on government, military and intelli-

gence services, and it also indicates that the success of biometrics in the U.S. was mainly

triggered by government and military, which should be kept in mind regarding the member

structure of the German platform.

4.2.2 National Biometric Security Project (NBSP) Unlike the Biometric Consortium, the National Biometric Security Project (NBSP) is a non-

profit, non-governmental organization open to companies, government agencies and non-US

states and organizations involved in the international anti-terrorist coalition. However, the

actual member structure remains unclear.

The platform’s objectives are to assist the public and private sector with an integrated secu-

rity program and support technology improving national security. Projects cover biometric

publications, standards and data base development, and research.107

Although the openness of the project for different parties is exemplary, its narrow focus on

national security should not be considered a model for the German Biometric Strategy Plat-

form.

4.2.3 International Biometric Industry Association (IBIA) The Washington, D.C.-based International Biometric Industry Association (IBIA) was founded

in 1998 and claims to represent the international biometric industry.108 Despite this claim it

consists of only 23 members. Two thirds of them are American companies, and one third is

Austrian, Canadian, Hungarian, Japanese and Swedish. IBIA aims to convince opinion lead-

ers, the public, and government officials of the benefits of biometrics. Therefore, the associa-

tion publishes information, negotiates with the target groups and conducts other lobbying

activities.109 IBIA comprises the largest American biometric companies, which are major

competitors of German biometric companies in the world market.

The German Biometric Strategy Platform will not be limited to corporate members but could

learn from IBIA’s lobbying activities.

4.2.4 Biometrics Working Group (BWG) As part of the governmental Communications Electronics Security Group (CESG), the UK

Biometrics Working Group (BWG) is concerned with biometric applications for British public

authorities and government business. As a forum for government departments, independent

experts, and other relevant contributors it gives advice on biometric technologies and ethical

107 Cf. Internet Source 42 – National Biometric Security Project. 108 Cf. Internet Source 43 – International Biometric Industry Association. 109 Cf. Internet Source 44 – International Biometric Industry Association.


32

issues, conducts tests and evaluates biometric technologies.110 The UK Biometrics Working

Group is involved in the following activities:

Support of Government and Critical National Infrastructure (CNI) requirements

Draft of a national policy on the use of biometric authentication within government

Development of biometric assessment and testing standards

Test of biometric products performance

General advice on the selection and procurement of biometric systems111

On the one hand, the German Biometric Strategy Platform should assume most of the

BWG’s activities. On the other hand, the BWG’s approach is strongly oriented in supporting

the government, and industry representatives do not seem to play a major role in this con-

cept. The Biometric Working Group’s role is comparable to the Biometric Consortium in the

U.S.

4.2.5 International Association for Biometrics (iAfB) The International Association for Biometrics is a UK-based pendent to the American IBIA. It

comprises 80 members, mostly biometric companies that originate or operate in the UK, and

several public authorities.112

The iAfB’s vision is to provide forum for the biometrics community, which includes to

Create awareness of biometric technologies/applications and provide resources to support

the biometrics community

Organize meetings, courses, workshops, sponsor/ support conferences and exhibitions

Develop and promote biometric standards and best practices.

Identify research opportunities and promote research.

Establish and maintain links with organizations and national/ international Government

Agencies.

Encourage debate on privacy and public acceptance113

A German Biometric Strategy Platform could adapt some of these activities. However, similar

to the IBIA the exclusively industry-oriented approach does not suit to the overall national

idea of the German Biometric Strategy Platform.

110 Cf. Internet Source 45 – Biometrics Working Group. 111 Cf. Ibid. 112 Cf. Internet Source 46 – Association for Biometrics 113 Cf. Internet Source 47 and 48 – Association for Biometrics.


33

4.2.6 International Biometric Foundation (IBF) The International Biometric Foundation (IBF) is based in London and was established in De-

cember 2003 with the aim to unite government, academia, industry, media and users in an

independent and neutral platform.114 The IBF’s activities comprise to

Provide information about biometrics and related issues, e.g. ethical concerns

Act as a global forum

Cover important issues by involving all relevant societal groups

Offer experience and expertise on biometrics

Develop a knowledge base that is freely available.115

In January 2004, the IBF comprised 80 companies, mainly from the United Kingdom (UK)

and the United States, and two British universities. Members are structured in 5 membership

classes, which are Government, Industry, Academia, Media, and General.116

It is not clear whether there are actually any Government agencies participating, and the ac-

tual member structure does not seem to achieve the IBF’s own targets. The German Biomet-

ric Strategy Platform should consider orienting in objectives, activities and the targeted

member structure of the IBF.

4.2.7 European Biometrics Forum (EBF) The European Biometrics Forum (EBF) is a Dublin-based biometric platform with a European

approach. It was founded in 2003 as a result of the BIOVISION project (cf. section 4.1.5) and

received funding from the European Commission and the Irish Government. Its activities

concentrate on

Developing standards and best practices

Conducting research on privacy, standards, usability, technology, applications, education

and training

Maintaining the roadmap for the European Biometrics industry from 2003–2010

Identifying research and development topics

Initiating pilot projects

Supporting the secure, user-friendly, socially acceptable and ethical use of biometrics in

Europe117

114 Cf. Internet Source 49 – International Biometric Foundation. 115 Cf. Internet Source 50 – International Biometric Foundation. 116 Cf. Internet Source 51 – International Biometric Foundation. 117 Cf. Internet Source 52 – European Biometric Forum.


34

The EBF has 25 members, of whom the majority are biometric companies from various

European countries, e.g. Austria, France, Germany, and UK. It does not comprise politics,

and research is hardly represented.118 The platform does not communicate who else cooper-

ates with them. Furthermore, the EBF hosts the European Biometrics Centre (EBC), which is

a public showroom promoting biometric applications and system integration solutions.119

Concluding on the EBF, it is strongly driven by Irish interests and currently not representing

the European biometric community. Therefore, they are not authorized to publish positions in

the name of the European biometric industry. Future development will reveal if the EBF has

the potential to become a truly European platform that could be supported by the German

Biometric platform.

4.2.8 Other Platforms Founded in 2001, the Nederlands Biometrie Forum (NBF) is the Dutch biometric platform,

approaching users, industry, R&D and government. Their aims are to create awareness and

increase acceptance of biometric technologies in the Netherlands, support the standardiza-

tion process and to collect and share non-commercial information on biometrics. According

to the forum some large industry players are members; the detailed member structure has

not been published.120

The Biometrics Security Consortium was founded in June of 2003 by 39 Japanese com-

mercial and governmental bodies. The platform seeks to promote biometrics in new markets,

e.g. health care, join marketing efforts and agree on standards for privacy protection.121 Fur-

thermore, the alliance intends to break the dominance of American companies on the world

biometrics market. The platform comprises Japanese industry giants such as Hitachi Ltd.,

Sony Corporation, NEC Corporation and Mitsubishi Corporation. According to press re-

leases, the Biometrics Security Consortium and the EBF have joined forces to develop a

standard for fingerprint and face recognition.122

Table 4.1 summarizes the international biometric platforms.

118 Cf. Internet Source 53 – European Biometric Forum. 119 Cf. Internet Source 54 – European Biometric Forum. 120 Cf. Internet Source 55 – Nederlands Biometrie Forum. 121 Cf. Internet Source 56 – CNETAsia. 122 Cf. Internet Source 57 – The Japan Times.


35

Table 4.1: International Biometric Platforms

Concluding on international biometric platforms, major activities take place in the United

States, the United Kingdom and Japan but some more platforms have been founded in other

countries. There is a high variance in the objectives, tasks and member structure of theses

platforms. Some are driven by governments, others by companies. Although some of the

platforms such as the IBF aim to comprise all national biometric interest groups, no platform

actually does. Some platforms such as the Biometric Consortium and the BWG consider

themselves national platforms, others such as the iAfB, the IBF and the EBF claim to repre-

sent the international biometric community or parts of it. Currently, neither of them achieves

this vision.

Nevertheless, the numerous activities of these platforms indicate the necessity to establish a

comparable German organization to support and promote the German biometric industry and

activities. This platform should orientate in the aims, activities and member structure of the

international biometric platforms.

4.3 Activities of the German Federal Authorities

The German federal government is the most important driver for biometric technologies in

Germany. It takes a position as promoter and customer – on the one hand it seeks to support

the industry with a national, seller-independent economic policy, and on the other hand it is

expected to be the first major German customer for biometric applications. Moreover, au-

thorities are involved in the biometric standardization process.

Biometric ConsortiumNational Biometric Security Project (NBSP)International Biometric Industry Association (IBIA) Biometrics Working Group (BWG)International Association for Biometrics (iAfB)International Biometric Foundation (IBF) European Biometric Forum (EBF)Nederlands Biometrie ForumBiometrics Security Consortium

United StatesUnited States

United States

United KingdomUnited Kingdom

United Kingdom

IrelandThe NetherlandsJapan

GovernmentIndustry, Public

Industry

GovernmentIndustry

Industry

Industry, PublicIndustry, PublicIndustry

AcademicExperts (independent) GovernmentIndustry

A =E =G =I =

No.AG EI R OtherMx IS, MIx x O

x U

x x Ox

xx x ID, Ox

x xxx x x U

x 39

23

80

??

?

82(targeted)

x

25?

Platform Country Focus Members

IndividualsIntelligence ServiceMediaMilitary

ID =IS =MMI =

Research InstitutesOther OrganizationsUsers

R =O =U =

Biometric ConsortiumNational Biometric Security Project (NBSP)International Biometric Industry Association (IBIA) Biometrics Working Group (BWG)International Association for Biometrics (iAfB)International Biometric Foundation (IBF) European Biometric Forum (EBF)Nederlands Biometrie ForumBiometrics Security Consortium

United StatesUnited States

United States

United KingdomUnited Kingdom

United Kingdom

IrelandThe NetherlandsJapan

GovernmentIndustry, Public

Industry

GovernmentIndustry

Industry

Industry, PublicIndustry, PublicIndustry

AcademicExperts (independent) GovernmentIndustry

A =E =G =I =

No.AG EI R OtherMx IS, MIx x O

x U

x x Ox

xx x ID, Ox

x xxx x x U

x 39

23

80

??

?

82(targeted)

x

25?

Platform Country Focus Members

IndividualsIntelligence ServiceMediaMilitary

ID =IS =MMI =

Research InstitutesOther OrganizationsUsers

R =O =U =


36

This section will cover those governmental institutions that pursue own biometric activities. It

will not describe all potential public customers.

The six most important federal institutions involved in biometrics are the Federal Ministry of

the Interior (Bundesministerium des Innern, BMI), the Federal Border Police (Bundesgren-

zschutz, BGS), the Federal Office for Information Security (Bundesamt für Sicherheit in der

Informationstechnik, BSI), the Federal Criminal Police Office (Bundeskriminalamt, BKA) the

Federal Ministry for Economics and Labour (Bundesministerium für Wirtschaft und Arbeit,

BMWA), and the Federal Ministry of Education and Research (Bundesministerium für

Bildung und Forschung, BMBF).

4.3.1 Federal Ministry of the Interior (BMI) The BMI’s biometric activities result from security policy interests and aim to use new tech-

nologies to provide high security during all sovereign processes, particularly considering

document safety (visas, passports etc.).

Biometric activities are covered by a Project Group Personal Documents, Registration, Bio-

metrics (Projektgruppe Pesonaldokumente, Meldewesen, Biometrie), which is part of the IT

force (IT-Stab) of BMI.123 They comprise the following points:124

Visa, passport and registration processes

Other document security issues

Border security

Biometric applications of the federal government, e.g. the digital BMI service card for BMI

staff and other access control systems

Smart card-related biometric topics125

Section 4.1.5 covered the European activities on biometric visas and residence permits. The

BMI participates in three European working groups to work out detailed technical specifica-

tions concerning biometrics in visa and residence permits, and it will participate in the pass-

port specification process as well.

Technical specifications of biometric passports are expected to be worked out by the end of

2004, which means that the first biometric passports could be issued at the end of 2005. To

accelerate this process the BMI carries out workshops with the industry concerning details of

the passport introduction. The face will be the first integrated biometric characteristic, fol-

123 Cf. Internet Source 58 – Bundesministerium des Innern. 124 Cf. Deutsches Institut für Normung (2003), pp. 11 f. 125 Cf. Footnote 26.


37

lowed by the finger one to two years later. This new passport generation will be the first

large-scale tender in the field of biometrics in Germany.

Furthermore, the BMI is likely to introduce a new digital ID card generation (digitaler Per-

sonalausweis) including biometric technologies by 2007 or 2008. This new chip card could

comprise both sovereign ID card functions and additional Citizen Card functions such as on-

line registration, access to government services etc. Currently, the BMI and their sub-

organizations BSI and BKA work on technical specifications of the new ID card. Since it will

be necessary to link all German registration offices to guarantee on-line functionalities, the

complexity of this project is very high. However, final decisions on the introduction of a digital

ID card have not been made by the government yet.126

Finally, BMI has conducted several biometric projects, the most of which have been con-

ducted by the the BGS, the BSI and the BKA.

4.3.2 Federal Border Police (BGS) The Federal Border Police (Bundesgrenzschutz, BGS) was founded in 1951 as the German

federal police and is under control of the BMI.127

Border control is one of the tasks of the BGS and, therefore, they are involved in biometric-

based border control issues. Since February 2004, the project Automated Biometric Border

Control (Automatisierte und biometriegestützten Grenzkontrolle) has been conducted by the

BGS on behalf of the BMI. It is a pilot project at Frankfurt Airport involving more than 6,400

Luft-hansa frequent flyers to test an iris recognition-based border control system. Goals of

this project are to improve border security, to test biometric technologies in border police rou-

tine, and to examine user acceptance of biometric technologies.128

Similar to the BMI, the BGS is both customer and governmental promoter of biometric tech-

nologies. Together with its sub-organizations, the BMI is the leading governmental force in-

volved in biometric activities.

4.3.3 Federal Office for Information Security (BSI) As a sub-organization of the BMI, the Federal Office for Information Security (BSI) is an inter-

face between politics and technology with the purpose to conduct preventive and responding

measures concerning security in computer systems of the federal administration and private

industry. The BSI is involved in testing biometric applications, standardization and represen-

tative work in international bodies. The BSI’s projects often involve partners.

126 Cf. Internet Source 59 – Silicon.de. 127 Cf. Internet Source 60 – Bundesgrenzschutz 128 Cf. Internet Source 61 – Bundesgrenzschutz and Dürand, Dieter/ Hohensee, Matthias (2004), p. 78.


38

Project Timeframe Technology Purpose Partner129

BioIS130 Apr. 1999 - Feb. 2000

Face, finger, hand geometry, iris and signature recognition

Comparative examination of biometric identification sys-tems, draft of evaluation crite-ria for the use of biometric technologies.

BKA, IGD, WIK

BioKrit131 Feb. 2001 - Jun. 2002

Finger and iris recognition

Application of the BioIS crite-ria to two biometric systems, draft of security requirements, matching of the evaluation criteria with these security requirements.

TÜV IT, Secunet AG, SD Indus-tries GmbH

BioNorm132 Dec. 2002 - May 2003

Finger, face, iris, signature, voice

Standardization of biometric methods for the identification of persons in Germany to enable large-scale, interoper-able biometric applications by federal ministries and other authorities; result were inte-grated in the international standardization process.

BMI, BMWA, DIN, other

BioFace I133 Jul. 2002 - 2003 Face recognition Storage and classification of 200.000 faces

BKA, IGD

BioFace II134 2002 - Jun. 2003 Face recognition Comparative examination of face recognition systems re-garding performance and effi-ciency using the captured facial data

BKA, IGD

BioFinger135 2002 - 2003 Fingerprint rec-ognition

Test of fingerprint system performance in verification processes, particularly the influence of factors such as age and optical resolution on the performance

IGD

BioP I136 Jan. - Aug. 2003 Face recognition Test and assessment of the suitability of face recognition systems regarding the use in identification documents, for the use in identification docu-ments

BKA, secu-net AG

BioP II137 Since Mar. 2004 Fingerprint and face recognition

Comparison of the best face recognition system with fin-gerprint and iris systems at Frankfurt Airport

secunet AG

129 Partner list may be incomplete due to limited sources. 130 Cf. Petermann et al (2003), p. 33. 131 Cf. Ibid., p. 34. 132 Cf. Deutsches Institut für Normung (2003), pp. 7 f. 133 Cf. Bundesamt für Sicherheit in der Informationstechnik (2003), pp. 5 ff. 134 Cf. Ibid. 135 Cf. Internet Source 62 – Fraunhofer IGD. 136 Cf. Internet Source 63 – Bundesamt für Sicherheit in der Informationstechnik. 137 Cf. Borchers, Detlef (2004), p. 34.


39

Project Timeframe Technology Purpose Partner129

BioIlse138 Currently Fingerprint, face and iris recogni-tion

Draft of technical specification of biometric passports, tech-nical data protection on RFID chips139

Chip manu-facturers, system inte-grators

Feasability study about the potential digital ID card140

Since Jan. 2003 Legal, technical and economi-cal issues, e.g. the potential integration of the digital signa-ture.

BMWA, IGD, IIG, other

Table 4.2: Biometric Projects by the BSI

Furthermore, the BSI has hosted two international biometrics symposia on Biometric Applica-

tion and Data Protection in May 2002141 and the on Biometrics in the Reflection of Require-

ments in March 2004.142

The BSI is a member of the ICAO (cf. section 4.1.1), representing German interests in this

international body.

Summarizing the BSI’s activities, the agency is one of the most important drivers for biomet-

ric technologies in Germany. The numerous projects also indicate the federal government’s

high awareness of biometrics.

To support the German biometric industry, it is now necessary to initiate large-scale field ap-

plications and take advantage of the knowledge gained in these test projects.

4.3.4 Federal Criminal Police Office (BKA) The BKA is the central police agency and international criminal police of Germany.143 Coop-

erating with the BSI, they have served as a partner for technical aspects in several projects,

for example BioIS, BioFace and BioP. Furthermore, the BKA has stored 3.2 million finger-

prints of criminals in AFIS (Automated Fingerprint Recognition System) for criminal prosecu-

tion purposes, and works on the further technical development of this system.144 Currently,

these fingerprints can be matched to a newly enrolled fingerprint within 120 seconds.145 Fur-

ther biometric activities by the BKA are subject to secrecy.

138 Cf. Ibid. 139 Cf. Footnote 81. 140 Cf. Petermann, Thomas et al (2004), pp. 35 f. 141 Cf. Internet Source 64 – Bundesamt für Sicherheit in der Informationstechnik. 142 Cf. Internet Source 65 – Heise Online. 143 Cf. Internet Source 66 – Bundeskriminalamt, p. 5. 144 Cf. Ibid., p. 6. 145 Cf. Schiffhauer, Nils (2004), p. T 1.


40

4.3.5 Federal Ministry of Economics and Labour (BMWA) The BMWA is interested in the economic aspects of biometric technologies, particularly the

growth potential for the German economy and the creation of new jobs.

In the last years the BMWA was involved in several biometric projects. For example, the Bio-

TrusT project examined the suitability of biometric technologies for banking applications (cf.

section 4.4.3).146 Beside this project, which was completed in 2003, the BMWA also took part

in the BioNorm project. Furthermore, the BMWA has authorized the feasibility study on the

future digital German ID card generation in cooperation with the BMI and the BSI.147

The BMWA also supported the MAP (Multimedia-Arbeitsplatz der Zukunft) project from 2000

to 2002. Biometric technologies were part of the project concerning the security requirements

of mobile Internet usage.148

Furthermore, the BMWA hosts the Round Table Biometrics in its premises comprising au-

thorities, industry associations and the DIN. The German Biometric Strategy Platform could

take advantage of the existing round table structure and meet at the BMWA building in Ber-

lin.

Although the BMWA currently does not conduct own biometric projects, it is a strong sup-

porter of the German biometric industry.

4.3.6 Federal Ministry of Education and Research (BMBF) The BMBF is approaching biometrics from the research support perspective. Research sup-

port can be institutional, i.e. tied to a certain research institution, or project-based. Project

proposals are handed in on topic-oriented callings by the BMBF or on initiative by the appli-

cant. The percentage of financial promotion depends on the applicant’s character: Academia

usually receive 100%, research institutes 80% and industry members 50% of the project

costs. Furthermore, projects should involve at least one academic institution and one com-

pany.

So far, biometric research does not constitute a separate promotional field but there is one

strategic IT project that include biometric aspects:

VERISOFT started in July 2003, and the first part will be completed in June 2005. The

project is concerned with the verification of integrated computer systems. Sub-project 4 is

concerned with a biometric access control system.149

146 Cf. Internet Source 67 – BioTrusT. 147 Cf. Petermann, Thomas et al (2004), pp. 35 f. 148 Cf. Internet Source 68 – Bundesministerium für Wirtschaft und Arbeit 149 Cf. Internet Source 69 – Verisoft Project.


41

Furthermore, Biometric technologies play a marginal role in the frame of the research offen-

sive Software Engineering 2006, which has the objective to promote secure and reliable IT

systems. A new tender round in software engineering is planned for spring 2005 and could

cover basic biometric research more directly, e.g. the development and standardization of

algorithms. Finally, the BMBF funded six projects on human-machine interaction, for example

the SmartKom project, which was occupied with dialog-based based human computer inter-

action including biometric aspects, and the EMBASSI project dedicated to develop a human-

machine interface.150

Although the BMBF is supporting some projects that include biometrics, it is strongly recom-

mended establishing a separate promotional field for biometric technologies. The coverage

by strategic IT projects or other software projects is not sufficient to enhance national com-

petitiveness and close the gap to the American and British biometric industry.

Governmental institutions are important players in the German biometrics environment, tak-

ing a role as both supporter and potential customer of the German biometric industry. During

several test projects, authorities have supported the development of standards, field applica-

tions and evaluation criteria.

Nevertheless, there is still a lack in large public biometric purchases, and biometric research

promotion should be restructured and intensified. Discussions and negotiations with the gov-

ernment and other public authorities should be primary tasks of the German Biometric Strat-

egy Platform.

