Forms of Standardization - Impact of Standards PDF

STUDY INTO THE IMPACT OF
STANDARDIZATION
FINAL REPORT to DG Enterprise
April 2002
Impacts of Standards Users Group
ETD/OO/503207
ISUG (Impacts of standards users group) is an ad hoc consortium formed by Totus
Ltd., consultants in business, technology and marketing and based in Ireland, with
SIA - Società Italiana Avionica, to bid for, win and carry out this study and others of
a similar nature. The team members were:
Nicolo Bellina Maria Luisa Ferrero John Nolan

Craig Bullock Leslie Faughnan (webmaster)
Patrick Duffy, Sean Gallagher Liam Ó hAlmhain
(Managing Director, Finbar McDonnell Ewing Paterson
Totus Ltd.)
Totus Ltd. Tel. Int. 353+1+239 0019

Ahalan Cottage Fax 239 0018
Old Connaught Avenue E-mail: pduffy@indigo.ie
Bray URL: www.e-totus.com
Co. Wicklow Project: www.standardsimpact.org
Ireland
CONTENTS
CONTENTS
EXECUTIVE SUMMARY.................................................................................................6
1. INTRODUCTION .........................................................................................................1
2. IMPACT ON TRADE AND FREE MOVEMENT ......................................................17
3. IMPACT ON COMPETITIVENESS AND QUALITY ................................................32
4. IMPACT ON INNOVATION .....................................................................................54
5. IMPACT ON HEALTH AND SAFETY OF WORKERS.............................................72
6. IMPACT ON CONSUMERS ....................................................................................92
7. IMPACT ON THE ENVIRONMENT .......................................................................105

CONTENTS
Figures
Figures
Figure 1.1: Information Technology Equipment...........................................................................4
Figure 1.2: ‘Standards Drivers’.....................................................................................................7
Figure: 1.3 Overview of Approach and Method .........................................................................10
Figure 2.1: Effect of Agreements on International trade Barriers...............................................17
Figure 2.2: Intra Europe reciprocal trade ....................................................................................24
Figure 2.3: EU Electrical Trade NACE 31, % consumption ......................................................25
Figure 2.4: Trade (“international”) and Free Movement (“Europe”) benefits, ..........................27
Figure 2.5: The move towards International Standards ..............................................................28
Figure 2.6: Products affected by EMC Directive........................................................................29
Figure 3.1: Standardization - Competitiveness Trees .................................................................33
Figure 3.2: Standardization: cost reduction v. level....................................................................34
Figure 3.3: ‘Virtuous Circle’ of diminishing returns ..................................................................34
Figure 3.4: Standardization ‘costs savings chain’.......................................................................35
Figure 3.5: Effects of non-standardization on materials costs (an ISUG graphic) .....................38
Figure 3.6: Effects of non-standardization on total costs (an ISUG graphic) .............................38
Figure 3.7: The direct and indirect quality benefits of standards to a company .........................41
Figure 3.8: The Customer view is that standardization supports quality ....................................42
Figure 3.9: Simple 2–flanged casting..........................................................................................42
Figure 3.10: The standards operational environment of the modern corporation........................46
Figure 3.11: Car Reliability..........................................................................................................49
Figure 4.1: Innovation and Invention..........................................................................................54
Figure 4.2: Factors in Standardization ........................................................................................56
Figure 4.3: Powerful drivers for standardization when a company sees this combination.........57
Figure 4.4: Perception of a slight gain for Company 2 (C2) over Company 1, tips the balance
decisively...............................................................................................................................57
Figure 4.5: How standardization assists in market entry of an innovation .................................61
Figure 4.6: Use of standards by Innovators.................................................................................62
Figure 4.7: Using Standards to manage innovation ....................................................................64
Figure 5.1: European standardization methodology in machine safety ......................................72
Figure 5.2: Situation before and after New Approach ................................................................80
Figure 5.3: Machine accidents in France I ..................................................................................84
Figure 5.4: Machine Accidents in France II................................................................................84
Figure 5.5: Rollover accidents agricultural tractors Sweden .....................................................86
Figure 5.6: Adapted, showing rise in farming and “green” (includes fishing etc.) fatalities
Sweden ..................................................................................................................................87
Figure 5.7: Reduction of Electrical Accidents at Work in Germany ..........................................89
Figure 5.8: Reduction of Electrical Work Accidents in France ..................................................90
Figure 6.1: Consumers and Innovation .......................................................................................93
Figure 6.2: Electrical Fatalities in Finland ..................................................................................96
Figure 6.3: Electrical Fatalities at Home Germany.....................................................................96
Figure 6.3: Electrical fatalities Sweden.......................................................................................97
Figure 6.4: Consumer electrical fatalities USA ..........................................................................97
Figure 6.5: Electrical Blanket Fatalities UK ...............................................................................98
Figure 7.1: Index of toxic emissions .........................................................................................109
Figure 7.2: Environmental Impact Tracking .............................................................................110
Figure 7.3: Environmental achievement with targeted quality system .....................................113
CONTENTS
Tables
Tables
Table 3.1: Quality and productivity improvement example .........................................................50

Table 3.2: Quality and cost related improvements........................................................................52
Table 4.1: Success of Software Standardization ..........................................................................70
Table 5.1: Reporting rate of non-fatal injuries UK 1999/2000 ..................................................76
Table 5.2: Accidents due to non-conformity of equipment ..........................................................79
Table 5.3: Design-related accidents, construction machinery, Germany (Speck) ......................84
Table 5.4: Average number of Rollover before and after regulatory use of ROPS ......................87
Table 6.1: Cycle Masks performance.........................................................................................102
Table 7.1: ISO 14000 Applications...........................................................................................111
EXECUTIVE SUMMARY
Study into the Impact of Standardization
Executive Summary
A. INTRODUCTION AND STUDY BRIEF
Standards have been used in Europe since at least as far back as the Greek and Roman
civilizations and increases in standardization have paralleled Europe's technical development.
Today, standards are fundamental to most people's lives and work. For example, when office
workers access material on the web, or pass files to each other, standards and protocols ensure
images are recognized as images, that page formats remain in delivered documents etc. Without
standards, there would be no Internet - indeed, mankind would probably not yet have reached the
industrial revolution.
At the start of the 21st century, there are more standards in operation than ever before, partly
driven by the growth of technology and the need to structure interconnections between
technologies. For example, cars and engines contain increasing amounts of electronics and
software, and engines have electronic management systems. There is ongoing major
standardization in safety systems and intelligent controls in cars, both for cost reasons and to
allow technicians to programme and service them. Machines likewise have increased
functionality, e.g. the cost of sensors and embedded controls has fallen so much that many
machines now incorporate them. (Sensors now measure the load on a crane, its positional
stability, the angle of its jib, jib speed and direction – and can shut a crane down rather than
allow an operator to topple it.) This is based on standards that permit hardware devices and
software to be installed, checked, maintained, and interfaced. Standards don't do all these things
but they underpin them. When we speak, it is not our knowledge of the rules and structures of
language that generates the sounds – but without them, we could not communicate. Standards
work in a similar way in many areas of modern industry and wider modern society.
Despite the ubiquity and importance of standardization, the subject is not much discussed in
public (apart perhaps from discussions in business sections of newspapers about standards
platforms for new software or services or when some media tell us of EC plans for straight
bananas or square tomatoes). The Economist magazine has commented: "In the eyes of any sane
person, standards are mind-glazingly dull, eye-glazingly dull, but on a standard rests the wealth
of multiple industrial nations".
Despite the risk of being dull, this study addresses the topics of standards and standardization.
The brief for this study was to “produce a qualitative and quantitative impact assessment of
standards in the European Union and the EFTA.” Commissioned by the European Commission
(DG Enterprise), the brief states: “The study shall … analyse the types of standards used in a
range of sectors, it shall assess the impact of these standards on defined key areas of Community
policies related to the competitiveness of enterprises, such as free movement of goods within the
Community, external trade and innovation, as well as the protection of workers, consumers and
the environment.”
EXECUTIVE SUMMARY
B. METHOD
The study combined a range of different research techniques and methods. The principal ones
were:
• Extensive secondary research on the impact of standards in each of the six areas identified as
relevant "key areas of Community policies" - trade and free movement; competitiveness and
quality; innovation; health and safety of workers; consumer protection and the environment.
This research covered relevant literature and attendance at a number of standards-related
conferences;
• Primary research through initial meetings with experts and a large workshop consisting of
people working with standards (in standards organisations and industry), a survey of
European companies in a number of industries (see below), ongoing input from experts in
the field including a special interim experts meeting, a project website, and review meetings
of experts at draft report stage, for each area of Community policy listed above.
Ten industry sectors were chosen, to give a representative selection of standardization activity,
and to include different approaches to standardization. The sectors ranged from long established
sectors, such as mechanical engineering and aeronautics, to technology sectors such as software
and e-commerce. The sectors tended to provide case studies and anecdotal evidence of the
impact of standardization, supporting the more general evidence provided from the literature.
The study was guided by a Steering Group, chosen and chaired by DG Enterprise.
C. SOURCES OF STANDARDS
There are in effect two sources of standards. On the one hand, there are established SDOs
(standards development organizations). These are the national standards bodies which exist in
European countries, organisations with pan-European responsibilities such as CEN, CENELEC
and ETSI, and world organisations such as the ISO, the IEC and the ITU. On the other hand,
standards develop from within industries, being devised either by one company or (more
usually) by industry consortia (which can be either "open" or "closed"). With different
constituencies, these two sources have different drivers that influence how they are organised
and how they undertake their work. They may have areas of overlap, e.g. standards that begin as
industry-driven may be modified over time by SDOs to add further public safety or
environmental protection features.
A difference between the two sources of standards is the relative balance in motivation between
contribution to the public good and to private interest. While a 100% to 0% balance either way
tends not to happen, SDOs tend to be towards the left of the diagram below, and consortia to the
right.
Private interest
0 100
100 0
Public Good
EXECUTIVE SUMMARY
While SDO standards can improve competitiveness and quality (and can be an important source
of know-how for SMEs), their public nature means they tend to give companies only short-run
advantages. Indeed, they do not necessarily give competitive advantages, i.e. their use may be a
"stay-in-business" necessity, and, as a result, investment in such standardization is often made
reluctantly.
The standardization process also differs between the two "sources". In one way, consortia
standardization is more difficult in that, while SDOs have an established process, each
consortium process is different and negotiating participation terms may be challenging.
However, once agreed, consortia can push towards a solution quickly whereas SDOs need to
take account of the different (sometimes conflicting) interests in a policy-making process. This
facilitates what is often an important consideration for consortia - speed. Particularly in
technology and other highly innovative sectors, delay in producing a better standard can mean
loss of a market opportunity.
When we speak of standardization bodies in this study, we generally refer to SDOs. The
exception is with the innovation impact, where consortia play an important role.
D. OVERALL IMPACT OF STANDARDIZATION
Standardization is normally not the primary or direct cause of impacts. Instead, it facilitates,
often in a crucial way, impacts that arise. As a secondary factor in the generation of impacts, in
often complex situations, it is difficult to show "proof" (as one would use the word scientifically)
of causal links between the development and adoption of standards and subsequent effects
(which often occur after a time lag).
In relation to our six defined types of impact (listed earlier), we searched for evidence relating to
the benefits of standards in terms of:
• hard evidence, where we felt data existed that established a cause and effect link;
• circumstantial evidence, where strong and cumulative evidence showed an associative link;
• anecdotal evidence, where individual cases gave examples of cause and effect.
As well as these three types of evidence showing the benefits of standards, we also reviewed
evidence relating to any negative impacts generated by standards, i.e. unwanted side effects of
standards. The evidence of negative impacts was largely anecdotal, with some circumstantial
evidence.
The following sections discuss the evidence in relation to the different impacts: note that the
order in which they are presented is not indicative of their relative importance. However, key
points are summarised in the table overleaf. This shows that what we consider to be hard
evidence was found in relation to five of the six types of impact (the exception being the effect
of standards on innovation). This is not to say that this proves that standards always have a
positive effect in regard to these five types of impact but that there is hard evidence that, in at
least some instances, positive effects have been generated. Equally, it does not infer that
standardization impacts innovation less than other policy areas. The table also lists a selection
from the study of some key circumstantial and anecdotal evidence in relation to all six types of
impacts. The table shows that, in relation to five of the six impact types, there is evidence of
negative impacts arising, or at least the possibility of such impacts.
EXECUTIVE SUMMARY
Impact Hard Circumstantial Anecdotal Negative

Trade and Free Positive econometric evidence Growth of intra-European trade ISUG survey showed strong Standards used to open markets can generate
movement from Swann and other studies with European standards (same benefit to aeronautics - literature skewed benefits (i.e. favouring companies
true globally) evidence on containerisation with larger home markets, or that are in
consortia). Also, SMEs say their costs
disproportionate.
Competitiveness Definite examples of cost Standards improves design, ease Standards have prevented There may be adaptive losses, forcing use of
and reductions from companies legal liability and enable JIT unnecessary investment in power higher cost parts. There is also an uneven
and industries - costs without manufacturing. grids application of EN ISO 9000 and certification.
standards would be far higher From a society perspective, standards reduce
need for artisans.
Major improvements in Strong benefit to Aeronautics
Quality Statistical quality control reliability of appliances, sector
equipment
Innovation Evidence that innovative firms Case histories of Internet, Wrong decision on timing or choice of
seek standardization most, e.g. in Microsoft/Apple etc. where standard can mean company loses.
IT networks and many correct standards at correct time Technically best standard may not be chosen
technology consortia producing caused take-off and much by market. Imposing standards too early can
standards innovation kill innovation. Over-powerful consortia can
lead to abuse of dominant position.
Health and Safety Data showing how (with Reduction of thousands of Views of safety inspectors and Limit to ‘fit’ of European approach with
regulation), "ROPS" standards industrial accidents and experts in a number of countries. international, due their inclusion of use,
save hundreds of lives hundreds of electrical fatalities Emulation of European system by European concentration on design
annually in tractors and per year in Europe via standards US, Japan and international
construction machines and regulation bodies
Consumer Consumer and society benefit Electrical accidents in the home Use of standards for consumer Standards can reduce variety for consumers.
protection from all the above and from reduced due standardized product testing and evaluation Also the quality of surveillance of standards
greater information, devices, hundreds of deaths per varies
transparency year saved
Environment Use of EN ISO 14000 with Reductions in industrial waste, Europe potentially making its products more
targeting has reduced CO2 examples expensive (higher standards in Europe than
emissions elsewhere)
EXECUTIVE SUMMARY
Having referred to the difficulties of building factual or quantitative "proof" of the impact of
standards, it is not possible to somehow subtract the negative impacts from the sum of the
positive impacts to give a neat overall answer as to the impact of standards. However, the
overwhelming evidence, for most sectors most of the time, is that the overall impact of standards
is positive. This was also the conclusion of the workshops held as part of the study and holds for
all six impact types. This conclusion does not prevent standards having a negative impact in a
particular case. (Signals as to when such cases may arise are discussed in the study.)
The following sections provide further detail on each of the six impacts.
E. TRADE AND FREE MOVEMENT
A number of econometric studies have reviewed the impact of standards on international trade.
Professor Peter Swann in turn reviews these studies in a 2000 report for the UK's Department of
Trade and Industry. He concludes that while, in theory, standards can be good or bad for trade,
in practice, the impact is usually one of "trade creation", where both countries in the trading
relationship gain.
Circumstantial evidence for this impact includes the growth of intra-industry trade in the EU in
the 1990s, which coincided with a greater level of European standardization in many sectors,
and the standardization (and simplification) of trade documentation. A typical curve showing
increased trade in a European industrial sector while standards were introduced is shown below
(this is for the electrical sector).
'Normalised' EU trade as % consumption
35
30
25
20
15
Extra EU Exports*
10
Intra EU Imports
5 Extra EU Imports
Intra EU Exports
0
1990 1992 1994 1996 1998
Other supporting evidence of the impact of standards on trade include:

• responses to ISUG questionnaires where companies making a variety of products confirm
that one version is sufficient for Europe;
• responses to industry association questionnaires (e.g. in aerospace), where members want
international standards;
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EXECUTIVE SUMMARY
• the existence of voluntary bodies such as IFAN to promote standards;

• the increasing gravitation from national standardization to European and international
standards as evidenced by the work programmes of the CEN, CENELEC, ETSI.
Potentially negative impacts of standards on trade can arise either if:

• the standard itself is skewed in some way to help one group of companies (e.g. from one
country or region) more than others. As standards become more international and less
national, this protectionist use of standards is declining;
• the industry sector lends itself to economies of scale, meaning that the benefits arising from
the trade facilitated by standards may be gained by certain companies, with others losing out.
However, the econometric evidence shows that this outcome is less likely than both sides
sharing the trade gains.
F. COMPETITIVENESS AND QUALITY
In terms of the breadth and depth of evidence, and the force of impact, the impact on
competitiveness and quality is the single largest impact of standardization. There is good direct
evidence on the contribution of standardization to cost reduction. There are many examples
available, providing strong evidence of a positive impact (some shown below). Indeed, as
today's industries and society are the beneficiaries of many iterations of cost reduction,
standardization is arguably a key driver of ever-rising standards of living in most parts of the
world. A key route for this impact is the link of standardization to volume production machines.
Some examples of cost reductions by standardization

Type of Price for non- (DM) Price for Effects Ratio
component standard part (DM) standardized part :1
Washer 16.04 0.128 125.3
Bolt 6.30 4.43 1.4
Set-screw 50.95 1.11 45.9
Screw 42.45 17.83 2.4
Pivot bearing 588.75 37.70 15.6
Bush 15.00 4.50 3.3
Data from “Company standardization as a strategic management tool: the influence of standardization in the
construction process on competitive strategies”, Lars Hoops and Wilfried Hesser, Proceedings, 6th EURAS
Workshop 2001
The “effects ratios” show the ratio of the cost of the part pre-standardization to the cost
afterwards, showing that standardization can lead to substantial cost reductions.
From the perspective of quality, standardization is the basis of modern statistically-based quality
control and assurance systems. The study reviews the benefits of EN ISO 9000, the standard that
has the largest number of user companies, which has facilitated the spread of a quality culture
and trained quality personnel in Europe.
Other benefits of standardization for competitiveness and quality are that it:
• frees engineers from ongoing work on low-level design minutiae;
• gives a first line of defence in product liability (and exposes non-compliance);
• has saved Europe’s electricity supply industry capital investment of billions of euro to
protect the network (European standards limiting electromagnetic emissions).
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EXECUTIVE SUMMARY
Potentially negative impacts in this area are:

• Adaptive costs – non-availability of a perfectly customised part, substituted by a standard
part, can lead to more use of materials. (The study quotes an example relating to bolts on this
point.);
• Standardization has all but eliminated artisan workers in industry, although they remain in
servicing private demand
G. INNOVATION
One might think standardization the enemy of innovation but there is considerable
standardization activity in this area. While we did not find hard evidence of a positive link for
this impact, we find the circumstantial evidence persuasive that innovation in many cases needs
standardization as a sine qua non. However, timing is critical, and standardization at the wrong
time, or in the wrong way, can harm innovation.
Innovative industries tend to be enthusiastic seekers of standards. This holds for diverse products
such as micro CHP, fuel cells (a whole technology), and gas heaters. In these cases,
standardization conveys legitimacy and continuity for a new product to the market, which aids
companies and reassures customers. Evidence that innovative companies tend to use standards
more is shown below.
Us e o f s tan d ar d s ('ye s ') an d in n o vatio n activity
80
60
Y es
40
20
0 No
innovators
innovators
innovators
Follower
Novel
Non-
CIS Innovation survey, DTI, UK
In the information and communication technology (ICT) sector, many companies have dedicated
managers at senior level with a responsibility for standardization, to help achieve market
acceptance of innovation. Most hardware and software products connect with other products
(inside and outside the customer premises). These "network industries" have the property that
every product sold also adds to the value of the overall network - newly connected internet users,
for instance, raise the value of the internet for all users. Such "network externalities" in ICT
sectors mean that the correct (or clever) use of standards can be a means to strong growth for
some companies and their incorrect (or less clever) use means other companies get left behind.
In some sectors, early stages are characterised by competing standards from different consortia,
before one standard (not necessarily that which is technically best) triumphs. For example, the
internet is founded on HTML, a simpler adaptation of an ISO standard mark-up language,
SGML, and the TCP/IP protocol. It can be argued that this protocol is technically inferior to a
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EXECUTIVE SUMMARY
rival, but more complex, alternative called OSI. However, the choice of the simpler TCP/IP
made the Internet accessible to more people, more quickly, leading to a critical mass emerging
and its adoption as the base standard.
The evidence suggests that it is not just speed but focus and, in a sense, lack of restraining
influences that makes consortium standardization common in ICT innovation. These attributes
give consortia advantages that official SDOs lack.
H. HEALTH AND SAFETY AT WORK
A distinctive European approach to standardization in this impact area is now being emulated in
Japan and the US and taken up by the international standards bodies. Experts within Europe told
this study that European standards do not compromise the safety levels of individual member
states, but work to spread best practice in Europe.
In terms of impacts, data on accidents in European countries often uses different measures and is
subject to under-reporting. Although data shows accidents falling in virtually all European
countries in recent decades, it is not possible to attribute this exclusively to standardization
(rather than partly to factors such as better training).
However, we felt one standards/regulation combination did stand up as more rigorous hard
evidence - the use of ROPS (Roll-Over Protection Systems) for agricultural tractors and for
construction and materials handling machines. ROPS was introduced sequentially across
Europe, starting in Sweden. As the regulations were introduced, the effects form a kind of
empirical experiment as to whether ROPS saves lives. Based on the data, we believe ROPS
saves some 200-300 lives per year in Europe in agriculture, another 100 in construction, with
smaller numbers in other areas.
Average number of Rollover fatalities per 100,000 tractors before and after regulatory use
of ROPS1
Country Period 1 Rate Period 2 Rate Inferred lives
saved in 1999
Denmark 1965 30 1980 2 36
Norway 1961-69 24 1979-86 4 28
Sweden 1957-61 17 1979-86 0.3 29
Finland 1980 16 1987 9 14
There is also strong circumstantial evidence of standardization reducing electrical accidents and
fatalities - the graphic below shows that an electrical accident in the late-1990s was only 30% as
likely to result in death as it was in the late-1960s. Such a change would also save hundreds of
lives annually. Fatalities in electrical utilities remained more or less constant over the period. We
postulate that the fall in electrical work accidents is due to the greater use of standardized mini
circuit breakers and residual-current devices, of conversion to ”TN” wiring standard, and of the
double insulation of many tools and appliances. All of these are due to standards, or standards-
regulation.
1
“Rollover Fatalities – a Nordic perspective”, A. Thelin, Director of R & D, Swedish Farmers Safety and Preventive
Health Association, Journal of Agricultural Safety & Health 4(3):157-160
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EXECUTIVE SUMMARY
Germany 1969 - 1998

Deaths as % of electrical accidents at work
0
1969 1974 1979 1984 1989 1994
Adapted from “Elektrounfälle in Deutschland” (ISUG graphic)
I. CONSUMER PROTECTION
This is a different type of impact as it covers a number of impacts for a particular group of
citizens, rather than looking at a specific impact. The evidence for this impact therefore draws on
the earlier sections, although there are some attributes that relate specifically to consumers.
An overall conclusion is that the ultimate beneficiaries of standardization are the consumers. At
a simplistic level, if standardization makes industries increasingly innovative and competitive,
and rates of return for companies remain broadly the same over time, then benefits are being
passed on to consumers. This is a core driver of the ever-increasing standards of living in most
parts of the world.
Standardization has also led to advances in product quality and reliability - a by-product of (the
standards-based) mass production. This has improved consumer protection - with longer
equipment warranties being given over time. Transparency in comparing goods and prices is
made easier and there are many examples of how consumer organizations use standards in this
way to help consumers compare goods.
Electrical fatalities at home - Germany 1970 - 1999
Germany Former BRD
300
250
200
150
100
50
0
1970 1975 1980 1985 1990 1995
Adapted from “Elektrounfälle in Deutschland” (ISUG graphic)
There is also strong circumstantial evidence of safety benefits to consumers. Electrical fatalities
in the home in Germany are 80% down compared to 30 years ago, and similar reductions are
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EXECUTIVE SUMMARY
noted in other parts of Europe. We believe this large decline is partly due to standardized
residual current safety devices being increasingly used in Europe by regulation and consumer
choice. The saving in lives amounts to some hundreds each year. Lesser, but important,
contributions to household safety include standardized limits to the temperatures of exposed
surfaces of appliances, and a standard for electric blankets, where UK statistics show far fewer
electric blanket related fires after the standard was introduced.
Consumers also benefit from safer air travel (European airlines in an ISUG survey saw
standardization as having most impact on reliability and safety) and improved sports and leisure
equipment, the latter courtesy of standardization experience under the Personal Protective
Equipment Directive for work situations.
Standards are also now being used in Europe to support the concept of “design-for-all”, whereby
products are to be designed with use by children, elderly and disabled people in mind. The aim is
to use standards as a lever to improve access by all citizens to generally available products.
A negative for consumers is variety reduction, which reduces consumer choice. However, this
negative impact has been cushioned by the use of technology to achieve ‘mass customisation’
where products with basic standards can still be customised to individual needs (e.g. PCs).
Indeed such approaches are now a core marketing focus for many companies. A further negative
relates to inadequate surveillance of adherence to standards, permitting non-complying and even
unsafe products to be sold in Europe. Some of this is due to uneven testing regimes.
J. THE ENVIRONMENT
Not many years ago, the environment was a minor consideration in standardization but CEN
now has a permanent advisory helpdesk for standardizers as do a number of national bodies. Our
consideration of this impact fell under three headings.
First, standards for environmental monitoring tests and systems are a prerequisite for serious
consideration of the environment, without which an argument based on verifiable facts is not
possible. So this sector, a by-product of the instrumentation sector, enables production of data to
support decisions, and allows comparisons after follow-up (and between sectors or countries).
Secondly, there are environmental management systems such as EN ISO 14000, and even EN
ISO 9000 targeted at environmental improvement. Many have been sceptical because of the lack
of target setting in older versions of the standards (being remedied in newer versions). Yet a
number of studies show measurable improvements, as well as raised environmental awareness
among employees. Evidence exists of actual achievements in factories, petrochemical operations
and in the electronics industry. Having either such system helps companies to manage their
environmental responsibilities in a professional way.
Thirdly, product standardization can benefit the environment. Its linkage to mass production
makes companies aware of waste and rework levels, with the aim of reducing waste percentage.
Such waste, for instance, could be materials trimmed off the sides or ends of product lines,
and/or products rejected on quality grounds. In the former case, standardization frequently
facilitates installation of continuous recycling, minimizing waste. Secondary effects include
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EXECUTIVE SUMMARY
minimizing packaging waste. A further secondary effect relates to greater product predictability
for recycling purposes.
Health and safety standards have also had environmental knock-on benefits. For example,
cadmium, arising largely in batteries, and phthalates, in toys, have been prohibited by regulation.
‘Green standards’, now under consideration, whereby the environment would be a major
consideration in standardization, could lead to designations of products that might be accepting
of 100% recycled material (e.g. plastics) as basis material, which might have a certain
percentage of recyclate etc. Standardization that takes recycling into account ab initio (not the
case at present) will achieve more recycling.
Standardization has a negative impact in that it causes cost reductions and makes products
therefore less costly for consumers to discard. On the other hand, there are cases where
standardization enables substitution of more valuable materials and specie. The use of MDF
(medium density fibreboard), chipboard and OSB (Oriented strand board) in the construction
industry, using low value and waste rather than prime timber, are examples.
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INTRODUCTION
1. INTRODUCTION
1.1 STUDY OBJECTIVE
“In the mind of any sane person, standards are mind-glazingly dull, eye-
glazingly dull, but on a standard rests the wealth of multiple industrial
nations...”
‘The Economist’ in 1993
This study aims to “produce a qualitative and quantitative impact assessment of standards in the
European Union and the EFTA.” Commissioned by the European Commission (DG Enterprise),
the project brief2 states: “The study shall … analyse the types of standards used in a range of
sectors, it shall assess the impact of these standards on defined key areas of Community policies
related to the competitiveness of enterprises, such as free movement of goods within the
the environment.” So the study is asked to take account of three dimensions
• different types of standards,

• different sectors of the economy
• different areas of Community policies.
Having done this, the study “should identify opportunities and risks for future development of
standards in European standardization in order to improve the beneficial effects of standards and
standardization policies.”
The relatively broad intended readership of European and national policymakers as well as
standards bodies and their stakeholders means that this report is largely non-technical in nature,
except where technical detail is absolutely necessary. The brief asks also that the report “should
be written in a style that facilitates the understanding of the findings and the study’s application.”
We have added relevant quotations and examples in places to enliven the presentation. For those
interested in specific areas, more detailed material may be included in the Annex volume.
The findings of the study are contained in the following six chapters of the report that follow this
Introduction; note that the order in which they are presented is not indicative of their relative
importance. Here we first present some background to help the reader to interpret and
contextualize the study findings :
• How standards have developed over time

• What is meant by standards and the types of standards reviewed in the report
• The factors influencing a company’s decision as to whether to adopt a standard
• The broad general challenge of trying to measure the impact of standards
• The approach and method adopted in undertaking the study
• How the rest of the report is structured.
2
A full copy of the project brief is contained in the Annex volume.
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1.2 STANDARDIZATION IN HISTORY

Standards existed as early as 7000 BC when cylindrical stones were used as units of weight in
Egypt. The ancient Egyptians used standardized building blocks from 3000 BC. We know from
writing (itself a form of standard) on cylinders discovered in Mesopotamia that King Goudea, the
builder of Ningirsu’s Temple in Sumeria ca. 2000 BC, used standard bricks and laid out a place
for storage of a vessel of (standard) capacity ‘1 ban.’ A statue of King Goudea holding a length
standard is to be seen at the French national standards body AFNOR.
Another example of standards usage in antiquity is that bricks were built to a standard
specification for the Great Wall of China (and indeed are still produced in parts of China). The
ancient Greeks trained soldiers to take a standard pace for distance measurement purposes. The
Romans in turn built a type of geared measuring wheel or odometer to count out standard mille
passu. They also used standardized wooden components so that structures might be
manufactured where wood was available and shipped to the building site for assembly. The
Roman legionary used highly standardized equipment – the standard swords used by infantry and
cavalry enabled the development of standard manoeuvres and tactics.
In this time progression we see development from basic measurement standards to those that will
guarantee good performance. At the time of the Industrial Revolution, interchangeability
standards became necessary for mass production. An early documented (French) example of
such a standard was Gribeauval’s “Tables for the construction of the principal artillery
equipments” in 1788. It seems that, at this time, France was the world leader in
interchangeability with rifle parts made by Leblanc (although the Americans were the first to put
such standards to effective use for mass-production of rifles3).
The modern process of standardization is dated to Sir Joseph Whitworth’s proposal for a
standard for screw threads in a paper to England’s Institution of Civil Engineers in 1841. Henry
Ford made mass production based on standards popular with the Model T, the world’s first
‘affordable’ motorcar. His comment that “You can have any colour you like as long as it’s
black” is a classic example of standardization by variety reduction. Its combination of cost
reduction and restricted choice provides an example of both the positive and negative impacts of
standards.
During the 19th century another type of standard was developed for the public – the
interoperability standard. This was required for railroad systems, which started in many cases by
using different gauges (rail spacing) between in different countries and even regions. Gauge
standardization came about because of the market desirability of being able to board a train such
as the Orient Express and travel through a number of countries to a final destination without
changing. Long distance railways were also responsible for the introduction of standard clock
time to allow for a consistent timetable.
Slightly later, electricity production began in European and US towns with Alternating Currents
of different frequencies, Direct Current and a variety of voltages in both. As system
interconnection became necessary and consumers and producers wanted (mass produced)
electrical goods for use in different places, electrical distribution became largely standardized –
3
“Eli Whitney and the birth of American Technology,” Constance McL. Green, Little, Brown & Co. / Boston,
Toronto, 1956.”Voluntary consensus standards win over the Department of Defense,” Defense Standardization
Journal, August 2001
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in Europe to 230v, 50 Hertz. So today the same appliances may be used around Europe.
(Unfortunately, it is still necessary to change plugs or use a plug-adapter, as efforts to
standardize plugs and sockets have not yet succeeded.)
The path to standardization has never been smooth and competing standards were widespread. In
most instances, this was because the benefits of achieving standards did not outweigh the costs
and inconvenience of change. However, in a minority of cases, standards were deliberately
developed to be different. For example, the US still uses its ‘Standard Gallon,’ which is the old
Queen Anne wine gallon, deliberately chosen to be ‘small’ to maximize excise revenue. Another
example is the ‘Irish acre’ which was specified larger than its English counterpart to maximize
the size of confiscated land areas.
Milestones
Standardization has played a key role in development of Europe over 30 years. A

short note on what we consider to be the milestones in this journey are explained in
the annex.
I. The Initial Approach to Harmonization
II. The Low Voltage Directive
III. Information on Standards and Regulations
IV. The Single Market—The New Approach
V. CE Marking of Conformity—The Global Approach
The explosion of technologies in the 20th century led to an ever-increasing demand for standards,
particularly for interoperability. At the same time, rising consumer influence led to a focus on
safety, quality and performance standards. The opinion is sometimes voiced that: “there has been
so much standardization, it surely will come to an end soon.” But even apart from the need to
revise standards frequently (five years is the accepted span, so as not to stifle technical
development), the growth of Information and Communications Technologies is imposing
enormous new demands on standardization systems. One example, illustrated in the diagram
below,4 shows that Hewlett Packard with 24,000 products saw a five-fold growth in standards in
seven years.
4
Unter, B. D., (1998): ‘The importance of standards to Hewlett-Packard’s Competitive Business Strategy’,
‘Standards and Competitiveness – reports from nine multinational corporations on their use of standards as a
strategic and competitive tool’, ASTM 1998.
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Information Technology Equipment - relative

growth in standards and certifications (H-P)
Certifications
6
5 Standards and
Regulations
4
3
2
1
0
1989 1990 1991 1992 1993 1994 1995 1996
Figure 1.1: Information Technology Equipment
Standardization has also become relevant to a new range of policy areas (e.g., privacy,
transparency and the environment) in addition to the previous public-interest areas of health and
safety and this also increases service demands.
Besides the drive of technology, one author has asked: “What, sometime during the 1980s,
caused a process that had stayed the same for so many years to change so dramatically? (It)
appears to be the US Government’s National Cooperative Research Act of 1984, the European
Union’s ‘New Approach’ to regulation, and the World Trade Organization’s Technical Barriers
to Trade Agreement.”5 The first two unblocked the path to progress in standardization, the latter
added to the already growing demand. For these different reasons, the standards community has
never been as busy as it is at the start of the 21st century.
1.3 WHAT DO WE MEAN BY STANDARDS AND STANDARDIZATION?

The ISUG team has developed the definitions below for use in this study6 and refined them to
include virtual documents and all sources of standards preparation :
A Standard is a real or virtual document that provides rules, guidelines or characteristics for
activities or their results, for common and repeated use, aimed at achieving an optimum degree
of order in a given technical context.
Standardization is the process of formulating, drafting, publishing and reviewing appropriate

technical standards for the benefit of individuals, business, government and/or society, together
with implementing them through relevant Regulations, Testing and Certification, Marking and
Labelling, Inspection and Surveillance.
5
Oksala, S., (2000): ‘The Changing Standards World’, Standards Engineering Society 2000 World Standards Day
Paper Competition – 2nd Place Award
6
Further discussion of standards definitions, and different classifications of standards, is contained in the annex
volume.
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The previous section’s brief overview of the use of standards over time mentioned a number of
different types of standards. There are also a number of different ways in which standards may
be classified, e.g. by:
Type of standard (see below)

How, where and by whom they are developed
Their degree of ‘market orientation’.
The following seven-fold classification, based on type of standard, was seen as most useful for
this report:
1. Information standards. These include terminology, reference and metrics/metrology i.e.
definitions, weights and measures, etc. – what they are.
2. Test methods standards. How to measure weight, noise, radiation levels, etc.
3. Similarity (or product) standards. A bicycle helmet, a lawnmower, an excavator, a toaster,
air compressors, etc.
4. Horizontal standards. These are so called because they apply across other standards.
Examples include safety-related settings (electrical clearances, guarding rules for
machines), environmental caveats and methods of risk analysis. They are detailed further
in the Health & Safety chapter.
5. Interface or Compatibility Standards. Examples are standards that facilitate the production
of products that fit together, e.g. different computers, software, printers, etc., the size of a
manhole cover, railroad gauges, petrol nozzles (for filling stations with standardized petrol,
many types of spare parts, etc. Interface can be broken into further categories, e.g.
interchangeability and variety reduction. For interchangeability per se (e.g. that a piston on
a car may be replaced), a company standard is often used but, in the case of a light bulb,
there is an external network and a common standard (at least). Compatibility here includes
‘Backward Compatible’ which partly depends on how big and important is the installed
base of physical assets and people i.e. their familiarity with, and training in, use of the
assets.
6. Forward compatibility standards. This is split from the last category as it has the extra
dimension of continuity for possible future developments, e.g. SGML for legacy data.
These standards are of increasing importance due to the rate of technical progress with
inherent risk of obsolescence. The term ‘etiquette’ is sometimes used for this type of
standard.
7. Management systems or (in the US) process standards. These include Quality Management
Systems (such as the EN ISO 9000 series), Environmental Management Systems (such as
EN ISO 14000) etc.
The Impact chapters draw on Types 1-6 as appropriate, with Type 7 arising specifically in
relation to Quality (in the Competitiveness Impact chapter) and in the Environmental impact.
The relative importance of the seven different types of standards varies for the different impacts.
For example, the Innovation impact is best served by Information and Test standards until the
winning innovative technology becomes clear. The importance of type of standard also varies by
sector, e.g. horizontal standards are vitally important for machinery. Risk assessment and
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horizontal standards could, and sometimes do, substitute for most Similarity or Product
Standards, offering better flexibility in design and saving time and costs in formulating
standards. However, this makes it far more complex for regulations to refer to standards when it
is necessary to do so, e.g. in sectors such as Pressure Vessels: here Similarity Standards are
necessary and have the benefit that there are established review mechanisms to modify them
when changes in technology or experience of use suggests, which is far easier than changing
regulations.
Different authors have used different categorizations. For example, Swann7 provides a taxonomy
that lists several of the above (sometimes with different titles) and adds ‘Variety reduction’
standards. These are considered in this report as an internal company activity, under the
Competitiveness impact chapter.
“We don’t do standards because they’re fun. The process can be quite difficult, but is
necessary and we are involved because there’s big money to be made mastering the
standards process.”
Carl Cargill, Director of Standards for Sun Microsystems
7
Swann, G.M.P. (1999): ‘The Economics of Measurement’, Report for NMS Review, June 1999
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1.4 WHY ARE STANDARDS USED/NOT USED?
Companies adopt standards based on the perceived benefits and costs of adoption and non-
adoption. A decision tree, showing the pressures/benefits that function as ‘standards drivers’ that
determine whether a standard is or is not adhered to, might be represented as follows:
Figure 1.2: ‘Standards Drivers’
DECISION-MAKERS
Aware of standard Not aware of standard
Benefit of compliance Cost of adopting Cost of not adopting
Market access Implementation costs Commercial sanctions Official sanctions
Customer Satisfaction Inspection costs Customer rejection
Wider market Regulatory/criminal
Interoperability
Wider choice of suppliers Supply chain difficulties Civil lawsuits
Variety reduction Higher insurance costs
Increased worker safety
Lower product liability claims
Consumer acceptance
Each benefit and sanction will carry different weight according to circumstances. Even if a
standard is mandatory, a decision-maker might consider the risk of non-compliance and of any
possible sanctions. If there is no legal requirement to observe a standard, the decision to adopt a
standard is a commercial one. One influence will be the distribution of power in an industry
value chain. Whether the power lies with suppliers or customers, these will be the ‘standards
givers’ with actors without power being ‘standards takers.’ SMEs would normally be standards
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takers, unless they are members of an industry alliance. Another factor in standards adoption
related to power is the type of market structure, with (at the extremes) companies in
monopolistic markets, particularly if regulated, having potentially high influence over standards
but companies in perfectly competitive markets likely to be standards takers.
When the market or competition does not enforce standards (e.g. in relation to health/safety or
the environment) then directives and mandatory enforcement may be required.
1.5 THE CHALLENGE OF MEASURING THE IMPACT OF STANDARDS

