QR Codes Poised to Replace Barcodes Due to Increased Data Capacity and Open Standard

Origin of QR Codes

In 1992, Masahiro Hara, an engineer at Denso, a Toyota auto-parts subsidiary, developed the QR code. The need arose from the factory floor where components required multiple barcodes to capture tracking data. Hara conceived a two-dimensional barcode to consolidate information, reducing the number of scans per item from ten to one. The design was inspired by the game of Go.

Technical Advantages and Open Standard

QR codes can store 200 times more data than traditional barcodes and can be read from any angle. After patenting the innovation, Denso chose not to enforce royalties and instead published the specifications, allowing any company to use the technology for free. This decision is cited as a factor in its potential widespread adoption.

Contrast with Barcode System

The first barcode was scanned in 1974, using the Universal Product Code (UPC) as an industry standard. The UPC system, now managed by GS1, established a self-reinforcing monopoly where retailers and manufacturers adopted it widely. GS1 charges annual licensing fees for company prefixes, which scale with company size, making it the sole registry for mainstream retail products.

Implications for Retail

The open and royalty-free nature of QR codes, combined with their superior data capacity, positions them as a potential replacement for the current barcode system. This shift could impact how products are tracked and sold, moving away from the proprietary and fee-based structure of UPC barcodes.