Standards Increase Economic Growth and Help Companies Access Foreign Markets

Standardisation is a key to a well-functioning, economically prospering and sustainable society. It is also a way to increase economic growth. These conclusions can be made from the results of the new study “The Influence of Standards on the Nordic Economies”.

Standards Increase Economic Growth and Help Companies Access Foreign Markets

A STUDY on the impact of standardisation was conducted in the five Nordic countries, Sweden, Finland, Norway, Denmark and Iceland. In total 1,179 Nordic companies in different industries with prior experience from the use of standards took part in the study.

One of the most important findings of it is that standardisation was associated with 28 percent of GDP growth in the Nordic countries between 1976 and 2014. The value of standards derives mainly from increased productivity and efficiency. The study shows, for example, that doubling the stock of standards in an economy is associated with an increase of 10.5 percent in labour productivity. On average, standardisation is associated with an annual increase in labour productivity of 0.7 percent per year.

- The efficiency and economic gains that companies get from standardisation reflect highly to the welfare of each country. When companies are prospering and effective the customers – the citizens – get the best quality in products and a well-functioning society. Standards can also guide companies to operate more ecologically and with solid processes, says Thomas Idermark, CEO at SIS, Swedish Standards Institute.

New markets and business plans

The business survey also reveals that following and applying standards is an important part of Nordic companies. The most important reason for companies to use standards is to improve market access (34 percent of respondents), improve product/service quality (32 percent of respondents) and manage risks (26 percent of respondents). Companies experience similar benefits of standards independently of which country they operate from.

Standardisation also plays an important role when companies make their future business plans, state a large majority (87 percent) of the respondent companies. Standards are emphasized as a good means to follow technical development. The result is robust across sectors, although regarded as particularly important by companies operating within seafood and fisheries (73 percent), ICT (67 percent) and trade (65 percent).

The survey data indicates that the use of technical standards is of high importance especially for manufacturing industry companies. Nearly all the companies in the sector (98 percent) report that they use technical standards. Examples of these kinds of standards are standards for machine safety, personal protective equipment (PPE), electrical installations, inter-process communication (IPC) or standards for testing.

The survey data also indicates that the use of technical standards increases innovative activity in the sector. (See Figure 1).

Click Image to Enlarge
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Figure 1: In what way do standards affect your company's ability or willingness to develop innovative solutions?

 

De jure vs de facto standards 

De jure standards are formal standards – standards developed by official standardization organizations .These organizations can be global (like ISO and IEC), regional (like the European CEN, CENELEC, ETSI) or national (like SFS, SIS, DS, SN, IST etc.) and have been given formal recognition to produce formal standards. Use of de jure standards is voluntary.

De facto standards are standards that are not developed by one of the above-mentioned recognized bodies, but gain prominence through widespread use rather than official endorsement. De facto standards can be developed by consortia or fora, where the development process is more or less similar to the formal standardization process by e.g. being consensus-based and including public consultations. These types of de facto standards are often developed by standards developing organizations (SDOs). In other cases, de facto standards are developed by one organization or a closed circle of organizations, or simply as a result of one or more companies’ products being so influential that they become a ‘standard’ in themselves.

Source: “The Influence of Standards on the Nordic Economies” –report.

Nina Garlo-Melkas

R&D | 24.10.2018

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