Standards and their effects are everywhere about us. Yet while there is considerable material that
describes the effects of standards, and simple observation is often totally convincing, ‘proving’
the impact in a scientific way is challenging and difficult.
We all use traffic lights and accept the standard interpretations of red and green signals. Yet,
what exactly is their impact? If we remove them altogether we know that traffic will jam and
snarl up, but can we say how often or when or by how much? Mathematically, given definite and
precise information, we could make some predictions on a case-by-case basis and preferably
over a limited isolated area. Suppose there were a number of different colours and signals that
represented ‘stop’ and ‘go’ ? We can be sure the number of accidents would escalate. But again,
by how much? We know or believe that the absence of traffic lights would cause chaos and
accidents, yet robust ‘proof’ would be difficult to put forward.
At least with traffic lights, unlike many other standards, we could in principle try an empirical
approach: remove them in some areas, mix the signals in others and ‘measure’ what happens. In
many cases, even this admittedly unrealistic scenario is not possible. Asking ‘Where would we
be without standards?’ is like asking ‘Where would we be without laws?’ Our technical world
would become more anarchic, because whether products would work together would depend on
chance or collaboration between individual manufacturers. But, as with an absence of laws, it is
simply not possible to measure precisely what the impact on society would be.
In this study we find, for instance, that products would cost a multiple of what they do today
were it not for standardization. In fact from the evidence presented, we believe that in many
cases the costs could be some 50 to 100 times more. But we cannot go on to say that
standardization is the sole reason for goods being cheaper. There is no single reason. Yet we
know that without standardization it would not have happened. One could ask: “How much
would the product cost if made entirely by hand?” But many products cannot be made by hand
and, even if they could, their quality and reliability might not compare favourably to
standardized mass-produced goods.
The same is true regarding, say, the need for standards for an international telephone call. What
is their impact? The impact is, in a sense, unmeasurable, i.e. either goods or services based on
standardization exist or they do not.
“Standards govern the design, operation, manufacture, and use of nearly everything that mankind
produces. There are standards to protect the environment and human health and safety and to
mediate commercial transactions. Other standards ensure that different products are compatible
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when hooked together….. Standards generally go unnoticed. They are mostly quiet, unseen
forces … that ensure that things work properly, interactively and responsibly.”8
Public perception of standardization
• Bananas to be straight! (i.e. perceived Eurocratic nonsense)

• Failure – bought Betamax video recorder and cannot get tapes
• Joint Europe-US space probe crashes from mixing of metre / inch standards
Actual danger of bad standardization
• Disadvantages a better product

• Stifles innovation, if applied at wrong time
• Can permit market-cornering
• Unsafe products
• Becoming complex for SMEs to follow
What is standardization?
Standardization is to technical matters as law is to behaviour

Standardization is not just information, it is collected and collective technical wisdom
8
U.S. Congress, Office of Technology Assessment, ‘Global Standards: Building Blocks for the Future’, TCT-512,
Washington DC, U.S. Government Printing Office, March 1992
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1.6 PROJECT APPROACH AND METHOD

This project approach is set out in the diagram
Figure: 1.3 Overview of Approach and Method
Literature Review, by sector, by impact, by key words, of societies, institutes Standards bodies,
Universities and Research Institutes. Primary sources – statistics of trade, of Health & Safety, and
Interviews
Website
Generate assertions,
Circulate them
interviews with experts, discussions, correspondence, also encouragement to use website

QFD Workshop
Expert Assertions
Validate assertions
Standardization Experts
Meeting
Review methodology
Interviews
Questionnaires
Interim Report
Review
Dialogues
Questionnaires
Impacts
Draft Report
Review meetings
by Impact Final Report
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Each of the key research modules is now described in turn.
1.6.1 Literature Review

A wide range of literature was reviewed in the project research and is referred to in the Impact
chapters. However, a number of over-arching studies supported the research across the different
impacts and these are now briefly described.
A recent study9 by the German standards body and its counterparts ÖN of Austria and SNV
Switzerland (referred to as the “DIN Study” or “DIN Report” in this study) attempted to
establish the costs and benefits of standards to industry and to the wider economy. Undertaken
by the Fraunhofer Institut in Karlsruhe and the Technical University of Dresden and completed
in 2000, it examined the three countries represented. The study is a pioneering attempt to
establish reference points. It pointed to a range of benefits from standards and concluded that, on
an economy-wide basis, standards contributed between 0.25% and 1.5% to GDP between the
1960s and the 1990s in the countries reviewed.
In 2000 the UK Government commissioned a study by Professor Peter Swann10 which asked:
“How does standardization benefit the economy and what can government do to increase the
economic benefits …?” While acknowledging methodological difficulties, Swann reviews the
impact of standards on innovation, cost reduction and trade and the study finds positive
conclusions in each case. In a separate report, Swann describes the standards infrastructure using
a tree diagram. Standards act as budding points from which new products and services can
develop in an orderly fashion leading to a well-developed canopy of branches and sub-branches
as further innovations act as new growth points that capture new market niches. Without
standards, product growth is more sparse or disorderly with fewer branches and a less developed
canopy.11
A French government publication entitled “A hundred key standards for France from the year
2000”12 (available only in French) describes the French standards making process, and how
standards are applied. It does not attempt any socio-economic analysis, except for basic
comments on the areas that particular standards try to address. A number of standards are
described in some detail in six domains (health, quality of life, services, materials and energy,
product quality, quality in the company) and their benefits commented upon, e.g. free movement
of goods, trade, competitiveness, industrial significance, scientific significance, and consumer
protection.
9
DIN: ‘Gesamtwirtschaftlicher Nutzen der Normung, Unternehmerischer Nutzen 1, Wirkungen von normen:
Ergbnisse der Unternehmensbefragung und der Experteninterviews’ ISBN 3-410-14858-2
’Gesamtwirtschaftlicher Nutzen der Normung, Unternehmerischer Nutzen 2, Statistisches Material und Auswertung’
ISBN 3-410-14857-4
'Gesamtwirtschaftlicher Nutzen der Normung, Volkswirtschaftlicher Nutzen, Zusammenhang zwischen Normung
und technischenm Wandel, ihr Einfluss auf die Gesamtwirtschaft auf den Aussenhandel der Bundesrepublik
Deutschland’, ISBN 3-410-14859-0
10
Swann, G.M.P. (2000): ‘The Economics Of Standardization’, Final Report for Standards and Technical
Regulations Directorate Department of Trade and Industry, Manchester Business School University of Manchester
11th December, 2000
11
Swann, G.M.P. ‘The Economics of Measurement 1’, Report for NMS Review
12
‘100 normes clés pour la France de l’an 2000’, The Ministry of the Economy, Finance and Industry of France,
ISBN 2-11 0917 13-X, reference 99164 D060
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A number of other studies were particularly useful:
Tomas Földesi13 and an ISO working group (‘STACO’) describe efforts to quantify cost savings
from standardization through variety reduction;
The Japanese author S. Matuura14 and a US National Aerospace Standard15 provide formulae for
steps in the procurement and stocking of a technical part and list tangible and intangible savings
from them. Both of these focus on in-company cost reduction;
Märtson updated the work of Matuura and developed arguments on the benefits of
standardization and the notion of excessive standardization.16 He highlights a ‘standardization
paradox’, the consumer’s conflict between better prices, safety etc., resulting from
standardization, and the desire for diversity.
Wiese considers the impact of compatibility issues on market structures in relation to business
strategy with details of types of compatibility.17
Further literature (supplemented by discussion) was gained from attendance by the project team
at a number of conferences:
• EURAS at Delft
• IFAN at Berlin
• Challenges of measurements in Environmental Health and Safety, Paris
• The Challenge of Globalization – the EU market strategy, Brussels.
1.6.2 Preliminary Interviews

A number of preliminary meetings were held with standards bodies and industry experts to allow
us to focus the research process and begin gathering evidence of the impact of standards. While
these meetings built our understanding of the task, they also confirmed that hard data or “proof”
relating to the impact of standards would be very difficult to find. These interviews also
generated further contact names (within and outside Europe), which were contacted as the
project continued.
(A list of those who assisted in the research process is contained at the end of this report.)
1.6.3 Project Website

A project website was established early in the project and registered with the main Internet
search engines, with a range of standards-related and sector-related search ‘key words.’ The
website was secure and easy to navigate, giving details of the project, the sectors being examined
and ideas as to how interested parties could contribute online. A discussion group facility for
each sector, with ‘tracking’ facilities, was later added.
13
Földesi, T. (1975): ‘Economic Effects of Standardization’, ISO Central Secretariat, 1975
14
Matuura, S. (1973): ‘Principles of industrial standardization’, Report of the College of Engineering of Hosei
University no. 19, Tokyo, 1973.
15
National Aerospace Standard NAS 1524, ‘Standardization savings, identification and calculation’, NAS,
Washington 1971.
16
Märtson, I. (1999): ‘The essence of standardization and a way of calculating its benefits’, Tallinn Technical
University, Estonia, EURAS Yearbook of standardization Vol 2, Homo oeconomicus XV 3 München: Accedo 1999
17
Wiese, H., ‘Compatibility, Business Strategy and Market Structure – a Selective Survey’, EURAS Yearbook of
Standardization, Volume 1.
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While some useful comments were received via the website (which was updated and improved
several times), the overall response rate was somewhat disappointing. It may be that standards
people are accustomed to advancing ‘official’ points of view rather than engaging in more open-
ended discussion. However, the website was a useful introduction to people who wanted
information on the project team before they would engage. It offered access to project survey
questionnaires from time to time and welcomed responses in a variety of languages.
1.6.4 QFD Workshop

‘Quality Function Deployment’ (QFD) is a technique that offered an opportunity for a new
approach. We noted that de Vries describes a method to improve the process of creating
standards for management systems.18 He starts with the functions that standards are expected to
perform. He then adds the actors and their, perhaps differing, expectations, in a process called
Functional Standards Development (FSD). It struck us that this resembles a tool in the quality
area that has also been applied to strategic marketing – QFD. It appeared that QFD might help
unlock some of the hidden dimensions and expectations of standardization. By engaging
standards practitioners in this approach, the aim was to indicate the impacts of standardization,
be they positive or negative.
A workshop using the QFD technique was held at the EFTA offices in April 2001. Over 70
stakeholders attended it from industry, consumer and environment associations, ETSI, CEN,
CENELEC, national standards organizations, the US Mission to the EU, several DGs and large
and small enterprises. Sectors represented included Aeronautics, Agricultural Equipment,
Consumer Electronics, Medical Devices, Health Informatics, and Transport. The workshop was
organized into five groups, by Impact (of the chapters in this report, health and safety and
consumer impacts were grouped).
The QFD workshop:
• produced some 71 assertions for follow-up. Some of these subsequently turned out not to be
impacts but many form the basis of examples in the impact chapters
• identified the strong views held by different stakeholders relating to standards
• indicated again that hard evidence on standards impacts tends not to exist. The evidence
provided was ‘circumstantial, i.e. built through cumulative examples from individual sectors
and companies.
Based on input to the QFD workshop, working tables providing a framework for the different
impacts were produced by the project team. These helped to guide the ongoing literature
reviews, the validation of assertions made at the workshop and the remainder of the primary
research.
1.6.5 Survey of Companies

Questionnaires for the surveys were kept short to facilitate easy completion by companies and
experts. The aims of the surveys were to generate assertions that might be useful for further
investigation, and provide replies to illustrate the impact of standards at sectoral level. The aims
were therefore not to conduct an extensive review of a survey population, or to validate
hypotheses. Some of this type of research had, in any case, been previously undertaken by the
DIN study.
18
de Vries, H. J. , ‘Possibilities for better Management Systems Standards’, Euras Yearbook ,Vol. 2, p.379
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We issued questionnaires first to the:
• Trade associations in Gas equipment and Medical devices

• Personal Protective Equipment (PPE)
• Environment Monitoring laboratories
Following responses and feedback, revised versions of the questionnaire (which improved the
response rate and the nature of the input) were sent to:
• Aeronautics Airlines
Large manufacturers
Maintenance and overhaul
SMEs
• Software engineering – critical software
• Notified bodies (Medical Devices, Pressure Vessels and other sectors)
• Gas organizations on Safety and Environmental issues
• Environmental organizations
• Medical Device Procurement Agencies (in all the main European Languages)
• Biofuel and Biomass Organizations
• Electrical equipment manufacturers
• Mechanical engineering manufacturers
The overall response rate was under 20%, being highest in the aeronautics sector. Information
gained from the survey is contained in the impact chapters together with the rating by companies
of the importance of standards for the sector. However, the survey showed that:
• The aeronautics sector, although pursuing standardization mainly for cost reduction, saw its
main benefit as quality and safety. SMEs in this sector were also very positive about the
benefits of standardization.
• The software engineering sector confirmed the value of standardization in the relatively
narrow field of critical software.
• Notified Bodies gave a strong ‘No’ answer to the question “Do some companies use their
own Technical File to comply with Directives, instead of the usual standard?” – in itself a
very important proof of the value of standards.
• Responses in the electrical and mechanical fields provided a long list of products where the
Single Market is operating well, some instances of difficulty, and confirmed that the US
accepts international standards only to a limited extent.
• Respondents generally viewed standardization as good for costs, quality, customer relations
and market access. However, it has to be accepted that those responding may have a bias.
1.6.6 Standardization Experts Meeting

In July 2001 we convened a day-long seminar of a small number of recognized international
experts in the standardization field to discuss the challenges being encountered in identifying and
describing impacts. The group recognized the dearth of hard data sources and said it was useful
to persevere with the collection of secondary (or circumstantial) evidence. (Participants included
Dr Tineke Egyedi, Technical University of Delft, Wm Willingmyre of Willingmyre Associates
in the US and Dr. Veit Ghiladi of IFAN and Daimler-Chrysler.)
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1.6.7 Review meetings

Having continued to build the evidence on each impact based on the secondary research, the
survey and contact with experts and companies to validate the assertions made at the QFD
workshop, draft versions of each impact chapter were produced. These were then used as a basis
for a series of review meetings held in Brussels in January/February 2002. Each of the six
meetings held was attended by experts and interests in the particular field (six to eight per
meeting). Most had read the relevant draft chapter in advance and given the issues some thought
and were therefore able to provide useful critiques, and suggestions on the chapters.
1.6.8 Steering Committee

DG Enterprise appointed a Steering Committee to which progress reports were submitted on a
regular basis. These were discussed by ISUG with the Committee at six meetings over the life of
the study and resulted in useful amendments, corrections and ideas on how to proceed.
1.6.9 Comments on Method

As suggested in some of the above paragraphs, evidence arising as to the impact of standards
tends to be largely circumstantial rather than quantitative in nature and the impact chapters
largely reflect this. The secondary sources, for example, proved to be substantial in quantity,
good on case studies, but light in data. While some useful data was found, much of the data
would not support the direct linkage of standards to impact. An examination of primary sources,
of work already done or attempted and discussions with experts, persuaded us that we were very
unlikely to generate any robust data from them. Too many other variables are at play (even by
modeling data econometrically) to have any confidence of producing more than circumstantial
evidence. For a study as wide-ranging as this and with the pitfalls of using such an approach, it
was more efficient and effective to revert to mining data and information, however seemingly
trivial, to turn it into a bigger picture. Where good data exists this is included in each impact
chapter e.g. for parts of trade, for cost reductions, and for quality improvements),
Another point we would make in hindsight is that the research process showed that many of the
people engaged in standards development are focussed on the technical task at hand and do not
often reflect on the wider impact that the standards should have or are likely to have. For
example, a limitation of the QFD workshop was that the emphasis on different sectoral and
national disagreements and disputes on technical content made it difficult for discussion of more
general issues (such discussions did take place on the draft chapters). The same holds true
regarding the website, where it proved difficult to generate debate about general standards-
related issues. The fact that many people working in the area of standards are so busy is also a
reason in this regard.
1.7 REPORT STRUCTURE
Section 1.1 pointed out that the project brief asked that the study take into account three
dimensions: different types of standards, different economic sectors and different ‘key areas of
Community policies’ (i.e. trade and free movement, competitiveness, consumer protection etc.).
Any of these dimensions could have been used as the core way to structure this report.
Having completed the study research, and tried different options in draft reports, we decided that
the core structure should be around the key Community policies. The research provided evidence
of a general effect at this level (i.e. a general effect of standards on trade and free movement,
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INTRODUCTION
etc.) that merited discussion and that might be lost, or diluted, in sectoral chapters. Thus the
approach adopted is to:
• Present the evidence of the impact of standards in six chapters relating to general policy
areas. These are Trade and Free Movement, Competitiveness, Innovation, Health and Safety
of Workers, Consumers and the Environment. Additional comments on methodology for a
specific impact are included in the relevant chapter on the that impact.
• Within each of these, to discuss first the general impact of standards and then evidence
relating to the impact of standards at a sectoral level in that policy area. Sectoral impacts
were reviewed in each case for ten sectors (Medical Devices, Aeronautics, Mechanical
Engineering, Electrical Equipment, Gas Appliances and Pressure Equipment, E-Commerce,
Software, Environmental Monitoring, Food Hygiene and Safety, Nanotechnology).
However, the chapters report only on those sectors for which clear evidence of the impact
of standards (positive or negative) was found
• Identify the different types of standards being discussed in each case, i.e. to make it clear to
which types of standard the impact being discussed refers.
As well as this main report, there is a volume of annexes that contains further information,
background research and argument to complement the main report.
The following are the titles of the annexes:
Volume 2
ANNEX 1: Brief given by the Commission
ANNEX 2: The taxonomy of standards and regulatory issues
ANNEX 3: Standards organizations
ANNEX 4: Corporate preference in standardization
ANNEX 5: Annexes for Impacts
ANNEX 6: Sector Profiles
ANNEX 7: QFD
ANNEX 8: Questionnaires
Volume 3
ANNEX 9: Acknowledgements
ANNEX 10: Attendance at Review Meetings and Workshop
ANNEX 11: Articles and links posted on the ISUG website
ANNEX 12 Copies of Contributions made to the Project
ANNEX 13: Abbreviations used
ANNEX 14: Bibliography
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IMPACT ON TRADE and FREE MOVEMENT
2. Impact on Trade and Free Movement
“When goods don’t cross borders, armies will”

- Frederic Bastiat, French economist, 1801-1850
2.1 INTRODUCTION
2.1.1 Changing Context for Standards and Trade/Free Movement