4.4 National Industry Associations and the Standardization Institution

This section describes the biometric activities of industry associations and the national Ger-

man standardization institution. Representing their member companies they constitute pow-

erful political interest groups. Together with the German Institute for Standardization

(Deutsches Institut für Normung, DIN) they influence political and strategic decisions, market

development and standardization. In the following, the industry associations are listed in al-

phabetical order, followed by the DIN.

4.4.1 BHE The German Association of Security System Manufacturers and Installers (Bundesverband

der Hersteller- und Errichterfirmen von Sicherheitssystemen e.V., BHE) is the German asso-

ciation of companies involved in manufacturing and installing preventive security products or

solutions. The BHE comprises around 500 companies, and biometric activities focus on en-

hanced and more secure user recognition in access control systems.

150 Cf. Internet Source 70 – SmartKom Project.


42

Since another core competency of the association is housebreaking alarm equipment, bio-

metric technologies are also deployed for activating and deactivating these devices. Fur-

thermore, surveillance and tracking with non-cooperative systems is a relevant activity, for

example, based on video surveillance technology.

Finally, the association has published a brochure concerning biometric recognition.151

4.4.2 BITKOM The German Association for Information Technology, Telecommunications and New Media

(Bundesverband für Informationswirtschaft, Telekommunikation und neue Medien e.V, BIT-

KOM) represents 1,300 companies with combined sales of around 120 billion Euro and

700,000 employees. The association’s services comprise political consulting, public relations,

knowledge management and other customized services. 152 “On BITKOM’s agenda are such

issues as governmental policy for SMEs, regulations protecting minors, IT security, efforts to

reduce bureaucracy, and the new radio and media regulations.”153 It is divided in two divi-

sions – Politics & Market and Technology & Market. BITKOM supports the German biometric

industry by several activities. As part of the Technology & Market, biometrics are discussed

by the Competence Center Security, particularly by the Working Group Security Manage-

ment of Business Processes and Information and the Expert Committee Chip cards and

Smart Objects.154

BITKOM brings together biometric manufacturers, system integrators and consultants to im-

prove industry networking. Moreover, the association is in dialogue with politics. For exam-

ple, representatives of governmental authorities take part in discussions and hold presenta-

tions regarding biometric activities of the federal government.

In 2003, BITKOM in cooperation with TeleTrusT and ZVEI (cf. sections 4.4.3 and 4.4.5) con-

ducted a quantitative and qualitative research to gain overview of the German biometric in-

dustry. Companies, research institutions, public authorities and other interest groups were

asked to fill a questionnaire on biometric activities, technologies and contact data. The re-

sults have been published in the German Biometrics Guide 2003, which will be further main-

tained.155

Finally, BITKOM is the principal of the present study.

151 Cf. Internet Source 71 – BHE, go to „Sicherheitstechnik/ Fachbereiche“/ Zutrittskontrolle. 152 Cf. BITKOM (2004 a), p. 4. 153 Ibid., p. 4. 154 Cf. BITKOM (2004 a), p. 36. 155 Cf. Internet Source 72 – BITKOM.


43

4.4.3 TeleTrusT Deutschland TeleTrusT Deutschland e.V. is a non-profit organization dedicated to the promotion of trust-

worthiness of Information and Communication Technology. The association was founded in

1989 and currently comprises 88 members from industry, science and politics.156

Biometric technologies are covered by Working Group 6 Biometric Identification Systems,

which seeks to enhance public acceptance of biometric technologies and application fields.157

In this context the BioTrusT project was carried out from 1999 to 2002. Initiated by the

BMWA (cf. section 4.3.5) biometric methods were tested applying technical, legal and socio-

economical aspects such as biometric system performance, legal issues and user accep-

tance.

Furthermore, TeleTrusT has published a catalogue of evaluation criteria for biometric tech-

nologies, and the association was involved in the BioVISION project that resulted in the

foundation of the European Biometric Forum (cf. section 4.2.7).158 Finally, TeleTrusT cooper-

ates with the iAfB (cf. section 4.2.5).

Finally, TeleTrust is working on legal and ethical issues, for example data protection con-

cerns.159

4.4.4 VfS The Association for Security Technology (Verband für Sicherheitstechnik e.V., VfS) was

founded in 1994 with the aim to draft practicable and cost-efficient security solutions. Cur-

rently, the VfS comprises 60 companies and several public authorities. Biometrics are cov-

ered by Working Group 5 Biometrics with the focus on access control. Particularly, the VfS

has established a link between users and sellers of biometric technologies, thus taking ad-

vantage of user suggestions to further improve applications.160 Furthermore, the VfS seeks to

diminish reservations against biometrics by reference installations; for example, in correc-

tional facilities, hospitals or companies, and cooperates with data protectionists.

In 2001, the VfS published a CD containing data of 80 suppliers of biometric technologies.

Finally, the VfS hosts biometric conferences, e.g. Biometrics in Practice on February 11 and

12 2004 in Hamburg.161

4.4.5 ZVEI The German Electrical and Electronic Manufacturers´ Association (Zentralverband Elektro-

technik- und Elektronikindustrie e.V., ZVEI) represents 1,400 German electrical and electron-

156 Cf. Internet Source 73 – TeleTrust. 157 Cf. Internet Source 74 – TeleTrust. 158 Cf. TeleTrusT (2002). 159 Cf. Petermann, Thomas (2004) et al., p. 36 f. 160 Cf. Internet Source 75 – VfS. 161 Cf. Internet Source 76 – VfS.


44

ics companies with the aim to promote common interests, to support standardization and to

provide information and services. In this framework, the ZVEI supports innovative technolo-

gies by proposals concerning research, applications, environmental protection, educational

issues and scientific policy.

ZVEI has been working on biometric projects for three years. Biometric technologies are

covered by the security systems department, comprising 60 companies. Within this depart-

ment, the Expert Circle Access Control and Biometrics is working on biometric topics, par-

ticularly how to integrate biometric technologies in security systems. In cooperation with the

German Forum for Criminal Prevention (Deutsches Forum für Kriminalprävention, DFK) ZVEI

worked out a study on airport security based on biometric technology. The results were pre-

sented at a symposium on March 31, 2004 in Berlin.162

4.4.6 DIN The German Institute for Standardization (Deutsches Institut für Normung, DIN) was founded

in 1917, and is officially considered the German national body representing German stan-

dardization interests at the international level since 1975. The organization aims to develop

standards to enhance rationalization, quality, safety, and environmental protection, and to

improve communication between industry, technology, science, government and the public.

The DIN is open to anyone interested in standardization and currently comprises manufac-

turers, trade, service industries, consumer organizations, science and other.

Standards are drafted by member representatives in around 4,000 committees, then pub-

lished for public comment and, finally, reviewed and issued as consensus industry stan-

dards.163

The DIN has 76 standardization boards. Biometric technologies are covered by the Stan-

dardization Board Information Technology (Normenausschuss Informationstechnik, NI). As

part of NI, the NI-AHGB (NI-Ad-Hoc-Gruppe-Biometrie) has worked on biometric topics. For

example, the group was involved in the BioNorm for BSI (cf. section 4.3.3, and was the first

to suggest the foundation of a German Biometric Strategy Platform. 164

Since standardization in information technology is international work, NI seeks to organize

their structure according to international IT standardization activities. Therefore, the sub-

committee NI-37 for biometric standardization was founded as the national corresponding

body to ISO’s SC 37.165

162 Cf. Internet Source 77 – ZVEI, go to Über Uns, Mission und Vision and Fachverbände & Landesstellen. 163 Cf. Internet Source 78 – DIN, go to About DIN. 164 Cf. Deutsches Institut für Normung (2003). 165 Cf. Deutsches Institut für Normung (2004), p. 7.


45

This subcommittee cooperates with other subcommittees such as NI-27 (IT Security Tech-

niques) and NI-17 (Cards and Personal Identification). NI-37 also participates in international

standardization by representing the DIN in ISO’s SC 37.166

Concluding on industry associations and the DIN, these organizations have high importance

for the German biometric industry because they support the industry in standardization ef-

forts, test and application projects, lobbying and public relations.

Nevertheless, industry associations cannot substitute or take the role of an independent na-

tional biometric platform. Competing expert circles pursuing different interests illustrate the

lack of neutrality and the fragmentation of the German biometric environment in times where

united efforts are required. As a result, the industry associations’ biometric activities should

be coordinated and integrated in the German Biometric Strategy Platform.

4.5 The National Legal Framework of Biometrics

This section concentrates on the regulatory framework of biometric technologies with particu-

lar emphasis on data protection.

4.5.1 Overview of the Legal Framework The national legal framework of biometric technologies consists of general requirements and

specific regulations. The most important general requirements are the protection of human

dignity according to Article 1 of the German Grundgesetz (GG)167 and the commensurability

principle, which ensures that state actions comply with actual needs and avoid constraining

democratic base rights as much as possible.168

Specific requirements depend on the application field, and the most distinguishing criterion is

whether the application is used by public authorities or private parties:169

Mandatory use of the government and public authorities

Public or private sector services and products

Intra-organizational use

Private use

Since there is no specific biometric law, within these four categories a multitude of regula-

tions has to be considered depending on the biometric application. Table 4.3 provides exem-

plary technological applications for each of the four legal categories.

166 Cf. Ibid., pp. 35 ff. 167 Cf. Internet Source 79 – Grundgesetz für die Bundesrepublik Deutschland, p. 1. 168 Cf. Albrecht, Astrid (2002), pp. 97 f. 169 Cf. Albrecht, Astrid/ Probst, Thomas (2001), p. 30.


46

Table 4.3: Legal Framework of Biometrical Applications Source: According to Albrecht, Astrid/ Probst, Thomas (2001), p. 30.

4.5.2 Data Protection and Ethical Concerns Indicating the importance of biometric data protection, it is mentioned in all four legal catego-

ries. Data protection contains all legal and technical measures to secure personal data from

being abused.170 The purpose of data protection is to secure the individual right on informa-

tional self-determination, which is derived from Articles 1 and 2 GG. It includes the right to

decide and know where one’s personal data is captured, stored and used.171

There are three categories of personal data. Evident data such as name and address on the

passport are frequently passed on by the person itself. Critical data such as income and

family status are only known to a restricted group of other people. Particularly critical are

data such as religion, medical conditions etc. Biometric characteristics such as the facial im-

age and the iris are evident but allow conclusions on critical or particularly critical data such

as medical conditions.172 For example, eye photographs can indicate diseases such as diabe-

tes or high blood pressure, and specific finger print templates are supposed to correlate with

leukemia or breast cancer.173 Therefore, biometric data has to be encrypted or handled as

critical data.

170 Cf. Nolde, Veronika (2002), p. 24. 171 Cf. Probst, Thomas (2002), p. 115. 172 Cf. Booz Allen Hamilton et al. (2003), pp. 47 f. 173 Cf. Albrecht, Astrid/ Probst, Thomas (2001), p. 33.

Mandatory Use by Authorities

Public or Private Sector

Intra-Organizational

Border Control E-Commerce Network access

Private Use

Laptop access

Grundgesetz (GG)

Passport and ID

card law (PassG,

PAuswG)

BGS-Law (BGSG)

Asylum regulations

Data protection

regulations

Digital Signature

Law (SigG, SigV)

AGB-Law (AGBG)

Data protection

regulations

Other private and

public law

Co-determination

law (BetrVG)

Other Labor Law

Data protection

regulations

Other private law

Data protection

regulations

Other private law

Mandatory Use by Authorities

Public or Private Sector

Intra-Organizational

Border Control E-Commerce Network access

Private Use

Laptop access

Grundgesetz (GG)

Passport and ID

card law (PassG,

PAuswG)

BGS-Law (BGSG)

Asylum regulations

Data protection

regulations

Digital Signature

Law (SigG, SigV)

AGB-Law (AGBG)

Data protection

regulations

Other private and

public law

Co-determination

law (BetrVG)

Other Labor Law

Data protection

regulations

Other private law

Data protection

regulations

Other private law


47

Furthermore, the discussion on biometric data protection is characterized by discrepancy. On

the one hand, biometric technologies allow secure protection of personal data, for example

by providing users with legal security in electronic transactions. On the other hand biometric

technologies provide the means to harm informational self-determination by collecting and

abusing personal biometric data.174 For example, they allow gaining a complete record of

movement and behavioral patterns of individuals. If different user records such as an authen-

tication process at a door and a shopping transaction are stored in a central data base, they

could be consolidated to a complete surveillance profile. This is particularly critical because,

unlike PINs or other traditional identification methods, biometric data are bound to the indi-

vidual and can hardly be changed once they have been compromised or abused.175 Answer-

ing introductory question 1, public opinion of biometrics is often negatively influenced by

these ethical concerns.176 They have the potential to intervene privacy severely and could

harm human dignity.177 Once biometric technologies are widely installed their surveillance

potentials could be used to monitor citizens.178

The word ethics derives from the greek ethos (engl. habit, custom), and can be defined as

the science of moral which analyzes the normative correctness of actions.179 Business ethics

is the application of ethical values to business behavior.180 In this context, morally responsible

behavior constitutes a basis for decision making on the individual, corporate, industry and

economic level.181

Ethical concerns against biometric technologies find their expression in data protection regu-

lations. Above all, the European Data Protection Guideline (Europäische Datenschutzricht-

linie) provides the framework for national data protection law. The European Data Protection

Guideline regulates cross-country data flow. In article 8 it defines sensitive data such as eth-

nical or gender data. Some biometric technologies make it possible to conclude on such in-

formation using biometric information of individuals. It is a requirement to prevent these con-

clusions, i.e. to store the data in a neutral form that cannot be traced back to sensitive infor-

mation.182

Within the scope of German law, the Federal Data Protection Law (Bundesdatenschutzge-

setz, BDSG) controls data handling by federal authorities and private parties on a federal

level. It is the most important German law regarding biometrics with respect to data protec-

174 Cf. Nolde, Veronika (2002), p. 25. 175 Cf. Albrecht, Astrid/ Probst, Thomas (2001), p. 32. 176 E.g., cf. Internet Source 80 – Heise Online. 177 E.g., cf. Krempl, Stefan (2004), p. 82. 178 Cf. Ibid, p. 83. 179 Cf. Rothlauf, Jürgen (2004), p. 246 and Internet Source 81 – Microsoft Encarta Encyclopedia. 180 Cf. Morden, Tony (1999), p. 142. 181 Cf. Rothlauf, Jürgen (2004), p. 248. 182 Cf. Albrecht, Astrid (2002), p. 100.


48

tion and regulates the use of personal data as well as their storage and administration.183 Ba-

sic principles are avoidance, scarcity and commensurability of data - only the actually

necessary data should be stored and used.184 For example, these principles are represented

in § 6b regarding camera-based surveillance.185

The federal government has established the position of a Federal Data Protection Commis-

sary (Bundesbeauftragter für den Datenschutz) to consult and monitor federal authorities and

a wide range of private companies with regard to data protection.186

On the federal state level State Data Protection Laws (Landesdatenschutzgesetze, LDSG)

apply to state and community authority activities.187 They comprise rules concerning informa-

tion enquiries, data processing, transmission, storage and obligations to meet certain techni-

cal and organizational requirements.188 Moreover, the states have installed Federal State

Data Protection Commissaries (Landesdatenschutzbeauftragte).

There are no specific data protection guidelines concerning individual biometric technologies,

and biometric data has to be handled according to the general data protection law.

In the frame of this study, 20 German biometric companies were asked how to cope with

ethical concerns. All of them are aware of the ethical risks inherent with biometric technolo-

gies, and there was consensus that objections to new technologies are understandable and

justifiable. Responsibility should be shared among all industry players, including business

partners. To tackle public concerns, the companies suggest the following measures:

Interview Results – Measures to Diminish Ethical Concerns

Comply with all data protection regulations and cooperate with data protectionists

Acquire data only with knowledge and acceptance of the affected person

Implement data protection regulations in technology, for example by

Ensuring that biometric data is used only for the purpose it was captured for

Preventing conclusions on additional information.

Storing and processing data on tokens (e.g. cards) rather than in centralized data bases

Use digital templates instead of actual pictures to allow the biometric comparison but pre-

vent conclusions on the person

Encrypting templates with a code known only to authorized people

183 Cf. Bundesregierung (2003). 184 Cf. TeleTrust (2002), p. 31. 185 Bundesregierung (2003), p. 73: „Die Beobachtung öffentlich zugänglicher Räume mit optisch-elektronischen

Einrichtungen (Videoüberwachung) ist nur zulässig, soweit sie 1. zur Aufgabenerfüllung öffentlicher Stellen, 2. zur Wahrnehmung des Hausrechts oder 3. zur Wahrnehmung berechtigter Interessen für konkret festgelegte Zwecke erforderlich ist und keine Anhaltspunkte bestehen, dass schutzwürdige Interessen der Betroffenen überwiegen.“

186 Cf. Internet Source 82 – Bundesbeauftragter für den Datenschutz. 187 Cf. Internet Source 83 – DuD Webserver. 188 Cf. Albrecht, Astrid/ Probst, Thomas (2001), p. 35.


49

Establish organizational principles to prevent abuse, e.g. dual control of actions

Pursue a clear public information and communication policy, which means to

Inform public on functionalities and application fields of biometrics. For example, many

people that biometrics are only used for surveillance purposes.

Abolish fears. For example, some people still think iris recognition could harm their eyes.

Create trust by involving people in large-scale test projects

Address politics to counteract public concerns

Table 4.4: Interview Results – Measures to Diminish Ethical Concerns

Broad public acceptance of biometrics depends on the industry’s commitment to these as-

pects.

Summarizing this section, diminishing ethical concerns requires a broad and transparent

public discussion.189 Ethical issues should be addressed on all four layers of business ethics:

the individual, the corporate, the industry, and the global economical level.190

4.5.3 Other Applicable Law The further analysis will be restricted to the most significant examples out of each legal cate-

gory described in section 4.5.1.

The mandatory use by public authorities obliges citizens to use biometric technologies, for

example in border control applications and identification document security. Sometimes gov-

ernmental intervention could occur without knowledge of the affected individual, for example

when identification applications are used to search for criminals. In any case, sovereign ap-

plications must not constrain human dignity as described by Article 1 GG.191

Passport and ID card law are examples of applicable law concerning border control and

document security. In January 2002, the German federal law against terrorism (Gesetz zur

Bekämpfung des internationalen Terrorismus, TBG) became effective. Beside other aspects,

Articles 7 and 8 TBG regulate changes in the Passport law (PassG) and ID card law

(PAuswG) concerning the integration of biometric characteristics in German passports and

ID cards. Furthermore, Article 11 TBG changes the foreigner law (Ausländergesetz, AuslG),

enacting the integration of biometrics in visas and residence permits of foreigners. Details will

be regulated by a new federal law.192

The key objective of these changes is to prevent persons from claiming other identities than

their own.193 However, although the AuslG allows centralized storage of biometric data by

foreigners, PassG and PAuswG prohibit the centralized storage of biometric data by Ger-

189 Cf. Thalheim, Lisa/ Ziegler, Peter-Michael (2003), p. 36. 190 Cf. Morden, Tony (1999), p. 143. 191 Cf. Internet Source 79 – Grundgesetz für die Bundesrepublik Deutschland, p. 1. 192 Cf. Bundesregierung (2002), pp. 366-371 193 Cf. Petermann, Thomas et al. (2004), p. 91.


50

mans, which inhibits applications based on central data bases, e.g. matching with watch

lists.194

Public or private services affect human dignity less than mandatory applications because

their use is voluntary. The relevance of other law depends on the individual biometric appli-

cation.

For example, in case of E-Commerce, the regulations concerning digital signatures have to

be considered.195 Although the signature law (Signaturgesetz, SigG) from May 2001 does not

regulate the use of biometric technologies explicitly, the by-law (Signaturverordnung, SigV)

does. To secure the digital signature by ensuring that the user actually is the one the signa-

ture belongs to, it is permitted to apply traditional means such as a PIN or biometrics that are

adequately safe (§ 15 SigV).196 As a result, digital signature providers using biometric tech-

nologies would have to adapt their product to these regulations.

If public authorities provide on-line services to citizens based on biometric technologies, ad-

ministrative law (Verwaltungsgesetzgebung) such as the social codes (Sozialgesetzbücher)

which regulate the processing of social and medical data has to be applied. Concerning tele-

communication applications, telecommunication law has to be considered.197

Intra-organizational applications are usually closed applications, i.e. designed for a re-

stricted user group. These could be companies, authorities and other organizations.

Although it is an important topic in the daily business of companies, co-determination law is

not the first consideration regarding the legal framework of biometrics. Nevertheless, it will

become more important because companies increasingly base their security systems on

biometrics, for example to organize workstations, network and building access control.198 § 87

Betriebsverfassungsgesetz (BetrVG) defines the co-determination rights of employee repre-

sentatives. Biometric technologies belong to issues concerning work rules and behavior of

employees (§ 87 I 1 BetrVG) and the implementation and use of technologies suited to sur-

vey staff (§ 87 I 6 BetrVG).199 This relates to camera installations, control checkpoints, time

recording systems etc.200

As to private use, there are only few specific regulations so far. Legal concerns could occur

if rights of independent third parties are affected. For example, a surveillance camera in-

194 Cf. Ibid., p. 102. 195 Cf. Footnote 48. 196 Cf. Internet Source 84 – Büro für Technikfolgen-Abschätzung beim Deutschen Bundestag. 197 Cf. Probst, Thomas (2002), p. 117. 198 Cf. Schedel, Eva (2004), p. 39. 199 Cf. Internet Source 85 – Betriebsverfassungsgesetz, p. 30. 200 Cf. Ibid., p. 25.


51

stalled at a fence recording face data of persons outside the property could violate these in-

dividuals’ rights on their own picture data.201

These are selected examples how the use of biometric technologies is affected by a wide

range of law. Biometric technologies are affected by a wide range of general and specific

regulations, above all by data protection law. Most regulations cover only few aspects of

biometrics.

