Previously published research on economic benefits of standards

Standards research reports 2000-2014

Over the last few decades there have been numerous research studies carried out on the economic benefits of standards and standardization. Here we share a number of these reports undertaken from around the world between 2000 and 2014.

BSI UK SME Landscape Report (Stage 1)
BSI UK SME Landscape Report (Stage 2)
Economic Benefits of Standardisation, Standards Australia 2014
ISO Case Studies, 2012
ISO Case Studies, 2011
The economic benefits of standards to New Zealand, Standards Council of New Zealand 2011
The Economic Benefits to Standardization, DIN 2011
International Standards and Trade: A Review of the Empirical Literature, Swann 2010
The Economic Impact of Standardisation, AFNOR 2009
Economic Value of Standardisation, Standards Council Canada 2007
The Empirical Economics of Standards, DTI 2005
Economic Benefits of Standardization. Summary of Results. Final Report and Practical Examples, DIN 2000
The Economics of Standardization, Swann 2000

BSI UK SME Landscape Report (Stage 1)

The output of this research programme, which focuses on the important industry sectors of aerospace, automotive, construction, food, healthcare and ICT will provide a snapshot of the UK SME landscape and attitudes towards the role of business standards. This first stage report, combined with the outcomes of the second phase will be used to inform BSI’s strategy to involve SMEs in standardization and to develop standards based solutions that can furtherimprove small business performance and potential.

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BSI UK SME Landscape Report (Stage 2)

Micro, small and medium sized enterprises (SME) represent a large and important section of British industry; however these organizations face many challenges that can impact their performance and growth potential. Government policies including the Department for Business, Innovation and Skills and HM Treasury policy, ‘Making it easier to set up and grow a business’ recognise the importance of helping SMEs grow in order to benefit the wider UK economy. To achieve this, small businesses often need assistance to increase sales (and particularly exports), to improve the skills of their staff and to innovate more effectively. Standards and standardization can and should play a major role to help SMEs rise to these challenges.

The output of this research programme, which focuses on the important industry sectors of aerospace, automotive, construction, food, healthcare and ICT will provide a snapshot of the UK SME landscape and attitudes towards the role of business standards. This second stage report, combined with the outcomes of the first stage, will be used to inform BSI’s strategy to involve SMEs in standardization and to develop standards based solutions that can further improve small business performance and potential.

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Economic Benefits of Standardisation, Standards Australia 2014

Standards Australia. (2014). Research Paper: The Economic Benefits of Standardisation. Standards Australia, Sydney.

This report uses econometric methodology to understand the contributions of standards to the Australian economy. The results show that factors such as productivity, innovative technical knowledge generation and diffusion, which are estimated by patent registrations, and standards all support economic growth in Australia. Specifically, standards have been shown to exhibit a positive relationship with GDP such that a 1% increase in the production of standards is associated with a 0.17% increase in GDP, which translates to approximately AUD 2.78 billion in 2009.

Standards in this analysis are used as an estimate of the diffusion of technical knowledge within the economy, and the multifaceted impacts of standards cannot be captured in this sort of analysis. However, the strong and positive relationship between standards and GDP demonstrated here, provides compelling empirical evidence ofthe importance of standards to the national economy.

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ISO Case Studies, 2012

Gerundino, D. and Weissinger, R. (2012). Economic Benefits of Standards – International Case Studies Volume 2. ISO, Geneva.

This is the second volume of case studies carried out using the ISO Methodology developed by ISO to quantify the economic benefits of standards mainly from a microeconomic perspective. It contains ten studies from nine countries carried out between 2011 and 2012 within companies and in close cooperation between an ISO member body, an academic institution, and staff of the ISO Central Secretariat, acting as advisors to the project team. The collection covers studies from South Asia (China – 2 studies – and Sri Lanka); South, Central, West and North Africa (respectively: Mauritius, Cameroon, Senegal and Egypt); Middle East (Jordan and Lebanon) and Italy. It demonstrates how and for what purposes standards are used by companies and the benefits they can gain by implementing standards.