Confidence is fundamental to trade and standardization helps build confidence among parties to
a transaction. Swann reports that “Historians of standards have observed that standards were
essential for the growth of trade from the earliest times … any trade involves risks, transaction
costs and issues of compatibility; standards served to reduce these problems and hence enable
trade to take place.” 19
Successive agreements have cut international tariff barriers by over 90% of their level of 50
years ago, as the diagram below shows.
Average duty % industrial goods
45
40
35
30
25
%
20
15
10
5
0
1 2 3 4 5 6 7 8 9 10 11
1945 - 1995 (source: GATT)
Figure 2.1: Effect of Agreements on International trade Barriers
The fall in tariffs, however, means remaining barriers to trade are more noticable. These include
‘technical barriers to trade,’ i.e. standards, technical regulations and certification. An OECD
study points out that “to the extent that standards, technical regulations and certification systems
differ across countries, they may act as technical barriers to the flow of trade.” 20
19
Swann, G.M.P. (2000): ‘The Economics of Standardization’, Final Report for Standards and Technical
Regulations Directorate Department of Trade and Industry, 11 December, 2000
20
Deardorff, A., Stern, R., ‘Measurement of Non-Tariff Barriers’, OECD Economics Department Working Paper
179
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There has been a gradual reduction in the use of corporate and national standards21 and their
replacement by agreed international standards (see below). Reasons we see driving this are:
• the continuous increase in international trade and therefore in demand for harmonized
international standards by companies;
• a recognition that freer trade is ultimately in the interest of all countries, even if some sectors
in some countries experience problems when trade is opened up.
The push for international standards has occurred in a wide range of sectors. One US
government commentator22 has claimed that, in 1970, international standards accounted for 10%
of standards used by a US company but this increased to 45% by 1995. The internationalization
of standards and its importance for trade was reflected in the General Agreement for Tariffs and
Trade (GATT) Uruguay Round, in the first half of the 1990s, which produced the first binding
set of rules in its Technical Barriers to Trade (TBT) agreement. Its implementation has since
been reviewed twice by the World Trade Organisation (WTO), with recommendations on each
occasion as to how to accelerate the reduction of standards-based barriers to support the further
opening of global trade. A commitment to further reduce non-tariff trade barriers was made in
the WTO Ministerial Conference at Doha, Qatar in late-2001. (Further discussion of the move to
international standards is contained in the annex volume.)
In Europe, the gradual global harmonization of standards was supplemented and greatly
deepened by the Single Market Programme and the associated major effort to eliminate non-
tariff barriers to trade in the EU and EFTA area. In principle, mutual recognition of standards
applies to all intra-EU traded goods, i.e. if the good (or service) is on sale in any one EU
Member State then no other Member State can stop its distribution. However, for goods where
mutual recognition is clearly not working to open up Member States' markets, harmonization of
national rules can become the aim. However, rather than the old approach of detailed
specification of harmonized standards, a "New Approach" defined essential requirements that a
product should meet but allowed a manufacturer flexibility as to how to meet the requirement.
The European standards organisations (CEN, CENELEC and ETSI) then suggested one way that
the requirements could be met.
The New Approach and the single market’s political momentum have led to a large number of
new EU and EFTA wide standards. Between 1987 and 2001, some 21 directives came into force
based on the New Approach to technical harmonization and the Global Approach to conformity
assessment. These contributed to a large increase in the number of CEN and CENELEC
standards. The OECD has reported that the number of standards agreed by CEN increased from
20 in 1985 to 200 in 1992 to 400 in 1993.23 In 2000, some 948 European Standards (ENs) were
produced 24 and the total stock of CENELEC standards reached 820. Looked at from another
perspective, in 1997 the British Standards Institute published 2,000 new standards of which 1900
originated with ISO, IEC or EN standards, i.e. only 100 were purely British new standards. By
21
“Standards” in this chapter, as elsewhere in the study, refers to the existence of the standard per se and its
implementation (including any work by companies in conforming to the standard).
22
Lowell, S.C (1997): ‘The Modern Day Archimedes: Using International Standards to Leverage World Markets’,
U.S. Defence Standardization Program Journal ,1997
23
.Hoeller, P., Louppe, M., ‘The EC’s Internal Market: Implementation, Economic Consequences, Unfinished
Business’, OECD Economics Department Working Paper 147
24
CEN Newsletter, February 2001
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2001, Sweden, influenced by its large multinational companies, had under 700 purely Swedish
standards in its stock of 12,100.25
The trend is therefore towards international standards, with particularly rapid progress in EU and
EFTA counties. The European Commission reported in November 2001 that “more than 80% of
standardization now takes place at European or international level, as compared to 80% at
national level only 15 years ago”.
2.1.2 Comment on Method

The method used to review the impact of standards on trade was largely as set out in Chapter 1
(secondary sources, survey, industry workshops etc.) As stated there, quantitative ‘proof’ of a
causal link between changes in standards regimes and impact is difficult to furnish. Specifically
regarding trade, the OECD has noted that “calculation of the tariff equivalent of a given non-
tariff barrier (NTB) for a given economic indicator is complex and requires a great deal of
information”.26 It also notes that “if regulatory and/or certification mechanisms are designed in a
way that puts imports at a disadvantage relative to domestic goods, this is one of the hardest
NTBs imaginable to quantify.” Nevertheless, a number of authors have undertaken quantitative
investigations and their conclusions are discussed below (along with the other evidence of
impact). In this context, it is worth noting a number of specific challenges to the quantitative
measurement of the trade impact of standards:
• the number of other factors changing at the same time. Standards have emerged in the
context of wider changes to trade barriers, making it difficult to pinpoint the trade effect of
changes to standards regimes;
• linked to this is the fact that pressure for standards often emerges from companies as they
expand their trade. Thus, other factors may already have started to push trade upwards and
may continue to operate and strengthen;
• the role of multinational enterprises. One effect of standards is to make it easier for
companies to operate on a multinational or global basis. Direct investment inflows into the
EU in 2000 were estimated at 125bn euro by Eurostat, up 448% on the 1992 figure of 23bn
euro. This means that trade patterns ex ante are difficult to compare to those ex post as global
production patterns have changed;
• differences across sectors are so great that one cannot compare sectors with and without
harmonized standards and draw conclusions in relation to the impact of standards on trade;
• there is a time lag between agreement of standards under the New Approach and any effect
on trade (e.g. a directive may need to be translated into national law and companies take time
to adjust their behaviour).
2.2 OVERALL IMPACT OF STANDARDS ON TRADE
2.2.1 How Standards Affect Trade

Based on economic and trade theory, Swann (2000) identifies three hypotheses for the
prospective impact of standards on trade:
25
Egyedi, T.M., ‘Institutional Dilemma in ICT Standardization: Co-coordinating the Diffusion of Technology?’,
Delft University of Technology
26
Deardorff, A., Stern, R.., ‘Measurement of Non-Tariff Barriers’, OECD Economics Department, Working Paper
179
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1. Standards make trade easier and increase both exports and imports. This is the ‘trade
creation’ hypothesis
2. Standards, if national, can favour domestic companies. Over time and used strategically,
this can lead to increased exports and reduced imports as the home country’s companies
use their home market base to build international market share. This is the ‘competitive
advantage’ hypothesis.
3. National standards are a form of protectionism and will reduce both exports and imports
as they increase the cost of selling in more than one country – the ‘trade reduction’
hypothesis. 27
Swann (1999) points out that “there is relatively little systematic empirical evidence on the
macro-economic effects of standards.”28 This may be partly because of the difficulties in
‘proving’ a link between standards and trade. However, despite the difficulties, econometric
studies do exist, including:
• two involving himself (Swann et al, 1996 and Swann and Temple, 1995);29
• the DIN (2000) study 30;
• a review of German trade by Blind and Jungmittag (2000)31;
• two studies on German/Austrian/Swiss trade (Blind, 2000a and 2000b)32.
Having reviewed the econometric evidence in these studies, Swann concludes:

• there is most evidence for the trade creation hypothesis. The empirical evidence “tends to
concur” with the proposition that “the emergence of standards is helpful to the operation of
markets as it reduces transaction costs” and that “the standards infrastructure (is) a critical
tool for national trade and for removing technical barriers to global trade”;
• there is some evidence for the competitive advantage hypothesis. One reason that countries
participate in standards bodies is to create an advantage, or prevent a disadvantage, for
national companies;
• there is little empirical evidence for the third trade reduction hypothesis. While there are
cases of “idiosyncratic national standards” having such an impact, it is not a general effect.
27
Swann. G.M.P. (2000): ‘The Economics Of Standardization’, Final Report for Standards and Technical
Regulations Directorate Department of Trade and Industry, Manchester Business School, University of Manchester,
11th December, 2000
28
Swann, G.M.P.(1999): ‘The Economics of Measurement’, Report for NMS Review, University of Manchester,
June 1999
29
Swann, G.M.P., Temple, P., Shurmer, M. (1996): ‘Standards and Trade Performance: The British Experience’,
Economics Journal, 106, 1297-1313 and Swann, G.M.P., Temple P. (1995): ‘BSI Standards and Trade
Performance’, BSI News, March 1995
30
“Gesamtwirtschaftlicher Nutzen der Normung, Unternehmerischer Nutzen 1, Wirkungen von normen: Ergbnisse
der Unternehmensbefragung und der Experteninterviews”. ISBN 3-410-14858-2
“Gesamtwirtschaftlicher Nutzen der Normung, Unternehmerischer Nutzen 2, Statistisches Material und
Auswertung”. ISBN 3-410-14857-4
“Gesamtwirtschaftlicher Nutzen der Normung, Volkswirtschaftlicher Nutzen, Zusammenhang zwischen Normung
Deutschland”. ISBN 3-410-14859-0
31
Blind, K., Jungmittag, (2000): ‘The Impacts of Innovation and Standards on German Trade in General and on
Trade with the UK in Particular: A Step Further on Swann, Temple and Shurmer’, Unpublished Paper, Fraunhofer
Institute for Systems and Innovation Research, Karlsruhe
32
Blind, K., (2000a), ‘The Impacts of Innovation and Standards on Trade of Measurement and Testing Products:
Empirical Results of Switzerland’s Bilateral Trade Flows with Germany, France and the UK’, Unpublished Paper,
Fraunhofer Institute for Systems and Innovation Research, Karlsruhe
Blind, K. (2000b): ‘The Impact of Technical Standards and Innovative Capacity on Bilateral Trade Flows’,
Unpublished Paper, Fraunhofer Institute for Systems and Innovation Research, Karlsruhe
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Based on his study of the UK situation (Swann et al, 1996), Swann finds “no support from
the empirical results” for the trade reduction hypothesis.33
Therefore, while the quantitative evidence is not large, it supports the traditional economic view
that harmonized standards leads to increased trade. This largely aligns with the views of the
informants we met during the study (trade associations, etc.) and the non-quantitative evidence
(sectoral case studies, etc.) described later in the chapter. A caveat from the econometric studies
is that standards can also be employed by countries to try to skew trade advantages towards
national companies.
Discussion as to why one or other of the three hypotheses occur tends to focus on the competitive
advantage hypothesis. This may be because both traditional economics and intuition support the
view that standards benefit both trading partners (see next section). Trade gains are skewed when
the companies of one country benefit disproportionately, or even take all the gains. Swann et al
(1996) argue that this scenario occurs when:
• a company can take advantage of economies of scale in the new (common standards) market.
This would tend to favour companies with large domestic markets as these already have
achieved scale economies in their home market;
• there are other national characteristics that give companies an advantage in the wider
(common standards) market. This draws, for example, on Porter.34 Factors such as greater
domestic competition, sophisticated consumers or good domestic standards can mean
companies are ready to bring inherent, sustainable advantages to international competition.
In both of the above cases, it would seem to us that European industries are well positioned to
gain from the development of international standards, even if the gains were not commensurate
for its trading partners.
2.2.2 Benefits and Potential Costs of Standardization for Trade

How does the development and implementation of standards (developed by standards bodies or
by industry) support international trade? This section divides benefits into direct, indirect and
dynamic, before listing possible downsides for companies.
Examples of direct benefits are the savings companies make from standardized containerization,
trade documentation (including electronic versions such as EDI) and health and safety
regulations.
Egyedi (2000) looked at the ISO Series 1 international shipping container standard that “caused a
revolution in international inter-modal transport in the 1970s”, greatly reducing shipping costs
and transit times.35 It meant:
• much faster loading/unloading and ship turnaround;

• mechanical inter-modal handling between sea, rail and road;
• containers as temporary loading/unloading warehouses;
• safer handling for dock workers;
33
Swann, G.M.P, Temple, P., Shurmer, M. (1996): ‘Standards and Trade Performance: The British Experience’,
Economics Journal, 106, 1297-1313
34
Porter, M, (1990): ‘The Comparative Advantage of Nations’, Free Press
35
Egyedi, T., ‘The Standardised Container: Gateway Technologies in Cargo Transport’, EURAS Yearbook of
Standardization, Vol.3, Homo Oeconomicus XVII(3). Munich: Accedo, pp.231-262
Page 21 of 115
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• reduced waste (re-usable containers).
The standard also had medium-term effects such as standardized trucks/trailers and container
ships. Egyedi shows how an international standard in an area critical for trade greatly reduced
transaction costs and has facilitated trade.
In facilitating customs clearances and payments systems, standardized documentation, terms and
conditions reduce the transaction costs of trade. Some 62% of the DIN study respondents said
European and international standardization simplified contractual agreements.36 With electronic
communications, standards also emerged for Electronic Data Interchange (EDI).
In a European context, the Single Market aimed to reduce trade costs and the evidence is that it
has done so. For example, Matha (1999), reviewing Swedish multinationals, concludes: “the
Single European Market programme has significantly reduced intra-EU transaction costs.”37.
(Further evidence on this issue in the annex volume.)
Indirect trade benefits to companies from standardization include:

• the need for fewer types of products;
• consequent savings on raw materials (discounts), manufacturing costs, packaging,
warehousing and marketing;
• savings in training people in production and in the supply chain;
• better quality control (greater focus with fewer products; agreed standards);
• consequent ability to outsource with greater certainty, e.g. many Just-in-Time processes
depend on quality standards;
• improved certainty, facilitating long-term investment;
• (at a wider level) international standards reduce opportunities for countries to engage in
standards-based protectionism.
(Despite progress in Europe, the continuing need for different types of products (even if only
marginally so) in some sectors is illustrated in the example of Caterpillar products in the chapter
annex.)
Dynamic benefits from standards partly derive from economies of scale and lower average costs.
This draws on ‘strategic trade theory’ literature (e.g. Krugman and Obstfeld, 1988)38. If
companies increase production based on the certainty provided by standards and lower average
costs, this gives an international comparative advantage. For example, Nokia and Ericsson
became leading global mobile communications companies despite being based in countries with
small home markets. Standards were critical to achieving a critical mass in production, allowing
procurement and manufacturing economies and providing a base from which to build
international market share.
36
DIN Report: see footnote 26
37
Matha, T. (1999): ‘European Integration and Geographical Concentration of Swedish Multinationals - Third
Draft, School of Economic and Social Studies’, University of East Anglia
38
Krugman, P.R., Obstfeld, M. (1988): ‘International Economics: Theory and Policy’, Scott, Foresman and Co.,
Illinois
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A second dynamic impact comes in ‘network industries.’ Shy (2001)39 describes such industries
as having:
• products that need other products to be useful, e.g. computer hardware, software, printers
etc.;
• ‘adoption externalities’ i.e. the utility derived from consumption of a product partly depends
on how many other people use it, e.g. internet services;
• ‘switching costs’ that create a disincentive to switch to a competitor product once the first
product is purchased. These include re-learning costs;
• significant economies of scale.
Shy describes how these characteristics shape diverse industries such as hardware, software,
banking and airlines. A theme throughout is the role of standards, which influence each of the
four characteristics listed above. In these sectors, good products (from a technical perspective)
fail because they choose the wrong standards and align themselves against ‘winning’ standards.
Shy draws on Gandal, Greenstein and Salant for the term ‘orphans’ for products or technologies
that stop being supported by complementary products and services.40 In rapidly evolving
markets, standards can therefore be a competitive variable, locking customers into particular
products and reducing competition. This is particularly the case in the (largely US-based) high-
tech sectors, given the more market-based US approach to standards41.
Standards may also create downsides for companies:

• national standards can be used as a means of protectionism. In some cases, a country may
take international standards and add further specifications to create a national standard that
favours domestic producers;
• the cost of compliance with standards may be significant and may reduce, or even eliminate,
the trade gains;
• in new sectors, if a company is on the side of the ‘losing’ standard, it may invest considerable
amounts in product and market development but may need to write-off that investment, even
if its technology is superior.
Overall, however, the econometric evidence suggests that the benefits outweigh the costs and
standards support trade. The direct and indirect benefits fit with traditional economics and the
dynamic benefits link to newer theories of how industries develop and why trade happens. The
direct and indirect benefits tend to benefit both parties to the trading relationship whereas the
dynamic benefits may be skewed and could be captured by a small number of companies.
Dynamic benefits can thus generate losses for other companies.
The evidence suggests, therefore, that standards are a positive part of the "soft" trade
infrastructure. In line with this, respondents to the ISUG survey rated the overall trade impact of
standardization at average of +3 on a –5 to +5 scale.
39
.Shy, O. (2001): ‘The Economics of Network Industries’, Cambridge University Press
40
Gandal N., Greenstein S., Salant D. (1999): ‘Adoptions and Orphans in the Early Microcomputer Market’,
Journal of Industrial Economics XLVII: 87-105
41
Denning, E., guru of quality and of the Japanese post-WWII recovery, has commented: "If you control an
industry's standards, you control that industry lock, stock and ledger", From Out of the Crisis, published by the
Center for Advanced Engineering Study, MIT, 1996.
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2.2.3 European Standards and Extra-EU Trade

The general reduction in trade barriers (tariff and non-tariff) has coincided with a large increase
in world and European trade. In 2000, Eurostat data show that EU exports of goods accounted
for €938 billion (17.5% share of world trade), up from €396 billion in 1990. The EU exported a
further €291 billion worth of services, up from €149 billion in 1992.42 (Further EU trade
statistics in annex volume.)
These figures do not include trade between European countries, which accounted for another
€1,500 billion for products and €711 billion for services in 2000. If standardization is a factor
that facilitates and supports trade, what kind of trade growth coincided with the intensive
European phase of standardization since the New Approach was adopted in 1987 as an early step
in the Single Market programme?
In tra - E u ro p e tra d e 1 9 8 0 -1 9 9 6
45
40
35
'Q u a lity '
30
25 'V a rie ty '
20
15
10
1980 1985 1990 1995
A study by two French academics (Fontagné and Freudenberg) looked at trade patterns in the
EU between 1980 and 1996.43 Their study uses Eurostat data for some 10,000 products.
Contrary to traditional economic theory, they found that inter-industry trade had declined in the
EU over the period (from 45% to 35% of trade). Completion of the single market, with its
associated push to European standardization, coincided with increased intra-industry trade (i.e
trade between companies in the same industries), with the economies of EU Member States
becoming more similar in terms of the types of products produced. Intra-industry trade
accounted for some two-thirds of trade within the EU by 1996, with the strongest growth being
within the same industries but at different levels of product quality. This could suggest increased
pan-European production patterns and sub-supply due to the process of standardization and the
gradual completion of the single market. An example of the trade growth in one sector
(electrical goods) is shown below.
Figure 2.2: Intra Europe reciprocal trade
The flexible New Approach process is seen by some as linked to the trade increases. Oksala
(2000)44 commented: “A decade later, this novel approach has clearly served its purpose. The
1992 objectives have largely been met and the process continues to allow industry a real voice in
the details associated with regulation. It is a model that other governments, including the United
States, are beginning to adopt.”
42
Eurostat (2001): ‘The EU Figures for the Doha Conference’, News Release November 2001
43
Fontagné, L., Freudenberg M. (1999): ‘The Single Market and the Development of Trade’, Economie et
Statistique no 326-327, Sept.
44
Oksala, S. (2000): ‘The Changing Standards World’, Standards Engineering Society 2000 World Standards Day
Paper Competition
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In the European Commission’s "Cardiff Report" on progress in single market completion for
2001-02, there is an estimate of how much further trade would increase in a totally integrated
single market with standards/mutual recognition, no transport costs, language barriers, etc. While
such a market will never fully occur, it puts an upper limit on the trade gains possible from the
single market. The exercise showed that trade would be 4.7 times higher in such a market than its
2000 level and indicates continuing scope to increase intra-EU trade.45 The report reinforces the
role of standards in increasing trade.
'Normalised' EU trade as % consumption
35
30
25
20
15
10 Extra EU Exports*
Intra EU Imports
5 Extra EU Imports
0 Intra EU Exports
1990 1992 1994 1996 1998
an ISUG Graphic
Figure 2.3: EU Electrical Trade NACE 31, % consumption
ISUG’s examination of EU trade in Electrical equipment (NACE classification 31) shows that
intra-EU imports and exports, and extra EU imports and exports increased significantly in
1992/1993, which may support the assertion that Trade and Free Movement responded to the
implementation of the Single Market.
(As well as the growth of intra-EU trade over the broad period of the 1990s, there is evidence of
increased industry concentration and price convergence in Europe over the period. These
trends, which also coincided with completion of the single market and a growth in European
standards, are discussed in the annex volume.)
2.2.4 Standards, Trade and SMEs

