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ISO standards - What's the bottom line?

by Roger Frost on
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ISO (International Organization for Standardization) is the developer and publisher of more than 19 200 voluntary International Standards bringing benefits for business, government and society. But how do ISO standards contribute to the economic returns of countries and companies? What is the “bottom line”?

A new brochure provides answers by giving examples in hard figures of the benefits of implementing ISO's and other voluntary, consensus-based standards:

  1. For the global economy and a number of national economies
  2. For individual companies from different sectors and countries.

An inventory of studies established by ISO and the International Electrotechnical Commission ((IEC) on the economic and social benefits of standards, from which many of the following examples are taken, can be accessed at:

http://www.iso.org/iso/benefits_repository.htm?type=EBS-MS

  • Estimates by the Organisation for Economic Co-operation and Development (OECD) and the US Department of Commerce both show that standards and related conformity assessment (checking that products and services measure up to standards) have an impact on 80 % of the world’s trade in commodities.

  • The World Trade Organization (WTO) requires its members to use international standards of the type developed by ISO, in order to avoid the technical barriers to trade that can be caused by differing national or regional standards.

Macroeconomic studies on the contribution of standards to national economic growth show that :

  • Standardization directly contributes to the growth in the French economy, for up to 0.81 %, or almost 25 % of GDP growth.

  • Macroeconomic gains are a function of both more efficient production (labour productivity) and better decision making (capital productivity) within the New Zealand economy. Standards are a powerful economic lever and, over time, could lead to a 1.0 % – or NZD 2.4 billion – increase in New Zealand's annual economy-wide GDP.

  • In Canada, growth in the number of standards accounted for 17 % of the labour productivity growth rate and about 9 % of the growth rate in economic output (real GDP) over the 1981 to 2004 period. If there had been no growth in standards in this period, real GDP would have been CDN 62 billion lower.

  • Over the 40 years to 2002, a 1 % increase in the number of Australian Standards is associated with a 0.17 % increase in productivity across the economy. Additionally, standards can be considered, together with R&D expenditure, as contributing factors to the stock of knowledge: a 1 % increase in this joint stock of knowledge leads to a 0.12 % increase in economy-wide productivity.

  • The economic benefits of standardization represented about 1 % of GDP in Germany, where standards made a greater contribution to economic growth than patents or licenses. Export-oriented sectors of German industry used standards to open up new markets and facilitate technological change

  • In the United Kingdom, standards made an annual contribution of GBP 2.5 billion to the economy, and 13 % of the growth in labour productivity was attributed to standards. Standards were identified as enables of innovation and facilitators of technological change. The economic return on investment in standards made sound business sense at both macro- and micro-economic levels

The brochure ISO standards – What's the bottom line? published in English and French, is available free of charge from the ISO Central Secretariat through the ISO Store or by contacting the Marketing, Communication & Information department. It can also be obtained from ISO national member institutes (see the complete list with contact details). The brochure can be downloaded as a PDF file free of charge from the ISO Website.

ISO Standards - What's the bottom line

ISO standards – What's the bottom line?

A brochure with hard figures for the benefits of implementing ISO's and other voluntary, consensus-based standards.