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ISO Case Studies, 2011

Gerundino, D. and Weissinger, R. (2011). Economic Benefits of Standards – International Case Studies Volume 1. ISO, Geneva.

This book contains a set of 11 case studies from 10 countries about the economic benefits of standards from the company perspective across numerous sectors. The studies collected were undertaken between around October 2010 and June 2011 in South East Asia (Indonesia, Singapore, Thailand and Vietnam), Southern Africa (Botswana and South Africa), South America (Brazil, Colombia and Peru) and Germany (two studies).

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The economic benefits of standards to New Zealand, Standards Council of New Zealand 2011

BERL. (2011). The Economic Benefits of Standards to New Zealand, Standards Council of New Zealand and BRANZ, Wellington.

The Standards Council of New Zealand and BRANZ (2011) conducted a two stage estimation procedure to determine the relationship between standards, patents, and Total Factor Productivity (TFP); and the capital-labour ratio and TFP on labour productivity. The results show a significant and positive relationship between standards and TFP such that a 1% change in the stock of standards is associated with a 0.10% increase in TFP and therefore a 0.054% increase in labour productivity.

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The Economic Benefits to Standardization, DIN 2011

DIN. (2011). The Economic Benefits of Standardisation: An update of the study carried out by DIN in 2000. DIN German Institute of Standardisation, Berlin.

The investigation updates the initial study into The Economic Benefits of Standardisation (DIN, 2000). The findings show an economic benefit of 16.77bn Euros a year which approximately corresponds to the value obtained ten years ago. Relatively speaking this is 0.72% of Germany‘s GDP, a slightly lower value than that obtained in the first study in 2000. At the same time, it has been shown that after German reunification standards have had a stabilizing effect on growth corresponding to about 0.7% to 0.8% of the gross domestic product.

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International Standards and Trade: A Review of the Empirical Literature, Swann 2010

Swann, G.P. (2010). International Standards and Trade: A Review of the Empirical Literature. OECD Trade Policy Papers, No.97, OECD Publishing.

This paper reviews the body of empirical work that has investigated the specific question: How international standards impact on international trade? The findings from econometric models shows that there is often, but not always, a positive relationship between international standards and exports or imports, which supports the view that international standards are supportive of trade. For national standards studies find positive as well as negative effects on trade and thus provide only qualified support for the commonly held view that national standards create barriers to trade.

On the issue of trade effects, the literature review provides a complex explanation on how the multiple economic effects of standards interact. The paper summarises some of the existing empirical evidence for some of these effects, which include network externalities, variety, knowledge, quality and trust, and which merit further research in order to understand when standards help trade, and when not.

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The Economic Impact of Standardisation, AFNOR 2009

AFNOR. (2009). The Economic Impact of Standardization – Technological Change, Standards and Long-Term Growth in France. AFNOR, Paris.

The AFNOR study on the relationship between standards and long-term economic growth in France is comprised of two parts: a macroeconomic study to investigate the impact of standards on economic growth measured by Total Factor Productivity (TFP). The findings indicate that, on average since 1950, the impact of standards of economic growth has been significant and positive such that a 1% change in the stock of standards is positively associated with a 0.12% change in total factor productivity. And it reveals that standardization directly contributes almost 25% of GDP growth in the French economy.

The second part is a microeconomic analysis through a survey of 1790 companies to capture perceptions of the impact of standardization. Over 66% of the companies interviewed value standardization for its contribution to the generation of profits, proving that it has a positive impact on a company’s value. Standardization was found to promote the dissemination of innovation without revealing a company’s manufacturing or technological secrets; encourages transparency and business ethics in practice; standards enable companies to increase their export capacity; and standards are a quality marker in addition to giving give companies greater control over safety-related problems.

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Economic Value of Standardisation, Standards Council Canada 2007

Standards Council of Canada. (2007). Economic Value of Standardization. The Conference Board of Canada, Ottawa.