At first, one might think that SMEs would be less affected by harmonization of EUROPEAN
standards, as they trade less across national boundaries than larger companies. However, a major
study by the European Network for SME Research (ENSR) in 1996 showed that this was not the
case.46. The study showed that, while SMEs were generally less affected by the Single Market
than larger companies, the exception related to technical barriers, covering harmonization of
national standards and product regulations. Some 44% of SMEs said that they had been affected
by these measures. The ENSR concludes that harmonization of standards and regulations affects
many SMES, whether they trade internationally or not, i.e. even to sell locally may demand
changes to a product to conform to a European standard. Also, SMEs that do not themselves
export may supply to companies that do.
Two specific trade benefits of standards for SMEs are:
45
European Commission, Economic Reform: Report on the Functioning of Community Product and Capital
Markets 2001-2002, Communication from the European Commission to the European Parliament and Council, 07
December 2001
46
ENSR, 1996, ‘The European Observatory for SMEs’, Fourth Annual Report
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• standards can provide blueprints for SMEs, i.e. without them, more product development
expense might be needed
• standards facilitate outsourcing by large companies of products or processes and SMEs

benefit as a result
• Even the narrowest of niche markets, aggregated worldwide, can offer an SME
opportunity when standardized (e.g. medical devices for rare conditions)
Having said this, there are also costs of standards to SMEs. In particular, costs of compliance
may create an effective barrier to entry in an industry for small enterprises, e.g. a demand for
ISO 9000 compliance or the legal requirements of the Construction Products Directive. Also, if
standards change, the proportionate cost of adjustment may be greater for SMEs (the example of
EMC testing in the medical devices sector was quoted in an ISUG workshop). Thirdly, simply
knowing which standards exist, and how to comply with them, is proportionately more costly for
small firms. In these cases, standards reduce SME competitiveness and competition.
2.3 SECTORAL IMPACT OF STANDARDS ON TRADE
2.3.1 Medical Devices and Informatics

This sector comprises a wide range of products. Globally, it is dominated by US companies,
which account for over half of world production. While EUROPEAN production rose in the
1990s, consumption rose faster and a trade deficit emerged with the US. Within the EU, medical
devices are regulated under a number of New Approach Directives. Standards assist
manufacturers to demonstrate compliance with the Directives when submitting applications to
Notified Bodies and test houses. The ISUG survey of industry indicates a strong feeling that
standardization has reduced costs of compliance with regulatory requirements. Within the EU,
patient funding organizations (state and private) can still impose requirements above those in the
standards, on grounds of increased safety (public, patient or health worker)47.
European participation in international standardization and the adoption by CEN of relevant ISO
and IEC Standards has facilitated trade into as well as out of Europe, as external (mainly US and
Japanese) manufacturers find harmonized standards easier to comply with. However,
EUCOMED states in its recent paper “Improving international and European healthcare
standardization to meet global safety, regulatory and market needs” that further globalization of
medical device standards is needed.48 One development supporting international trade in 2001
was the publication of a Global Medical Device Nomenclature for the first time, with
internationally agreed generic terms and definitions for medical devices. CEN noted in its
December 2001 Newsletter that “Unique codes for devices are essential for commercial
transactions and as numeric data in electronic trade.”
The debate above about how the benefits of standards to trade can sometimes be skewed was
reflected in this sector by the support given by US manufacturers for a move to international
standards in the context of completion of Europe's Single Market. For example, in 1990 the US
Association for Advancement of Medical Instrumentation helped to form ISO's Technical
47
As recounted to ISUG by Frnak Aniba of PIE, Netherlands
48
Global Standards : a discussion document, http://www.eucomed.be/docs/
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Committee on sterilization. European standards in this area now tend to be the same as the
international standards. 49
2.3.2 Aeronautics
The European Association of Aerospace Industries (AECMA) estimates that the European
aerospace industry had a turnover of around €60 billion per year in the late 1990s, with some
60% accounted for by civil aerospace and 40% by military aerospace. The European industry
was more fragmented than that of the US but with gradual consolidation occurring (Airbus being
the strongest example). The European aerospace industry had a 1997 trade surplus of €4 billion
with the US and of €22 billion with the rest of the world. (AECMA 1997 Statistical Survey)
Discussions with the AECMA and with aircraft manufacturers, make it clear that barriers
remaining in certain areas are the exception. Standardization scored highly for facilitating free
movement and trade in the ISUG survey (see diagram below). Based on the survey responses,
this appears particularly true between aircraft manufacturers and airline companies. There appear
to be remaining issues upstream, between manufacturers and suppliers. Suppliers say further
international standards would facilitate cost reductions.
Average Standardization benefit to sales
(rated between -5 and +5)
4
3
Europe
2 International
1
0
SME Large co's.
Figure 2.4: Trade (“international”) and Free Movement (“Europe”) benefits,

ISUG questionnaire (aeronautics), 15 respondents averaged
2.3.3 Mechanical Engineering

The single market has not greatly increased concentration in this sector, due to a lack of
achievable economies of scale. The sector remains fragmented, with SMEs making up a high
proportion of total output50. The EU has a trade surplus, reflecting an historical sectoral
expertise. From a standards perspective, the key event was adoption of the Machinery Directive
in 1995, providing a basis for intra-EU and indeed extra-EU trade. One US source51 commented
that: “The objectives of the EU’s harmonized safety standard (constitute) … a reasonable
approach for any company. Top US manufacturers that follow (US standards) … are already
meeting most, if not all, EU requirements”. A study in the mid-1990s on the single market’s
impact 52 found that about a third of companies in this sector felt that harmonization and mutual
recognition have had a positive impact.
49
GTW Associates, Insights, Dec. 1996
50
European Commission DBIII and Eurostat (1997), Panorama of EU Industry 97 - The Key to European Industry,
Office for Oficial Publications of the European Communities
51
Hook, S., Kolka, J. (1999): ‘CE Marking - How to Meet the Machinery Directive’, Quality on-line, October 1999
52
Atkins, W.S. (1996): ‘Technical Barriers to Trade’, The Single Market Review Series, November 1996
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70%
60%
50%
International
40%
National
30% Company
20%
10%
0%
1970 2000
Figure 2.5: The move towards International Standards

(an ISUG Graphic)
The choice of international standards by globally trading companies is typified in the diagram
below, which shows the proportion of Caterpillar standards that were corporate, national and
international in 1970 and in 2000. Further data show that adoption of international standards was
highest in Europe (in 2000) with 56% of standards being international. The figure for the US was
17%, with 54 % pending.53
A further example of the impact of the Machinery Directive was supplied to ISUG by two
engineers with the John Deere corporation54. "The adoption of the directive resulted in John
Deere Harvester Works (Combines) and Zweibruecken Werke (Combines and self-propelled
agricultural machines) being able to eliminate certain regional differences in the design and
manufacture of harvesting equipment. For example, before the Directive, combines in France
required shields that were bolted closed … after the Directive, this was required in all European
countries".
2.3.4 Electrical Equipment
Like mechanical engineering this incorporates a wide range of product areas, although it has
higher industry concentration, with large companies exploiting economies of scale and having
extensive product ranges. Equipment produced in the sector for electrical applications must
comply with voltages and frequencies used. In Europe, low voltage distribution harmonization
occurred in 199455 and medium and high voltages harmonization was well advanced by 2001.
Frequencies are harmonized at 50 Hz. This enables manufacturers to supply identical equipment
in most applications, facilitating trade and competition, although differing network conditions
and customs of installation demand modifications in some cases.
Data on the effect of the Directive on Electomagnetic Compatibility was published in the
Commission's 1999-2000 "Cardiff Report". The diagram below shows that trade in products
affected by this Directive grew at the same pace as EU manufacturing as a whole between 1988
and 1992. However, after adoption of the Directive, trade in products affected grew much more
rapidly than trade for all manufactured products. A check was made to try to determine whether
this growth of trade in EMC simply reflected growing demand - as products covered by the EMC
directive are likely to be important investment goods, the evolution of gross fixed capital
53
Hedberg, W. (2001): ‘The Global Market Sector Concept’, IFAN World Trade and Standardization Conference,
Berlin, Sept. 2001
54
Senneff, M., Durant, D., Engineers with John Deere Corporation in communications with ISUG
55
UNIPEDE, Implementation of 230/400V in UNIPEDE member countries
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formation in the European was also tracked. This turned out to grow much less than the growth
of EMC directive-affected products, so the growth of trade cannot be said to have been driven by
growing demand. This therefore provides soft evidence that the directive did positively impact
on trade in relevant products.
Products affected by EMC Directive -
evolution of trade
300
Intra-EU elmag
250
Intra-EU manuf.
200
150 Invest
100 1991 = 100
50
1989 1994 1999
Figure 2.6: Products affected by EMC Directive

Most responses from companies to the ISUG survey indicated that companies had standard
European-wide basic products, indicating a knock-on benefit for cross-border trade, costs and
competition. One company (Tyco Electronics, the largest global producer of passive
components) commented that "for manufacturers of components and interconnection systems,
standards are vital".
2.3.5 Gas Appliances & Pressure Equipment

Standardization of gas appliances is regarded as generally successful in supporting development
of the internal market even if for some appliances, such as gas cookers, regional cultural
differences remain strong. The usefulness of standards is reflected in developers of new
appliances requesting standards for their products, e.g. gas wok, micro CHP, fuel cells, NGV
tests. They see standardization as important to market acceptance of their products. In the case of
micro-CHP (combined heat and power) a CEN workshop agreement is being developed (with
CENELEC input).
As in other sectors, harmonized EN Standards supporting the Gas Appliance Directive make it
easier for non-European companies to enter the European Market56. In this sector, the US
National Institute of Standards and Technology and NEMA has produced guidance documents
for applying EU/EFTA standards and regulations.
The context for pressure equipment is set by the Pressure Equipment Directive (PED), which
came into force in November 1999. The European Commission comments on its website that
“The Directive provides, together with the directives related to simple pressure vessels,
transportable pressure equipment and aerosol dispensers, for an adequate legislative framework
on European level for equipment subject to a pressure hazard.” The PED was prepared under the
New Approach and says Member States may not, “on the grounds of hazards due to pressure,
prohibit, restrict or impede the placing on the market and putting into service of pressure
equipment and assemblies which comply with the provisions of the PED. Member States are to
presume that pressure equipment and assemblies bearing the CE marking and accompanied by
the EC declaration of conformity satisfy the provisions of the PED.” 57
56
as reported by Deischer, Sabelli, Sims, Wolf at the International Appliance Technical Conference, March 2001
57
CEN Technical Committees for pressure equipment products are listed in the chapter annex
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Despite the PED, potential trade barriers exist where users are discriminated against if they buy
equipment that complies with the PED but does not comply with local codes such as AD
Merkblatt, CODAP, Swedish SPVC, Italian VSR, Swiss SVDB or the ASME Boiler and
Pressure Vessel Code. Also, PED-compliant equipment requires more frequent in-service
inspection, whereas PED and AD Merkblatt (for instance) compliant equipment has longer
inspection intervals. Indirectly, this pushes manufacturers to produce equipment to meet national
or regional codes and affects production costs. 58
2.3.6 Software Engineering

A key issue for standards in software is that the sector is still undergoing rapid change and
development. This primarily concerns the impact of standards on innovation, but also has a trade
impact. The sector is a ‘network industry’ as defined earlier by Shy. He points out that “most
software packages operate on one operating system (such as "Universal Inter-exchange" (UNIX),
Disc Operating System (DOS), Macintosh, Windows etc.) and not on other operating systems.”59
The systems just mentioned are "winners" and there are other "orphan" software packages that
lost out. Shy points out that “the desire for software compatibility has led to the emergence of a
software leader called Microsoft.” Perhaps not surprisingly, Microsoft supports leaving the
emergence of standards in technology sectors to the market. Bill Gates says “In the world of
computing, technology is so dynamic that any company should be able to come out with
whatever new product it wants and let the market decide … It would be foolish to impose the
constraint of government-dictated design on an unfinished invention.”60 (This issue is discussed
further in the Innovation Impact chapter.)
Whether one agrees or disagrees, the trade impact has tended to benefit US companies. They are
generally closer to leading-edge software developments, giving a critical time advantage in
putting compatible products in place, building networks of users and taking advantage of
‘switching costs’ to lock in customers once a product is adopted. Perhaps indicating the sector’s
growing maturity, the WTO’s Committee of Participants on the Expansion of Trade in IT
Products was compiling a list of non-tariff trade barriers and their trade impact in 2001. The
committee was then planning to discuss reductions in these barriers to facilitate greater trade
freedom.
2.3.7 Food Hygiene & Safety

The 2000-01 CEN Annual Report notes that “the objective set out in the EU proposal for a
regulation on the general principles and requirements of food law, the establishment of the
European Food Authority and of procedures in matters of food safety is – ‘the free movement of
safe and wholesome food.’” This follows the Commission’s White Paper on food safety.61
An early European set of food-related standards emerged from a consortium of companies within
the sector. These related to EAN (European Article Numbering), a conscious building block of
greater international physical and electronic trade. Specifically regarding safety and hygiene,
between 1988 and end-2001, CEN produced over 150 European Standards, mainly for methods
of sampling and analysis. Some of these are EN ISOs formulated under the Vienna Agreement.
58
Zhu L, ‘Impacts of Standardization on Pressure Vessels’, copy in Annex “Contributed Papers”. This paragraph is
also based on information supplied to ISUG by Hans-Peter Burzig of COCIR
59
Shy, O. (2001): ‘The Economics of Network Industries’, Cambridge University Press
60
Gates, B. (1995): The Road Ahead, Penguin
61
(COM/99/719).
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These standards follow from earlier Directives on food labeling and hygiene. They do not cover
traceability, which is under discussion in 2002, or the systems supermarket groups use to ensure
food hygiene and safety in their supply chains. However, comments at the ISUG workshops
indicated that the progress made in this sector has supported inter-country trade in the EU and
EFTA.
Safety and hygiene standards underpin trade of food products. Indeed the flurry of
activity and institutional change in recent years is because consumer confidence
was damaged by food scares that affected intra-EU trade. Some ISUG informants
suggested that food hygiene and safety standards were overly influenced in the
past by the agricultural sector, and not sufficiently by consumers. However, others
said that the new standards were too onerous, especially for small producers. We
noted one newspaper article quoting a small Irish gourmet food producer saying
“the HACCP system (Hazard Analysis and Critical Control Points) was developed
at NASA for astronauts” (and was too detailed for small EU food producers).
(Darina Allen of Ballymaloe Foods, quoted in The Irish Times, 01 February 2002)
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IMPACT ON COMPETIVENESS and QUALITY
3. Impact on Competitiveness and Quality
There is no mass production without standardization, there are no high-

output machines without mass production. Therefore standardization is
causal in competitiveness"
ISUG
3.1 INTRODUCTION
DG Enterprise defines Competitiveness as “the ability to generate rising standards of living for
the population as a whole whilst operating in markets open to international competition.”
Competitiveness operates at different levels:

• Enterprise level – can a company survive and make a reasonable return on capital
• Industry level – reflecting average performance of all companies in a sector; and
• National or Regional level – e.g. can the EU increase its global market share?
Europe’s competitive position depends on the sum of the competitiveness of individual

enterprises, which in turn depends on a mix of factors such as how it is positioned in the price/
quality market matrix. No two enterprises occupy exactly the same position. The low-cost
supermarket and the up-market boutique may both be competitive, so it is comparative – How do
costs compare, at an equivalent quality level, with competitors in a market served?
Standardization also operates at different levels – company, industry, national, regional and
international. Standardization grew historically in that progression, which mirrors and was partly
driven by the growing globalization and complexity of products. The different levels also carry
different emphases – at the initial levels, corporate self-interest is dominant, but this becomes
generally less true from national level upwards.
As competitiveness is a function of price, quality and design, we discuss the impact of standards
on quality and engineering design in this chapter. Having discussed each of these, a specific
section describes some of the potentially negative effects of standards and standardization on
competitiveness.
The impact of standards on innovation (another aspect of competitiveness) is considered

separately in a dedicated chapter. Health and safety performance also contributes to
competitiveness, directly and via insurance premiums: this is discussed in its own impact
chapter.
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Historically, competitiveness comes second to trade as a standardization motive. The

competitiveness/standardization relationship is wide and strong. The main branches to the ‘tree’
are shown below.
Positive Influences Negative Influences
Networkability Legal
Compatibility certainty
Interchangeability
H & S
C-R* Intl. standards costs
Less
variety Can hinder
C-R Regional Engineering major
standards design innovation
C-R National Can aid Misuse of

standards innovation quality
systems Artisans
C-R Industry de- skilled
standards Improves quality
C-R in–company
standards
Standardization nourishes competitiveness Standardization side-effects
(* C-R = Cost Reduction)

Figure 3.1: Standardization - Competitiveness Trees
3.2 THE IMPACT OF STANDARDS ON COMPETITIVENESS
3.2.1 Standards and Cost Reductions

As shown in the standardization – competitiveness tree, cost reductions emerge directly from
standardization and indirectly from better quality and reliability, and lower health and safety,
legal and engineering costs. We use two comparison ratios which we have termed:
• effort ratio – benefits of standardization/investment in standardization costs

• effects ratio – costs before/costs following on standardization
Toth says that companies in mature industries have a 7:1 effort ratio from standardization
investment, with companies in new industries (including many technology sectors) having ratios
of between 10:1 and 20:1. The relationship between costs and the level of standardization is
shown graphically below: the precise shape of the curve depends on the sector and its state of
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maturity. The latter is not immutable in that a new technology, such as nanotechnology, can
move mature industries backward along the curve with renewed cost-savings opportunities from
further standardization.
Standardization: cost-reduction v. level

Costs
In-company, Industry, Regional/International
Figure 3.2: Standardization: cost reduction v. level

(an ISUG graphic)
Moving from internal to (the different external) standardization ‘levels’ facilitates this process of
cost reduction in a ‘virtuous circle’ of diminishing returns (see below).
1. Variety Lower costs, Higher market Increases

reduction
More competitive
Better quality share volumes
9(internal)
Iterations
2, 3, 4 - Enables investment in
Standardization technology and equipment
(external)
Figure 3.3: ‘Virtuous Circle’ of diminishing returns

(an ISUG graphic)
3.2.2 In-company standardization

This first level of standardization can convey the greatest cost reductions. Mature industries have
already had these benefits. The in-company process causes variety reduction of simple parts and
bought-in assemblies and in finished products. These lead to volume increases at individual
product level, lower costs, better quality – the virtuous circle has commenced. In the aeronautics
industry, the consequent effects ratios was as high as 125:1 (see Aeronautics sector below).
Standardization of mechanically-attached pipe fittings (see Mech Engineering sector) showed an
effects ratio of 77:1, and batteries a ratio of 49:1 (see Electrical sector).
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3.2.2 Industry-level standardization

