Industry standards have been around for years, developed with the aim to benefit industries, consumers and government when dealing with technological advances, new developments and research. In this report I aim to clearly define standards and standardisation from a technological and also commercial and social point of view, the standardisation process and give a brief overview of some standard-making organisations. I will look at technological developments and their relation to standardisation and explore the implications and impact of standards and standardisation in the modern communications and networking industry.
A standard is defined as “a technical specification, which provides guidance on practice and design. Its main functions are to ensure compatibility, to provide information, to establish quality, and to limit type variety.”1 Thus standardisation is the process of defining mutually agreed technical solutions and establishing compatibility and interoperability and ensuring the safety and health of citizens.
From a commercial and economic point of view “the primary aim of standardisation in the current social and economic context is to help encouraging the free movement of goods. Standardisation will help to remove technical barriers, open up new markets, and enable new economic models. It helps to create economies of scale while at the same time increasing opportunities for product differentiation and competition and services.”2 In other words standardisation is a medium for globalisation and harmonisation (through removing trade barriers). As a consequence, the three groups of stakeholders primarily benefiting from standardisation processes are industry, consumers and governments.
1.1.2 Stakeholders in standardisation
Industries benefit from saving on time and costs due to the lowered technical barriers and free movement of goods, which means increases in efficiency in production. Consumers benefit from a larger variety of compatible goods, for instance mobile phones are designed to one specification to be able to connect to any given active network in any country and mobile networks use the same technology to be compatible with any mobile phone model. This creates more possibilities for a consumer. Basic safety features are often used as a legal requirement to further benefit the consumer. Governments benefit from the resulting economic gains from the activity between the market and consumer.
1.1.3 The basic standardisation process
While the standardisation process rarely follows exactly the same steps there are a number of commonalities, which characterise a standards development life cycle; firstly there must be a market need identified by a number of standard-making bodies from the knowledge of consumers and industries. The first specification is drafted of what sensible regulations should exist taking into consideration technical specifications. After a consensus between the organization’s members and technical experts is reached the standards are created, approved and then implemented. A period of time is given to test the effectiveness of the standards. Once they are certified by the industry a maintenance process takes place and a review is scheduled to make sure the standards are still in sync with the market requirements. This step would remedy any problems, which may arise.2
1.2 Formulating and maintaining standards
Standards are developed and managed by different organisations at various levels within the economy. A consideration of the activities of the various standard-making bodies indicates the complexity of the development and updating of standards processes. The process of standardisation mentioned previously is only a simplified version of events. In reality it is a time consuming process of gathering knowledge, information and opinion from a rounded variety of sources. It is also a costly undertaking which costs a great deal of money and resources.
1.2.1 Requirements for standardisation
When forming standards there are several considerations to take into account such as who is allowed to vote and have input on new or revised standards, how are bias and commercial interests handled, how are negative votes or ballots handled, what type of consensus is required? “Formal standard setting is essential to the development of new technologies.” Regulations have even been placed on the development process of standards. Here is an extract from the ‘European Policy Principles for International Standardisation’, which describes some requirements on formulating an acceptable standard:
” II. The standards making process should respect some basic requirements: openness, transparency, consensus and participation of all interested parties. If regulatory authorities decide to make recourse to international standards it is important that they can make use of standards from standards bodies which can be held accountable for establishing consensus between all national positions and interested parties.
III. International, European and National Standardisation complement each other: it can be of particular value to consult between stakeholders nationally and represent national positions independently in the international context. For that purpose, it is important that the national standardisation systems allow for effective participation by all interested parties, and that national positions are coherent with European policies and legislation, if existing.”
I’d like to note here that the extract above is a further example of how standardization is a process for harmonization and compatibility.
1.2.2 Standard-making bodies
Today there are formal internationally, regionally (e.g. Europe), and nationally recognised standard bodies (ITU being one of them). These are organisations concerned with developing consensus-based standards, coordinating, revising, amending and maintaining standards that address the interests of a wide base of users. Most notably the International Organisation for Standardisation (ISO); “the world’s largest developer and publisher of International Standards. ISO is a network of the national standards institutes of 160 countries, one member per country… Therefore, ISO enables a consensus to be reached on solutions that meet both the requirements of business and the broader needs of society.”3 For more ICT based standards there is a joint operation between ISO and the International Electrotechnical Commission (IEC), usually referred to as ISO/IEC.
IEC is a more specialized standards organization for electronic, electrical and related technologies. The following extract from the IEC website gives a better idea of the application of the standards to real life technologies: “Wherever you find electricity and electronics, you find the IEC supporting safety and performance, the environment, electrical energy efficiency and renewable energies. The IEC also manages conformity assessment systems that certify that equipment, systems or components conform to its International Standards.”4
The British Standards Institution (BSI), which is the British national standards organisation, which consists of over 1000 technical committees. BSI standards are prepared as consensus documents, which result from extensive consultation and are aimed to represent the interests and needs of a variety of stakeholders. It is important to note that many other countries have similar organisations for that particular nation most of which are part of the ISO network.
An example relating to the mobile technologies industry is the International Telecommunications Union (ITU), an established, long-standing, internationally recognised organisation, which has formed many global standards and regulations regarding international telecommunications and radio “for example, since 1865, the telecommunications industry has depended on the ITU to establish the telecommunications standards that have been adopted worldwide. The ITU has created numerous telecommunications standards including telegraph specifications, allocation of telephone numbers, interference protection, and protocols for a variety of communications technologies.”
The organisations mentioned above are just a few of many formal standard-making organisations. Their standards are certified, based on expert opinion and take into consideration social, industry and government needs.
Standards are normally maintained by being formally reviewed at particular intervals, usually 5 years and updated if there have been any changes in technological and/or consumer behaviour advances. Due to the fast paced environment surrounding technology development, some standards regarding this subject are reviewed at intervals of 2 years.
