Many people are not aware of them, but every day we are surrounded by standards.
From Wi-Fi and 4G to connect to the Internet, to the central heater in your house
and the bank card you use for purchases. They all involve technology
that has become the standard in their field. Researcher Paul Wiegmann of
Rotterdam School of Management, Erasmus University, studied how standards come
into existence. He explains that there are basically three different ways, but
if a corporation wants their product to become the standard they have to
creatively combine them. So how do standards then come into being?
It actually turns out that there are three different ways of how standards can emerge.
Well you could say three different modes of standardisation.
The first mode is the committee based mode. In this mode you have lots of different
interested parties that just sit around a table and try to jointly develop a
solution to a problem. A very well-known example of a standard that emerged in
a committee is the A-series of paper sizes, so A4 A5 and so on. The second way in
which standards can come into being is through a market battle. In this market
based standardisation you have different companies that all put their products
onto the market and then basically compete against each other, until one of
them becomes the dominating one that supersedes all the other ones.
And the classic example of that would be the VHS versus Betamax battle back in the 80s
when home video was something new. And finally you have government based
standardisation where the government basically just picks a solution
and uses its hierarchical position to impose that on actors in the market.
Increasingly we see that these three different modes of standardisation
become mixed. So if you look at trends for example like making things smart,
so if you have smart cities, smart industries, if you look at big sustainability
challenges, you see that actors from a lot of different industry sectors, a lot
of different countries, come together to set standards and they all bring their
own experience in standardisation into this process. And as a result quite often you get two
or even all three of these modes included in the same standardisation
process, which can lead to very dynamic developments with lots of competition
and lots of interaction between different players. A good example of a
process where all three modes of standardisation were active in parallel is
the process they took to standardise this charging plug for charging electric
cars in Europe. In that case a number of companies were active in the committees
to agree on a common design, but at the same time some of them were already
putting their designs in the market and building up installed bases to
strengthen their position in the discussions. When it turned out that the
European industry could not agree on a common design, the European Commission
stepped in and used its hierarchical position to choose this design as the
common standard in Europe. A German medium-sized company used all of the
three modes very strategically and as a result they were successful in getting
their design accepted as the standard for charging electric cars all over Europe.
There is an increasing number of cases were more than one mode of
standardisation plays a role in the emergence of a standard. For example when
different mobile telecommunication standards were competing on a global scale
there was an element clearly of market battle in there, but also strong
involvement by various governments that tried to promote their own national developments.
If you want to look at a case that involves both committees and
governments then look no further than the ISO shipping container. And a good
example of a case that involves both committees and markets is the
development of a common file format for office documents on your computer.
So what does this mean for companies? If you want to influence the next standard
that's being developed in your industry to reflect your preferences you really
need to be aware of these three modes and how you can use them strategically.
For example if you engage in a committee that can help to increase the legitimacy
of a solution. If you bring new products into the market that can really help you
to build up an installed base. At the same time you also have to be aware of
what your competitors are doing. For example if your competitors go into a
committee and you don't join, then you might be left out of the discussion.
If they put product into the market and you don't, then maybe
you get a disadvantage there. Finally you also have to be aware of the
standardisation culture in your industry. For example if in your industry also in
your country standardisation committees are not used very often, it might be
difficult to join discussion partners if you want to use community based standardisation.
If you use all of these options well and strategically then you
really can increase your chances of getting a standard that reflects your preferences.
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