At this level, standardization is now ‘externalized’ with cost benefits arising from the facilitation
of increased company specialization, an increased numbers of suppliers of bought-in parts and
increased competition, which drives down sales prices of finished products, pressurizing further
cost reductions.
Some company areas that deliver reduced costs from standardization, are shown below in a
typical Standardization ‘costs savings chain’
5. Raw materials
1. Design purchase prices
time
2. Drawing
time
6. Raw materials &
finished goods
inventory
3. Materials
management
time
7. Production
set-up time
4. Production
scheduling
8. Production
time
9. Cost reductions
10. Higher quality due to experience
due to experience
11. Lower
inventory costs
for customer 12. Lower materials
management costs 13. Shorter
for customer maintenance time
due to experience
Figure 3.4: Standardization ‘costs savings chain’

an ISUG graphic
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In competitive markets, companies will try to repeat and deepen the effects shown above to
achieve every improvement possible in cost competitiveness. Examples of the savings chain (see
chapter annex for details) include:
1. Design time (considered below under Engineering Design).
2. Drawing time: an Aeronautics example shows €67,000 drawing cost savings on one
project.
3. Materials management time. A large project with 600 technical personnel is shown to save
an astounding €4.59 million each year as a small part of the Engineering Design savings5.
Toth (p40)62 reports an engineering search saving of $1.23 million, at a cost of $0.24
million – an effort ratio of over 5:1. In production scheduling, known standard quantities
make timing more predictable.
4. Raw materials purchase prices: a rivet example for an aero engine (see Annex) brings
savings of €2.75 million per year.
5. Raw materials and finished goods inventory: Prof. Hesser described at an ISUG review a
major forklift truck manufacturer that closed its standardization department to cut overhead
– the numbers of parts in stock rose from 120,000 to 360,000 seven years later. The Kreisel
– Hoops study found that the number of parts in inventory in a company expanded by on
average 3% per year. Hesser has found inventory expansion ranges from 4-5%. The cost of
stocking a new part ranged from €50 to €10,000. SBAC5 quotes British Airways reducing
inventory by 60% at halved value. (A cost commonly quoted for placing a new item in
inventory at B&Q, the UK’s largest DIY retailer, equates to €164,000).
6. Production set-up time – fewer set-ups, shorter times, with standardization.
7. Production time – all
8. Cost reduction due to experience : T.P.Wright’s Experience Curve of 1936, popularized
later by the Boston Consulting Group, shows experience-based reductions from 100 as
below. Studies have shown that production costs usually decline by 10%-30% with each
doubling of cumulative output from executing standardized operations (and therefore with
standardized parts etc.). The Curve is too simplistic to use to formulate strategy in a
particular case.
Typical achievements due to experience of repetitive

operations Aerospace 85%
Shipbuilding 80-85%
Complex machine tools for new models 75-85%
Repetitive electronics manufacturing 90-95%
Repetitive machining or punch-press operations 90-95%
Repetitive electrical operations 75-85%
Repetitive welding operations 90%
Raw materials 93-96%
Purchased Parts 85-88%
62
Marx, M.L., Katz, J.S. (2001):‘Economics of Standards for Telecommunications Access’, prepared for NIST,
March 1, 2001.
Toth, R.B., ‘Conformity assessment now more important than standards’
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9. Quality improvement due to experience (see Quality below).

10. Lower inventory costs and materials management costs for customer, are mirrors of earlier
points above.
11. Shorter maintenance time - frequently the greatest life-cycle cost of equipment,
maintenance time is shortened and less frequent reduced by standardization.
ISO’s “Benefits of Standardization” 1982 illustrates typical annual proliferation rates in

the absence of a standardization/variety reduction programme:
Final products 8 to 10%
Procedures, layouts, symbols 6%
Electrical components 6%
Mechanical components, semi-finished 5%
Basic features (e.g. screw threads) 4%
Test and analysis methods 3%
3.2.3 Further cost-reducing drivers from standardization

At regional and international level, standardization further reduces costs by:
• More volume: Larger markets opened by wider standardization intensifies the volume-
driven cost reductions resulting from investment in technology and higher productivity
machines.
• Competition intrinsic to standardized goods: There is a price reduction intrinsic to
standardization. Ronnen says: “by its very nature, a minimum quality standard limits the
range in which producers can differentiate qualities. Hence, in the end, price competition
intensifies, and prices fall”.63
• The specialisation effect – standardization enables companies to do what they do best,

and to outsource to others what they in turn do best.
• Global reach: supplies may be sourced from, or manufacturing located in, low cost areas
around the world.
3.2.4 What is being saved NOW by standardization?

If we accept that cost-reductions, which are in many orders of magnitude, have been historically
delivered by standardization, can we approximate the current, ongoing cost savings? It appears
that we can, if we assess the proportion of standardized parts, and then estimate their cost if not
standardized.
A number of examples suggest that standardized parts in the engineering industry typically cost
about 20% of total materials. This figure comes from sources as diverse as Rolls Royce, Airbus
and a Brazilian shipbuilder. Rolls-Royce specifically mention an 80/20 relationship between
costs and standardization (refer to Annex).
63
Ronnen, U. (1991): ‘Minimum Quality Standards, Fixed Costs, and Competition’, Rand Journal of Economics,
Volume 22, No. 4, Winter 1991
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From the Kreisel-Hoops study covering 56 company replies (machinery, aeronautics, autos,
electro-tech and shipbuilding companies in order of frequency), the averaged saving to
investment, or effects ratio, on standardized parts was estimated at 5:1. Respondents to a DIN
study placed the ratio at 3:1. Ratios of 10:1 for the automobile to 15:1 for aeronautics industries
are mentioned.
Toth 64(ref. pages 32-38) reports on standardization of petroleum tanks saving 30% on costs with
an effort ratio of 4.2:1: associated piping standardization returned 6.7:1 effort ratio.
When we combine the above effects ratios with the 20% average of standardized parts, we get a
picture of the ongoing costs savings being obtained through standardization. For a product with
20% costs arising from standardized parts, its base cost of 100 would rise to 140 if the effects
ratio was 3:1 (the standardized parts thereby costing 60 rather than 20) – the figure below depicts
this for various effects ratios. At a typical effects ratio of 5:1 the parts costs are almost doubled
(to180).
Effects on materials costs if the 20% is not

standardized Materials costs with
20% standardized parts
380
No standardization,
280 effects ratio 3:1
180 Do., effects ratio 5:1
140
100
Do., effects ratio 10:1
Do., effects ratio 15:1
Figure 3.5: Effects of non-standardization on materials costs (an ISUG graphic)
The corollary is that total direct costs, and therefore selling prices, would increase considerably if
that 20% of parts was not standardized. The increase depends on the effects ratio and the percent
material content of a particular industry or business. Below we assume a typical effects ratio of
5:1 and show the resulting total direct costs for a variety of materials contents.
T o ta l d ir e c t c o s ts if th e 2 0 % is n o t
s t a n d a r d iz e d (5 :1 e f fe c t s r a t io a s s u m e d )
148 P re s e n t c o s t =
140 100
132
124 M a te r ia ls a t 3 0 %
100 o f d ir e c t c o s ts
M a te r ia ls a t 4 0 %
Figure 3.6: Effects of non-standardization on total costs (an ISUG graphic)
The graphic above shows how a product’s total direct costs would increase by 24% NOW if that
20% of parts was not standardized, assuming materials are only 30% of direct costs and an
effects ratio of 5:1. With less conservative assumptions, the cost rises would be greater. This
64
ibid.
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clearly indicates the value of standardization to a company, and that diligent attention to its detail
could be far more fruitful than e.g. efforts to increase sales price.
It is our opinion that the potential for savings and competitiveness indicated above may not be
appreciated by many companies. As the amounts involved are considerable, small changes in
effectiveness could be significant. The standardization manager of one major company that
ISUG interviewed, who asked not to be identified, said his company discovered some years ago
that it was (then) spending some € 55 million per year on standardization activities that they did
not generally recognize as such. His company now manages its standardization very carefully,
but how many other companies, large and small, are unaware of the extent of their real
standardization activities, or do not rigorously pursue the benefits available? – The awareness of
standardization seems to relate only to contact with outside bodies. Does a lack of continuity
between company- and industry-level standardization on the one hand, and external and more
formal standardization on the other, reduce the benefits to companies? The SDO’s (Standards
Development Organizations) play no role in the former, although there are standards such as
DIN 4000 available for that purpose. Many if not most of the larger companies, such as Daimler-
Chrysler, Siemens and Amp, try to get full benefit from their corporate standardization activities
and have standardization departments reporting at senior level. They show complete awareness
of the respective roles of internal and external standardization. The fact that internal programmes
are so rarely mentioned by many companies suggests that awareness of the breadth of the
standardization continuum may be low: the overall benefits available may thus be hidden from
many, especially SME, companies – a view strongly endorsed by Hesser and Hoops (in
communications with ISUG).
3.2.5 Standards, Competitiveness and Quality
“Companies who are, or aspire to be, market leaders, usually are at the vanguard
of standards development work”
- Says AMP, the world’s largest supplier of electronic components and connectors. It has
over a dozen standards professionals directing a further 2000 engineers who receive an
8-hour basic training (which includes “Robert’s Rules of Order”, + a special manual)
and represent AMP at meetings. In 1996, it formed its own internal Global Working
Group for Standards – US, Japan + 5 European countries, in 1998 it held its first Global
Working Group for Standards Workshop with 250 staff from around the world. It
circulates global standards papers monthly to over 300-and has standards-related
electronic databases available to over 8,00 -0 staff throughout the world. Because
standards relate to the new product requirements of customers who are increasingly
global, Amp’s Standards Dept. reports to the Global V-P Marketing.
(“Industry standards, a key factor for market success, Henry Lime”, AMP, “Standards and Competitiveness – reports
from nine multinational corporations on their use of standards as a strategic and competitive tool” – ASTM 1998)
Quality, expressed in reliability, safety etc. could not and would not have reached its present
levels without standardization – again standardization is not uniquely causal, but has been and
remains an essential condition for the attainment of high levels of quality. The Quality impact
was not in the study brief, but as standardization has such a major impact on the quality of goods
and services, and a Quality management systems standard (ISO 9000) is the world’s best-known,
it was decided to include it.
The quality impact of standardization derives from three principal and distinct effects:
• Standardization as a cause of variety reduction.
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• Quality Management Systems

• The impact on all (not just low-quality) suppliers
3.2.6 Variety reduction

A central impact of standardization has been variety reduction, seen most clearly in mass
production. Without it, few quality improvements could have been introduced or sustained.
Statistical methodology, feedback and correction including experience in use, improvements in
production machinery, methods and work practices, would not have been possible. Indeed, in
some sectors, mass production now uses standards to help provide ‘volume customization’,
pioneered by companies such as Hewlett Packard. The further quality benefit available from
‘specialization’, where companies do that they are most competent at, and outsource the rest
from further specialists, is another form of variety reduction benefit. Illustrations of standards-
associated reliability improvements are described later in this chapter in the sectoral impacts.
3.2.7 Quality Management Systems

According to de Vries65, the quality management system standard ISO 9000 has had the largest
impact of any single standard in the world, and, from studies discussed in the Annex, it opens the
door to environment management standards ISO 14000. Its importance is such that ISO, the
largest International standards body, introduces itself on its website as “ISO – the source of ISO
9000 and more than 13,000 International Standards for business, government and society.”
Almost 250,000 ISO 9000 Quality Management System 3rd party certifications are held by
companies in Europe, and almost twice that number around the world, showing its huge use in
manufacturing and service industries. “The pre-eminent standard in the area of management is
the international quality management standard ISO 9000. Such standards are more important to
an organization’s success than are technical standards”66. Further evidence of the importance
of ISO 9000 based on Dutch, Canadian and ICSCA studies is contained in the chapter annex.
There are valid criticisms of the standard, most of them addressed by the 2000 revision: uneven
implementation regimes remain grounds for concern. However, the evidence from such studies
and by observation, that in very many cases it helps improve quality both directly and indirectly,
is absolutely overwhelming. Although it represents a cost burden for SMEs, ISO 9000’s
widespread availability from a variety of competing sources strongly suggests it must be cheaper
than any alternative quality management system, and its international recognition is of immense
value to them. Widespread industry praise for the revised version, ISO 9000: 2000, confirm its
influence will continue to grow.
Although ISO 9000 was initially perceived as a particularly European standard, its use is even
urged on the US government. Epstein67 says many branches of US government already use it:
“regulatory agencies think ISO 9000 is good enough to promote to their regulated industries
(among them are) FDA, FAA, USDA, and DOE: the FDA rewrote their “Good Manufacturing
Practices” regulation to conform to the requirements of ISO 9000”.
65
de Vries, H. J., 'Possibilities for better Management Systems Standards', Erasmus University, Rotterdam, Euras
Yearbook Vol. 2 p.379
66
Rada, R., Virtual University Academic Officer, Washington State University, Pullman, WA 99164-2725
67
Epstein, I. (2001): ‘ISO 9000 and the Federal Government’, Defense Standardization Journal Jan/Feb 2001
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3.2.8 The impact on all suppliers

The impact of quality on all suppliers, not just those of low-quality has been explored by
Ronnen. His 1999 study found that “minimum standards can increase the average and maximum
quality of products in the market. Such standards can not only force low quality firms to raise
their quality, but may cause high quality firms to increase quality, presumably in an attempt to
alleviate price competition and differentiate themselves from their now higher quality rivals”.68
The direct and indirect quality benefits of standards to a company are shown below.
Direct Indirect
Reduced Fewer Fewer Good basis Customer

Waste rejects Warranty for legal acceptance
claims defence
Environmental Better Advertising Company

responsibility communication claims Reputation
within company enhanced
(an ISUG graphic)

Figure 3.7: The direct and indirect quality benefits of standards to a company
Customers, particularly expert customers, are the best judges of the effects of standardization on
quality. The Association of European Airlines (and individual airlines) averaged response to an
ISUG questionnaire is shown below.
68
Chipty, T., Dryden Witte, A., (1999): ‘An Empirical Investigation of Firms’ Responses to Minimum Standards
Regulations’, Children and Youth Services Review, Vol. 21, April 1999, 111-146.
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The customer's view (airlines) of

standardization impact, rated -5 to + 5
6
5
Quality of
4 maintenance
3 Operational safety
2 Aircraft reliability
1
0
an ISUG graphic from data from ISUG questionnaire

Figure 3.8: The Customer view is that standardization supports quality
3.2.8 Standards, Competitiveness and Engineering Design

Design impacts are separate from cost reduction and innovation benefits and in fact most design
has little connection with innovation. The following two quotations convey the importance of
standards for engineering design:
“If standardization did not exist at all, design would be virtually impossible, e.g. how large
would a hole for a 5mm bolt be, how would you specify a material, how could a tube coupling be
made and sealed? It is standards that make questions like these simple for a designer to deal
with, and cost effective to produce, and prevents designers continually re-inventing the wheel.”5
“Consider the simple casting, comprising 2 flanges (see diagram below), one with bolt holes and
the other fitted with wire thread inserts. Consider how such a part would be designed, drawn and
manufactured. Now refer to the features of this part that are covered by standards, and consider
the number of components engineered by aerospace companies in one year, or for a single
project, and the enormous value of standardization can be understood.”69
Figure 3.9: Simple 2–flanged casting

The following is a further example of standardization’s benefits for design: “ A threaded joint..
(screw and nut).. is by geometrical parameters one of the most complicated machine elements.
Thanks to complete standardization.. it is indisputably the cheapest machine element. If the
engineer had to calculate all .. it would take tens of hours if not days…When solving a
complicated engineering problem…using a special solution means that one has to carry out
serious research…The designer usually does not have time and skills to create such a calculation
method.”70
69
Allen, K. (1999): ‘Report from the SBAC Engineering Standards Working Party on Cost /
Benefits of Standardization’, February 1999
70
Sterk, W. (1999): ‘Challenges to Standardization’, European Kommission DG III Industry, Hamburg, May 1999
Page 42 of 115
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Based on the above examples, and the wider project research, we have identified a range of
benefits from standardization for design and for engineers/designers:
• They need not get enveloped in the minutiae of ‘low-level’ design but can concentrate their
talents at a higher level
• By using tried and proven parts, sub-systems and systems, designers and engineers are
freed to take design risks
• By enabling them to design with standard low-cost parts and systems, design and
development budgets stretch further and more new products are possible. This is reinforced
by the lower risk of launching a new product to existing standards
• It increases the availability of skilled, highly-trained designers by not engaging them in
unnecessary work
• Many products would not be available if they were not able to draw off a large number of
standardized components
• Complex design would be prohibitively costly if standards did not exist,
• Lower design risks result from standardized parts, i.e. they improve safety
• The satisfactory performance of parts covered by standards is assured, due to testing
carried out in the development phase of the standard.
Toth71 reports that one high-technology company found its standards engineers were purchasing
about $1 million each of standardized parts and assemblies while the design engineers were
responsible for about $60,000 each. This realization of the importance of standardized parts,
even in high-tech sectors, led to greater attention to the standardization department in salary
levels, performance monitoring etc. He also documents an aerospace company that saved
$28,000 in engineering search time on a concept development by use of standardization.
Information and communications technology takes advantage of standards to allow new
design possibilities, e.g.:
• CAD/CAM : Huge changes have occurred in numerous sectors based on the possibility of
Computer Aided Design (CAD) and Computer Aided Manufacturing (CAM). Engineers now
collaborate electronically working with design packages that are inter-operable or can
exchange data, drawings and digital 3D models in a standard formats. E-commerce
technology has brought further sophistication with real-time and complete corporate
collaboration from concept to raw materials procurement. This allows location-independent
design in a range of industries. A design engineer in Dublin can send drawings and
specifications to a toolmaker in Delft to make and ship something for a manufacturer in
Dresden according to a product brief from a client in Denver. A 3D-model can be machine-
built remotely from electronic communications between designer and rapid-modeling shop;
• Exchange of complex documents: Another impact is that the standards for design and
document exchange can pass seamlessly through to post-design activities of manufacturing,
maintenance and asset management. For example, in aeronautics, a Boeing 7 series aircraft
and its components give rise to approx. 49,000 pages of design drawings, leading to a range
of large maintenance manuals. That documentation is now reduced to a CD library for the
maintenance hangar and service engineers can take a CD on a portable computer to a work
site. ICT also allows real-time interaction with manufacturers’ documentation libraries,
71
Economics of Standards for Telecommunications Access”, prepared for NIST by Michael L. Marx and Jonathan
S. Katz, TASC Inc. March 1, 2001. “Conformity assessment now more important than standards” - Robert B. Toth
Page 43 of 115
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instant cross-referencing with part numbers for absolute accuracy, anywhere in the world.
This creates benefits for speed, productivity, quality control, costs and return on investment.
Rapid revisions (from accident reports, etc.) also add to safety.
3.2.9 Standards, Competitiveness and Legal Certainty

Business operates best in a stable environment, without which investment in equipment and
technology falls. Standards help to provide stability and certainty. One commentator has noted
that: “Of all standardizing systems, law is the oldest. No society is possible without a system of
rules…the fact is that (law) creates the framework and rules and thus the security in expectations,
which is the Alpha and Omega of economic growth.”72
More specifically, a DIN report confirmed that standardization reduces liability. In the event of a
product liability damages suit actually occurring:
• Manufacturers are disadvantaged if not manufacturing to a standard - if one exists - unless

superiority to the standard can be demonstrated; this is difficult to do.
• Manufacturing to a standard is not a complete defence. If it is shown that the technology
has moved on, this defence is weak, indicating a need for technically sound standards,
regularly reviewed using risk analysis
• The type of standard and its development path are relevant – good procedures, wide
participation and prestigious standards bodies (CEN, CENELEC, ETSI, etc.) are seen as
positive.
• There is more ‘case history’ in the US than in Europe: in a US case, it has been held that
industry standards can be for the benefit of industry and may therefore be a ‘lowest
common denominator’.
• A quality management system mitigates liability (where the standard is inadequate),
provided it is used properly.
• Good labeling in accordance with standards is also helpful where a hazard exists
3.2.10 Potential Negative Implications of Standards for Competitiveness