Standards have also been predominantly created by industry consortia, but their emergence is more recent. These are not officially standards bodies, but provide publicly available specifications. Subsequently they are less prevalent.
1.2.3 Formal and de facto standards
The specifications provided by the various consortia are what are known as de facto standards, which means that they are informal and non-compulsory guidelines and recommendations, however they are the outcome of market decisions, usually seen as more up to date, quicker and more practical.2 For a specification to become a de facto standards it also has to be widely accepted by relevant market players for a sufficient period of time (approximately 2-3 years).
This is in contrast to formal standards, also referred to as de jure standards, which have been formulated by an official standards development organisation such as ISO/IEC, and are frequently legally binding laws, contracts or regulations. These take a long time to finalise the approval process as opposed to de facto standards.
There are several arguments in support of both the de facto and formal regulations.
The argument for formal standards and regulations advanced by standards participants is that standards are essential to the globalised economy where international de jure standards organisations have important roles to play. “The standards that are created through standards organizations lead to improved product quality, ensured interoperability of competitors’ products, and they provide a technological baseline for future research and product development. Formal standard setting through standards organizations has numerous benefits for consumers including increased innovation, multiple market participants, reduced production costs, and the efficiency effects of product interchangeability.”
On the other hand a contrary argument, mainly found in economic literature says that formal standards suppress innovation by committing everyone to one approach, design or established technology. It can also be argued that consensus-based standardization is slow, cumbersome and costly in comparison with de facto standards. Formal standards are said to reflect only what the market has already determined, making standardization not worth the considerable investment of time and resources involved, although the technique for revision of standards on a regular basis is a way to deal with the above argument.
Finally it can be argued that the existence of a published standard does not necessarily imply that it is useful or correct. Just because an item is stamped with a standard number does not, by itself, indicate that the item is fit for all or any particular use. The people who use them are responsible for distinguishing between the ‘right’ and ‘wrong’ standard for their purpose.
An advantage of de facto standards with regard to communications networks is that many aspects of ICT standardization are now covered by other forums (e.g. W3C for the Web and the IETF for the Internet), industry consortia and trade organisations rather than by formal standards bodies. “Industry consortia do not primarily aim at producing formal standards, and many times set out to address or resolve only a limited number of specific issues. Despite the less formal character of the industry standards they produce, their focus on specific market segments often proves to be an efficient way for generating critical mass among stakeholders, necessary for successfully completing standardization processes.”
2. Considerations associated with standards and standardisation
Technology managers deal with standards primarily in terms of their technical quality, but the commercial, economic and political implications cannot be ignored. Standards should be industry led and responsive to market needs primarily.
Commercially it can be said that standardization is not without it’s limitations. The sheer volume of standards organizations and consortia provide a platform of very different types of standards and specifications. Companies are forced to trawl through masses of options to select the ‘right’ standard, which best fits their purpose and overall goal. In ICT standardization means that there is a need for players from very different backgrounds to agree on something they all universally deem as ‘right.’ This is a time consuming and highly difficult process to achieve. Not only this but “conflicting technical standards can have serious negative impacts on consumer acceptance of products and industry attractiveness. As electronic systems, for example, become more complex and involve growing numbers of complementary products, standards take on an increasing importance and need to be managed strategically.”
It can be argued that having a uniform standard would leave us with a limited variety of technological options and carries the risk of the market being left with a less-than-optimal solution which is not only detrimental to the market but also to the consumer. Problems associated with this are that in this case there may well be a need to create a better but incompatible system or update the existing leading system, which may take years and may be the root of new associate problems.
From a political perspective, the world of technology is forever changing and evolving it is difficult to create new standards on time for new developments. There is a great uncertainty in the market and it’s difficult to forecast new developments. There lies a risk of placing money on a technology, which fails in which case this action can be very damaging to a company. It also poses problems for developing new standards. Because of the uncertainty a new standard may be in the process of being approved, however if the market finds itself going in a new direction it may mean that some standardization processes need to be started over.
Alternatively, aside from the uncertainty in ICT standardization helps the economy by opening paths to a much larger market with competitors offering a compatible service, which can result in increasing profits for a company. It can be argued that with a larger number of competitors the benefits of producing something will decrease however the counter argument for this is that the value of a service or product, particularly in the mobile communications and networks field, will increase with the increase in the number of users with whom communication links can be established.
3. The impact of standards and standardization on education and training in communication and networking technology
Several standardization organizations and for and consortia are developing standards and specifications for communications technologies in order to cope with the growing demand for multimedia communications. The continual upgrading of standards such as ISO/IEC makes it difficult to keep course materials and academic skills up to date and creates difficulties in overcoming cumbersome course curriculum approval systems, to change curriculum and to squeeze new course material into an already crowded syllabus.
After having clearly defined standardisation, explored its development process and the various means by which standards are released and adopted it is easy to see the benefits of standardisation as a means of control of quality and interoperability on an international scale, but a more critical look at standardisation shows the problems associated with it and how it affects the different stakeholders.
While some arguments are persuasive it is necessary to imagine a technological world without the limits of standardisation. The result of this is most likely a scene where all countries and companies are out for themselves. On a domestic scale consumers would be affected with a choice of diverse products and services but with the hassle of having to adapt to entirely new systems regularly and on a global scale industries would be very different to how they are now without the extra competition. Multinational companies in the communications networks sector would have to have many different sets of processes to satisfy the needs of different countries not mention the processes necessary to employ in education and training.
1 The Management of Technology by Paul Lowe
5 Selected Readings on Information Technology Management By George Kelley
The Technology Management Handbook by Richard C Dorf
Standardisation Processes in IT By Kai Jakobs