Messages from Keidanren Executives and Contributed articles to Keidanren Journals April, 2024 The role of international standards in trade, prosperity and social benefit
International standards represent a common language that consumers, governments and industries worldwide can rely upon as a basis for seamless trade, interoperability and resilient supply chains. Standards are a form of business information, used to define important attributes of products and services, that can be shared with other organizations, investors, regulators and consumers.
Whereas harmonization of regulation across national borders is very difficult to deliver (the European Single Market is the most well-known example), it is much simpler for nations to agree to adopt identical international standards, especially if these standards have been developed through a formal process with national representation.
Today the processes for shaping international standards are managed by three organizations that make up the international standards system, the International Organization for Standardization (ISO), the International Electrotechnical Commission (IEC) and the International Telecommunications Union (ITU). Through these world-famous bodies, national members and their expert delegations propose, develop and maintain consensus standards that detail technical specifications, industry processes, and business principles for everything from manufactured goods to good corporate governance to the use of artificial intelligence technologies.
At the turn of the twentieth century, industry leaders in many countries had recognized that agreeing common standards, for example in electrotechnical technologies, would improve safety and bring competitive advantage. Standards committees were established in many countries including the UK, Germany and the US to support industrialization. BSI traces its roots to 1901 when the engineering standards committee (ESC) was set up by the professional engineering institutions in London. The UK became a founder member of the International Electrotechnical Commission (IEC) in 1906, when the ESC hosted an international convention of countries looking to agree standards for electrical equipment. In 1946, BSI also hosted the UN Conference in London that led to the establishment of ISO in 1947.
BSI went on to become the UK National Standards Body and works closely with the Japan Industrial Standards Committee (JISC) and the Japan Standards Association (JSA) in the international standards system.
Standards are the bedrock of every market framework, used to support regulation, to disseminate knowledge of best practice, to enter contracts and to enable robust measurement and assurance.
Standards are used throughout global value chains as the common denominator that allows organizations to demonstrate quality, performance and interoperability. Assurance against standards delivers trust and confidence to consumers, customers and market authorities.
BSI has developed an international standards strategy that is stakeholder-led and that supports the UK public policy interest. The prosperity of the UK depends on global trade. To ensure that businesses working in the UK (or global companies working with UK partners) can maximize their competitive advantage through frictionless trade, rapid access to international markets and fast track innovation. To maximize the benefit of international standards to support domestic economic outcome, we view that it is important to both participate in the development of these standards and implement the deliverables when they are delivered. The UK has a strong track record of participating in the technical work of the international organization for Standardization (ISO) and the International Electrotechnical Commission (IEC). UK organizations see the advantage that shaping standards that become pervasive across the globe bring, the UK is a large adopter of international standards.
Standards form an underpinning component of a broader ecosystem of public and private institutions in what is called ‘National Quality Infrastructure', comprising of a National Standards Body, National Metrology Laboratories, National Accreditation Organisations and Conformity Assessment Bodies. In the UK the main institutions collaborate under an initiative called UKQI. This seeks to maintain a state-of-the-art NQI, that can respond to both government and private sector requests.
At a national level there are several key components to the development of a national standards strategy. Working with policy makers to highlight the role that standards can play to support the delivery of effective regulatory policy, including in some cases acting as an alternative to regulation, can deliver a range of positive outcomes. Engagement with stakeholders is key to the identification of areas where standards development is required, alongside recruiting standards makers into the standards development process. Educating companies especially from the SME community on the benefit of the implementation of standards, increases the uptake of global knowledge, helping companies to increase productivity, export potential and profitability.
As we witness the acceleration of the development and adoption of new technologies, there is an associated need to accelerate the development of standards that support the safe enablement of these technologies. BSI have implemented fast track standards development methodologies that provide the basis for the development of standards to support nascent technologies, delivering internationally applicable solutions.
Standards deliver positive impact, a 2022 study in the UK highlighted that 78% of the over 1,000 companies surveyed said that standards increased their annual turnover and productivity levels at the point of implementation. 79% of exporters said that using standards increased their trade revenues at the point of implementation. The evidence highlights that the utilization of standards by organizations improved economic performance and subsequent business growth.
It is extremely important to engage with stakeholders to understand their current and future challenges, this supports the development of solutions that can tackle those challenges, delivering trust for the benefit of organizations and society. This is especially important in areas of new technology and innovation, where instilling best practices can open up market access and trade, drive innovation, and strengthen consumer trust.
BSI has developed a deep mutually beneficial relationship with a range of organizations in Japan, including the development of deliverables that have supported the development of refrigerated transportation and the sharing economy. We are keen to share good practice and work with partners from across the globe to support the creation of knowledge that helps to address some of the world's largest challenges, be that sustainability, decarbonization, electric vehicles or digital trust.