The Issue of Reducing Variety for Consumers
Variety reduction following from standards (J. Sittig, “Economically optimal standardization,”
Proceedings of the First Annual Symposium on application of mathematical methods to
standardization, Wyadwnictwa Normalizacyje, Warsaw) may involve an ‘adaptation loss’. This
is the cost to the user of paying more for an (unwanted) higher performance level, as the
alternative lower performance level (at lower cost) is not acceptable. This point was made by Jan
Webjörn, Verax, Sweden, in exchanges with ISUG, who explained that, for fasteners,
standardization lists ‘preferred sizes’. Other sizes, standard but non-preferred, are available in
theory but difficult to get in practice. For example, Bolt M7 is non-preferred. A design for which
M6 is inadequate will thus often employ M8 or specially-made bolts. M8 uses 140% more
material than M6 but M7 only 60% more. Thus standardization can increase material use.
The contrary argument is that the market will supply any product for which there is reasonable
demand, so these effects are relatively minor and infrequent.
72
“Law as a standardizing system”, S. Jørgensen, Homo oeconomicus XIV (3), Accedo Verlagsgesellschaft, 1997
Page 44 of 115
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Webjörn also argues that the existence of extensive families of standards enables engineers to
design products to satisfy essential requirements, but which may be “outmoded and expensive.”
For example, for pressure vessels, some standards cited in an ISUG workshop are in use in 2002
but are not adapted to the latest technologies.
In relation to variety reduction, a further ‘defence’ of standards is that, having supported mass
production and similar products, they have also in recent years supported so-called ‘mass
customization.’ This, in theory at least, offers consumers both choice and low cost but generally
imposes greater complexity in managing, from design to planning to inventory and production.
Companies now frequently invoke complex customization strategies ,e.g. for cars, PCs, mobile
phones, Benetton clothing, Swatch watches, even pumps.73
The ability to deliver mass customization rests on a mix of private (in-house), regional,
international and consortia standards, operating in mix-and-match approaches. Four approaches
have been identified in such strategies74:
• Part standardization uses common parts – in the case of a car, common cable-harnesses will
not cause a problem as they are not seen, nor will common platforms, but common fascias
for different models would
• Process standardization postpones customization as long as possible. It requires modularity
so that modules may be stored at intermediate stage before final ‘differentiation’ – for
example the addition of power supplies and manuals for specific markets for PCs, before
shipping
• Product standardization is variety reduction, coupled with use of the 80/20 rule in stocking,
and a willingness to ship a product which is ‘over-spec’ if necessary rather than producing
the exact requirement (e.g. supply of an over-spec chip). The losses are greatly surpassed by
the savings.
• Procurement standardization is possible where there is a wide variety of end-products across
which demand may be pooled and parts and production equipment bought accordingly, e.g.
in production of application specific integrated circuits.
Thus, modern companies function through an increasingly sophisticated and inter-related web of
standardization and standards choices, internal and external. This web is represented
diagrammatically below, and in our view, many companies are unaware of the lower, internal
portion, which may not be systematically addressed by smaller companies and SMEs in
particular.
Forward compatibility/etiquette
Internal/external visibility -
Compatibility (performance standards)

Externally Interface
Visible
Societal relationships
Horizontal
Use of standards Similarity
Measurement
ISO EN 14000
ISO EN 9000
Information
Internally Part commonality
Managed Process - modular
customization Product – variety available
Procurement
73
F.T. McCarthy, “All yours,” The Economist, 01/04/2000
74
Jayashankar M. Swaminathan, California Management Review CMR 203, University of California, April 2001
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Figure 3.10: The standards operational environment of the modern corporation

(an ISUG graphic)
3.2.11 Uneven application of Certification procedures

This is a very live issue. The uneven application of Certification procedures, particularly for ISO
9000 (it also applies to compliance certification) is damaging to the entire standardization
process. “The divergence currently observed by manufacturers and Member States between the
practices and fees of notified bodies.. can reach a ratio of 10 to 1”.75
A new Dutch study (details in annex) concludes “There appears to be a remarkable difference in
internal audit frequency, and the standards for auditing are unknown” and says that auditors even
from the same body may assess quite differently.
3.2.12 Penalties for Manufacturing to Highest Standards

Some manufacturers expressed anxiety to ISUG that European environmental requirements make
their products expensive and that a customer will either be unable to afford them or may buy a
cheaper product from an environmentally non-complying source. Some companies claimed that
standards surveillance has been weak in many European states and that even some CE-marked
products do not comply with requirements. Thus standards end up penalizing those who adhere
to them.
3.2.13 Standardization de-skills artisans and others.

Standardization is one element of modern manufacturing that has greatly reduced artisan
numbers in both manufacturing and services. Instead of people skilled in the use of their hands to
produce complex and accurate work, standardization encourages the use of machines and tools
backed by measurements and instruments – work more for the brain than for the hands. It has led
to a society that has a higher proportion of ‘skilled’ (i.e. educated) personnel than ever before.
The accompanying rise in living standards has, however, led to:
• A buoyant market for skilled hand-work

• A proportion of the population learning artisan skills for DIY and hobbies.
Also, to place this point in perspective, consider the example of hypodermic syringes. These
were invented in 1848 but were hand-made as valuable medical instruments by skilled artisans
until 1918 and cost about 57 euro each at today’s prices. By 1930, some 2 million were being
mass-produced. Now, they are one-trip or disposable and a small manufacturing facility can
make 100 million a year for under two cents each.76.
A related issue in industry associated with capital investment and standardization is the de-
skilling of machine operators. A machine produces consistent quality in a manner impossible for
a human and this has led to widespread machine adoption. The de-skilling of operators is
coupled with increased demand for the technicians who service, adjust and maintain the
machines. It creates a need for re-training for operators.
75
Alain Mayer (INRS), “Market Surveillance in Europe, the viewpoint of a notified body”, 4th
Seminar on Personal Protective Equipment in Europe, 2-5 December 1997, Kittilä – Finland.
76
Review article in “The Lancet” 08/12/2001
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The possible negative impact of standardization on major innovations is discussed in the chapter
on the impact of standards on innovation.
3.3 SECTORAL IMPACT OF STANDARDS ON COMPETITIVENESS

Eucomed, in correspondence with ISUG, advise that the Risk Analysis and Management
Standards for Medical Devices are reported to enable enterprises to become more competitive.
The fragmented nature of the market and a wish to create a worldwide industry drives the interest
in common standards, without which product costs, with very small production volumes, would
tend towards the unaffordable and restrict development of the market. The cost of common mass
produced small devices has become more competitive – the hypodermic syringe example quoted
above is an example. In the quest for cost and price reduction by volume, standards have made
market access easier.77 The heavy involvement of major standards-conscious manufacturers such
as Siemens and Philips, as well as their US and Japanese counterparts, in this sector, has
maintained an effective standardization impetus – there is however sectoral unhappiness with
certification procedures relating to ISO 9000 in particular – a demand for even application, and
one certification per product.
3.3.2 Aeronautics
A number of examples are given in the Annex. Because the sector is continually developing its
products, standardization benefits are high in cost reduction, generally the effects ratio is in
excess of 10:1, and companies in the sector are highly aware of the costs benefits. There is an
excessive number of applicable standards and the industry is active in seeking to reduce them –
the desire for only one international set of standards is very strong. In quality management, ISO
9000 is the accepted QMS basis internationally for aeronautics production – the industry version,
AS9001, was developed by the ISO Aerospace Technical Committee, the American Aerospace
Quality Group and AECMA among others. Boeing Co., GE Aircraft Engines and Rolls Royce
have accepted AS9001. It is planned to rapidly bring it line with ISO 9001:2000. Boeing has
given 3,000 of its suppliers two years to reach compliance.
Military equipment is a prime application field for standardization and NATO and the US have
specific standardization programmes, to move to civilian standards as much as possible as a cost-
cutting measure, under way. A number of impressive cost savings through standardization
examples are detailed in the Annex. Winners of the best achievement competition 2000
converted 868 government standards to consensus (civilian) standards, inactivated over 2000
Military specifications and saved $32 million.78

Professor Hesser79 confirms that the annual growth rate for variety and number of physical parts
in an organization not using standards is from 4-5% to as much as 6-7%. This is reinforced by
the Kreisel Hops- study, which found that parts stockholding averaged 40,000 in variety with the
costs of stocking a new part ranging from €50 to €10,000 each. The average increase in numbers
77
Personal communication, Richard Moore, EUCOMED
Personal communication, Victor Dorman Smith Abbott Laboratories
78
Defense Standardization Program Journal August 2001.
79
Hesser W., and Meyer R. 1993 p.352,
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of stocked parts was 3% per year. Parts database costs ranged from €2.50 to €500 each. The
average cost reduction for standardized parts was an effects ratio of 5:1. The DIN study, which
was industrially broad-based but included much Mechanical Engineering, reported an effects
ratio of 3:1. Toth 80 reports an effects ratio of up to 6:1 in US Mechanical Engineering. As in
Offshore industry – savings from standardization
• API reports steelwork fabricated to standards saved 9% by reduced welding
costs.
• Standardization of North Sea ‘christmas trees’ saved 30% of costs.
• A valve manufacturer estimated that 65% of the valves manufactured in a year
were non-standard. Customers paid premiums of 10% to 75%: the extra spend
did not add sufficient performance or safety improvements to justify the
additional cost and did not alter the performance of the valve.
• Identical-application production platforms in the North Sea have cost four times
their Gulf of Mexico counterparts. A study showed that most of the extra cost
related to different conditions, but a massive 25% could be saved by use of
standards, codes and specifications.
• NORSOK, the Norwegian offshore authority, anticipates that common industry
standards and standard practices will assist in cutting investment costs by as
much as 50% in the next five years. Additionally, it estimates there may be a
25% reduction in operating costs. (“The value of standardization,” API, 1995).
•
Shell NL advises that the petroleum industry spends about $ 20 billion on materials and
equipment per year, savings related to standardization (such as wellhead christmas-trees
in accordance with standard EN ISO 10423:2001 Petroleum and Natural Gas industries,
Drilling and Production Equipment). Wellhead and christmas tree equipment on which
Shell spend about $ 250 million per year is estimated to save at least $200 million with
standardization costs of $8 million, an ‘effort ratio’ of 25:1.
other sectors, initial standardization yields far higher effects ratios – a saving of 77:1 was
reported for a mechanically attached pipefitting standard in the US.
The offshore oil and gas industry is still developmental. Standardization has been in the hands of
the American Petroleum Institute, which is now working with ISO to produce International
standards. The main benefit to this sector lies in safety, but the financial benefits are also
substantial, as indicated in the box above.
Quality improvements : “Saab has set itself an ambitious target: it aims to become the world’s
leading luxury-car manufacturer with the help of DNV’s certification services - as part of our
total quality drive we assigned DNV to carry out our ISO 9001 certification” – Saab press
statement.
80
“Economics of Standards for Telecommunications Access”, prepared for NIST by Michael L. Marx and Jonathan
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Car reliability - maintenance and repair hours
1.5
Maintenance hours
Hours
per car
1
Repair hours percar
0.5
0
1981-2000
(DAT Veedol Report - VDA)
(an ISUG graphic)
Figure 3.11: Car Reliability
The curve above shows the reduced annual maintenance times, despite their increasing
complexity, of cars in Germany over the past 20 years (VDA).

Toth 81describes an electronics development where standardized devices were substituted,
reducing variety of semiconductors by 31%, saving $35,000 on specification and testing, with a
final saving of $595,000 for expenditure of time at a cost of $2000 – an effects ratio of 300:1.
Standardization of aircraft batteries in the US at a cost of $8.6 million yielded savings of a

staggering $289.6 million over system lifetimes. A further ‘minor’ component, the vent caps,
cost a further $0.7 million to standardize with a saving of $165 million. The total effects ratio
was 49:1.
‘JASSM’ Joint air to surface stand-off missiles were deliberately developed using standard
components as far as possible and cost 25% of comparable units, at an actual cost of $347,000
each they were 10% below target and 50% below ceiling price.
European electricity supply - a competitive reliable electric power supply is essential for any
modern country. An unusual example of standardization saving costs before they arise is that
Electricity networks in Europe would require investment in up to 10% more capacity, many
billions of Euros, if the EMC Directive is not vigorously implemented, due to the increased
harmonics arising from electronically-controlled equipment (Eurelectric). An ERA report agrees
that the EMC Directive, with associated standards, has been essential to enable continued
reliable power supply in Europe (refer to Anex for more detail).
The dramatic falls in prices of GSM telephones and penetration of over 250 million users
worldwide – two-thirds of the world’s digital mobile telephone population in over 140 countries
– is based on standardization by ETSI. Standardization of Digital Enhanced Cordless
Telecommunications (DECT) by ETSI made it the world’s most competitive solution. As a
result, there are now over 100 million DECT terminals in use in over 110 countries. RADIUS
Sweden AB, which produces a wide range of digital radio equipment, says that the revised ISO
81
“Economics of Standards for Telecommunications Access”, prepared for NIST by Michael L. Marx and Jonathan
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9000 is the best quality system ever introduced. The CEO said “We have experienced better
internal flow of work, fewer failures and greater customer satisfaction.
Military Electronic components - technology is changing at such a rate, and combined civil and
military aeronautics purchases are now such a small part of that market, that procurement is a
major problem – a military aircraft may have a service life of up to 40 years, while components
change in a year or less (civil aircraft are also in service for well over 20 years). This problem is
addressed by a special standardization group AWG (Avionics Working Group) of IEC that
operates an unusual qualification-standardization -approval programme “COTS” (Commercial
off-the-shelf) for avionics, civil and military, without which a great percentage of all the world’s
aircraft would have to be grounded! Many of the components have to be screened to operate
outside their normal design range.17
Parameter/Year 1994 1998 Improvement
Own $200,000 $327,000 63%

productivity/employee
Own quality rejection 0.9% 0.04% 22.5 times better
Supplier delivery on- 75.9% 98.8% 31%

time
Supplier quality reject 0.9% 0.08% 11.25 times better

rate
Time spent on rework 56%

and repair of C-17
Mean time between 8 times better

maintenance
A&T, manufacturer of C-17 aircraft, Balridge Quality Award prize NIST 1998 ISUG Graphic
Table 3.1: Quality and productivity improvement example
3.3.Gas Appliances & Pressure Equipment

While the impact of standardization is reported (by AFECI and other manufacturers
Organisations) as difficult to separate from other effects, it is a factor in enabling concentration
of this industry across Europe for many years, reducing significantly the numbers of players in
the field.
According to Dr. Irani of British Oxygen, the new standards (EN 1964 and 1975 Gas Cylinders)
saved 6% of the cost of cylinders.
3.3.6 Electronic Commerce

ISO 10303 (or “STEP”) is the principal standard that facilitates the exchange of CAD data.
STEP enables the exchange of product model data between different modules of their product or
the sharing of that data by different modules through the use of a common database. An example
of its successful use is the design of the Boeing 777.82 It enabled Boeing to design and build a
82
Lloyd Condra, Boeing Commercial Airplane Group and President TC 107 IEC, in correspondence with Totus Ltd.
Sept. 5th 2001.
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high quality jet in less time and for less cost than it ever had done previously. This was done by
designing without paper drawings with all the technical information represented, stored and
shared electronically. This has important competitiveness effects in efficiency, specialization and
procurement.
Buyers/customers can interface directly with the QA process systems of their

supplier/manufacturer, through standardized e-commerce technologies such as Extranets It is an
important enabler in JIT (just-in-time) procedures, leading to major recognized reductions in
inventory, now an integral part of car production. Supermarkets and large retail chains also
extensively use it.

The software engineering community interest in process standards derives from recognition that
a controlled and mature software process is essential to software quality.
Interest in developing standards on software process assessment started in 1990. The number of
assessment approaches available increased rapidly, together with their use in commercially-
sensitive areas; in parallel a positive impact of such methods in driving improvements in both
quality and productivity was widely recognized.
A number of surveys have been conducted to investigate improvement based on different

standards such as ISO/IEC 15504 (Software Process Improvement and Capability
Determination), ISO 9001 and CMM (Compatibility Maturity Model for software). Their
findings have been analyzed are tabulated below and are evidence of the success of software
process standards in driving improvements in both quality and productivity. Although the
different studies examined different parameters to evaluate the improvement, the collected data
has may be classified on the basis of the commonly recognized objectives of process
improvement, to make comparisons:
• improving software quality

• increasing productivity
• decreasing the cycle time for software development.(see references in the annex for this
section)
The table below contains general and summarized information of quality and cost related
improvements derived from these surveys, including negative side-effects where reported.
SURVEY on RELATED IDENTIFIED IMPACT/BENEFIT
STANDARD
Compatibly Maturity SW CMM ¾ better product quality
Model for software ¾ ability to keep on schedule
(CMM) Results ¾ customer satisfaction
BUT
¾ improvement often takes longer and costs more than expected
SPICE Trials Results SPICE, ¾ enables benchmarking of software process capability
ISO/IEC TR BUT
15504 ¾ improvement costs more than expected and takes more than
expected
Quality system ISO 9001, ¾ better definition and improvement of internal organization
ISO 9000-3 ¾ identification of business processes
¾ definition of best practices
¾ increases staff motivation and team cooperation
¾ limited data on quality improvement
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ESSI Projects Software best practices adoption within European organizations

Table 3.2: Quality and cost related improvements
A very positive contribution of process standards to software quality has been reported also from
the ISUG Questionnaire for software engineering. The answers, although limited in number,
confirmed that standards have a high impact on product quality improvement and result also in a
minor impact on productivity increase; this leads globally to a positive contribution of software
process standards on competitiveness.
Software standards related to product aspects are mainly concerned to ensure interoperability
between products from different suppliers, a critical market issue in many application domains.
An example of successful standard in this context is given by the IEEE 802 LAN standards:
although Personal Computers and workstations operating over local area networks are not
perfectly compatible, they would be far less compatible if not for these standards. Without the
protocol standards that have been implemented in software, it would be impossible to use a
variety of vendor hardware and operating system platforms on the same network – with
inevitable costs knock-on from reduced competition.
An example of efficiency-based cost reduction based on standardization, the UK software

company Advent has a document management product 3B2 that uses standardized SGML (ISO
8879) tagging. The auto parts company Multipart lists 2,000,000 items in a catalogue issued
monthly in eight sections to 25,000 outlets (with exploded views of assemblies, large tables,
much cross-referencing etc.). It formerly took weeks to prepare production of each issue but now
it is completed in a matter of hours, available electronically or in hard-copy.
Application of software process standards is generally recognized as an effective driver for

product quality. It is also generally accepted that the costs of poor quality and poor quality
management are much easier to identify and quantify than some of the benefits, however, being
the actual data extremely sensitive to companies’ business, it is not possible to have appropriate
benchmarks for comparison.
The TickIT Organization is responsible for a certification scheme for software companies
directly related to the requirements set out in ISO 9001 and used by 1,250 organizations, 71.6%
in United Kingdom and 13.8% in other European countries. It reports on its website
(http://www.tickit.org ): “Surveys conducted in the late 1980s indicated that, for companies
without a quality management system, the failure costs could be in the region of 20% of
turnover. These same surveys also suggested that, with the repeatability and consistency that
resulted from having a well tuned quality management system, up to 50% of these costs could be
saved.”
3.3.8 Environmental Monitoring