There are two central activity fields. First, legal uncertainty regarding individual biometric

technologies and data protection should be addressed, for example by a master or doctoral

thesis. As a result, this study may suggest case-oriented data protection guidelines. Another

step towards more legal certainty could be the announced federal law concerning storage,

administration and use of biometric data with respect to identification documents.

Second, the industry has to comply with these regulations, conduct additional technical

measures to ensure data protection and enhance public trust by commitment to ethically re-

sponsible use of biometrics. The German Biometric Strategy Platform should be the indus-

try’s instrument to address these issues.

Chapter 4 has highlighted which political and legal factors influence the German biometric

industry. The international and national strategic environment is complex and requires high

awareness to comply with political conditions, legal regulations and ethical expectations. One

task of the German Biometric Strategy Platform will be to monitor the environment and

quickly communicate status and changes to the German biometric industry.

201 Cf. Albrecht, Astrid/ Probst, Thomas (2001), p. 32.

Market and Industry

52

Second Part – Market and Industry Analysis, Strategy Development & Platform Conception

Having described technological, political, legal and ethical background of biometrics, the

second part of this study is dedicated to an analysis of the biometric markets and the Ger-

man biometric industry in chapter 5, the development of an industry strategy in chapter 6 and

the draft of strategy implementation by the German Biometric Strategy Platform in chapter 7.

5 Market and Industry

This chapter is dedicated to an analysis of the German biometric markets and the German

biometric industry. The results are summarized by the diamond of national competitiveness

and a SWOT matrix.

5.1 International and National Biometric Markets

Market analysis and forecasting are key elements of the strategic analysis because they as-

sess the attractiveness of a market.202

Figure 5.1: Total Biometric Industry Revenue 1999-2002 Source: Elsevier Science (2002), p. 7.

The world market volume of biometrics increased from $98.3 million in 1999 to $260.1 million

in 2002, with an average annual growth rate of 39%. 202 Cf. Morden, Tony (1999), p. 96.

Market and Industry

53

More than half of the 2002 revenue was realized in North America, and within Europe, Great

Britain was dominating. With a 17% share, Asia Pacific was the third largest market. Only 2%

were sold in the rest of the world (ROW).

Figure 5.2: Geographic Biometric Markets 2002 Source: According to Elsevier Science (2002), p. 8.

The strong growth of the world biometric industry is expected to continue in the next years,

and the average growth rate is more than 60%.

Table 5.1: World Biometrics Revenue Forecast until 2006 Source: Elsevier Science (2002), p. 14.

North America53%

Europe24%

Asia Pacific17%

Latin America4%

Rest of the World2%

North America

Europe

Asia Pacific

Latin America

Rest of the World

Market and Industry

54

However, most of the growth will happen in North America because the U.S. government

strongly promotes large-scale projects (for example U.S. VISIT, cf. section 4.1.4). American

companies are likely to profit the most from the expected growth.

Figure 5.3: Biometrics Revenue Forecast for the World’s Geographic Regions until 2006 Source: Elsevier Science (2002), p. 94.

This enlarges the revenue gap between German and American biometric companies and

could enable American companies to finance acquisitions in the less growing German bio-

metric industry.

The biometric markets comprise a number of very different technologies. For example, the

development of signature recognition used in document management is not connected to

face recognition used at national borders. Therefore, the perspectives of each technology

have to be evaluated separately.

Fingerprint recognition will be the leading technology in the next years, comprising more than

half of the total biometric revenue. Face recognition is expected to take the second rank. Al-

though iris, signature and voice recognition will grow as well, they together have a market

share less than half the size of fingerprint recognition.

Market and Industry

55

Figure 5.4: Revenue Forecast by Biometric Technology until 2006 Source: Elsevier Science (2002), p. 17.

Although the world biometric market has grown rapidly, the German biometric market has

not. In 2004, a total volume of only € 12 million is expected to be realized in the German

biometric market, which is shared by more than 80 companies. To understand this, one has

to analyze the life cycle. Strategy literature suggests that the life cycle concept, once devel-

oped for single company analysis, can be applied to whole industries or markets.203

The German biometric industry is still in the early stage, or introduction stage of the life cycle,

whereas the American biometric industry has already entered the growth stage. According to

strategy experts, the introduction stage implies market barriers such as uncertainty about

future structure and growth, high capital requirements, low or negative profitability and wide

differences in standards and performance. Usually, there is little information about competing

products’ performance and market acceptance, and one of the crucial questions is how to

cope with low returns and finance the early life cycle stage.204

This correlates with the empiric results of the interviews. Asked for the reasons, the inter-

viewed companies mentioned the following barriers to the German biometric market:

203 Cf. Pearce, John/ Robinson, Richard (2000), p. 216 and Porter, Michael (1998 b), pp. 157 f. 204 Cf. Thompson, Arthur A./ Strickland, A.J. (1996), pp. 150.

Market and Industry

56

Interview Results – German Biometric Market Barriers

Technology

There have been only few reference projects and field tests.

Technological standardization has been insufficient, e.g. concerning protocols.

Because of this, most solutions are singular and not interoperable.

System integration requires complex technological and organizational efforts.

As a result, customers fear technological dependency on manufacturers and integrators.

Biometric technologies to some extent cannibalise each other.

There are still technical problems, e.g. the recognition of Asian faces.

Finance

The early life cycle stage causes high uncertainty with regards to market perspectives.

Potential customers have high risk aversion; German “wait-and-see attitude”

Customizing costs are high because there is no standard solution, especially in the sovereign

segment. The number of units in production series remains small. Hence, companies cannot take

advantage of economies of scale and unit costs respectively customer prices are still high.

This is even more problematic in times of low budgets and deters potential customers, particularly

in the private sector. Eventually, the government remains as the customer with the lowest price

sensitivity.

Biometric projects require high initial investments but do not immediately create a steady positive

cash flow to finance these investments. Therefore, several biometric companies have become in-

solvent in the last years.

Small and medium-sized biometric companies have insufficient financial power to finance pro-

jects.

Large-scale enterprises seek to avoid pre-financing projects on account of low revenue expecta-

tions with biometrics.

Many potential customers consolidate and save rather than invest in new technologies

Public capital appropriations are scarce.

Since biometric system do not work errorless, the necessary fallback procedures raise costs.205

Society

Germans often seek to achieve perfectionism from the first minute but error rates of biometric

technologies sometimes still are high.

Many people have hygienic concerns, e.g. with contact sensors.

There are public reservations against new technologies and large-scale projects.

Some people fear for data abuse and governmental surveillance.

Some early test results have created negative perception regarding technology performance.

205 Fallback procedures become effective if the biometric system fails. E.g., if a biometric border control system cannot verify a person, a human would have to check the documents in the traditional way.

Market and Industry

57

Data protectionists’ criticism further harms image of technology.

Although media coverage is increasing, information by media, industry, politics and other respon-

sible parties has been insufficient.

Politics

The industry mentions an insufficient information level of public decision makers.

German politics should support national biometrics intensively. So far no large public tenders

have been published. The biometric industry requires government activities that give a direction.

Political quarrels seem to hinder economic decision making.

Legal

Data protection regulations hinder certain applications, e.g. those requiring a central data base.

Some interviewees mentioned a lack of case-oriented data protection guidelines.

Table 5.2: Interview Results – German Biometric Market Barriers

It would be a primary task of the German Biometric Strategy Platform to overcome these bar-

riers.

According to a current study by SOREON research, sovereign projects such as the biometric

passport, biometrics-based border control and the equipment of public authorities with bio-

metric technology will push the market into the growth stage in the next years with the high-

est growth rate in 2007. As soon as people experience the benefits of biometric technologies

and overcome fears, they will accept these technologies in other applications as well. In

2009, a market volume of € 377 million is expected. The private sector will outperform the

public sector with a 55% market share in 2009. Private sector growth will be driven by trans-

portation, retail & services applications and the financial sector. Furthermore, strong growth

is expected in the IT security sector, e.g. access control and data security. In 2009, biometric

access control systems will be responsible for 31% of the revenue, whereas payment sys-

tems will also grow but represent only a small market share. Around 90% of the applications

will be based on fingerprint and face recognition.206

206 Cf. Internet Source 86 – Heise Online.

Market and Industry

58

Figure 5.5: The German Biometric Market 2004-2009 Source: Internet Source 87 – SOREON Research.

Although in the early life cycle stages of biometrics sovereign applications will dominate, it is

likely that in the long-run, private sector and consumer applications will play a an increasingly

important role. This is particularly on a result of the buying power of mass markets and the

wide application scope of biometric technologies.

The majority of the interviewed experts expect significant market growth from the end of

2005, with the exception of signature recognition already from late 2004. The speed of

growth will depend on how fast the market barriers can be eliminated.

Figure 5.8 illustrates the mid-term development of the German Biometric market in a road-

map based on both secondary sources and interview results. It illustrates that in spite of the

numerous potential application fields (cf. section 3.4) only selected applications will be of

economic importance in the next years.

The international political and legal framework influences the sovereign and non-sovereign

public sector, primarily in identification document and border control applications. Addition-

ally, there are two trends. On the one hand, sovereign applications will push private sector

applications. For example, sovereign border control applications could be extended to check-

in, boarding and physical access control for airport employees, flight crews etc. On the other

hand, the consumer market is likely to pull demand itself. Eventually, both segments are

likely to fertilize each other.

Market and Industry

59

Figure 5.6: German Biometric Roadmap 2005-2010

Another important conclusion from the graph is that face recognition is likely to become the

most used biometric technology in sovereign applications, whereas fingerprint recognition will

dominate private applications. Technology priority is the expected ranking depending on in-

troduction timing (particularly in the sovereign sector) and probability of usage (mainly in the

private sector.

5.2 Overview of German Biometric Research

Research is the basis for technological advancement of the German biometric industry and is

undertaken by manufacturers, research institutes or academic institutions. Since information

on manufacturer research is hardly available, this section will focus on selected activities by

research institutes and academia.

Biometric research must not be confused with biometrics in the sense of biological statistics,

which is taught and researched at several academic institutions in the fields of medicine, bi-

ology etc. The following alphabetical list of institutions involved in biometric research is ex-

emplary and does not include universities that teach biometrics without conducting research.

Fingerprint Recognition

Face Recognition

Iris Recognition

Signature Recognition

Document Workflow Management

ID CardsService CardsForensic Applications

Passports

ICAO, U.S. and EU Regulations

20062004 2008 2010

Transportation

IT Security

Financial Services

Visas

Other Services

2005 2007 2009

Border Control

Corporate SecurityPu

blic

Sec

tor

Priv

ate

Sect

or

TechnologicalPriority

1 2 3

Retail

Market and Industry

60

Fraunhofer Institute for Graphical Data Processing (IGD)

The IGD (Fraunhofer-Institut für Graphische Datenverarbeitung) develops hardware, soft-

ware, concepts, models and applications for graphical data processing. Working Field 8 cov-

ers security technology for graphic and communication systems, including biometrics. The

institute hosted a biometrics workshop in 2001 and was a partner of several BSI projects and

events, for example BioIS, BioKrit, BioFinger, BioFace and the BSI Symposium on Biomet-

rics and Data Protection.207 Furthermore, the IGD is involved in the feasibility study on the

future digital German ID card.208

Fraunhofer Institut für Secure Telecooperation (SIT)

The SIT (Fraunhofer-Institut für Sichere Telekommunikation) offers security technologies and

applications for telecommunications and related services. Research on biometric technolo-

gies is conducted in the frame of security and smart card technologies, for example used in

verification processes.209 Furthermore, Fraunhofer SIT was involved in the BioNorm project

(cf. section 4.3.3).210

Fraunhofer Institute for Integrated Circuits (IIS)

The IIS (Fraunhofer-Institut für Integrierte Schaltungen) develops microelectronic circuits and

systems. Biometric technologies are included in several projects. For example, EMBASSI is

dedicated to develop a human-machine interface, and the project Sensing People is con-

cerned with the evaluation of acoustic and picture data in industrial or authority applications

and consumer products. Both projects are promoted by the BMBF and based on biometric

technologies such as facial, voice and lip movement recognition.211

Other Fraunhofer Institutes

Furthermore, the Fraunhofer Institute for Production Systems and Design Technology

(Fraunhofer-Institut für Produktionsanlagen und Konstruktionstechnik, IPK) and the Fraun-

hofer Institute for Biomedical Engineering (Fraunhofer-Institut für Biomedizinische Technik,

IBMT) are involved in biometric activities.212

Association for Supporting Applied Informatics (GFaI)

The GFaI (Gesellschaft für angewandte Informatik) conducts and supports research, devel-

opment and training in applied informatics. As to biometrics, the GFaI develops 3D data

processing solutions, e.g. for body measurement in the clothing industry, and works in pat-

207 Cf. Internet Source 88 – Fraunhofer IGD. 208 Cf. Petermann, Thomas et al (2004), pp. 35 f. 209 Cf. Internet Source 89 – Fraunhofer SIT. 210 Cf. Deutsches Institut für Normung (2003), p. 8. 211 Cf. Internet Source 90 – Fraunhofer IIS. 212 E.g., cf. Internet Source 91 – Fraunhofer IPK and Internet Source 92 – Fraunhofer IBMT.

Market and Industry

61

tern recognition, picture enhancement and sensor development. Biometric verification and

identification are not in the center of the GFaI’s activities.213

FH Augsburg

The informatics faculty of the University of Applied Sciences Augsburg has conducted a pro-

ject concerning the recognition of gestures by a web cam.214

FH Giessen-Friedberg

The University of Applied Sciences Giessen-Friedberg’s Institute for Biometric Identification

Systems (Institut für biometrische Identifikationssysteme) was founded in 2001 to conduct

interdisciplinary, manufacturer-independent research focused on biometric identification. Be-

side technical aspects, social issues are part of the research activities. The institute has

hosted a Biometric Symposium in 2002 and participated in the BioTrusT (cf. section 4.4.3)

and BioVision projects (cf. section 4.2.7).215

FH Regensburg

The University of Applied Sciences Regensburg is also involved in biometric research. For

example, one project is working on a Biometric Smart Pen (BISP) for signature or handwrit-

ing recognition.216 Furthermore, a diploma thesis has been written on face recognition algo-

rithms.217

Friedrich-Alexander-Universität Erlangen-Nürnberg

At the information management faculty (Wirtschaftsinformatik III) of the Friedrich-Alexander-

University Erlangen-Nürnberg a study on the state of the art of biometrics was carried out in

2003. The university participated in the SmartKom project supported by the BMBF (cf. sec-

tion 4.3.6).218

Humboldt-Universität Berlin

The Institute for Informatics’ Chair for Signal Processing and Pattern Recognition (Lehrstuhl

für Signalverarbeitung und Mustererkennung) at the Humboldt University Berlin is working on

sensors, data capturing, processing and enhancement, e.g. for access control systems.219

213 Cf. Internet Source 93 – GfaI. 214 Cf. Internet Source 94 – FH Augsburg, go to Die Projekte 215 Cf. Internet Source 95 – IBIS. 216 Cf. Internet Source 96 – FH Regensburg, search for BISP. 217 Cf. Internet Source 97 – Markus Hofmann. 218 Cf. Internet Source 98 – Friedrich-Alexander-Universität Erlangen-Nürnberg. 219 Cf. Internet Source 99 – Humboldt-Universität Berlin.

Market and Industry

62

Ludwig-Maximilians-Universität Munich

The Institute for Phonetics and Human Communication (Institut für Phonetik und Menschli-

che Kommunikation) at Ludwig Maximilian University Munich also took part in the SmartKom

project.220

Otto-von-Guericke-Universität Magdeburg

The Institute for Technical and Operational Information Systems (Institut für Technische und

Betriebliche Informationssysteme) at the Otto-von-Guericke University Magdeburg has con-

ducted the Open Source Biometrie project since 2002 with the aim to support standardization

activities. In the frame of laboratory tests, diploma theses and other student works technolo-

gies such as face, finger and signature recognition have been researched.

Another project is concerned exclusively with handwriting recognition.221 Finally, the univer-

sity took part in the BioNorm project (cf. section 4.3.3).222

TU Munich

The Technical University Munich conducts one of the dissertations of the PSYlock project at

the Regensburg University.223 Furthermore, the Chair IV of the Informatics Institute (Lehrstuhl

IV für Informatik) is involved in the VERISOFT project supported by the BMBF (cf. section

4.3.6).224

Moreover, the Chair for Measuring Systems and Sensor Technology (Lehrstuhl für Messsys-

tem und Sensortechnik) conducted the Tele-Haus project concerned with fingerprint and

voice-based access control.225

Finally, the Chair for Human-Machine-Interaction (Lehrstuhl für Mensch-Maschine-

Kommunikation) conducted a diploma thesis on the recognition of emotions, beside other

aspects based on voice and facial play recognition.226

Universität Hamburg

From 1999 to 2002, the Hamburg University has installed a laboratory access control system

based on iris recognition. Furthermore, they developed a framework for biometric recognition

and classified algorithms for iris recognition.227

220 Cf. Internet Source 70 – SmartKom Project 221 Cf. Internet Source 100 – Otto-von-Guericke-Universität Magdeburg, pp. 398 f. 222 Cf. Deutsches Institut für Normung (2003), p. 8. 223 Cf. Internet Source 101 – TU München. 224 Cf. Internet Source 102 – TU München. 225 Cf. Internet Source 103 – TU München. 226 Cf. Internet Source 104 – TU München. 227 Cf. Internet Source 105 – Universität Hamburg, pp. 8 f.

Market and Industry

63

Universität Regensburg (ibi research an der Universität Regensburg gGmbH)

The ibi research institiute at Regensburg University concentrates on application-oriented re-

search and implementation in the financial sector, including biometrics. In cooperation with

the Munich University the PSYlock project engaged in key stroke-based verification in E-

Business and E-Government, including laboratory tests and two dissertations. Currently, the

institute intends to conduct field tests in a bank. The researchers are supported by the Chair

of Information Mangagement II (Lehrstuhl für Wirtschaftsinformatik II).228

Universität Stuttgart

The Institute for automated Speech Recognition (Institut für Maschinelle Sprachverarbeitung)

at Stuttgart University is concerned with computerized recognition of the spoken word. How-

ever, this is not actual biometric research because the focus is on recognizing the content of

the speech rather than the speaker. The institute participated in the SmartKom project.229

TU Darmstadt

The Darmstadt Center for IT Security (Darmstädter Zentrum zur IT-Sicherheit, DIZ) at the

Technical University Darmstadt is involved in the SicAri and Verisoft Project supported by the

BMBF (cf. section 4.3.6).230 The university also hosts the Competence Center for Applied

Security Technology (CAST) and the CAST forum, which is an important meeting for the

biometric community.231

Although there are several organizations conducting biometric research, in most cases it is

one side aspect of informatics research. It is crucial to bring biometric-focused research to

the center of attention. For example, chairs for biometric technologies should be established

at least at the large universities. Furthermore, some interview partners mentioned a lack of

product-oriented biometric research. Academic research should focus on the industry’s

needs to establish a direct pipeline from research to marketable products.

5.3 Overview of the German Biometric Industry

In this study, the German biometric industry is defined as all companies pursuing biometric

activities in Germany, no matter where their headquarters is located. For example, in some

cases capital shares belong to foreign groups but the companies consider themselves as

German biometric companies.

228 Cf. Internet Source 106 – Universität Regensburg, search for PSYLock. 229 Cf. Internet Source 70 – SmartKom Project. 230 Cf. Internet Source 107 – TU Darmstadt and Internet Source 75 – Verisoft Project. 231 Cf. Internet Source 108 – CAST-Forum.

Market and Industry

64

The German biometric industry’s value chain comprises Research & Development (Software,

Hardware), Manufacturing (Cameras, other sensors etc.), System Integration (Integration in

other systems, e.g. networks, computers, chip cards, passports), Sales and Operation (Ser-

vice for customers). Furthermore, consulting is a cross-functional activity. Since this is a

generalized industry value chain, the individual companies’ value chains can differ from the

model.

Figure 5.7: The German Biometric Industry’s Value Chain

More than 80 companies in Germany are offering one or more parts of this value chain. De-

tailed information is only available of those 56 companies that participated in the Biometrics

guide survey conducted by BITKOM in 2003 and maintained in 2004. Figure 5.10 illustrates

the distribution among the value chain elements except R&D, which is conducted by manu-

facturers or other institutions, and sales, which is conducted by manufacturers and system

integrators. Multiple answers were possible.

Figure 5.8: The German Biometric Industry by Value Chain Elements Source: BITKOM (2004 b).

34

29

14

32

Manufacturing System Integration Operation Consulting

Research & Development

System Integration Sales

Operation & other

Services

Consulting

ManufacturingResearch & Development

System Integration Sales

Operation & other

Services

Consulting

Manufacturing

Market and Industry

65

Manufacturing, System Integration and Consulting are the largest groups and relatively equal

in size, whereas only 11 companies are involved in System Operation. Most companies have

their own consulting teams.

The industry mainly consists of small and medium-sized enterprises (SMEs). Almost three

quarters of the companies employ less than 10 people working in biometrics; this does not

include employees in other market segments of the companies. 5 companies did not answer

to this question.

Figure 5.9: Staff Numbers of German Biometric Companies Source: BITKOM (2004 b).

In total, it is estimated that only 500 people were employed directly in German biometric

manufacturing in 2003, and between 5,000 and 10,000 including system integration, consult-

ing and other services etc.232

Among the German biometric companies, the most common technology is fingerprint recog-

nition, followed by face and iris recognition. On the one hand, this is a result of the interna-

tional top-down influences by the ICAO, the U.S. and the EU that support fingerprint and face

recognition. On the other hand, it is possible that the industry’s focus on certain technologies

have influenced international recommendations in a bottom-up process as well.

232 Cf. Booz Allen Hamilton et al. (2003), p. 121.

Employees in Biometrics

36

12

23

<10 10- 50 50- 100 >100

Market and Industry

66

Figure 5.10: Technologies Offered by German Biometric Companies Source: BITKOM (2004 b). As to geographical distribution, the biometric centers of gravity are Munich, Frankfurt, south-

west Germany and Berlin; some more companies are spread over Germany.