The Standards Council of Canada (SCC) commissioned a study to examine the impact of standardization on the Canadian economy. The study involved a review of the standards-oriented economics literature, an empirical analysis of the impact of the collection of standards on Canadian labour productivity, a series of interviews with Canadian leaders, and two case studies on the benefits of selected aspects of standardization.

The empirical work clearly showed that standards play an important role in enhancinglabour productivity, measured as output per hour worked. Over the study period of 1981-2004, standardization accounted for 17% of the growth rate in labour productivitywhich translates into approximately 9% of the growth rate in output (real GDP). Theimpact, over time, of this positive contribution to output growth is substantial. The findings from the qualitative research support the benefits of standards and standards development: as the basis for continuous improvement, innovation and new product development. Standardization helps to establish a level playing field for business and validate credibility without which many would not be in business. Other respondents commented on the important role that standards play in improving productivity, facilitating trade and new market development as well as contributing to improved public safety.

The Empirical Economics of Standards, DTI 2005

DTI. (2005). The Empirical Economics of Standards, DTI Economics Paper No. 12, London.

This study, as one of the most comprehensive national studies, aims to quantify the value of standards to the economy. It presents the results of an investigation of the role and impact of standardization on economic performance, especially on growth, productivity and innovation in the UK. The overall programme consisted of three projects:

Benchmark estimates of the impact of public standards upon technological change using UK data
Standards and the international transmission of technology
Do standards enable or constrain innovation?

The report quantifies the extent to which standards enhance products and services, build trading relationships, improve management practices and help organisations to reduce risk. As a result, the research shows that standards are a key driver of growth and labour productivity across the economy. Its main findings are:

Standards make an annual contribution of GBP 2.5 billion to the UK economy
Thirteen percent of the growth in labour productivity is attributed to the role of standards
Standards are an enabler of innovation and facilitator of technological change

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Economic Benefits of Standardization. Summary of Results. Final Report and Practical Examples, DIN 2000

DIN. (2000). The Economic Benefits of Standardisation. DIN German Institute of Standardisation, Berlin.

The DIN study is a comprehensive investigation into the economic benefits of standardization. The research is divided into two parts. The first part looks at microeconomic effects of standardization on business using company surveys and interviews with experts. The study reveals that standards have the greatest positive effect on businesses, for they help improve processes. When it comes to businesses' relationship with suppliers and customers, however, industry-wide standards are the main instruments used to lower transaction costs and uphold market power over suppliers and customers. In fact, industry-wide standards play a vital role in our increasingly globalized world. Eighty four percent of the companies surveyed use European and International Standards as part of their export strategy in order to conform to foreign standards.

The second part takes a macroeconomic approach to understand the relationship between standardization and technological change and their effects on the German economy and foreign trade. From a macroeconomic perspective, significant findings are that:

Standards make a greater contribution to economic growth than patents or licences
Export-oriented sectors of industry make use of standards as a strategy in opening up new markets
Standards facilitate technological change

Read Economic Benefits of Standardization. Summary of Results. Final Report and Practical Examples, DIN 2000 >

The Economics of Standardization, Swann 2000

Swann Peter, G.M. (2000). The Economics of Standardization. DTI, London.

This seminal study on the economics of standardization was undertaken by the Manchester Business School for the UK Department of trade and industry (DTI). It provides an overview and classification of the literature on standardization and different ways of standards setting (formal versus consortia process). Standardization is seen as a key part of the microeconomic infrastructure with benefits resulting from cost reduction and quality increases. Although standardization may not raise the profitability of all companies, it is in the interest of the economy as a whole as it induces competition. Standards have a strong element of ‘public goods’ and are, due to their open and rule-based development process, often criticized for the slowness of their development. However, a counter argument against the slowness of this process is to view the development of the corresponding products as too fast, especially if one regards standardization as a tool to help define consumer requirements. The participation of different interest groups in the standards-setting process is reviewed and a warning is formulated against an over-representation of producer interests. The study concludes that the participation in standards setting bodies needs to be balanced between different interests and emphasizes that governments can play an active role in ensuring such a balance. The standards’ infrastructure needs to be kept efficient and functional to ensure that it can contribute overall benefits to society.

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