Small and medium-sized enterprises (SMEs) form a diverse group, ranging from simple crafts manufacturers to innovative high-tech companies. According to the European Union’s definition, these can include one-person firms to 250-strong companies. Many SMEs could derive greater benefit from standardization, although standards are sometimes perceived as a burden rather than an advantage. This article highlights the obstacles that prevent SMEs from profiting from standards and standardization and offers solutions.
Why SMEs are different
Most SMEs, particularly the smaller ones, lack the necessary resources to commit to long-term strategies and investments.
Their management is largely involved in daily operational practice, and there is no time or money available for activities not directly related to the primary process.
They tend, therefore, to have a short-term view of their business and rarely anticipate change such as future regulations or the development of new standards. This also makes SMEs a notoriously difficult group to target with communication schemes.
Most of them tend to discuss strategy and keep informed within a limited, stable network of suppliers, trade associations and consultants. This is why it is important to take advantage of the SME network to reach them.
With regard to the implementation of standards, SMEs are at a disadvantage because they lack the “absorptive capacity”, including the expertise and organizational infrastructure (e.g. standardization units or enterprise knowledge management) that is beneficial for proper implementation of standards. This presents a sequence of barriers to standardization :
1. Lack of awareness
SMEs may be unaware that standards exist, in particular standards specific to their industry.
2. Importance of standards for SMEs
SMEs may be not aware of the added value of standards for their particular enterprise. They may regard standards as a necessary evil rather than a powerful tool with which to meet their business objectives.
3. Tracing the right standard
SMEs may have problems finding the relevant standards, or knowing whether a standard is still in effect.
4. Obtaining standards
SMEs may have difficulty getting hold of a standard because they are unaware of the distribution points, because of the price of standards, or simply because they end up buying the wrong standard (through inadequate description of its contents).
SMEs may not properly understand a standard due to the technical content and language, the unavailability of a version in the national language, the abundance of references to other standards, or a lack of information on the context of the standard.
Most of the benefits, of course, come from the implementation of the standard. SMEs may have difficulty implementing standards, either because of their inherent complexity or due to lack of knowledge or skills.
7. Evaluating implementation
Achieving business goals is the chief motivation for implementing a standard. An SME may therefore wish to evaluate the potential benefits of implementation to derive lessons that will help implement standards in the future and gain feedback for the standards developers.
Barriers to involvement benefits
The low representation of SMEs in standardization can be explained by the fact that they often do not have the time, personnel or financial resources to engage in standardization. Moreover, they face a relatively higher financial burden than larger companies because the cost of travelling and participation are invariably fixed. Many SMEs also lack the necessary expertise in standardization matters.
However, a Dutch study revealed that the reason most often given for non-involvement was simply that they didn’t know it existed. Those that did often met with other obstacles, the financial aspect being only one of these and not the most important one. A number of barriers may prevent them from becoming involved in standardization.
1. Lack of awareness
SMEs may know about standards, without understanding that these are developed in a process in which any company can get involved.
2. Awareness of the importance of involvement
Even when an SME is aware of the fact that it can become actively involved in standardization, it may still have trouble assessing whether it is worth the investment.
3. Tracing projects
An important reason for SMEs not getting involved in standardization is often simply a lack of knowledge about the process. SMEs that do become interested in standards development may still have difficulty tracing the relevant standards development projects.
4. Getting involved
Lack of resources (money, time, skills and knowledge) are another reason to refrain from participation.
5. Effective involvement
Being involved does not imply that the involvement is effective. Other participants may ignore an SME simply because it is an SME. Issues presented by a multinational may – consciously or unconsciously – carry more weight. Research, however, shows that the role of individuals in standardization can be decisive. Is an SME able to delegate a highly qualified person, in terms of both knowledge and skills, who is able to make a difference ?
Involvement in standardization is a long-term investment. Cost precedes benefits, but continuous focus on benefits is a must during the process. Is the SME able to evaluate the effectiveness of its involvement ?
7. Initiating new activities
An SME may wish to initiate a new standardization activity, because it needs standards to make its invention a market success. Yet starting a new project from scratch can be difficult.
