Importance of International Standards

Standards are typically a published document setting out specifications and procedures to ensure consistent implementation of processes, technologies, and methods. The use of standards, when developed properly and deployed well, can enable a high benchmark for security, safety, quality and reliability of goods and services being delivered into a market. In turn, the implementation of standards increases the interoperability of the processes, technologies or methods standardised across the range of producers, suppliers, and consumers.

The adoption, implementation, and use of international standards is crucial, and provides numerous benefits, including:

  • Interoperability in digital systems for transparency, simplicity, and compliance;
  • Mutual compatibility in products, components, and services, especially where digital developments have created new products, components or services, or introduced elements of risk;
  • Flexibility and promptness in responding to new challenges or changes in such processes that will inevitably occur as digital economy and digital trade frameworks continue to adapt and change; and
  • Consistency in the quality of goods or services, with appropriate safety and security safeguards.
 
Standards bring benefits to businesses in terms of substantially larger (potentially global) markets, reduced costs, standardised processes, and compliance, as well as enhanced productivity. By making trade easier and more efficient, they bring benefits to the overall economy. For instance, a report commissioned by the British Standards Institute (BSI) found that standards contributed towards 37.4% of annual productivity growth in the UK, translating to an extra AUD15.63m of GDP in 2013. An additional AUD11.63bn exports per year can also be attributed to standards.[1]

International standards facilitate interconnectivity and interoperability by setting out specifications and procedures to ensure consistent implementation of processes, technologies, and methods. Interconnectivity of networks allows traffic to travel across and between networks. This will for instance, enable economies of scale as the fixed costs of infrastructure rollout are spread across a greater level of output bringing about a fall in unit costs.

Interoperability of systems, software and operating platforms means that traffic can run effectively across different types of networks (e.g., from telecoms to banking to logistics to educational to health networks and so on). This too enables economies of scale, as fixed costs are spread across a wider range of output of different goods and services. Scale is associated with reach—the ability of a system to serve the greatest number of users.

International standards play a key role in aligning rules and processes across borders to minimise both incompatibilities among national approaches as well as regulatory uncertainty. With the development of new industries such as components for AVs or use of new technologies such as blockchain for existing industries—failure to participate in international standards and processes can inevitably lead to product or service incompatibility, causing market inefficiencies.

Certain new developments in technology will demand greater interoperability to meet the objectives for the innovations. For example, where telecommunication and wireless standards have long been based on distinctive, non-interoperable, national standards (which, for example, in the European Union were developed by national champions as a competitive advantage) the envisioned objective of ubiquitous 5G connectivity requires the adoption of common 5G standards, ensuring compatibility across geopolitical borders.

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