The concept of RNAV (Area navigation) and RNP (Required Navigation Performance) is certainly the way forward, and is already implemented worldwide, to various degrees.
The very short explanation is that a RNAV system is an indepentent, onboard system for navigation, which may use several sensors depending on the aircraft configuration. Sensors may be one or more INS/IRS's, GPS, and a combination of conventional navaid fixing using VOR/DME/LOC, with the most accurate normally being DME/DME fixing. The RNAV system will monitor the integrity of it's position by giving you an estimated ANP -- Actual Navigation Performance, which should be lower than the RNP. Ie, for a Basic RNAV system, BRNAV, which is required a lot of places (in Norway over FL95, and in certain TMAs over FL45 for instance), the the required navigation performance is RNP5 -- ie the RNAV system needs to keep you within 5NM of the indcated position for 95% of the time. Quite crude, that is. However more and more procedures are now designed for Precision RNAV, PRNAV, which has a RNP value of 1 nm. ANP will normally be significantly better in areas where plenty of conventional updating/fixing is avaliable. It is envisaged that as technology progresses, procedures using even lower RNP, such as RNP0.03, to maximise airspace use and efficiency.