Figure 5.11: Geographical Distribution of Biometric Technologies in Germany Source: BITKOM (2004 b).

Industry

Independent Research

Geographic Distribution of Biometric Technologies

3

4 Voice

Key Stroke

Face

Finger

Signature

Hand

Iris

30

8

6

3

17

15 Multibiometrics

2

1

3

2

1 Gait Dynamics

Industry


Industry


Geographic Distribution of Biometric Technologies

3

4 Voice

Key Stroke

Face

Finger

Signature

Hand

Iris

30

8

6

3

17

15 Multibiometrics

2

1

3

2

1 Gait Dynamics

39

23

9 9 8

4 3 3

Finger Fac e M ult ibiom etrics S ignature Iris Hand V oice Other

Market and Industry

67

The concentration in the south and southwest correspond with the economic strength of

these regions, which is an argument for the creation of competitive industry clusters.

Some critical points regarding the industry structure have emerged during the interviews:

Interview Results – Structural Deficiencies of the German Biometric Industry

The industry suffers from a lack of interoperability and standards.

Manufacturers note that system integrators do not sufficiently communicate their requirements.

Some interviewees mention a waste of resources due to insufficient division of labor for the differ-

ent value chain components, e.g. algorithm development, sensor manufacturing, integration)

There are many singular applications but few holistic solutions.

Some interviewed manufacturers mentioned an insufficient number of system integrators,

whereas some system integrators observed a lack of manufacturing companies. Since both can-

not be true simultaneously, considering the total of 57 biometric companies of whom 33 are in-

volved in manufacturing and 26 in system integration, these answers indicate a lack of communi-

cation between manufacturers and integrators.

Most manufacturers are small in size, which results in:

Insufficient R&D expenditures

Often inadequate plans for practical applications

Low project financing power

Low market power

Research does often not result in marketable products. Therefore, research promotion must not

only support research but also practical applications. This could be achieved by sharing promo-

tional funds between researching company and customer.

Since the German market is not growing yet, several manufacturers became insolvent or have

been acquired by foreign competitors in the last years.

To prevent foreign acquisitions and enable market growth, market consolidation is needed.

There is still a lack of multimodal solutions and fallback procedures233

Since there have been few large pilot projects, the industry lacks application experience.

Table 5.3: Interview Results – Structural Deficiencies of the German Biometric Industry Although the industry is technologically well-positioned competitive disadvantages result from

a lack of communication between manufacturers and integrators, the small size of manufac-

turers and the lack of large field projects. Particularly the last aspect complicates the indus-

try’s position for two reasons. First, German biometric companies have to generate a high

portion of their sales in foreign markets with higher transaction costs. Second, they cannot

present potential foreign customers successful reference projects in their home country.

These issues should be addressed by the German Biometric Strategy Platform.

233 Cf. Footnote 205.

Market and Industry

68

5.4 The Industry’s Competitive Environment

In this section, the five competitive forces model is used to analyze the structure of the Ger-

man biometric industry. After a brief introduction to the model, each force is analyzed, inte-

grating the results of the previous sections and introducing new facts. The results are sum-

marized illustrated by Figure 5.13.

5.4.1 Introduction to the Five Forces Model The Five Competitive Forces Model by Porter is a popular strategic management tool to ana-

lyze the structure of an industry.234 Strategists use the tool to assess the structural determi-

nants of an industry and the main forces competing on influence. Literature suggests that the

model provides inside views of an industry and can be one basis for strategy development.235

In this study it is applied to analyze the German biometric industry’s structure.

The five forces and their determinants are:

Competing sellers Intensity of rivalry among competing sellers Potential entrants The threat of entry Substitute products Pressure by substitute products Buyers The bargaining power of buyers Suppliers The bargaining power of suppliers

Figure 5.12: The Five Competitive Forces Model Source: Porter, Michael (1998 b), p. 4.

234 E.g., Thompson, Arthur A./ Strickland, A.J. (1996), p. 64 and Morden, Tony (1999), p. 55. 235 Cf. Porter, Michael (1998 b), p. 17. and Bowmann, Cliff/ Faulkner, David (1997), p. 81.

Threat of

Intensity of Rivalry

Bargaining Power of Buyers

Bargaining powerof suppliers

Pressure from

Potential Entrants

Suppliers

Substitutes

BuyersCompeting Sellers


new entrants

Substitute Products

Threat of



Bargaining powerof suppliers

Pressure from

Potential Entrants

Suppliers

Substitutes

BuyersCompeting Sellers


new entrants

Substitute Products

Market and Industry

69

5.4.2 Intensity of Rivalry among Competing Sellers The rivalry among competing sellers constitutes the dominating factor in a free market. It

arises because sellers seek to meet customer needs better than their competitors and set

their competitors under performance pressure.236

Following the logic of PORTER’s model, the manufacturers of biometric technologies are

suppliers, and the system integrators are sellers. Except for some manufacturers that also

sell their products directly and try to become system integrators themselves, this premises

can be applied to the German biometric industry.

From the 56 companies in BITKOM’s Biometrics guide 2003, 26 consider themselves system

integrators/ sellers, and they come from different backgrounds such as the IT security sector,

other from building security, document production (e.g., passports), or smart card sector

(e.g., banking cards). This results in different interests, needs, resource power, and resource

allocation. Moreover, it will complicate the development of an industry strategy with regards

to markets and international competition. Considering the number, background and size of

sellers, competition tends towards oligopolistic structures.

As mentioned in section 5.1, the German biometric market and industry are still in the intro-

duction stage of the life cycle. There is high uncertainty among sellers on standards, al-

though the international and national standardization efforts have started to address this

problem. Uncertainty continues with respect to market perspectives, particularly in the con-

sumer market. The increasing number of sellers and the growth of public interest in biometric

technologies are not yet reflected in sales. Since the German market is still too small for

more than a few sellers of the same biometric technology, and many companies compete for

few projects, the intensity of competition is high. Most sellers seek to evade domestic rivalry

by selling in other countries. As soon as the market enters into the growth stage the intensity

of competition could diminish, and more companies will benefit from the increasing market

volume.

So far, brand identity of biometric products and solutions is low. As a result, brand recogni-

tion can hardly be used as a competitive advantage. Most system integrators use external

technology which is usually manufactured by the suppliers.

5.4.3 The Threat of Entry New entrants threaten an existing industry with production and sales capacity, technology,

know-how and other resources. The impact depends on entry barriers and the reaction of

236 Cf. Porter, Michael (1998 b), p. 17.

Market and Industry

70

existing rivals to the threat. Entry barriers often found are regulatory policies, tariffs and trade

restrictions.237

The German biometric industry is seriously threatened by American and British biometric

companies. Whereas German technology is highly competitive and attractive to foreign ri-

vals, German manufacturers/ suppliers often lack sufficient finance to grow internally, acquire

other companies or withstand acquisition threats. Particularly American companies tend to

have more financial resources because the American biometric market is supported by the

U.S. government and authorities’ large-scale projects as described in section 4.1.4. The

market analysis in section 5.1 has demonstrated that the U.S. market has already entered

the growth stage, which leads to steady cash flows that enable acquisitions. Furthermore, the

American biometric industry has consolidated during several mergers and acquisitions, and

is now very competitive in size.238

In the last years, this has led to some acquisitions by American companies in Germany in

key technologies such as face recognition, and continuously raises pressure on biometric

companies already active in the German market.239

Other potential market entrants could be system integrators from other industries. With high

financial resources and a positive cash flow from other markets they would be a serious

threat to existing biometric integrators. The threat of entry by new biometric start-ups that

would threaten existing manufacturers is lower, particularly because biometric manufacturing

requires high initial investments and is very research intensive.

Generally, the threat of entry increases on account of the mentioned low brand identity of

existing sellers.

Considering market entry barriers, there are no traditional hard barriers such as regulatory

policies and trade restrictions to the German biometric industry and market. Particularly

within the European Union companies can operate freely, and even companies from other

parts of the world are allowed to enter the market. However, the market barriers described in

section 5.1 constitute entry barriers for new biometric manufacturers, system integrators and

foreign rivals. That is why they are integrated in Figure 5.13.

5.4.4 Pressure from Substitute Products Substitute products represent a danger to established sellers because they threat the foun-

dations of their businesses by substituting their products.240

237 Cf. Ibid, p. 7. 238 E.g., cf. Internet Source 109 – RFID Journal on the merger of Identix and Visionics in 2002. 239 E.g., cf. Internet Source 110 – FindBiometrics on the acquisition of ZN Vision by Viisage. 240 Cf. Porter, Michael (1998 b), p. 23.

Market and Industry

71

These products could be other biometric or non-biometric technologies. Since it takes sev-

eral years to research new biometric technologies, develop products and market them, the

threat of new biometric technologies is relatively low, with the exception of some niche mar-

kets. The more established fingerprint, face and iris recognition become, the more difficult it

will be for new technologies to substitute them.

Non-biometric technologies threaten biometrics in some market segments. For example,

cryptography technologies such as the digital signature compete with signature recognition in

electronic document authentication. On the other hand, integration of biometrics and digital

signature would diminish technological competition and further enhance security.

Eventually, there is no technology known to substitute the biometric core competency, which

is to judge whether a person actually is the one it claims to be. As a result, the overall substi-

tute threat is low.

5.4.5 Bargaining Power of Suppliers The power of suppliers is expressed in their ability to bargain about prices and conditions.

This ability increases the more concentrated and centralized the supply market is, and is di-

minished the more standardized and ubiquitous the product.241

Suppliers in the German biometric market are the manufacturers of software (algorithms,

data bases, security mechanisms etc.) and hardware (sensors, devices etc.). They supply

system integrators with their products or develop own solutions and become integrators

themselves.

Since biometrics worldwide still lack standardization, suppliers are powerful once they have

bound a system integrator to their technology. If a system integrator has decided for a certain

biometric manufacturer, a change to another manufacturer is technologically difficult and

causes high switching costs. This tendency increases due to supplier concentration. Al-

though according to the Biometrics guide 33 companies are involved in manufacturing, this

includes several biometric technologies. If a customer needs a specific technology, the num-

ber of potential suppliers is smaller because most suppliers offer only one technology. Ac-

cording to some interviewed companies, the entry of foreign competitors by acquisition has

left an insufficient number of German suppliers and created high dependence on foreign

ones.

As a result, the suppliers have high bargaining power in negotiations, and they also threaten

the system integrators with forward integration.

241 Cf. Ibid p. 27.

Market and Industry

72

On the contrary, most German biometric manufacturers are small companies or even start-

ups. In many cases they are not able to offer complete product lines and holistic solutions

and depend on the system integrators’ projects, which diminishes their bargaining power. As

a result, they possess medium power in the industry.

5.4.6 Bargaining Power of Buyers

A buyer’s bargaining power depends on the sales volume he creates, and it rises the more

competing sellers are able to provide similar products because the customer could switch to

another seller.242 The German biometric market currently depends on few large public pur-

chases, and the private sector market is not yet developed. Eventually, there is no business

without buyers, and this awareness gives them substantial power.

The German biometric sellers have public sector customers, e.g. the federal government and

other authorities, and private sector customers, e.g. companies and private consumers.

Since there have been only few, low-volume sales to private consumers, e.g. fingerprint sen-

sors in laptops, the power of individual private consumers is low.

Conversely, the first large purchases are expected by governmental authorities and large

private sector players, which empowers these potential customers. Sellers will fulfill all re-

quirements and demands to participate in the expected purchases. Major potential custom-

ers in the next years will be:

The Federal Ministry of the Interior (BMI) with passports and ID cards

The Federal Foreign Office (Auswärtiges Amt, AA) and the visa issuing international

branches with visas and corresponding equipment, e.g. capturing devices and readers

The Federal Border Police (Bundesgrenzschutz, BGS) with biometric border management

solutions

Large authorities and companies that need access control, time recording etc.

The government and its institutions will be the major customers of biometric technologies in

Germany for a while, which leads the following consequences:

Governmental institutions take a hybrid role of customer and promoter at the same time.

Since for governmental and other public customers high security is more important than

low prices, this group has lower price sensitivity than private sector customers.

Buyer concentration causes high buyer bargaining power

242 Cf. Ibid. p. 24 f.

Market and Industry

73

Governmental customers have detailed information about the biometric markets and in-

dustry through their large human resources, work in international bodies and own biomet-

ric projects. The more information customers have the more power they can execute.

Their stamina is high due to their public character, and time plays a less important role.

Motives and interests are politically motivated rather than economically.

They purchase not very often but in large quantities.

The only limitation of power could be the potential switching costs once the buyer has de-

cided for one biometric system. The government and other authorities will be the leading

power the German biometric industry has to deal with. However, their power will reduce as

soon as standardization is achieved and the private sector outperforms the governmental

sector.

Figure 5.13 summarizes the five forces of the German biometric industry:

Figure 5.13: The Five Competitive Forces of the German Biometric Industry

Concluding on the five forces, the German biometric industry’s dominating influence factors

are the rivalry of competing sellers and the power of governmental buyers. Suppliers have

certain bargaining power and threaten the system integrators with forward integration but are

under pressure from potential new entrants themselves. Substitute technologies do not con-

stitute a major threat.

The Threat of Entry

• American and British companies, few Start-upsTechnological & Financial Entry Barriers• Few reference projects, insufficient standardization • Complex system integration, fear for dependency • Unclear market perspectives, risk aversion• High initial investments required, high unit costs • Low budgets & scarce public capital appropriationsSocietal, Legal& Political Entry Barriers• Low public information level, hygienic concerns • Reservations against technology & large projects• Fear for data abuse and surveillance• No central data base, no case guidelines• No large public tenders, political quarrels

Intensity of Rivalry Among Competing Sellers

• 29 system integrators• Intense rivalry• Different sector backgrounds • Some are part of international groups • Mostly medium-sized• Uncertainty on standards and market perspectives• Low number of projects• Low biometric brand identity • Market is too small for many sellers one technology • Sellers evade rivalry by selling internationally • Rivalry diminishes when market enters growth stage


• Government, Private Sector, Consumers• Substantial bargaining power • Buyer concentration and expected large tenders• Government: customer and promoter; lower price

sensitivity than private sector • Purchase in large quantities• High stamina due to public character • Political motives rather than economic• However, high switching costs

Bargaining Power of Suppliers

• 34 manufacturers of software & hardware• High bargaining power due to low

standardization & high supplier concentration• No supplier offers all technologies• High switching costs due to low interoperability • Threaten integrators with forward integration • However, mostly small suppliers • Dependcy on integrators with holistic solutions• Several bankruptcies during the last years

Pressure from Substitutes

• Substitute threat is low• Cryptography for documents • No substitute for verification• Few new biometric technologies

Potential entrants

Suppliers

Substitutes

BuyersCompeting sellers

The Threat of Entry

• American and British companies, few Start-upsTechnological & Financial Entry Barriers• Few reference projects, insufficient standardization • Complex system integration, fear for dependency • Unclear market perspectives, risk aversion• High initial investments required, high unit costs • Low budgets & scarce public capital appropriationsSocietal, Legal& Political Entry Barriers• Low public information level, hygienic concerns • Reservations against technology & large projects• Fear for data abuse and surveillance• No central data base, no case guidelines• No large public tenders, political quarrels

Intensity of Rivalry Among Competing Sellers

• 29 system integrators• Intense rivalry• Different sector backgrounds • Some are part of international groups • Mostly medium-sized• Uncertainty on standards and market perspectives• Low number of projects• Low biometric brand identity • Market is too small for many sellers one technology • Sellers evade rivalry by selling internationally • Rivalry diminishes when market enters growth stage


• Government, Private Sector, Consumers• Substantial bargaining power • Buyer concentration and expected large tenders• Government: customer and promoter; lower price

sensitivity than private sector • Purchase in large quantities• High stamina due to public character • Political motives rather than economic• However, high switching costs

Bargaining Power of Suppliers

• 34 manufacturers of software & hardware• High bargaining power due to low

standardization & high supplier concentration• No supplier offers all technologies• High switching costs due to low interoperability • Threaten integrators with forward integration • However, mostly small suppliers • Dependcy on integrators with holistic solutions• Several bankruptcies during the last years

Pressure from Substitutes

• Substitute threat is low• Cryptography for documents • No substitute for verification• Few new biometric technologies

Potential entrants

Suppliers

Substitutes

BuyersCompeting sellers

Market and Industry

74

Therefore, the industry strategy should define the strategic direction to serve the governmen-

tal customers requirements, and the German Biometric Strategy Platform should orient in

these customers’ needs. Another result is that a joint industry strategy for domestic competi-

tion cannot be develop because the interests of the German biometric companies are in dia-

metrical opposition to each other. Competitive strategy elements have to be limited to inter-

national competition.

5.5 National Competitiveness

The previous market and industry analysis has suggested that the American and British bio-

metric industries are main competitors of the German biometric industry. To compare how

competitive the biometric location Germany is, the analysis results are now aggregated and

complemented by additional economic aspects in the diamond of national competitive advan-

tage.

Figure 5.14: The Diamond of National Competitive Advantage Source: Porter, Michael (1990), p. 77.

Michael Porter243 in his book The Competitive Advantage of Nations suggests that national

competitiveness in a specific industry depends on four determinants.244

243 Porter leads the Institute for Strategy and Competitiveness at the Harvard Business School. For a detailed

personal profile refer to Internet Source 111. 244 Cf. Porter, Michael (1990), pp. 77-81.

Firm Strategy, Structure,

and Rivalry

FactorConditions

DemandConditions

Related and SupportingIndustries

Market and Industry

75

Factor Conditions

This is a nation’s position in factors of production, such as infrastructure, skilled labor, prop-

erty, or capital.245

There are hardly disadvantages in the tangible factor conditions for the German biometric

industry. The infrastructure such as transportation and telecommunication networks is highly

competitive, and property is easily available. Academic institutions produce highly qualified

workforce. For example, the previous section has illustrated that German universities train

their students in several biometric projects.

One limitation of intangible factor conditions is capital availability. Traditional bank loan fi-

nancing is common, and the use of modern financing tools such as options and derivatives is

still less developed than in the U.S. and the UK. Furthermore, the flow of private equity and

venture capital is very limited since the burst of the Internet bubble.246 Simultaneously, sev-

eral bankruptcies during this crisis have also diminished the willingness and ability of banks

to provide traditional loans to their customers. Finally, the interview results suggest that

German investors are basically more risk averse than, for example, American investors.

These restrictions hinder founders to establish new, innovative companies, for example in

the field of less developed biometric technologies.

Firm Strategy, Structure, and Rivalry247

The nature of domestic rivalry and the rivals’ strategies and structures highly influences na-

tional competitiveness - the more intense domestic rivalry is, the higher the national competi-

tiveness in this industry.

Summarizing the results of the five forces analysis, it can be stated that there is no lack of

domestic competition on the German biometric market. However, competitive pressure could

diminish if the absolute number of German biometric companies decreases on account of

foreign acquisitions, bankruptcies and the difficulties in creating new companies. Acquisitions

particularly threaten smaller manufacturing companies, whereas the larger system integra-

tors are less affected.

Related and Supporting Industries248

The presence of related and supporting industries that are internationally competitive is a

major advantage to any industry because they together form competitive industry clusters. In

the case of the German biometric industry, important supporting industries would be the IT

industry in general, and particularly the cryptography industry (concerned with technologies

245 Cf. Porter, Michael (1998 a), pp. 73-85. 246 Cf. Internet Source 112 – Computerwoche. 247 Cf. Porter, Michael (1998 a), pp. 107-124. 248 Cf. Porter, Michael (1998 a), pp. 100-107.

Market and Industry

76

to encrypt data, e.g. using the digital signature249), the smart card industry250 (e.g. cards to

store biometric data), and document production (e.g., passports, ID cards, driver licenses).

All of these industries are well positioned on the world market, which means that the re-

quirements for a competitive national biometric cluster are given.251

Demand conditions252

The composition and character of home demand highly influence an industry’s international

competitiveness. For example, the nature of domestic buyers, the mix and character of their

needs and the size and patterns of growth of home demand are key success factors of an

industry.253

The German biometric industry has a demand problem because it depends on the attitudes

and needs of the federal government and other public authorities. Since there is only small

private sector demand so far, the industry hopes for major public projects but so far no ten-

ders have been published. This means that the nature of buyers is lopsided, the mix and

character of their needs remains unclear, and their demand is not growing yet.

Conversely, biometrics have been in the focus of U.S. government spending at least since

September 11 2001, which is illustrated by the U.S. biometric activities (cf. section 4.1.4) and

the existence of the Biometric Consortium (cf. section 4.2.1).

Additionally, PORTER underlines that a nation’s competitiveness depends on their ability to

spread their desires and values to other parts of the world.254 This is exactly what is done by

U.S. legislative acts, which influence the rest of the world’s decisions on biometrics, and one

reason why the U.S. biometrics industry is internationally successful.

Summarizing the national competitive advantage determinants, there is no lack of production

factors except in the capital market. Domestic rivalry and related industries also support the

German biometric industry. The major obstacle is the unwholesome nature of home demand.

In order to change this situation, major public projects should be initiated, and the demand

for biometric technologies has to be transferred to the private sector to diminish the industry’s

dependency on the federal government and authorities. Biometrics are a promising future

market, and Germany should take advantage of the existing know-how to strive for market

leadership.

249 Cf. Footnote 48. 250 Cf. Footnote 26. 251 E.g., cf. Bundesministerium für Wirtschaft und Arbeit (2004), pp. 7 f. and European Information Technology Observatory (EITO) (2003), p. 230. 252 Cf. Porter, Michael (1998 a), pp. 86-100. 253 Cf. Ibid., p. 86 and Porter, Michael (1990), p. 79. 254 Cf. Porter, Michael (1998 a), p. 86.

Market and Industry

77

Furthermore, the industry needs a forum to spread their values and communicate German

biometric technologies worldwide.

