ICT, Smart Systems, and Standardization

Introduction

According to the definition adopted by the International Organization for Standardization (ISO) a standard is a document, “established by consensus and approved by a recognized body, that provides, for common and repeated use, rules, guidelines or characteristics for activities or their results, aimed at the achievement of the optimum degree of order in a given context” [ISO, 2015]. The fact that standards are established ‘by consensus¹’ distinguishes them from legislation. Typically, the use of standards is voluntary. However, through legislation they may become mandatory (e.g. many health and safety standards) or ‘quasi-mandatory’ (e.g. Harmonized European Standards).

Standards – in a very general sense – have been with humankind for quite some time. About 4,000 years ago the first alphabets emerged, enabling new forms of communication and information storage. Around the 7^th century BC the Lydians invented the first coin-based currency; it established the basis for easier inter-regional trading. The advent of the railroad in the 19th century resulted in a need for technical standards, e.g. those that enabled compatibility between individual parts of technical artifacts, defining e.g. the width of railway gauges, the diameter of screws, etc. This was once more reinforced when mass production generated a demand for interchangeable parts. In parallel, the invention of the electric telegraph in 1837 triggered the development of standards in the field of electrical communication technology. In 1865, the International Telegraph Union – to become the International Telecommunication Union² (ITU) in 1932 – was founded by twenty nation states. The other major international standards setting bodies, the International Electrotechnical Commission (IEC) and ISO, were founded in 1906 and 1947, respectively.

In the field of Information and Communication Technologies (ICT) international standards are the major mechanism to ensure interoperability between systems. Frequently, ICT standards also describe a commonly agreed platform upon which innovations can be based. Moreover, standards in general are a valuable means of technology transfer. They have also been used as policy tools – for example, they are a major pillar of the European Single Market. Standards’ potential economic implications must also not be under-estimated. A new standard may be used to extend a market, or even help open up a new one. Intellectual Property Rights (IPR), mostly patents, also play a major role here. That is, standards must also be considered as strategic tools for firms.

The above suggests that standards are not just technical documents but that they may have ramifications well beyond technology. Accordingly, they should no longer be considered as pure ‘public goods’, i.e. as something that is non-rival and non-excludable [Deneulin & Townsend, 2007]. Rather, these days standards are typically seen as impure public goods, or club goods; they are non-rival and excludable, just like e.g. satellite TV, cinemas or private parks (see also e.g. [Hawkins, 2009]). This is largely due to the frequent incorporation of IPR into standards.

Against this background, this chapter will first briefly look at the links between standards and standardization, innovation and economics. It will then offer a brief description of the complex ‘web’ of Standards Setting Organizations (SSOs) in the ICT sector. Subsequently, a flexible tool to describe the characteristics of an SSO will be discussed. It can be deployed by firms to identify the SSO that is best suited for a planned standardization activity. This will be followed by the description of a typical standards setting process. These are only parts of the fairly complex task of standardization management, which will be described next. The subsequent section will briefly discuss national standardization strategies. Finally, some likely future research directions are sketched.