On the Leading Edge… or Behind the Curve?
The economic payback of participation in standards development is not always obvious, but the survey showed that companies actively involved in the standards process are more likely to see both short- and long-term cost benefits than those that do not participate.
Potential Competitive Advantage through Standards
“Having influence in the content of a standard is an important factor in gaining competitive advantage.”
It is often said that you can be part of the solution, or live with the solution developed by others. Being part of the standards development process allows the company to gain ‘insider knowledge’ and to exert greater influence on the substance of the standards.
Cost Reduction through Standardization
“Standardization can lead to lower transaction costs in the economy as a whole, as well as to savings for individual business.”
The interviews with representatives of major firms as well as small- and medium-sized companies revealed that the costs of developing standards are not easily quantified. However, the businesses interviewed rated the positive effect on transaction costs as positive, noting that transaction costs drop considerably as a result of standards since they make information easily accessible to all interested parties.
Effects of Standards on the Supplier-Client Relationship
“Standards have a positive effect on the buying power of companies.”
Standards can encourage competition within the marketplace, and can be used by businesses to exert market pressure on companies further down the value-added chain. Businesses are, therefore, able to use standard to broaden their potential markets. Companies also have increased confidence in the quality and reliability of suppliers who use standards.
Standards and the Formation of Strategic Alliances
“…it is clear that cooperation between companies in matters of standardization is advantageous, for the resulting synergy can help reduce costs and increase profits.”
In the survey, respondents rated the effect of standardization on cooperation with competitors as positive, indicating that standardization encourages cooperation between businesses that are at the same stage in the value chain.
Standards and Research Development