This role should be taken by the German Biometric Strategy Platform. Further implications

are to support sufficient capital supply, to stimulate national and local cluster creation, and to

promote and increase domestic demand. This will be taken into consideration in chapter 7.

5.6 SWOT Matrix

SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats. A SWOT ma-

trix summarizes the results of an analysis process and, simultaneously, forecasts future de-

velopment. This tool was first used at the Harvard Business School in the 1960s. It is now

applied to the German biometric market and industry to summarize the strategic analysis.

Strengths are advantages relative to competitors; weaknesses are limitations or deficiencies

relative to competitors. An opportunity is a major favorable situation in the environment, and

a threat is a major unfavorable situation in the environment. Whereas strengths and weak-

nesses focus on internal aspects of an organization or industry, opportunities and threats

cover the environment. Under the assumption that strengths and opportunities should be

maximized but weaknesses and threats should be minimized, the tool provides a squeezed

overview on the strategic situation and provides the basis for specific measures.255

Based on the previous primary and secondary analysis, figure 5.15 illustrates the SWOT ma-

trix of the German biometric industry. Answering the question if the biometric industry is well-

positioned, the matrix indicates a range of weaknesses and threats, summarizing in what

respect the German biometric industry is not yet well-structured and organized. Neverthe-

less, the large list of opportunities illustrates the positive perspectives.

255 Cf. Pearce, John/ Robinson, Richard (2000), pp. 202 f.

Market and Industry

78

Figure 5.15: The German Biometric Industry SWOT Matrix

Chapter 5 has illustrated that international biometric markets are growing strongly but the

German biometric market is still constrained by some market barriers. In the next years the

domestic market is likely to provide high growth opportunities. Concerning the biometric in-

dustry, it is technologically well-positioned but suffers from several structural weaknesses

and external threats. These findings suggest that a joint strategy is necessary to eliminate

the weaknesses, fight the threats, preserve the strengths and take advantage of the opportu-

nities. Moreover, the German Biometric Strategy Platform will have to abolish the market bar-

riers, address the industry’s structural deficiencies an enhance public opinion of biometrics.

StrengthsThe German biometric industry enjoys excellentinternational reputationMore than 80 biometric companies in GermanyBalanced value chain, e.g. sufficient number ofmanufacturers and system integratorsHealthy domestic rivalry, e.g. among system integratorsWorld technology leadership in some segments, e.g.face and signatureDifferent background of system integrators enablesdiversified resources

WeaknessesInsufficient independent biometric researchAcademic research does not often result in marketableproductsSmall size and low financial capabilities of manufacturersPoor communication along the value chainLack of reference projects, tests etc.High costs and prices of biometric technologiesHigh risk aversion of potential customersLow brand identityLow extent/ unhealthy structure of domestic demandMoreover, no full participation in international growthInsufficient use of economies of scale

OpportunitiesParticipation in worldwide growth of 60% per yearStrong awareness of Information and CommunicationSecurity in Germany and EuropeGerman and European research promotionAdvancing international standardization processIncreasing security requirements at EU bordersLarge-scale public projects in the next years expectedBreakthrough of biometrics after passport introduction;fertilization of private sector & consumer applicationsEconomic upturn in the next years likelyBranding Biometrics Made in GermanyData protection as a Unique Advertising PropositionSynergies with related industries, e.g. smart cardsLeadership in new biometric technologies possible

ThreatsU.S. biometric industry has longer application historyNew biometric giants through M&A processes in the U.S.Several acquisitions by foreign competitors in the lastyears, as well as insolvenciesData protection regulations raise costs, slow downprocesses and hinder certain applicationsNegative public perception, fear for surveillanceInsufficient standardization and interoperabilityFew public tenders, scarce capital appropriations

Strategy Development for the German Biometric Industry

79

6 Strategy Development for the German Biometric Industry

The strategic analysis has pinpointed the German biometric industry’s current situation. To

enhance the industry’s position with respect to markets, international competition and rela-

tionships it is necessary to develop an industry strategy. Chapter 6 will further follow the stra-

tegic management process described in section 2.1 and develop a strategy for the German

biometric industry. This process is structured as follows:

Figure 6.1: The Strategy Development Process

The results of the interviews influence the suggestions and will be referred to at the relevant

places.

6.1 Strategic Vision and Business Mission

Vision and mission stand at the beginning of the strategy development process. Although

sometimes used interchangeably, the terms have to be distinguished. A vision stands at the

top providing a picture of who the organization is and in which direction they are headed in

the long-term future. A suitable and accepted vision is the basis for any strategy-crafting

process.256 Visions can be described as glue that holds together values, ideologies and orien-

tation.257 On the contrary, a mission is more focused on the present, the actual business and

the near to mid-term future.258 It is crucial to link vision and mission to an analysis as per-

256 Cf. Thompson, Arthur A./ Strickland, A.J. (1996), pp. 22 f. 257 Cf. Morden, Tony (1999), p. 109. 258 Cf. Thompson, Arthur A./ Strickland, A.J. (1996), pp. 22 f.

Vision

Mission

Objectives

Strategy


80

formed in chapter 5 to avoid a mission-driven strategy without hold in actual environment and

industry conditions.259

Based on the analysis, the following vision and mission are suggested for the German bio-

metric industry:

Strategic Vision:

Germany is the world’s leading and most innovative biometric environment. The German

biometric industry leads international competition in research, technology, applications and

sales. Sovereign, other public and private customers worldwide prefer German biometric so-

lutions due to their superior quality and reliability. The industry is a strong and growth-

oriented part of the German economy and sells products and solutions that make the society

safer and provide convenience to users.

From this Vision, the following mission is derived:

Business Mission:

As part of the German economy, the biometric industry is dedicated to meet and exceed the

requirements of governmental, other public, private sector and consumer needs in the field of

biometrics fast, efficient, with superior quality, and on the highest security level. They re-

search, develop, manufacture, integrate, sell, operate and consult in the field of biometrics.

Understanding the societal responsibility of any business, the industry commits to the Ger-

man Corporate Governance Code and the values of ethical business behavior. This means

respect for human dignity, responsibility, trustworthiness, fairness and caring towards their

customers, all interest groups and the society. The German biometric industry seeks to im-

prove the legal and societal framework of biometric technologies, and they support environ-

mental issues.

Summarizing basic values of the industry, these are:

Public and private customer orientation

High security

Superior quality

Technological competence and leadership in international competition

Innovation & future orientation

Research & application orientation

Commitment to German economic policy

Ethical commitment – responsibility, trustworthiness, respect, fairness, and caring

Environmental commitment

259 Cf. Schafir, Schlomo (2004), p. 36.


81

6.2 Objectives

Objectives translate both vision and mission into concrete outcomes and milestones, and

they express the commitment to achieve a given result in a given time. Therefore, they

should be measurable, tied to a time restraint, and achievable.260 Objectives are either finan-

cial (e.g., a higher Return on Investment) or strategic (market-, efficiency-, competition-,

prestige-oriented etc.). Moreover, they can be oriented towards social and ecological

achievements.261 Although some strategists suggest a distinction of quantitative and qualita-

tive objectives, this study will follow the first approach.262

Based upon the strategic analysis results, and pursuing vision and mission, the following ob-

jectives for the German biometric industry are suggested:

Financial

Annual revenue growth equivalent to total world biometric revenue growth, i.e. at least

60% annually in the next 5 years. In the long term, the German market growth rate should

even exceed the world market growth rate to close the gap to the main competitors.

The revenue growth results in corresponding earnings growth.

Biometric investments create a positive and steadily increasing net cash flow.

Costs and prices of German biometric products reduce faster than the U.S. and British

biometric industry’s costs and prices.

Other financial objectives could be defined by the German Biometric Strategy Platform.

Strategic

Achieve a world market share of 30% by 2009. This means to participate in the growth of

international markets and, simultaneously, large-scale entry in the German market.

Diversify the structure of domestic demand to diminish dependency on government pur-

chases.

Gain technology and quality leadership in the world biometric market, demonstrated by

internationally recognized comparative tests.

Establish the brand Biometrics Made in Germany. Brand recognition exceeds the U.S.

and British biometric brand recognition among customers in terms of quality, reliability and

security. The German image for high-tech products must be transferred to biometric secu-

rity.

Establish Germany as the most valued biometric location, to be proved by internationally

recognized customer surveys.

260 Cf. Thompson, Arthur A./ Strickland, A.J. (1996), p. 30. 261 Cf. Ibid., p. 31. 262 Cf. Morden, Tony (1999), p. 112.


82

Research and develop new innovative biometric technologies and market new products

faster than international competitors.

Achieve legal certainty with respect to detailed data protection and biometric application

guidelines.

Support market consolidation to become competitive in size on the company level.

Social & Environmental

Enhance public perception of biometrics and technology acceptance. This should be re-

flected in positive media coverage.

Reduce risk aversion among customers.

Prevent ecological criticism in biometric technologies, e.g. concerning recycling of sort-out

products.

In the following section, these objectives will be transformed in a strategy.

6.3 Industry Strategy

6.3.1 The Significance of Strategies Strategies summarize how achieve the objectives. They define the long-term behavior on the

basis of the premises, i.e. the strategic analysis. Particularly, they constitute where to con-

duct business and how to allocate resources to meet internal and external changes, how to

build up strengths, avoid weaknesses, take advantage of opportunities and face threats.

Strategies define how to use synergies, create innovations and behave internally and exter-

nally.263 Generally speaking, they define the strategic direction of impact, the line of attack

towards resistance and barriers.

Strategies are strongly influenced by the results of the SWOT analysis as performed in sec-

tion 5.6. Within a company, the strategy pyramid breaks down the corporate strategy to

functional and operating strategies.264 In the case of industries, the strategy should be gen-

erally acceptable by all industry members and broken down into sub-strategies.

To answer the question if it is possible for the German biometric industry to pursue a joint

strategy, some specific aspects have to be considered:

The pursued strategy approach for the German biometric industry is strongly market-oriented

for three reasons. First, the strategic analysis indicated that developing the German biometric

market is the most difficult strategic aspect. Second, the industry comprises many players

with contradictory competitive and financial interests. Therefore, an industry strategy will

263 Cf. Kreikebaum, Hartmut (1997), pp. 70 f. and Meffert, Heribert (2000), p. 233. 264 Cf. Thompson, Arthur A./ Strickland, A.J. (1996), p. 38.


83

concentrate on non-competitive domestic aspects and international competition. Financial

aspects must remain general as described by the objectives in the previous section.

Third, this approach is supported by the observation that increasingly, markets are the bot-

tleneck of managerial and business activities. Therefore, strategic marketing applies strategic

management methods to analyze complex market situations and provide the basis for deci-

sion making and implementation of activities.265 This enables the permanent adaption of ob-

jectives, resources and strategies to changing environment and market conditions to guaran-

tee the survival of the company or industry.

Donelly notes that „in recent years…there has been an increasing shift towards more active

participation by marketing managers in strategic analysis and planning. This is because, in

reality, nearly all strategic planning questions have marketing implications.”266 Thus, a distinc-

tion of strategic management and strategic marketing in theory or business practice is neither

practicable nor recommendable because strategic decisions are usually influenced by market

conditions, and have influence on marketing decisions themselves. SCHLIESSMANN con-

cludes that there is no such question as strategic management or strategic marketing or stra-

tegic controlling. Modern, market-oriented management has to comprise all these fields.267 As

result, strategic marketing aspects are included in the overall strategic process conducted in

this study.

The strategy should also consider general national economic and security interests. Consid-

ering these premises, a joint industry strategy is possible as a consensus that can differ

from the companies’ individual strategies.

As described in the methodology chapter, this strategy development orients in Meffert’s

strategy system, who integrates partial aspects by Ansoff, Porter, Backhaus, Becker etc.268

Based on this approach, the sub-strategies will be develop systematically, then illustrated in

a strategy grid and, finally, summarize the strategy verbally.

265 Cf. Vollert, Klaus (1999), S. 30. 266 Donelly, James H./ Peter, J. Paul (2001), S. 22. 267 Schließmann, Christoph Ph. (1995), S. 32. 268 Cf. Internet Source 113 – Katholische Universität Eichstätt-Ingolstadt, pp. 2 and 23.


84

Figure 6.2: Strategy System by Meffert Source: Internet Source 113 – Katholische Universität Eichstätt-Ingolstadt, pp. 2 and 23.

Additionally, some partial aspects which are not part of Meffert’s system will be integrated,

which are area strategies, vertical markets, market entry modes and Porter’s generic com-

petitive strategies. On the contrary, intermediary strategies are not considered because the

biometric industry mainly sells directly. The industry strategy must be complemented by the

individual companies

6.3.2 Business Field Strategies At the beginning of strategy development the industry should define which business fields

they target. This is a requirement for further considerations regarding markets and market

participants. Business field strategies define the industry’s areas of activity in terms of prod-

uct-market fields, competitive advantage, vertical target markets, geographical target mar-

kets and timing.

Market Field

Ansoff suggests that strategic decisions have to be met according to target markets and

products. The assumption that both markets and products can be current or new provides a

matrix with four growth strategies. Market penetration means to seek growth by increasing

the market share in existing markets with existing products, thereby crowding out competi-

tors. For example, the German biometric industry would try to grow further in the German


85

sovereign market, hindering American companies to enter. Market development is to seek

growth by selling existing products in new market segments. For example, the German bio-

metric industry would seek to sell their existing products to the U.S. sovereign market. Pursu-

ing a product development strategy, the industry seeks to bring new products into current

market segments. For example, the industry would bring new biometric technologies to the

current German sovereign market. Finally, diversification means to enter new markets with

new products, e.g. the German industry would enter the U.S. consumer market with new

biometric technologies.269 Since it is a waste of resources to be positioned in all four sectors,

it is necessary to decide on the strategic direction regarding market fields.

Figure 6.3: Market Field Strategies Source: According to Ansoff, Igor (1965), p. 109.

Since in most cases the financial resources are limited it is not recommendable to take both

market and product risk at the same time, as it would be the case with diversification. On ac-

count of the variety of German biometric companies, they could pursue all other field strate-

gies such as market penetration, market development and product development.

Competitive Advantages

According to MEFFERT, strategy development has to consider which competitive advan-

tages a company or industry provides to their customers. Basically, these could be innova-

tion, quality, branding, program range, and costs.270 Although competitive costs are neces-

269 Cf. Ansoff, Igor (1965), p. 109. 270 Cf. Meffert, Heribert (2000), p. 271.

Market Penetration

Market Development

Product Development

Diversification

Current Markets

New Products

New Markets

CurrentProducts

Market Penetration

Market Development

Product Development

Diversification

Current Markets

New Products

New Markets

CurrentProducts

General Focus of the German Biometric Industry


86

sary and achievable, an innovative technology industry should not communicate low costs

and prices as the main benefit to customers.

Corresponding to their basic values, the Germany biometric industry should concentrate on

innovation, quality, branding and program range, and all of these aspects are equally impor-

tant to the success of the industry.

Vertical Target Markets

The next step is to define vertical market segments to address.

Based on section 3.4, the industry’s vertical target markets are the sovereign, the non-

sovereign public, the private sector (producer applications) and the consumer markets (con-

sumer applications). Although the individual company should concentrate on selected seg-

ments, the industry as a whole can address all vertical markets. Horizontal markets spread

across these vertical markets but cannot be included in the joint strategy because the inter-

ests of the individual companies are very different from each other.

Area Strategies

Area strategies determine where products are offered, and the scope ranges from local, re-

gional, national, international, to global.271

Since the German biometric market is too small for local and regional strategies, and even

on the national level sales are very limited, the German biometric industry should define their

markets internationally. Considering the small size and limited resources of most biometric

companies, competition worldwide would surpass the industry’s forces. Therefore, an inter-

national strategy with focus on selected areas and countries is suggested. The actual target

countries may differ depending on the individual companies’ objectives.

Timing (Innovation Diffusion)

The Innovation Diffusion concept by Rogers and Shoemaker is part of innovation manage-

ment and illustrates how new ideas and technologies are spread among groups of people

such as customers. In a society innovations are not adopted by all members at the same

time. Usually, a small percentage acts as innovator and pioneer. They are followed by the

early adopters, the early majority, the late majority and the laggards.272 Figure 6.3 illustrates

this normal distribution curve:

271 Cf. Becker, Jochen (2002), p. 352. 272 Cf. Rogers, Everett M./ Shoemaker, F. Floyd (1971), p. 182.


87

Figure 6.4: Innovation Diffusion Curve Source: Rogers, Everett M./ Shoemaker, F. Floyd (1971), p. 182.

This concept can be applied to the German biometric industry and has two implications. First,

the industry has to decide which customer segments to address. Second, this decision must

correspond with the industry’s behavior. A pioneer company can address all customer seg-

ments but a follower company has to consider that innovator and early adopter customers

are already served by the pioneers.273

Since biometric technologies are emerging technologies and one of the industry’s values is

innovation orientation, focus on innovators and early adopters is recommended. Regarding

the international public sector, the German government is an innovator because they will be

among the first to issue biometric passports. In the private sector, innovators could be large

companies and innovative consumers.

As a result the German biometric companies have to be pioneers and early adopters. This is

supported by the strategic analysis results as several companies mentioned the risk aversion

of German companies and potential customers as the reason for the lack of early adopter

customers. Hence, the industry should take communication measures to reduce the custom-

ers’ risk aversion and convince them to become early adopters. One of the strategy platform

tasks would be to support these measures. Once they are recognized as pioneers, the Ger-

man biometric companies could also address the early and late majority customers in a later

market stage.

273 Cf. Backhaus, Klaus (2003), p. 272.

2.5% 16.0%34.0%34.0%13.5%

Innovators/ Pioneers

Early Majority Late Majority LaggardsEarlyAdopters

2.5% 16.0%34.0%34.0%13.5%

Innovators/ Pioneers

Early Majority Late Majority LaggardsEarlyAdopters


88

Becker has introduced the so-called strategy grid to illustrate the results of strategy devel-

opment.274 Figure 6.5 illustrates the German biometric industry’s business field strategies.

Figure 6.5: Business Field Strategies of the German Biometric Industry

6.3.3 Market Entry Strategies Market Entry Forms

Meffert mentions three alternatives to enter emerging markets. Striving for internal growth,

companies have to focus on technology and product development. This is called product in-

troduction strategy. Seeking external growth, they could on the one hand acquire licenses,

patents, products or other companies. This is called acquisition strategy; however, it is nec-

essary to note that this strategy provides more options than acquiring other companies. On

the other hand, companies could initiate joint projects, joint research & development, joint

ventures etc., which is a cooperation strategy.275

Biometrics are an emerging market. Since most German biometric manufacturers are too

small for an acquisition strategy, they should pursue a product development or cooperation

strategy. Some large system integrators could also follow an acquisition strategy because if

they generate revenue with other business to finance these transactions.

Foreign market entry modes

The decision how to enter international markets is a crucial part of any strategy focusing on

international markets. Internationalization can occur by exporting, licensing, joint venture, or

direct investments in foreign branches, production plants, or affiliate companies.276 Whereas

exporting is the mode with the lowest risk and the lowest influence on the entry proceeding

and results, direct investments allow highest influence but correspond with the highest risk as

well.

274 Cf. Becker, Jochen (2002), p. 352. 275 Cf. Meffert, Heribert (2000), p. 259. 276 Cf. Internet Source 114 – Quick MBA.

Not recommendedRecommended in few casesRecommended

Business Field StrategiesMarket Field Market Penetration Market Development Product Development Diversification

Competitive Advantage Quality Innovation Branding Program Range Costs

Vertical Target Markets Sovereign Other Public Private Sector Consumer

Area Strategies Local Regional National International Global

Timing (Innovation Diffusion) Pioneers Early Adopters Early Majority Late Majority Laggards


89

The strategic analysis results suggest that the German biometric industry has to participate

in international markets. Therefore, the decision on the entry modes has to be made. On ac-

count of the industry’s little resource power, focus on exporting is recommended. Licensing

and joint ventures should be considered if necessary under the premise that the biometric

know-how remains in Germany. Foreign branches and production plants imply a high risk,

particularly considering the small size of German biometric companies. The larger system

integrators could take advantage of existing foreign branches working in other business

fields.

Internationalization is also vital for the German biometric industry because it means to attack

foreign rivals in their own domestic markets to diminish their ability to attack in Germany. The

industry should constantly search for new geographic areas to enter to position themselves

in international markets before competitors do so.

Finally, internationalization is also helpful to spread German technologies and technical val-

ues over the world as recommended by the diamond of national competitiveness analysis

(section 5.5).

Figure 6.6 illustrates the German biometric industry’s market entry strategies.

Figure 6.6: Market Entry Strategies of the German Biometric Industry

6.3.4 Market Participants Strategies According to MEFFERT, there are four groups of market participants to be considered – cus-

tomers, competitors, intermediaries and interest groups.277

Since most biometric technologies are sold directly, intermediary strategies will not be dis-

cussed.

Customer-oriented Market Parceling

Parceling strategies indicate if the products are manufactured for a mass market, i.e. large

quantities of similar products for the whole market, or customized to different market seg-

ments, i.e. adapted products for several customer groups.278

277 Cf. Meffert, Heribert (2000), pp. 267 f. 278 Cf. Ibid., pp. 268 f.


Market Entry Form Independent Cooperation Acquisition

Foreign Market Entry Modes Exports Licensing Joint Ventures Branches Plants


90

Since the biometric market is no mass market, and there are no standard products and solu-

tions, the German biometric industry should follow a segmentation strategy and customize

their solutions to the high number of different horizontal application fields as described in

section 3.4.

Additionally, market segmentation could be the tool to diversify the nature of domestic de-

mand and trigger growth in private sector and consumer markets. Particularly, this could be

achieved by transferring experience and positive public recognition from sovereign to private

projects.

Customer Stimulation Strategies

There are two ways to stimulate market demand. First, in a price/quantity strategy one seeks

to enter the market with large quantities, take advantage of economies of scale and keep

prices low. Price-quantity focuses on price competition and turnover rather than profit, and is

often chosen in lower market segments. Moreover, this strategy corresponds with a mass

market parceling strategy.