Solutions to overcome the barriers to standardization can be grouped into three categories : 1) compensate SME’s lack of resources (time, financial resources or knowledge) ; 2) make the “ supply side ” of standards and standardization more easily accessible ; and 3) focus on intermediary organizations to bridge the gap between SMEs and the “ standardization world ”. Trade associations in particular have a role to play.
In our project for the European Committee for Standardization (CEN) and the European Committee for Electrotechnical Standardization (CENELEC), we developed a set of 58 solutions to help SMEs derive greater benefit from their participation in, and implementation of, standards.
This toolbox of solutions may be used by national standards bodies as well as national trade associations to support SMEs in their country. Following are just a few of the solutions related to standards :
- NEN (ISO member for the Netherlands) has developed a method for systematically tracing standards needed for a product or service, a method that can be used in other countries as well
- A summary, scope and table of contents of each standard should be published on the standards body’s Website
- Technical committees should create a meta-document for each set of interrelated standards, in which the structure of cross-referenced standards is presented. This provides SMEs and other stakeholders with a clear picture of the available standards in a given field. Standards bodies should make this document available for free on their Websit.
- Technical committees should provide a short document containing background information about the standard
Some of the solutions pertain to the involvement of SMEs in standardization :
- National standards bodies should develop case studies of SMEs that have successfully participated in standardization
- Proposals for new work items should be accompanied by a feasibility study including relevant stakeholders and their interests
- National standards bodies should stimulate representation of groups of SMEs via their trade association
A survey among both national standards bodies and trade associations in Europe showed support for almost the entire toolbox of solutions. CEN and CENELEC and their national members agreed to implement improvement measures from the toolbox. National standards bodies can choose the relevant subset by assessing their country’s current situation : which solutions are in place already and which are not ? To which barriers do they relate ? Guidance is provided to help pinpoint national priorities.
Education in matters of standardization is one of the priorities. This is fundamental for solving the lack of awareness. CEN, CENELEC, the European Telecommunications Standards Institute and their national members (notably Denmark and the United Kingdom) are becoming active in this field, following in the footsteps of the international initiatives taken by ISO, the International Electrotechnical Commission and the International Telecommunication Union.
Another top priority is to establish or improve relationships with trade associations, discuss their respective roles, and provide them with knowledge and materials. The study recognizes the crucial role of trade associations in improving the situation for SMEs. Some trade associations are very active in supporting their members in the field of standardization. Others are less so.
Supporting trade associations might start with an analysis of the strengths and weaknesses of member companies relative to the opportunities created and threats imposed by standardization. This exercise can be undertaken jointly by the national standards body and trade associations, perhaps even in cooperation with a university. On that basis, the trade association can identify a range of available solutions, in close cooperation with the relevant national standards body. The report provides best-practice cases of trade associations from different business sectors, in several European countries.
Some of the characteristics inherent to SMEs prevent them from getting the full benefit of standardization. However, joint efforts by national standards bodies and trade associations can make it much easier for SMEs to reap the benefits.
More information is available in the CEN/CENELEC report. Although the report is written for the European market, the situation for SMEs is to a large extent similar in other parts of the world, including developing countries.
About the authors
Dr. Henk J. de Vries is Associate Professor of Standardization at the Rotterdam School of Management (RSM), Erasmus University, Netherlands.
Prof. Knut Blind is Professor of Innovation Economics at the Technische Universität Berlin, Professor of Standardization at RSM, and Leader of the research group Public Innovation.
Dr. Axel Mangelsdorf is Research Fellow at the BAM Federal Institute of Material Research and Testing in Berlin, Germany, and visiting Researcher at the Chair of Innovation Economics of the Technische Universität Berlin.
Dr. Hugo Verheul is Professor i-Thorbecke, Digitalization of the Public Sector, at the NHL University of Applied Sciences, Leeuwarden, Netherlands.
Jappe van der Zwan is Manager of Publishing at the Netherlands Standardization Institute.
This article is based on the report SME Access to European Standardization – Enabling small and medium-sized enterprises to achieve greater benefit from standards and from involvement in standardization.