Economic Benefits of Standardization. Summary of Results. Final Report and Practical Examples

The DIN study is a comprehensive investigation into the economic benefits of standardization. The joint research project Economic benefits of standardization initiated by DIN was carried out simultaneously in Germany, Austria and Switzerland by two contractors: the Department of Market-Oriented Business Management and the Department of Political Economics and Economic Research at the Technical University (TU) Dresden and the Fraunhofer Institute for Systems and Innovation Research, Karlsruhe. Part A, "The effects of standardization: Results of the company survey and interviews with experts" was carried out by TU Dresden and Part B, "Standardization and technological change: the effects of standardization on the German economy and foreign trade" was researched by the Fraunhofer Institute. Owing to technical and organizational limitations, the study dealt only with selected aspects of the economic implications of standardization.
The analysis of the economic benefits of standardization takes into consideration the four main partners in standardization: businesses, private households, the State and the standards body. The latter acts as an intermediary between the other three, which in turn are affected by standardization in different ways. The reactions of these actors to standardization and their motivation to become involved in standardization work are the main focus of the research conducted by TU Dresden. In contrast, the Fraunhofer Institute adopted a macro-economic approach, concentrating on the link between standardization and technological change, and the relationships between standardization, economic growth and exports. The hypothetical framework was tested via a company survey carried out in Germany, Austria and Switzerland. In addition, interviews were held with German and Austrian experts who represent the interests of private households and the State.
As expected, the study shows that company standards have the greatest positive effect on businesses, for they help improve processes. When it comes to businesses' relationship with suppliers and customers, however, industry-wide standards are the main instruments used to lower transaction costs and uphold market power over suppliers and customers. In fact, industry-wide standards play a vital role in our increasingly globalized world. 84 percent of the companies surveyed use European and International Standards as part of their export strategy in order to conform to foreign standards. From a macroeconomic perspective, significant findings are that:
  1. standards make a greater contribution to economic growth than patents or licences;
  2. export-oriented sectors of industry make use of standards as a strategy in opening up new markets;
  3. standards facilitate technological change.

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Published:2000
Other bibliographical information:DIN - German Institute for Standardization