A preference strategy concentrates on instruments that are not price-related. For example, it

aims for profit rather than turnover, focuses on quality competition, and is interested in upper

market segments, i.e. high quality and high prices.279

Since the biometric market is characterized by high quality, high security products, a low

number of units and the relatively price-insensitive public sector as the main customer, the

German biometric industry should follow a preference strategy.

Generic Competitive Strategies

Competitive strategies define how to position towards competitors. Since the German bio-

metric companies compete with each other in the German market, they cannot follow a joint

competitive industry strategy in Germany. Therefore, strategy development can focus on in-

ternational competition only.

Porter suggests four generic competitive strategies, resulting from the decision on competi-

tive scope and competitive advantage.

279 Cf. Ibid, p. 269.


91

Figure 6.7: Generic Competitive Strategies Source: According to Porter, Michael (1998 c), p. 12.

The competitive scope can either be broad or narrow, and the competitive advantage can

either be lower costs or differentiation. These assumptions lead to four generic strategies:

Cost leadership means to be the producer with the lowest cost. The competitive advantage is

mainly built on cost and competition is challenged in many segments. Cost focus niche

strategies concentrate on costs in selected niche markets, while differentiation focus niche

strategies concentrate on differentiation in niche markets. The difference is the competitive

advantage the company seeks for – either costs or differentiation.

Pursuing a differentiation strategy, companies competes on a broad base but aims to be

unique in dimensions that are valued by customers and not related to prices, for example

high quality. For this uniqueness, these companies are compensated with a price premium.280

It is vital to avoid the strategic mistake of a stuck-in-the middle position where scarce re-

sources are wasted and none of the customers’ expectations is clearly met. A company

should position itself in one of the four areas.

As suggested above, costs should not be the competitive advantage of the German biometric

industry. Considering the industry’s basic values and the strategy development process so

far, they are recommended following a Differentiation or Differentiation Focus Niche Strategy.

According to their basic values, exemplary competitive advantages could be quality, security

and reliability.

280 Cf. Porter, Michael (1998 c), pp. 12-15.

CostLeadership

Differentiation

Cost Focus Niche

Differentiation Focus Niche

Competitive Advantage

Lower Cost

CompetitiveScope

NarrowTarget

Differentiation

BroadTarget

CostLeadership

Differentiation

Cost Focus Niche



Lower Cost

CompetitiveScope

NarrowTarget

Differentiation

BroadTarget


CostLeadership

Differentiation

Cost Focus Niche



Lower Cost

CompetitiveScope

NarrowTarget

Differentiation

BroadTarget

CostLeadership

Differentiation

Cost Focus Niche



Lower Cost

CompetitiveScope

NarrowTarget

Differentiation

BroadTarget



92

Competitive Behavior

According to MEFFERT, competitor-oriented strategies have to determine long-term behav-

ior towards competitors. Companies can either seek to avoid or to face competition, and they

can act as innovators or imitators. Again, these assumptions generate a matrix of four com-

petitor-oriented behavioral strategies. Avoidance means to evade competition by innovative

products and solutions that do not affect competitors. Conflict is based on innovative prod-

ucts and solutions that are directed against competitors. Pursuing an adaption strategy,

competition is avoided by imitating the competitor, whereas imitative behavior and facing

competition leads to a cooperation strategy.281

Figure 6.8: Competitive Behavior Strategies Source: According to Meffert, Heribert (2000), p. 284.

Considering the German biometric industry, the previous analysis has shown that behavior in

international competition should be innovative and facing competition, which leads to a con-

flict strategy. Such strategy can only be pursued on the base of a strong brand Biometrics

Made in Germany. This holds particularly true because the industry should expect some

powerful competitors to entry within the next years, for example, American competitors and

German system integrators from other industries. In spite, cooperation could be useful in

some rare cases, for example to enter markets that cannot be entered without support of a

domestic company.

Some interviewees suggested creating a win-win situation by concentration on different value

chain elements. However, two aspects speak against this idea. First, this would diminish

281 Cf. Meffert, Heribert (2000), pp. 282-288.

Avoidance Adaption

Conflict Cooperation

InnovativeBehavioralDimension

FacingCompetition

Imitative

AvoidingCompetion

Avoidance Adaption



FacingCompetition

Imitative

AvoidingCompetion


Avoidance Adaption



FacingCompetition

Imitative

AvoidingCompetion

Avoidance Adaption



FacingCompetition

Imitative

AvoidingCompetion



93

healthy domestic competitive pressure. Second, it will be difficult to combine the heterogene-

ous company interests, and new entries will disturb the agreement frequently.

Interest Group Strategies

Interest groups influence the strategy development process by having social or market-

oriented expectations towards an organization or industry. They are all internal and external

stakeholders such as customers, shareholders, employees, suppliers, partners, banks, the

government, and other societal groups.282

Depending on the strength of interest groups and the strength of companies, there are four

generic strategies. If both interest groups and companies are weak, the claims of interest

groups can be avoided by relocating the problem, i.e. shifting the problem out of the claimers’

perception. For example, the biometric industry would financially support data protectionist

organizations but continue with their business and product policy.

If strong interest groups challenge weak companies, the latter have to adapt to the claims or

avoid the problem by retreat. For example, the biometric industry would either adapt their

products to data protectionists’ demands or not sell these products anymore. Pursuing this

strategy the companies remain in a passive, reactive position.

Figure 6.9: Interest Group-Oriented Strategies Source: According to Meffert, Heribert (2000), p. 301.

If weak interest groups meet strong companies, passivity or resistance are possible. In the

long term this leads to confrontation and holds the danger to lose societal acceptance.

282 Cf. Meffert, Heribert (2000), p. 297.

Adaption/ Avoidanceby Retreat

Innovation

Avoidance byRelocating

the Problem

Passiveness/ Resistance

Company StrengthLow

Influenceby Interest

Groups

Low

High

High Adaption Innovation


the Problem


Company StrengthLow


Groups

Low

High

High


Adaption/ Avoidanceby Retreat

Innovation


the Problem


Company StrengthLow


Groups

Low

High

High Adaption Innovation


the Problem


Company StrengthLow


Groups

Low

High

High



94

Finally, if both parties are strong, the companies have to forecast the interest groups’ de-

mands actively and develop innovative approaches to satisfy the demands.283 For example,

the industry could lead the data protection discussion themselves and provide their custom-

ers with technical and social initiatives to solve this problem.

The German biometric companies are young, small, and do not possess high resources. Ac-

cording to the interview results they have to face strong interest groups, particularly regard-

ing data protection, ethics and fear for technology. Since retreat from the market is no option

for the emerging biometric industry, they have to adapt to these claims to kick-off initial pur-

chases. Gradually, the industry will become stronger and be able to apply an innovation

strategy.

Figure 6.10 illustrates the German biometric industry’s market participants strategies.

Figure 6.10: Market Participants Strategies of the German Biometric Industry

6.3.5 Strategy Summary

Figure 6.11 summarizes the German biometric industry strategy. Considering business field

strategies, the companies have several options. For example, their individual market fields,

vertical target markets and timing may be adapted to specific company visions and objec-

tives. The same holds true for market entry strategies because there is no unique successful

entry strategy for all industry members. On the contrary, market participants strategies pro-

vide fewer options because they strongly depend on the biometric industry characteristics.

For example, in the emerging high-technology biometric market companies are not recom-

mended pursuing an undifferentiated mass market strategy, and costs should not be the ma-

jor competitive advantage.

283 Cf. Ibid., p. 15


Market Participants StrategiesMarket Parceling Undifferentiated Mass Market Differentiated Segmentation

Customer Stimulation Price/ quantity Preference

Generic Competitive Strategies Cost Leadership Cost Focus Niche Differentiation Different. Focus Niche

Competitive Behavior Avoidance Adaption Conflict Cooperation

Interest Groups Adaption/ Avoidance by Retreat Avoidance by Relocation Innovation Resistance/ Passivity


95

Figure 6.11: German Biometric Industry Strategy Grid

Resulting from the interview series, there are some more aspects the industry should con-

sider in the strategy. To overcome the market barriers analyzed in section 5.1 the industry

suggests to:

Interview Results – Strategy Details

Establish a strong brand Biometrics Made in Germany

Quickly adopt to emerging standards

Take advantage of research support on European and German level

Secure fast conversion of R&D results into marketable products

Enhance technology and product quality

Develop attractive features

Table 6.1: Interview Results – Strategy Details As a conclusion on strategy development, the industry strategy can be formulated as follows:


Business Field StrategiesMarket Field Market Penetration Market Development Product Development Diversification

Competitive Advantage Quality Innovation Branding Program Range Costs

Vertical Target Markets Sovereign Other Public Private Sector Consumer

Area Strategies Local Regional National International Global

Timing (Innovation Diffusion) Pioneers Early Adopters Early Majority Late Majority Laggards

Market Entry StrategiesMarket Entry Form Independent Cooperation Acquisition

Foreign Market Entry Modes Exports Licensing Joint Ventures Branches Plants

Market Participants StrategiesMarket Parceling Undifferentiated Mass Market Differentiated Segmentation

Customer Stimulation Price/ quantity Preference

Generic Competitive Strategies Cost Leadership Cost Focus Niche Differentiation Different. Focus Niche

Competitive Behavior Avoidance Adaption Conflict Cooperation

Interest Groups Adaption Avoidance by Relocation Innovation Resistance/ Passivity


96

The German biometric industry concentrates on penetrating existing markets with existing

and new products, and open new markets with established products. Their competitive ad-

vantage is based on quality, innovation, branding and a broad program range. Vertical target

markets are the sovereign, non-sovereign public, private sector and consumer market na-

tionally and internationally. Since the industry considers themselves as pioneers or early

adopters, they concentrate on serving pioneer, early adopter and early majority customers in

the early market stage. In the later market stages they will serve late majority and laggards

as well.

Markets will be entered either independently or in cooperation with partners. Foreign markets

are targeted via exports, licensing or joint ventures. Foreign branches could be an option for

some larger companies with adequate resource.

Customers will be approached with a differentiated product range and stimulated using a

preference strategy to diversify the nature of domestic demand and meet international re-

quirements. Towards their competitors, the German biometric industry pursues a differentia-

tion of differentiation focus niche strategy. Furthermore, international competition is faced in

conflict, on the base of a superior brand Biometrics Made in Germany. As to interest groups,

the industry adapts to claims to kick-off initial purchases and avoid disturbances in the new

market. In the long-term interest groups will be served with an active and innovative ap-

proach.

Furthermore, the industry is aware of the difficulties arising in emerging markets. To over-

come these barriers, the strategy is to adopt emerging standards quickly, take advantage of

European and German research support and secure fast conversion of R&D results into

marketable products. Simultaneously, the industry will enhance technology and product qual-

ity and serve customers with attractive features. Based on this overall industry strategy, the individual biometric companies are recommended

developing individual instrumental strategies, for example concerning detailed financial ob-

jectives and marketing strategies in product, price, place and promotion.284

Chapter 6 has proven that the German biometric industry can pursue a joint market-oriented

strategy, and has developed the outlines of this strategy. On a national level, the implemen-

tation tool is the German Biometric Strategy Platform, which should discuss this strategy and

support industry-wide strategy implementation in 2005.

284 Cf. Internet Source 113 – Katholische Universität Eichstätt-Ingolstadt, p. 23.

The Implementation of a German Biometric Strategy Platform

97

7 The Implementation of a German Biometric Strategy Platform

This chapter is dedicated to design the German Biometric Strategy Platform as the tool to

implement the industry strategy and will suggest goals, strategic decisions, tasks and mem-

ber structure of the platform. Finally, implementation proceedings, strategic controlling and

support by BITKOM will be drafted.

7.1 Motivation and Goals of the Platform

The success of any strategy depends on the quality of implementation, and it is crucial to

translate strategies into clear tasks and effective policies for daily work.285

The German Biometric Strategy Platform will be a working group with the aim to bundle the

business, research, sovereign and general public interests in the field of German biometrics.

Originally, the suggestion to establish this platform has been made by the DIN-AHGB (cf.

section 4.4.6), particularly because comparable bodies have already been founded in other

countries (cf. section 4.2). Moreover, the intense efforts of US authorities on the field of bio-

metrics and the time lead of the US biometric industry make quick actions by the German

side necessary to withstand competition and to open up comparable market opportunities.

Successful strategy implementation depends on some Key Success Factors. They have a

predominant impact on the achievements and have to be defined in order to avoid failure.286

To make the Biometric Strategy Platform a success, these factors are:

The majority of industry members should agree on the strategy and consider it in their in-

ternal strategic management.

The platform’s tasks must reflect industry objectives and strategies.

Industry strategy, platform objectives and tasks have to be reviewed and adapted con-

stantly.

The member structure must be well-balanced and represent the most important players in

the German biometric environment and should be quickly adapted if necessary.

Based on the interview series and complemented by the strategic analysis results, the plat-

form should strive for the following goals:

Create a strategic alliance of industry, research, politics, and other interest groups

Stimulate national and local cluster creation

Implement the developed industry strategy

285 Cf. Pearce, John/ Robinson, Richard (2000), p. 357. 286 Cf. Morden, Tony (1999), p. 45.


98

Provide a basis to communicate, discuss and meet sovereign requirements

Promote and increase public and private domestic demand

Strengthen the brand Biometrics made in Germany

Transfer technologic knowledge into products, solutions and services

Organize large-scale national reference projects

Identify chances for German biometry companies on international markets

Support sufficient capital supply of manufacturers to expand their business

Enhance communication and exchange of information within the industry

7.2 Strategic Issues and Tasks of the Platform

According to the interviewed companies, the Strategy Platform should decide on some stra-

tegic issues to support the German biometric industry, structured in four strategic fields:

Interview Results – Strategic Issues of the Biometric Strategy Platform

International Competition

How to establish the brand Biometrics Made in Germany?

How to strengthen the industry in international competition?

Can German authorities support German companies in internationalization, e.g. pursuing a certain

export policy?

Which industry policy activities have to be conducted to position Germany as a biometric location,

e.g. considering location marketing, investor recruiting, demonstration of competence, retention

and recruiting of qualified workforce?

Could the biometric industry influence European politics?

Is it possible to form German bidder consortia for large international tenders?

How can the German biometric industry gain technology leadership?

How to become early adaptor and pacemaker rather than follower?

Should the industry organize a joint appearance at international fairs and events?

How to represent German biometric interests internationally? Is the European Biometric Forum

the appropriate forum to do so?

German Market

How can the described market barriers be eliminated?

How to open the market, e.g. with large reference projects in selected market areas?

How to improve the legal framework, e.g. achieving congruency of international and national regu-

lations, creating new regulations etc.?

Could the fiscal treatment of biometrics be used as a supporting instrument, e.g. raising the de-

preciation rates?

How can industry policy decision makers be convinced to support the industry?


99

How to enhance interconnectedness of the German biometric industry?

Research

Which research topics have to be addressed?

What kind of support can be given to German biometric research?

Which financial resources are available?

Standardization

How can the platform support international and national standardization?

Table 7.1: Interview Results – Strategic Issues of the Biometric Strategy Platform

These issues could be used as a discussion base. During the first meetings of the platform,

they should be prioritized, tied to a timeframe and split up in smaller work packages.

Goals and strategic issues should lead to detailed tasks of the German Biometric Strategy

Platform. The following list is based on the results of the strategic analysis, the conducted

interviews and the tasks of international biometric platforms as described in section 4.2.

General Tasks

Work in national and international bodies

Further develop industry vision, mission and strategy

Eliminate the market barriers

Bundle forces of politics, industry, research, industry associations and other groups

Evaluate technology trends, conduct market research

Work out business cases for various market segments.

Discuss financing alternatives of large-scale projects. The national competitiveness dia-

mond (cf. section 5.5) has pinpointed some weaknesses with capital availability.

Establish a showroom to demonstrate German biometric technology

Communication

Discuss and find consensus regarding the platform participants’ different interests

Bundle public and internal relations of the industry, e.g. by

Organizing biometric symposia, manufacturer conferences, press conferences,

meetings, courses, workshops, sponsor & support conferences, exhibitions etc.

Creating a web page including the German Biometrics Guide and company product

information

Joining communication on international markets, e.g. at fairs and events


100

Practice lobbying and strengthen the link between politics and business, for example by

Providing information to decision makers, e.g. by submitting concepts, drafts, feasi-

bility studies, expertises, letters and memos concerning political decisions, legal

regulations etc.

Communicating business interests to politics and political interests to business

Conducting meetings and negotiations with politicians and authority representatives,

e.g. to increase transparency of sovereign biometric requirements, projects and pur-

chasing activities

Establishing the Biometrics guide and future platform results as a basis for biometric

industry policy

Convincing authorities to publish the Biometrics guide and other documents on their

websites and as printouts

Apply similar measures to establish and maintain links with other relevant organizations

and interest groups.

Create public awareness of biometric technologies, influence public discussion and create

transparency and trust, for example by

Informing on data protection measures

Cooperating with data and consumer protectionists

Publishing documents, articles and other contributions on biometric technologies

Constantly propagating the positive potentials of biometrics

Support industry networking, for example by

Enhancing communication between manufacturers and system integrators

Organizing symposia, conferences, meetings, courses, workshops

Providing a forum to exchange experiences

Establishing a knowledge management base to exchange internal industry informa-

tion and general biometric information, potentially on a technical base taking advan-

tage of the platform website mentioned above

Provide the base for a German vendor consortium in large international tenders

Projects and Applications

Support and evaluate public and private reference projects, field tests and large-scale ap-

plications to initiate domestic market growth

Describe and develop applications, e.g. software extension, data base security etc.

Accompany international and national standardization to achieve interoperability, e.g. re-

garding interfaces, evaluation criteria for biometric products and tests), forward interna-

tional standard document suggestions to the industry, develop best practices; link be-

tween companies and standardization in cooperation with the DIN


101

Examine potentials and costs of biometric systems

Evaluate public and private customer requirements

Support introduction of test and conciliatory proceedings for biometric reference projects

Research

Identify and support research topics

Initiate base research and product development

Link companies with research institutes

Organize inter-project coordination with other research institutes, potentially establish an

international research network

Link academia and industry, for example by

Supporting the development of marketable products

Initiate the constitution of chairs for biometrics at academic institutions

Organizing research contests in cooperation with academia

Establish public-private partnerships of companies and authorities

Consult research projects

Support the steps from R&D to market, particularly on the German market

Support small companies in handling research support programs

Concerning research topics, most biometric manufacturers will set their own targets. More-

over, a detailed analysis of research topics to be addressed by the German Biometric Strat-

egy Platform is still missing. Nevertheless, the interviewees already mentioned some topics

to be considered:

Basic research

Algorithm, template, protocol and interface standardization

Data protection by crytology, e.g. template encryption, data base security

RFID collision protection

Integration of biometrics and cryptography

3-D face recognition

Image editing

Research, communication and discussion of less developed or new biometric technolo-

gies

Embedding in telecommunication processes and devices

Application-oriented research


102

Process optimization, e.g. fast, efficient and secure clearance of passengers, crews and

ground staff at airports

Performance enhancement of existing technologies, for example lower error rates and

long-term use without maintenance

Sustainable secure systems, protection against system evasion

Multimodal systems/ multibiometrics

Fallback procedures, i.e. how to proceed if the system fails to recognize a person

Comparative evaluation of biometric technologies

Costs and evaluation criteria of large-scale reference projects

Projects and modules for less developed and new biometric technologies

Non-technical aspects, e.g. societal acceptance, estimation of consequences

The German Biometric Strategy Platform should deal with these subjects. Moreover, BIT-

KOM intends to address both BMBF and the European research promotion in the course of

the 7th framework starting in 2006 to promote these topics.

Asked how to position the German Biometric Strategy Platform towards international biomet-

ric platforms, the interviewees agreed that international cooperation of platforms is more im-

portant than competition. Cooperation could be expressed in a Memorandum of Understand-

ing and include to exchange information and coordinate international biometric issues such

as standardization. Multiple memberships in different biometric platforms should be possible.

Although the relation with international biometric platforms should be based on cooperation,

protection of German interests is necessary, particularly because international platforms also

safeguard their national interests. It is important to realize that the German Biometric Strat-

egy Platform can learn from their international counterparts, for example regarding tasks,

members, projects etc.

The German position towards the European Biometric Forum (EBF, section 4.2.7) still has to

be defined. Most interviewees did not support the EBF and dislike the idea of a German Plat-

form membership in the EBF. Some of the reasons are the EBF’s lack of neutrality, unclear

activities, and the not legitimized claim to represent a European position.


103

7.3 Member Structure and Foundation

Since structure should follow strategy, the platform member structure has to be based on the

strategic analysis results. The industry expressed the following opinion in the interview se-

ries:

Since the platform needs participants who work daily and operationally in biometrics, who are

available and have the capacity to work constantly for the platform, it would not be reason-

able to install the platform on the highest hierarchical level. Ministers and executives would

probably delegate the daily platform work to lower ranks. Nevertheless, leaders should be

invited to selected topics if necessary, and it is crucial to have their general support. There-

fore, authority and company representatives should regularly report the strategy platform’s

topics and results to their superiors.

Concerning industry participation, 15 of 20 companies suggest that representation by indus-

try associations is not sufficient for three reasons. First, associations usually cover a wide

range of topics and dispose of limited resources to work intensively at a specific topic. It is

almost impossible to support individual companies. Second, the more intermediaries are in-

volved in representing industry interests, the higher the inefficient and bureaucratic tenden-

cies. Third, both primary and secondary sources have indicated that the lack of communica-

tion along the value chain is a major impediment, which cannot be solved by the associations

alone.

There was consensus on the following permanent platform members:

Research institutes and academia

Authorities, e.g. BMI, BKA, BSI, BMWA

Industry representatives

Industry associations

Data protectionists and legal experts

Independent biometric experts and masterminds from other sectors

Concerning media, all interviewees committed to clear and open communication towards

public but considered media an external partner rather than permanent platform member,

particularly to avoid internal information diffusion and prevent sensation mongering.

Other organizations could be admitted to selected topics. Moreover, selected large custom-

ers such as the Federal Foreign Office, representatives of the aviation industry etc. could join

the platform as associative members. Alternatively, these groups could join for a limited time

for certain projects without any formal membership.


104

From these requirements the question arises how to integrate all representatives but limit the

membership to a reasonable maximum which secures working ability and effectiveness of

the platform. Concerning industry representatives, the value chain structure could be used to

form corresponding industry groups that send representatives to the platform. For example,

this could be 3 manufacturers representing different biometric technologies and 3 system

integrators. To avoid competitive advantages of the companies that send representatives, all

information should be documented and transferred to the other companies immediately. Fur-

thermore, all companies should have the same chances to bid for public tenders and partici-

pate in joint projects.

Finally, since there is evidence that military and intelligence services are to a high degree

responsible for the success of the American biometric industry, it is recommended inviting

representatives of equivalent German institutions to the German Biometric Strategy Platform.

Table 7.2 illustrates the suggested member structure.

Group Permanent Associative

Government Bundesministerium des Innern 1 Bundesgrenzschutz 1 Bundesamt für Sicherheit in der Informationstechnik 1 Bundeskriminalamt 1 Bundesministerium für Wirtschaft und Arbeit 1 Bundesministerium für Bildung und Forschung 1 Industry Manufacturers 3 System Integrators 3 Industry Associations BHE e.V. 1 BITKOM e.V 1 TeleTrusT e.V. 1 VfS e.V. 1 ZVEI e.V. 1 Standardization (DIN) 1 Academia 1 Research Institutes 1 Data Protection Representative of The Federal Data Protection Commissioner 1 Legal Experts 1 Intelligence Services 1 Military 1 Other Organizations, Customers etc. unlimited

Total 21 unlimited

Table 7.2: German Biometric Strategy Platform Member Structure


105

Since the BMWA currently leads the Biometric Round Table (cf. section 4.3.5), they are sug-

gested to take over leadership of the new platform.

7.4 Strategic Controlling

Whereas operational controlling is strongly tied to the short and medium-term allocation of

financial resources and schedules, strategic controlling is oriented in the long-term achieve-

ments. Strategic controlling is more flexible, covers a broader range of issues and is more

suited to a variable organization comprising members with different interests.287

The tasks of strategic controlling are:

Premise control: Regularly assessing if the strategic assumptions are still valid

Strategic surveillance: Monitoring a wide range of internal and external developments

Special alert control: Preparing for sudden, unexpected events and reacting to them

Strategy implementation control: Reviewing milestones and strategic thrust288

Since only some basic strategic controlling structures can be suggested at this point, the

platform will have to further work out their controlling system.

Due to the limited human and financial resources of the German Biometric Strategy Platform,

Premise control and strategic surveillance should be combined in a strategic early-warning

system. More concrete, this means to monitor and analyze issues and trends which could

influence the German biometric industry and the German Biometric Strategy Platform. The

structure of control could follow the analysis structure of this study and cover international

and national political, economic, regulatory and social environment developments, followed

by a market and industry overview. Implementing a rolling strategy system, both industry

strategy and platform activities have to be adapted constantly in case of situational changes.

Moreover, the individual companies could use the results to adapt their risk management,

asset allocation and corporate strategy formulation. This strategic early-warning analysis

should be conducted twice a year by a responsible platform member elected in the constitu-

tive platform session.

The regular analysis should be supplemented by permanent special alert control by all plat-

form members. Since the industry experts are working daily in the biometric field, their ex-

perts will detect trends and changes in the market. Authority representatives could cover

changes in the political and regulatory environment. All observations have to be communi-

cated to the platform and by the platform to their members.

287 Cf. Bowmann, Cliff/ Faulkner, David (1997), p. 254. 288 Cf. Pearce, John/ Robinson, Richard (2000), pp. 444-454.


106

Finally, the gap analysis is a suitable tool for strategy implementation control because it al-

lows tracking and steering the strategy, reviewing milestones and analyzing gaps between

plan and reality.289 Based on the detected strategic gaps, adjustments could be initiated.

Exemplary milestones are suggested in the following section. Issues and methods of strate-

gic controlling should be discussed in more detail during the constitutive meeting. To guaran-

tee the success of the German Biometric Strategy Platform, a well-designed, working strate-

gic controlling system is vital.

Figure 7.1: Gap Analysis Source: According to Morden, Tony (1999), p. 15.

7.5 Strategy Platform Roadmap

The German Biometric Strategy Platform should be implemented by May, 2005.

In September 2004, BITKOM will conduct a research workshop to identify further research

topics as a working base for the platform. On October 20 2004, the results of this study will

be presented to the Biometric Round Table at the BMWA (cf. section 4.3.5). Based on this

information, the Round Table should discuss the results of this study and agree on further

289 Cf. Morden, Tony (1999), p. 15.

Time

Milestones

Strategic Gap

Reality

Target

Time

Milestones

Strategic Gap

Reality

Target


107

steps. It is recommended inviting the biometric community to a constitutive meeting of the

German Biometric Strategy Platform, which could take place in early February 2005.

To gain the support and trust of all parties involved in biometrics, it is crucial to conduct an

all-embracing constitutive meeting. The participants would agree on the industry strategy,

strategic issues as mentioned in section 7.2, the platform objectives and tasks as well as the

member structure. Furthermore, some of the groups would have to elect their representa-

tives, e.g. industry, research institutes and academia.

Concerning the future platform work it is necessary to decide on regular meetings, further

milestones and the strategic controlling system.

In January 2005, the first regular meeting of the German Biometric Strategy Platform could

take place, one year after the suggestion was first made by the DIN. Regarding future work,

four regular platform meetings per year are recommended, supplemented by special ses-

sions if necessary.

Milestone Who Due

Research workshop BITKOM September 2004 Present study to round table BITKOM October 20, 2004Invitation to constitutive meeting BMWA November 2004 Constitutive platform meeting Biometric community February 2005 Industry strategy Platform strategic issues Objectives and tasks Member structure Election of representatives Regular meetings Milestone definition Strategic controlling First regular platform meeting German Biometric Strategy Platform May 2005

Table 7.3: German Biometric Strategy Platform Roadmap

All results and decisions of the German Biometric Strategy Platform constitute recommenda-

tions to the members and other players. Members voluntarily decide on project participation,

resource support etc.

7.6 Support by BITKOM

BITKOM took advantage of the interview series to ask the interviewees how the association

could support both industry and platform. The answers often matched with the described

tasks of the Strategy Platform, which indicates that the potential tasks are overlapping. To

avoid double word, the association should focus on the link between the platform and BIT-

KOM members, a function that cannot be taken by the strategy platform.


108

However, some tasks will be executed by both organizations. For example, lobbying is a

substantial part of the BITKOM’s work and will also include biometric companies as far as

they are members of the industry association. The interviewed companies expect the follow-

ing:

Interview Results – Support by BITKOM

To the Biometric Industry

Lobbying and dialogue with politics and interest groups

Support public relations and image building for biometrics

Communicate with users about biometric technologies

Initiate discussions, qualified ideas and topics

Organize forums, meetings etc.

Promote industry networking

Identify research topics

Maintain the Biometrics guide

Strengthen the dialogue of manufacturers and integrators

Communicate industry news and other information immediately

Organize symposia, exhibitions etc.

Support German companies in international competition

To the German Biometric Strategy Platform

Establish, coordinate and support the German Biometric Strategy Platform

Involve BITKOM members in the platform

Integrate other industry associations to create a national, superordinate body

Communicate the platform in media and at national and international fairs and events

Monitor market development

Table 7.4: Interview Results – Support by BITKOM Concluding the role of BITKOM, the association should be a communicator and lobbyist for

both industry and Strategy Platform. Finally, BITKOM’s activities strengthen the efforts made

by the platform if both are working in the same strategic direction.

Based on the strategic analysis and the developed industry strategy, Chapter 7 has sug-

gested objectives, strategic issues, tasks, positioning and member structure of the German

Biometric Strategy Platform. BITKOM will support the platform and control the further mile-

stones.

Conclusion

109

8 Conclusion

Biometric technologies are likely to become an integrated part of our society in the next

years. The potential application fields are wide and promise secure, reliable and customized

problem solutions. Nevertheless, legal and ethical issues, for example concerning privacy

and data protection, have to be addressed and solved.

The international environment increasingly supports the development of biometric technolo-

gies by creating a regulatory framework and promoting standardization. Particularly the U.S.

government has initiated strong domestic growth in the American biometric market.

Although this enhances the market perspectives worldwide in the long term, the immediate

gainer is the U.S. biometric industry. The German biometric industry still lacks a stable do-

mestic market and hopes for future public orders that could also fertilize the private sector

and consumer market. The current situation increases the gap between the North American

biometric world market leaders and the German biometric industry. Further weaknesses and

threats were highlighted in the course of a strategic analysis.

In order to overcome these weaknesses and threats, to increase the strengths and to take

advantage of the opportunities, a market-oriented strategy for the German biometric industry

was developed. It became clear that a joint strategy constitutes a general framework which

has to be particularized by the individual companies. Nevertheless, it illustrates the general

direction of business fields, market entry, behavior towards market participants and position-

ing in international competition.

To secure strategy implementation and controlling, the establishment of the German Biomet-

ric Strategy Platform provides an appropriate tool. Strategic issues, objectives, tasks and

member structure of the platform were drafted as well as recommendations regarding strate-

gic controlling and the next steps. As a result, the platform should be founded at a constitu-

tive meeting of the German biometric community in February 2005 and have their first regu-

lar meeting in May 2005.

Some aspects could not be covered in detail and should be subject to other studies, particu-

larly the improvement of the legal framework and the assessment of further research topics.

If the German Biometric Strategy Platform is established successfully, it will facilitate joint

efforts by the industry, politics and other relevant groups to open the German domestic mar-

ket and compete on the international markets. The success of the industry and the platform

strongly depends on the willingness and ability of all involved groups to join forces to achieve

the vision of Germany as the world’s most recognized biometric environment and the Ger-

man biometric industry as the world market leader.

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Internet Source 29 – International Organization for Standardization How are ISO Standards Developed? http://www.iso.ch/iso/en/stdsdevelopment/whowhenhow/how.html (download 2004/05/24) Internet Source 30 – International Organization for Standardizaton ISO/IEC JTC 1/SC 37 “Biometrics” http://www.jtc1.org/sc37/ (download 2004/05/24) Internet Source 31 – International Organization for Standardizaton ANSI http://www.iso.org/iso/en/aboutiso/isomembers/MemberDetailPage.MemberDetail?MEMBER=ANSI (download 2004/05/24) Internet Source 32 – BioAPI Consortium BioAPI Consortium http://www.bioapi.org/index.html (download 2004/05/24) Internet Source 33 – Patriot Act An act to deter and punish terrorist acts in the United States and around the world, to enhance law enforcement investigatory tools, and for other purposes. http://www.epic.org/privacy/terrorism/hr3162.pdf (download 2004/07/05) Internet Source 34 – U.S. Embassy in Germany Visa Waiver Information http://www.usembassy.de/travel/d41_2_10.htm (download 2004/05/19) Internet Source 35 – Enhanced Border Security and Visa Entry Reform Act An act to enhance the border security of the United States, and for other purposes. http://unitedstatesvisas.gov/pdfs/Enhanced_Border_SecurityandVisa_Entry.pdf (download 2004/07/05) Internet Source 36 – Department of Homeland Security DHS Launches US-VISIT Program Nationwide to Enhance Security, Facilitate Travel http://www.dhs.gov/dhspublic/display?theme=43&content=3043&print=true (download 2004/05/19) Internet Source 37 – Silicon.de USA verschiebt Deadline für Biometrie-Pässe http://www01.silicon.de/cpo/news-itsecurity/detail.php?nr=13845&kategorie=news-itsecurity (download 2004/05/14) Internet Source 38 – BMI Pressemitteilung: Grünes Licht für EU-Grenzschutzagentur und biometrische Merkmale in Visa und Aufenthaltstiteln http://www.bmi.bund.de/dokumente/Pressemitteilung/ix_93551.htm (download 2004/07/01) Internet Source 39 – CORDIS Information Society Technologies Project List http://www.cordis.lu/ist/projects/projects.htm (download 2004/05/27) Internet Source 40 – German Aerospace Center Project Management Organization http://www.eid.dlr.de/pt/;internal&action=_setlanguage.action?LANGUAGE=en (download 2004/05/27)

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Internet Source 41 – Biometric Consortium Background of the US Government's Biometric Consortium http://www.biometrics.org/REPORTS/CTST96/ (download 2004/05/26) Internet Source 42 – National Biometric Security Project National Biometric Security Project http://www.nationalbiometric.org (download 2004/05/26) Internet Source 43 – International Biometric Industry Association About IBIA www.ibia.org (download 2004/05/26) Internet Source 44 – International Biometric Industry Association Members http://www.ibia.org/members.htm (download 2004/05/26) Internet Source 45 – Biometrics Working Group Biometrics Working Group http://www.cesg.gov.uk/site/ast/index.cfm?menuSelected=4&displayPage=4 (download 2004/05/26) Internet Source 46 – International Association for Biometrics Members http://www.afb.org.uk/docs/members.htm (download 2004/05/26) Internet Source 47 – Association for Biometrics Mission http://www.afb.org.uk (download 2004/05/26) Internet Source 48 – Association for Biometrics Objectives http://www.afb.org.uk/docs/objectives.htm (download 2004/05/26) Internet Source 49 – International Biometric Foundation The International Biometric Foundation http://www.ibfoundation.com/intro.html (download 2004/05/26) Internet Source 50 – International Biometric Foundation Aims and Objectives http://www.ibfoundation.com/aims_and_objectives.html (download 2004/05/26) Internet Source 51 – International Biometric Foundation Members http://www.ibfoundation.com/member_roster.html (download 2004/05/26) Internet Source 52 – European Biometric Forum About the EBF http://www.eubiometricforum.com/index.php?option=content&task=view&id=2&Itemid=28 (download 2004/05/26)

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120

Internet Source 53 – European Biometric Forum Members http://www.eubiometricforum.com/index.php?option=content&task=section&id=12&Itemid=64 (download 2004/05/26) Internet Source 54 – European Biometric Forum European Biometrics Centre http://www.eubiometricforum.com/index.php?option=content&task=view&id=31&Itemid=48 (download 2004/05/26) Internet Source 55 – Nederlands Biometrie Forum Informatie over het Nederlands Biometrie Forum http://www.avk.nl/bio/contents.php?cid=51 (download 2004/05/28) Internet Source 56 - CNETAsia Biometrics consortium created in Japan http://asia.cnet.com/newstech/security/0,39001150,39137520,00.htm (download 2004/04/28) Internet Source 57 – The Japan Times Biometrics tieup eyed with Europe http://202.221.217.59/print/business/nb01-2004/nb20040109a2.htm (download 2004/04/28) Internet Source 58 – Bundesministerium des Innern Organisiationsplan http://www.bmi.bund.de/Downloads/Orgplan_Juni2003.pdf (download 2004/05/13) Internet Source 59 – Silicon.de Der digitale Personalausweis kommt, sagt Schily http://www01.silicon.de/cpo/news-itsecurity/detail.php?nr=13723&kategorie=news-itsecurity (download 2004/05/14) Internet Source 60 – Bundesgrenzschutz Strukturelle Gliederung des Bundesgrenzschutzes http://www.bundesgrenzschutz.de/Orga/index.php (download 2004/05/14) Internet Source 61 – Bundesgrenzschutz Automatisierte Grenzkontrolle http://www.bundesgrenzschutz.de/Auto_Grenzkontrolle/index.php (download 2004/05/14) Internet Source 62 – Fraunhofer IGD BioFinger – Vergleichende Untersuchung von Fingerabdruckerkennungssystemen http://www.igd.fhg.de/igd-a8/projects/biofinger/ (download 2004/06/15) Internet Source 63 – Bundesamt für Sicherheit in der Informationstechnik BioP I - Untersuchung der Leistungsfähigkeit von Gesichtserkennungssystemen zum geplanten Ein-satz in Lichtbilddokumenten http://www.heise.de/security/artikel/46398 (download 2004/05/14) Internet Source 64 – Bundesamt für Sicherheit in der Informationstechnik BSI-Symposium zu “Biometrie – Anwendungen und Datenschutz” http://www.igd.fhg.de/igd-a8/biometrics/BSI-Symposium-02/Programm_BSI-Symposium.pdf (download 2004/05/14)

Internet Sources

121

Internet Source 65 – Heise Online Biometrie für Flieger und Daheimgebliebene http://www.heise.de/newsticker/meldung/45192 (download 2004/05/05) Internet Source 66 – Bundeskriminalamt Profile http://www.bka.de/profil/broschueren/bka_das_profil_engl.pdf (download 2004/05/14) Internet Source 67 – BioTrusT BioTrusT http://www.biotrust.de/ (download 2004/06/03) Internet Source 68 – Bundesministerium für Wirtschaft und Arbeit Leitprojekt MAP http://www.bmwi.de/Navigation/Service/innovation-aktuell,did=9662.html (download 2004/05/19) Internet Source 69 – Verisoft Project Verisoft Project Description http://www.verisoft.de/teilprojekte.html (download 2004/06/15) Internet Source 70 – SmartKom SmartKom - Dialog-based Human-Technology Interaction by Coordinated Analysis and Generation of Multiple Modalities http://www.smartkom.org/start_en.html (download 2004/06/15) Internet Source 71 – BHE Sicherheitstechnik/ Fachbereich Zutrittskontrolltechnik http://www.bhe.de (download 2004/06/03) Internet Source 72 – BITKOM Flyer Landkarte Biometrie http://www.bitkom.org/files/documents/Flyer_Landkarte_Biometrie_mit_Links_-_V1.0f.pdf (download 2004/06/03) Internet Source 73 – TeleTrust TeleTrust Deutschland e.V. http://www.teletrust.de/default.asp?hi=6&Sprache=E_&HomePG=0 (download 2004/06/03) Internet Source 74 – TeleTrust Working Group 6 http://www.teletrust.de/glossar.asp?id=60720&Sprache=E_&HomePG=0 (download 2004/06/03) Internet Source 75 – VfS Mitgliederliste 2004 http://www.vfs-hh.de/mitglieder.html (download 2004/06/03) Internet Source 76 – VfS Biometrie: VfS-Veranstaltung bot umfangreiche Informationen http://www.vfs-hh.de/pressemBiometrie.html (download 2004/06/03)

Internet Sources

122

Internet Source 77 – ZVEI ZVEI http://www.zvei.org (download 2004/06/03) Internet Source 78 - DIN Deutsches Institut für Normung http://www2.din.de/index.php?lang=en (download 2004/06/03) Internet Source 79 – Grundgesetz für die Bundesrepublik Deutschland http://www.bundesregierung.de/static/pdf/gg.pdf (download 2004/06/02) Internet Source 80 – Heise Online Bundesdatenschützer warnt vor digitalen Passfotos. http://www.heise.de/newsticker/meldung/46389 (download 2004/05/05) Internet Source 81 – Microsoft Encarta Encyclopedia Ethics http://encarta.msn.com/encyclopedia_761555614/Ethics.html (download 2004/06/02) Internet Source 82 – Bundesbeauftragter für den Datenschutz Willkommen beim Bundesbeauftragten für den Datenschutz http://www.bundesdatenschutz.de/ (download 2004/06/02) Internet Source 83 – DuD Datenschutz und Datensicherheit Webserver Datenschutzrecht http://www.datenschutz-und-datensicherheit.de/dudserver/dsrecht.htm (download 2004/06/02) Internet Source 84 – Büro für Technikfolgen-Abschätzung beim Deutschen Bundestag http://www.tab.fzk.de/de/projekt/zusammenfassung/ab76.htm (download 2004/05/26) Internet Source 85 – Betriebsverfassungsgesetz http://bundesrecht.juris.de/bundesrecht/betrvg/gesamt.pdf (download 2004/06/02) Internet Source 86 – Heise Online „Massives Wachstum“ für Geschäfte mit Biometrie in Deutschland prognostiziert http://www.heise.de/newsticker/meldung/48560 (download 2004/06/25) Internet Source 87 – SOREON Research Biometriemarkt in Deutschland 2004-2009 http://www.soreon.de/site1/index.php/german/soreon_studien/biometriemarkt_in_deutschland_2004_2009_anti_terrorgesetze_kurbeln_wachstum_an?eZSESSIDgerman=c3145a54d6ece05a9b1f0caa76d9ebc0 (download 2004/06/25) Internet Source 88 – Fraunhofer IGD Der Körper als Schlüssel http://www.igd.fhg.de/igd-a8/projects/biom.html (download 2004/06/15) Internet Source 89 – Fraunhofer SIT SIT Profil http://www.sit.fraunhofer.de/german/profile/index.html (download 2004/06/15)

Internet Sources

123

Internet Source 90 – Fraunhofer IIS EMBASSI http://www.iis.fraunhofer.de/bv/biometrie/projekte/index_d.html (download 2004/06/15) Internet Source 91 – Fraunhofer IPK Willkommen http://www.internationales-buero.de/arbeitsfelder/wtz/Amerika/Chile/Jahresbericht-Nicolay.doc (download 2004/06/15) Internet Source 92 – Fraunhofer IBMT Willkommen http://www.ibmt.fraunhofer.de/ibmt9_index.html (download 2004/06/15) Internet Source 93 – GfaI Das Profil der GFaI http://www.gfai.de/kurzinfo/profil.html (download 2004/06/15) Internet Source 94 – FH Augsburg Fachbereich Informatik http://www.fh-augsburg.de/informatik/professoren/ (download 2004/06/16) Internet Source 95 – IBIS Institut für Biometrische Identifikationssysteme http://www.biometrics-institute.com/institut/index2.htm (download 2004/06/15) Internet Source 96 – FH Regensburg FH Regensburg http://www.fh-regensburg.de (download 2004/06/16) Internet Source 97 – Markus Hofmann Grundsätzliche Untersuchung von Bildverarbeitungsalgorithmen zur Gesichtererkennung http://www.markus-hofmann.de/ (download 2004/06/16) Internet Source 98 – Friedrich-Alexander-Universität Erlangen-Nürnberg Biometrische Verfahren - Studie zum State of the Art http://www.wi3.uni-erlangen.de/forschung/Biometrie_StateOfTheArt/Index.html (download 2004/06/16) Internet Source 99 – Humboldt-Universität Berlin Signal Processing and Pattern Recognition Group http://www.informatik.hu-berlin.de/Institut/struktur/signalverarbeitung/pr/index-en.htm (download 2004/06/16) Internet Source 100 – Otto-von-Guericke-Universität Magdeburg Forschungsbericht 2003 http://www.uni-magdeburg.de/forsch/Fobe03.pdf (download 2004/06/16) Internet Source 101 – TU München Benutzerauthentisierung durch Analyse des Tippverhaltens http://www.informatik.tu-muenchen.de/forschung/pub/diss/00/Bartmann.html (download 2004/06/16) Internet Source 102 – TU München Verisoft Gesamtprojekttreffen http://www4.informatik.tu-muenchen.de/~stenzg/verisoft/treffen-feb-04.html (download 2004/06/16)

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124

Internet Source 103 – TU München Seminar Messsystem- und Sensortechnik http://www.mst.ei.tum.de/veran/seminar_mst/10052000.html (download 2004/06/16) Internet Source 104 – TU München Emotionserkennung aus dem Sprachsignal http://www.mmk.e-technik.tu-muenchen.de/da/sch_emotionserkennung.htm (download 2004/06/16) Internet Source 105 – Universität Hamburg Arbeitsbereich Anwendungen der Informatik in Geistes- und Naturwissenschaften http://www.informatik.uni-hamburg.de/Info/JB/1999-2001/AGN.pdf (download 2004/06/16) Internet Source 106 – Universität Regensburg ibi research an der Universität Regensburg gGmbH http://www.ibi.de/ (download 2004/06/16) Internet Source 107 – TU Darmstadt IT-Sicherheit http://www.dzi.tu-darmstadt.de/forschung/ (download 2004/06/16) Internet Source 108 – CAST-Forum Die Presse über uns http://www.castforum.de/formalia/press?id=15 (download 2004/06/16) Internet Source 109 – RFID Journal Identix, Visionics Complete Merger http://www.rfidjournal.com/article/articleview/23/1/1/ (download 2004/05/19) Internet Source 110 – FindBiometrics Viisage and ZN Vision Technologies Extend Acquisition Agreement http://www.findbiometrics.com/viewnews.php?id=663 (download 2004/05/19) Internet Source 111 – Harvard Business School Faculty & Research: Michael E. Porter http://dor.hbs.edu/fi_redirect.jhtml?facInfo=bio&facEmId=mporter&loc=extn (download 2004/06/04) Internet Source 112 – Computerwoche Der Venture-Capital-Kanal trocknet aus http://www.computerwoche.de/index.cfm?type=detail&artid=49864&category=157&Pageid=258 (download 2004/06/15) Internet Source 113 – Katholische Universität Eichstätt-Ingolstadt Systematisierung von Marketingstrategien www.ku-eichstaett.de/WWF/MKT/Teil-5.pdf (download 2004/06/08) Internet Source 114 – Quick MBA Foreign Market Entry Modes http://www.quickmba.com/strategy/global/marketentry/ (download 2004/06/08)

Appendix I: Biometric Link List

125

Appendix I: Biometric Link list The following list comprises links to the main pages of organizations involved in biometric activities. For links to sup-pages refer to the footnotes in the corresponding parts of the study or go to the list of Internet Sources. United States http://www.dhs.gov U.S. Department of Homeland Security http://www.biometrics.dod.mil U.S. Department of Defense Biometrics Office European Union http://europa.eu.int European Union http://www.cordis.lu Community Research and Development Information System International Standardization http://www.icao.int International Civil Aviation Organization http://www.iso.org International Organization for Standardization http://www.bioapi.org BioAPI Consortium http://www.nist.gov National Institute of Standards and Technology http://www.ansi.org American National Standards Institute http://www.din.de Deutsches Institut für Normung e.V. International Biometric Platforms http://www.biometrics.org Biometric Consortium http://www.nationalbiometric.org National Biometric Security Project http://www.ibia.org International Biometric Industry Association http://www.cesg.gov.uk/site/ast Biometrics Working Group http://www.afb.org.uk International Association for Biometrics http://www.ibfoundation.com International Biometric Foundation http://www.eubiometricforum.com European Biometric Forum http://www.biometrieforum.nl Nederlands Biometrie Forum German Authorities http://www.bmi.bund.de Bundesministerium des Innern http://www.bundesgrenzschutz.de Bundesgrenzschutz http://www.bsi.de Bundesamt für Sicherheit in der Informationstechnik http://www.bka.de Bundeskriminalamt http://www.bmwa.bund.de/ Bundesministerium für Wirtschaft und Arbeit http://www.bmbf.de Bundesministerium für Bildung und Forschung Data Protection http://www.bfd.bund.de Bundesbeauftragter für den Datenschutz http://www.datenschutz.de Virtuelles Datenschutzbüro http://www.datenschutzzentrum.de Unabhängiges Landeszentrum für Datenschutz Schleswig-Holstein

Appendix I: Biometric Link List

126

German Industry Associations http://www.bhe.de BHE e.V. http://www.bitkom.org BITKOM e.V. http://www.teletrust.de Teletrust Deutschland e.V. http://www.vfs-hh.de VfS e.V. http://www.zvei.org ZVEI e.V. German Research Institutes http://www.igd.fhg.de Fraunhofer-Institut für Graphische Datenverarbeitung http://www.sit.fraunhofer.de Fraunhofer-Institut für sichere Telekooperation http://www.iis.fraunhofer.de Fraunhofer-Institut für Integrierte Schaltungen http://www.ipk.fhg.de/ Fraunhofer-Institut für Produktionsanlagen und Konstruktions- technik http://www.ibmt.fraunhofer.de/ Fraunhofer-Institut für biomedizinische Technik http://www.gfai.de Gesellschaft zur Förderung angewandter Informatik German Academia www.fh-augsburg.de FH Augsburg www.fh-giessen.de FH Giessen-Friedberg (http://www.biometrics-institute.com) www.fh-regensburg.de FH Regensburg www.uni-erlangen.de Friedrich-Alexander-Universität Erlangen-Nürnberg www.hu-berlin.de Humboldt-Universität Berlin www.uni-muenchen.de Ludwig-Maximilians-Universität München www.uni-magdeburg.de Otto-von-Guericke-Universität Magdeburg www.tu-darmstadt.de TU Darmstadt www.tu-muenchen.de TU München www.uni-hamburg.de Universität Hamburg www.uni-regensburg.de Universität Regensburg www.uni-stuttgart.de Universität Stuttgart Further Resources http://www.kriminalpraevention.de DFK Deutsches Forum für Kriminalprävention http://www.biometricscatalog.org U.S. Government sponsored database on biometric technologies http://www.biometricsinfo.org Biometrics information resource

Appendix II: Interview Questions

Bundesverband Informationswirtschaft, Telekommunikation und neue Medien e.V. Postfach 640144, 10047 Berlin Besucher: Albrechtstr. 10, 10117 Berlin Telefon +49 / 30 / 27576-0, Fax -400 E-Mail [email protected], Internet www.bitkom.org

Präsident: Willi Berchtold Geschäftsführung: Dr. Bernhard Rohleder (Vors.) Dr. Peter Broß

Ansprechpartner: Dr. Sandra Schulz Postfach 640144 10047 Berlin Telefon +49 / 30 / 27576-242, Fax -409 E-Mail: [email protected]

Appendix II: Interview Questions Mai 2004

Interview zur „Strategieplattform Biometrie“ Deutschland ist eine der führenden Nationen in der Entwicklung von biometrischen Verfah-

ren zur Identifizierung und Authentifizierung. Der BITKOM e.V. als Bundesverband der ITK-

Branche führt eine Studie über die Bündelung der Interessen von Industrie, Politik, Wissen-

schaft und anderen Gruppen in einer „Strategieplattform Biometrie“ durch. Ein Ziel dieser

Strategieplattform könnte es sein, das Thema Biometrie in Deutschland nachhaltig zu unter-

stützen. Eine vergleichbare Plattform existiert bereits unter anderem in den USA (Biometric

Consortium).

Der BITKOM e.V. interviewt im Rahmen dieser Studie ausgewählte Teilnehmer der Landkar-

te Biometrie, um ein Meinungsbild hinsichtlich der aktuellen Biometrie-Situation in Deutsch-

land, möglichen Branchenstrategien und Ideen zur Verwirklichung der Strategieplattform Bi-

ometrie zu erhalten. Das Interview wird ca. 20-30 Minuten in Anspruch nehmen. Anbei sen-

den wir Ihnen vorab zu Ihrer Information unsere Fragen.

Wir bitten Sie herzlich, unsere Studie durch die Bereitschaft zur Teilnahme an dem Interview

zu unterstützen. Herr Gregor Költzsch wird sich dazu mit Ihnen in den nächsten Wochen in

Verbindung setzen.

Ihre Angaben werden von uns vertraulich behandelt und anonym ausgewertet.

Für weitere Fragen stehen wir Ihnen gerne zur Verfügung.

Mit freundlichen Grüßen

Dr. Sandra Schulz

Appendix II: Interview Questions

1. Unternehmen

Haben sich Änderungen zu Ihren Angaben in der Landkarte Biometrie ergeben? 2. Biometrie in Deutschland

Warum ist es so schwierig, große Biometrieprojekte in Deutschland zu realisieren? Wel-che Markthemmnisse bzw. Marktbarrieren sehen Sie?

Wie gehen Sie mit ethischen Bedenken gegen biometrische Technologien um?

Wie müsste die Biometriebranche in Deutschland aufgestellt sein? Fehlen Technologien, Hersteller, Systemintegratoren, Betreiber etc.?

Wann erwarten Sie eine signifikante Steigerung der Nachfrage nach biometrischen Pro-dukten?

3. Strategieplattform Biometrie

Wer sollte Teilnehmer der Strategieplattform sein, z.B. Forschung, Industrie, Politik, Ver-bände usw.?

Welche Aufgaben und Themen sollte die Plattform abdecken?

Welche strategischen Entscheidungen sind zu fällen, um die Biometriebranche zu unter-stützen (z.B. Aufstellung im internationalen Wettbewerb)?

Wie sollte sich eine deutsche Biometrieplattform gegenüber anderen nationalen oder in-ternationalen Plattformen positionieren?

Welche Forschungsschwerpunkte sind anzustoßen, um das Thema Biometrie in Deutsch-land voranzubringen?

Welche Unterstützung sollte der BITKOM für die Branche und die Plattform leisten?

Vielen Dank für Ihre Unterstützung!

Appendix III: Interview Results

129

Appendix III: Interview Results Why are large-scale biometric projects difficult to realize in Germany? What market barriers do you see? Technology

There have been only few reference projects and field tests. Technological standardization has been insufficient, e.g. concerning protocols. Because of this, most solutions are singular and not interoperable. System integration requires complex technological and organizational efforts. Potential customers fear technological dependency on manufacturer. Biometric technologies to some extent cannibalize each other. There are still technical problems, e.g. with Asian faces.

Finance

The early life cycle stage causes high uncertainty with regards to market perspectives. Potential customers have high risk aversion; “German wait-and-see attitude” Customization costs are high because there is no standard solution, especially in the sov-

ereign segment. The number of units in production series remains small. Hence, compa-nies cannot take advantage of economies of scale, and unit costs respectively customer prices are still high.

This is even more problematic in times of low budgets and deters potential customers, particularly in the private sector. Eventually, the government remains as the customer with the lowest price sensitivity.

Many potential customers consolidate and save rather than invest in new technologies Public capital appropriations are scarce. Biometric projects require high initial investments but do not immediately create a steady

positive cash flow to finance these investments. Therefore, many biometric companies have become insolvent in the last years.

Small and medium-sized biometric companies have insufficient financial power to finance projects.

Large-scale enterprises seek to avoid pre-financing projects on account of low revenue expectations with biometrics.

Since biometric system do not work errorless and there are always people that cannot be captured, the necessary fallback procedures raise costs.

Society Germans often seek to achieve perfectionism from the first minute, which is not possible

with biometric technologies. Many people have hygienic concerns, e.g. with contact sensors. There are public reservations against new technologies and large-scale projects. Some people fear for data abuse and governmental surveillance. Some poor test results have created a negative image regarding technology performance. Data protectionists’ criticism further harms image of technology. Although media coverage is increasing, information by media has been insufficient so far.

For example, the public information level concerning biometric application fields is low.


130

Legal Data protection regulations hinder certain applications, e.g. those that require a central

data base. The industry feels a lack of case-oriented data protection guidelines.

Politics

The industry mentions an insufficient information level of public decision makers. German politics seems to support biometrics less than other governments. So far no large

public tenders have been published. The biometric industry waits for government activities that give a direction.

Political quarrels seem to hinder economic decision making. How can the industry cope with ethical concerns against biometric technologies?

Objections to new technologies are justifiable and understandable Depends on technology, e.g. signature recognition is less problematic than face recogni-

tion Responsibility by all involved parties Integrate business partners in data protection Acquire data only with knowledge and acceptance of the affected person Establish certain organizational principles, e.g. dual control Ethical concerns are expressed in data protection Comply with all data protection regulations Convert data protection regulations in technology, e.g. storage of necessary data only,

technical protection against abuse, no central data base, storage on chip cards or other tokens, usage of templates, data base security

Cooperate with data protectionists Clear public information and communication policy to create trust

Technology itself is not critical if not abused Biometric technologies are less qualified for surveillance than existing technologies Explain new technologies, e.g. that iris recognition does not harm the eye

Reduction of fear and ignorance is expected when people experience the first projects and applications, e.g. passports

Companies have to support politics to counteract public concerns

How should the German biometric industry be aligned? Is anything missing?

Technology is good but poor interoperability and lack of standards No best practices, system integrators have to communicate requirements and publish

guidelines Waste of resources due to insufficient division of labor for value chain components (Algo-

rithms, sensors, integration etc.) Many singular applications but few holistic solutions Lack of strong system integrators, high uncertainty with integrators due to lack of stan-

dards Since there are only few reference projects and almost no revenues many manufacturers

became insolvent; large-scale projects are a new chance Manufacturers do not have critical mass

Insufficient R&D expenditures


131

Often inadequate plans for practical applications Low market power Market consolidation under leadership of integrators is needed Prevent foreign acquisitions

Lack of multimodal solutions and fallback procedures Embedding in telecommunication processes and devices needed Lack of several years practical application history R&D rarely results in tenders, scientists leave the country Research support must not only support basic research but also practical applications

(e.g., shared funds for project and public customer) German market is too small for more than a few manufacturers of the same biometric

technology, sales mainly in foreign markets When do you expect a significant increase in demand for biometric products?

Depends on technology; signature recognition is not connected with ID process - break-through expected in 2004

Interest for biometric technologies has been increasing for 6 months but willingness to invest is still low

Breakthrough earliest in 2006, correlating with the introduction of biometric passports and border control; people experience biometrics and overcome inhibitions

Economic upturn starting 2006 could trigger growth of the German biometric market Continuous growth is more likely than escalating revenues; depends on standardization

and data protection barriers Consumer market could profit from positive development in the sovereign market, for ex-

ample in mixed projects at airports Two trends: 1) Sovereign applications trigger consumer applications, 2) Consumer market

pull; in principle both areas fertilize each other Consumer market suffers from high prices but the prices will not decrease until consumers

start demanding biometric products; Vicious circle Consumer market is likely to start growing within 3 to 5 years, probably high-priced cell

phones, PDA’s, laptops using fingerprint recognition, driven by Asian consumers

Who should participate in the strategy platform?

Not the highest level, e.g. no ministers and executives Industry (15 suggest own representatives, 5 suggest representation by industry associa-

tions); Manufacturers and system integrators, associative members according to topics; If representation by associations only, danger of inefficient and bureaucratic processes

Research, including academia Authorities/ Politics - BMI, BKA, BSI, BMWA, AA, possibly TAB Industry associations Data protectionists, jurists Independent biometric experts, masterminds from other sectors Large customers Media as external partner rather than member

What could be tasks and topics of the German Biometric Strategy Platform?


132

General Tasks

Further develop industry vision, mission and strategy Support elimination of market barriers Bundle industry forces and combine industry association activites Possibly establish a showroom to demonstrate biometric technology Evaluate technology trends, conduct market research Work out business cases for various market segments. Work in national and international bodies

Communication

Discuss and find consensus regarding the platform participants’ different interests Create a web page including the Biometrics guide and companies’ product information Practice lobbying and strengthen the link between politics and business, for example by

Providing information to decision makers Communicating business interests to politics and political interests to business Conducting meetings and negotiations with politicians and authority representatives,

e.g. to increase transparency of sovereign purchasing activities Establishing the Biometrics guide and future platform results as a basis for biometric

industry policy Convincing authorities to publish the Biometrics guide and other documents on their

websites and as printouts Similar measures could be applied to establish and maintain links with other relevant or-

ganizations and interest groups Create public awareness of biometric technologies, influence public discussion and create

transparency and trust Support industry networking, for example by

Providing a forum to exchange experiences Provide the base for a German vendor consortium in case of large international ten-

ders. Projects and Applications

Support and evaluate public and private reference projects, field tests, large-scale applica-tions to initiate domestic market growth

Describe and develop applications, e.g. software extension, data base security etc. Accompany international and national standardization to achieve interoperability, e.g. re-

garding interfaces, evaluation criteria for biometric products and tests), forward interna-tional standard document suggestions to the industry, develop best practices; link be-tween companies and standardization in cooperation with the DIN

Examine potentials and costs of biometric systems Evaluate customer requirements Support introduction of test and conciliatory proceedings

Research

Identify and support research topics Initiate base research and product development Link companies with research institutes Organize inter-project coordination with other research institutes, potentially establish an

international research network


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Support the steps from R&D to market, particularly on the German market Constitute the link between academia and industry, for example by Supporting the development of marketable products Initiate the constitution of chairs for biometrics at academic institutions Organizing research contests in cooperation with academia Establish public-private partnerships Consult research projects Support small companies in handling research support programs

Which strategic decisions have to be made to support the industry? International competition

How to strengthen the industry in international competition? How can the German biometric industry gain technological leadership? Is it possible to form German bidder consortia for large international tenders? How to represent German interests internationally? Is the European Biometric Forum appropriate to represent German interests in an interna-

tional biometric platform? How to establish the brand Biometrics Made in Germany? Which industry policy activities have to be conducted to position Germany as a biometric

location, e.g. considering location marketing, investor recruiting, demonstration of compe-tence, retention and recruiting of qualified workforce

Can the industry influence European politics? How to become early adaptor and pacemaker rather than follower?

German Market

How to eliminate the market barriers? How to improve the legal framework? How to support adaption of international and na-

tional regulations? Could the fiscal treatment of biometrics be used as a supporting instrument, e.g. raising

the depreciation rates? How can industry policy decision makers be convinced to support the biometric industry,

e.g. by submitting concepts, drafts, feasibility studies, expertises? How to open the market, e.g. with large reference projects in selected market areas, as

well in the consumer market? Research

What kind of support can be given in the research area? Standardization

How can the platform support international and national standardization? How should the German Biometric Strategy Platform position themselves towards in-ternational biometric platforms?

Integrative international cooperation is more important than competition of platforms Exchange of information, coordination of topics Multiple memberships should be possible


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However, protection of German interests, international platforms also support their na-tional interests; to a certain extent competition is necessary

EBF seems to be a dubious organization Which research topics have to be addressed to promote biometrics in Germany?

Manufacturers have own research topics but some overall topics could be: Basic research

Algorithm, template and interface standardization Data protection, e.g. template encryption 3-D face recognition Image editing Readout of several RFID chips in one document at the same time Integration of biometrics and cryptography Research, communication and discussion of less developed biometric technologies, e.g.

vein scan Embedding in telecommunication processes and devices New biometric technologies

Application-oriented research

Process optimization, e.g. at airports (fast, efficient and secure clearance of passengers, crews and ground staff)

Performance enhancement of existing technologies (lower error rates, long-term use with-out maintenance)

Sustainable secure systems, protection against evasion, e.g. live check Multimodal systems (multibiometrics) Comparative evaluation of biometric technologies Costs and evaluation criteria of large-scale reference projects Holistic solutions rather than singular products Projects and modules for less developed biometric technologies Non-technical aspects, e.g. societal acceptance, estimation of consequences

How should the BITKOM support both industry and platform? Support to the Biometric Industry

Lobbying and dialogue with politics and interest groups Represent and communicate business interests Accelerate interaction with politics

Support public relations and image building for biometrics Communicate with users about biometric technologies Initiate discussions, qualified ideas and topics Organize forums, exhibitions etc.

Promote industry networking, for example Maintain the Biometrics guide Communicate industry news and other information immediately Identify research topics Prevent double work

Support to the German Biometric Strategy Platform


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Establish, coordinate and support the German Biometric Strategy Platform Integrate BITKOM members in the platform Integrate other industry associations to create a national, superordinated body Communicate the platform

In media At national and international fairs and events

Danksagung

Die vorliegende Studie entstand im Rahmen einer Forschungsarbeit im Kompetenzbereich

Sicherheit.

Wir danken allen Interviewteilnehmern aus Wirtschaft, Forschung und Politik für die Zeit und

das Interesse, an dieser Studie mitzuwirken sowie für die Bereitschaft, wichtige Fragestel-

lungen mit uns zu diskutieren.

Bundesverband Informationswirtschaft, Telekommunikation und neue Medien e.V. Albrechtstraße 10 10117 Berlin-Mitte Tel.: 030/27 576 - 0 Fax: 030/27 576 - 400 [email protected] www.bitkom.org

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