The impact of Standardization of Environmental Monitoring is that it enables a transparent
regime for the meeting of regulations, facilitating price comparison and benefiting competition.
It also reduces compliance costs of conforming to regulations. An application akin to the New
Approach was noted in the US by API. The US Government planned to introduce the Safety and
Environmental Management Program (SEMP) to offshore oil and gas: the API demonstrated it
could comply by use of standards (API RP 75 and RP 14J) and showed that voluntary
compliance with them would have the same result. The API claims conservatively estimated
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savings at $200 million for the first year and $20 million a year thereafter, compared to the
alternative regulatory regime.
Improved environmental performance though effective application of EN ISO 14001 has benefits
for competitiveness, in cost reductions by making compliance with environmental regulations
and requirements easier. A recent example of cost reduction is the Norwegian Government’s
announcement of reduced inspections (and thereby inspection costs) for companies with ISO
14001 or EMAS registrations. EN ISO 17025, the quality standard for environmental
monitoring, is discussed in the Environment Impact chapter.
3.3.9 Food Hygiene and Safety

A key control role for food processing companies has been given to HACCP principles based on
the FAO/WHO Codex Alimentarius Commission system to manage the processes that assure
food is safe. From the time of its wide use in many sectors internationally the ISO 9000 standard
for quality management has become significant in use by food processing companies. In fact the
annual ISO Global Report on ISO 9000 Certificates (previously compiled by Mobil Oil) shows a
very large number of companies in the food sector hold third-party ISO9000 Certificates for their
Quality Management while this not a regulatory requirement, such as in connection with New
Approach Directives for manufactured products. Elsewhere in this report this adoption of ISO
9000 is considered in relation to Quality Standards.
This popular application of ISO 9000 by Food Processors and the recognition by Codex that
“HACCP is compatible with the implementation of Quality Management Systems has lead the
ISO technical committee responsible for Agricultural Food Products – ISO/34 to develop an
interpretative standard for the implementation of quality systems in the food industry. The result
of their work has been published as ISO 15161 – Guidance on the application of ISO 9001:2000
for the food and drink industry. It is interesting to note that this standard was initially based on
the necessary guidance notes used by a major certification body (BSI Certification) required to
audit food companies which had applied for third-party audit and certification. Its publication
now ensures that there is a consistent approach to quality management by food processors and
the bodies auditing them. It is assumed that all parties involved in QMS in food processing will
in future use ISO15161 as a reference. At the request of the food sector, its introduction has been
planned to coincide with the new edition of the original standard as ISO 9001:2000
The new ISO 15161 is not a HACCP standard but it is intended to provide a clear management
system that supports HACCP controls for an effective food safety system under the recognized
framework of an ISO 9000 Quality Management System.
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IMPACT ON INNOVATION
4. Impact on Innovation
The Lego brick – standard, yet innovative

Nothing could be more standard than the Lego brick. How could it be innovative? Yet Lego
has inspired millions of children and adults to imagine and make countless models, to the
extent that 52 bricks have been sold for every one of the six billion people on the planet. Lego
was voted Toy of the 20th Century and is Europe’s largest toy maker employing 8,000. Among
the many websites for Lego there is a ‘Mindsets Community’ for inventors
4.1 INTRODUCTION
4.1.1 Definitions and Concepts

Innovation offers the possibility of increased organizational performance and profitability,
through increased margins or market share from new products/services and licence and royalty
income from further exploitation. According to OECD/EC83, there are three kinds of innovation.
The first is “implementation/commercialization of a product with improved performance
characteristics (that) delivers objectively new or improved services to the consumer.” The others
are process and organizational innovation, which can be linked. Process innovation (says the
OECD/EC) is “implementation or adoption of new or significantly improved production or
delivery methods. It may involve changes in equipment, human resources, working methods or a
combination of these.” Examples would include new management techniques (e.g. TQM),
organizational structures and strategic orientations.
Products INNOVATION
Processes
Invention
alone is not Organizational change
innovation
ISUG graphic
Figure 4.1: Innovation and Invention
Innovation is a core economic concept in that new products and processes drive economic
growth. The main 20th century economic thinker on innovation was Schumpeter, who
distinguished between invention, innovation and the diffusion of innovation. In a summary of
83
“The measurement of scientific and technological activities: proposed guidelines for collecting and interpreting
technological innovation data,” Oslo Manual, OECD/EC
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Schumpeter’s contribution, the New Palgrave Dictionary of Economics84 says that “invention is
generally a novel idea, sketch or model for a new or improved product, process or system. It
need not necessarily imply any empirical test of feasibility or prototype experience but …
usually does convey the first belief that something should work and often the first rough test that
it will in fact work … There is an enormous distinction between invention and innovation.
Schumpeter used ‘innovation’ to connote the introduction of a new product, process, method or
system into the economy. … there is many a slip between cup and lip in development of an
invention to the point of commercial introduction. Problems in scaling up from laboratory scale
to works level lead to the demise of many apparently sound ideas.” Put differently by Ed Roberts
of MIT, “Invention + exploitation = innovation.” Innovation therefore involves a vital element of
management, unlike invention alone.
Invention is often synonymous with patenting, and most patents and inventions are never
commercialized and thus never become innovations: of those that are commercialised, frequently
it is not the inventor who does so (e.g. the electronic watch, invented in Switzerland, was
commercialized independently by Seiko of Japan). So innovation is more than invention, and it
is also broader than New Product Development as it adds new customer benefit, i.e. it is not just
a line extension.
Shumpeter's other distinction was between innovation and its diffusion, which leads to the
benefits of the innovation being exploited. The New Palgrave states: “Although almost all
economists would agree that diffusion of innovations … is crucial for productivity gains … they
would also agree … that the product or process being diffused is itself usually subject to further
change during the diffusion process.”
As regards concepts, the classic innovation life cycle is an S-shaped logistic curve with three
distinct phases: emergence (development of product or service, manufacturing capabilities and
place in the market), growth (when the product family pervades the market) and maturity
(market saturation and slower growth).85 Maidique discusses “five stages of the Innovation
Process – Recognition, Invention, Development, Implementation and Diffusion.”86
Baumol asked why firms innovate and argued that firms will not risk too much innovation,
because it is costly and can become obsolete. So mechanisms exist to reduce risk such as the sale
of technology licenses and participation in technology-sharing compacts. Such approaches
further benefit the wider economy and have made innovation a routine feature of economic life.
87
4.1.2 Methodology
Literature searches formed the initial backbone. Because of its topicality (market growth, venture
capital interest, the dot.com phenomenon, the Microsoft case etc.), much has been written on
innovation, including on innovation and standardization, reflecting the perceived importance of
their relationship. This work is at theoretical and case history levels. There is little direct
84
“The New Palgrave: A dictionary of economics (1987)”, edited by John Eatwell, Murray Milgate, Peter Newman,
Stockton Press, New York .
85
William G. Howard, Jr. and Bruce R. Guile. 1992, “Profiting from Innovation”, New York, NY: The Free Press,
p.12.
86
Modesto A. Maidique, “Entrepreneurs, Champions and Technological Innovation”, Sloan Management Review,
Winter 1980
87
“The Free-Market Innovation Machine: Analyzing the Growth Miracle of Capitalism”, William J. Baumol
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econometric evidence, although some broader econometric work informed the chapter88.
However, we found this the topic that most engaged industry players, large and small, in
personal contact and the ISUG workshop and review meetings.
The diagram below shows standards as one element in the innovation process, along with others
such as the regulatory environment, R&D and other factors.
Challenges,
Opportunities
R&D Standardization
Regulation
Innovation
Other
actions
Objectives
(AndréPirlet, CEN)
Figure 4.2: Factors in Standardization
4.2 OVERALL IMPACT OF STANDARDS ON INNOVATION
4.2.1 Tension between Standardization and Innovation

At first glance, if innovation creates new products and markets, and standardization harmonizes
markets, a harmonious relationship appears “counter-intuitive”89. This view has some support:
“The value added by having a standard - a concept that implies stability - in a fast moving area is
questionable. Standards (international ones in particular) limit companies' freedom”.90 However,
the evidence shows that the innovation-standardization relationship can also be close, dynamic
and productive, with standardization playing different roles (positive or negative) at different
stages of an innovation.
4.2.2 Standardization and Network Industries

Innovation in the ICT sector (Information Communications and Telecommunications) sector is
of interest given the sector's size and influence. The sector largely operates outside the traditional
standardization paradigm, with some 90% of standardization undertaken outside established
88
“Globalization and E-Commerce: Environment and Policy in Germany”, Prof. Dr. Wolfgang Koenig, Prof. Dr.
Rolf Wigand, Dipl.-Volkswirt Roman Beck, February 2002, CRITO at UCal, Irvine.
89
Hawkins, Professor Richard, TNO, comments at ISUG review meetings
90
Conti, Tito, “World View: How to find the correct balance between standardization and differentiation”, Quality
Progress, Vol. 34, No. 4, APRIL 2001, pp. 119-121
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standardization organizations or SDOs.91 As discussed in the trade impact chapter, much ICT is
in or part of network industries. This makes them similar to some traditional industries (e.g.
railways, telephone and telegraph nets, water and sewerage systems, electricity systems): “A
station, track and rolling stock are of no use unless they are connected to other stations. The
more stations that are connected, the more valuable the railroad becomes to its owners and the
consumers located along its path”.92 Similarly, consumers of computers and software, cellular
phones, faxes and Internet services have more valuable products as their use by others increases.
These “network externalities”, and other properties of networks such as tipping, path-
dependency and stranding, particularly account for the influence of standardization in
innovation, particularly if coupled with possible IPR and patents.
Innovation Network externalities IPR/patent

opportunities Company invests in
consortium standardization
Figure 4.3: Powerful drivers for standardization when a company sees this combination
– an ISUG graphic
“Because of the strong positive-feedback elements, systems markets are especially prone to
‘tipping’”.93 Tipping is where consumers gravitate to the apparent winner in a conflict between
competing standards: one system is perceived to gain the edge over its rivals, and starts to pull
away in market share. The action can be rapid and disproportionate to actual changes.
Consumers ‘tip’ partly to avoid the risk of becoming stranded with a product whose technology
becomes obsolescent.
Perceived C2
C1 C2 C1
– an ISUG graphic
Figure 4.4: Perception of a slight gain for Company 2 (C2) over Company 1, tips the balance decisively.
Path dependence is where initial actions, perhaps insignificant ones, place a consumer in a place
that cannot be left without ‘switching cost’ (in the extreme, the consumer is ‘locked-in’, as the
cost of change is prohibitive). According to David94, the standard "QWERTY" keyboard
arrangement is dramatically inferior to an arrangement offered by August Dvorak, but we are
91
Carl Cargill, Corporate Director of Standards, Sun Microsystems, in discussion with ISUG
92
Balto, David A., “Standard setting in the 21st century network economy”, The Computer and Internet Lawyer,
Volume 18, No. 6, June 2001
93
Katz, Michael and Carl Shapiro, (1994), "Systems Competition and Network Effects," Journal of Economic
Perspectives, vol. 8, no. 2, pp. 93-115
94
David, Paul. A. 1985. "Clio and the Economics of QWERTY", 75 American Economic Review, 332-7 (May)
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locked into the inferior arrangement by switching cost. The timing of the adoption of QWERTY,
whereby it rapidly established a network of users, and not its efficiency, explains its survival.
Egyedi95 develops on the work of Mulgan96 to stress that standardization built into a “gateway
technology” (a technology that plays a pivotal role in a system) can aid flexibility. By making
subsystems extendable and exchangeable, gateways introduce flexibility. The OSI standard is a
well known gateway, designed to solve the problem of system entrenchment and interoperability
in a flexible way.
In summary, with Network Externalities, companies see a dynamic marketplace with

characteristics that make the rewards for success high. As standards influence network
externalities, they are important to companies. Standards help create networks but also to protect
them, so standardization can be both good and bad for innovation. The next sub-section
discusses this paradox and its characteristics at the commencement, development and
commercialization stages of innovation.
4.1.3 Standardization and the Stages of Innovation

COMMENCEMENT
At commencement, use of standardized products and systems reduces costs, saves time and
assures quality. Standardized parts and modules, with proven quality-assured performance,
enable the pre- and early-market stages to proceed faster and at a lower cost. Small or moderate
(“adaptive”) innovation benefits most from using standardized inputs: mould-breaking
(fundamental”) innovations are less likely to use standardized components.
Development
In development, standardization can damage innovation, perhaps fatally, by:
• choosing an inefficient technology out of competing alternatives, or
• ‘freezing’ a technology in a premature embodiment, before it blossoms and reaches its
potential.
With moderate innovation, development parameters are reasonably clear, so the risk of early
standardization is low. Conversely, major innovation is going where standards may not have
been before and there may be a variety of possible technical paths. In this case, early
standardization may kill, or at least restrict, an innovation. Conscious of these risks, company
decisions on standardizing must assess resources vis a vis the market and competitors, and the
ability to go it alone with proprietary standards for a perhaps protracted period. Examples of
development conflicts between competing standards and technologies in development include
VHS/Betamax and Open Systems Interconnection (OSI) versus Internet standards series.
Major innovations, involving major change and scrapping of existing solutions, face an immense
uphill battle against an installed base and established standards. Development of standards for
the innovation may try to reassure potential purchasers and backers, perhaps through
participation by other firms. Apart from providing extra resources, this builds confidence that the
innovation will not be monopolistic or lock-in. It also promises more applications and
implementations – expanding the network.
95
Egyedi, Tineke M., “Standards and systems flexibility: Gateway perspective on XML and the ISO container
96
Mulgan, G.J., “Communication and control: networks and the new economies of communication”, Guilford Press,
NY 1990.
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Standardization and expected conformity assessment requirements should be firmly on the

agenda during development. This means that when technical and market testing is complete, a
product or service is less likely to require re-engineering for safety, environmental or other
reasons. Time-to-market is usually vital and regard for standardization at this stage can greatly
reduce it.
Ways to minimize risk in high-tech standardization include:

• Ensure Information and Test standards are agreed as priority
• Develop horizontal standards insofar as practicable
• Use risk assessment where relevant
• Keep future compliance issues in consideration during the development
• Use already-standardized components and systems where practicable
“Just think of ‘IT’. Without the definition of interfaces there would be no networks
and without protocol agreements there would be no worldwide digital
communication. The fact that the INTERNET exists can be attributed to global
consensus on protocols. Without this, the Internet would be a digital Babylon”
(Dietmar Harting, Harting KGaA, at DIN/IFAN Conference Berlin 2001)
Commercialization
When an innovation has gone through product development to commercialization, standards
will:
• Assure customers that the technology is serious. They assure the consumer of the possibility
of other suppliers and convey reliability, solidity and continuity.
• enable add-ons, extensions, further applications, interfaces etc. which can increase the size,
depth and attractiveness of the market
• permit more than one company to supply the product, process or service. Customers can be
nervous of sole suppliers. Competition also pushes costs down, further increasing customer
demand.
Evidence that manufacturers want standards to help market their products arises frequently. For
instance, at present leading players in the Micro Combined Heat & Power, Fuel Cells and
Natural Gas Vehicle tests markets are requesting standardization from CEN and CENELEC.
“The widespread adoption of a standard provides customers with confidence in the long-term
support for the standardized product by many different companies. This makes customers more
willing to buy and hastens the adoption of the technology”.97 One company commented: “Proper
standards can coalesce a market, which is another facet of my job – to persuade the market to
coalesce around standards we champion. It’s a market builder. The idea is to work together even
with competitors to create a market, then compete to get market share in the new market. I’ve
heard this called “co-opetition.”98
Quality systems standards also play an important role in commercialization of innovations. For
companies seeking a short time-to-market, involvement and liaison with quality systems
facilitate market introduction and reduce the chance of early versions of products getting a bad
reputation. Quality Management systems also facilitate cost-reduction and help track problems in
early days.
97
Standards Make Wireless Work”, Roger B. Marks, Applied Microwave & Wireless, February, 1999, pp. 101-102
98
Carl Cargill, “SUN Software” feature story, “Up close with Carl Cargill, Director of Corporate Standards, Sun
Microsystems” - interview with Peter Trapasso.
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Existing standardization may be an obstacle to innovations being commercialized. It may support

moderate innovations but hinder major ones. The installed base is likely to be a positive factor
for the former, but could form a major obstacle for the latter. Proprietary Standardization offers
High Reward at High Risk, but generally could only be contemplated by companies with
dominant international positions. Group, consortium and Standards Developing Organisations
will average the returns on investment by removing very-high-returns possibilities and reducing
the possibility of failure. These are the only options for most companies.
In both scenarios, standardization is likely to increase customer confidence and support success
in the marketplace. In the cooperative scenario, companies regard participation in standardization
as a learning process and indeed it is a form of technology transfer for SMEs in particular.
Indeed, one UK survey showed that most manufacturers saw product standards providing them
with more technology transfer and innovation than either universities or consultants99.
An example of consortium standards between a small number of players occurred with CD-
ROMs. When CDs were developed, there were four key players: those that owned the disk
technology (Phillips and Sony), those who wanted to use the new medium (IBM) and those that
could heavily influence diffusion (Microsoft). Moving swiftly, these prime movers held a
conference in California and produced the ‘High Sierra Standards for Compact Disks Read Only
Memory.’ It then became evident that wider acceptance needed the imprint of a Standards
Development Organization. The CD-ROM standard became ISO 9660.
The way in which standards can help or a lack of standards hinder commercialization, is shown
below. Of course, ‘non-standards’ can become the de facto standard in some cases (if inherently
better product is backed by a very large, perhaps market-dominant, company). – To be more
precise “We should instead speak of 'de facto compatibility' to emphasize the relevance of the
outcome. For compatibility is a consequence of a commercially successful product development
trajectory - which may include compatibility aims - rather than the outcome of a proprietary or
multi-party standards trajectory”.100
Speed of Conformity Testing, and Time-to-market

When technology is moving quickly, medium-quality quick standardization (or
agreement that a product conforms to the standards) beats excellent but slow. For
example, the rapid progress of technology in terminal telecoms equipment means
even short delays significantly cut a product's shelf-life. The US industry estimates
that the 3,000 products registered annually under US FCC Part 68 experience, on
average, a four-week delay in market introduction. The aggregate cost of delays is
approx. $100 million per year. If domestic manufacturers do not have this delay, they
gain a competitive advantage by getting products to market earlier.
99
Standards and Innovation, some empirical results”, Ray Lambert, Technology, Economics and Statistics, DTI,
UK
100
Egyedi, Tineke M., “Strategies for De facto Compatibility: Standardization, Proprietary and Open Source
approaches to Java, Delft University of Technology, forthcoming in Knowledge, Technology and Policy, 2002
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Figure 4.5: How standardization assists in market entry of an innovation

Standardized Non-standardized
Increased customer confidence Customer nervous
Greater sales Almost no sales
More competition Higher costs
Lower prices and costs Fewer sales
Market blossoms Market dies
A ‘virtuous circle’ A ‘vicious circle’

An ISUG graphic
Balto (above) says: “Consumer expectations are critical to the success of networks, either
existing or emerging. Consumers fear investing in a network and becoming stranded because
there is insufficient consumer acceptance. Standards alleviate those concerns, by assuring
consumers that the network technology will be adopted…interoperability is a core function of
most IT products: network products (e.g. modems and cellular phones) are heavily dependent on
interoperability standards (which) play a critical role in overcoming the concerns of stranding
and the expectations of those producing complimentary products”.
Innovation is not always predictable

An article in Popular Mechanics magazine in 1949 stated, "Computers in the
future may weigh no more than 1.5 tons."
In 1981, Bill Gates said, "640K ought to be enough for anybody."
"I think there is a world market for maybe five computers." - Thomas Watson,
chairman of IBM, 1943
"If I had thought about it, I wouldn't have done the experiment. The literature was
full of examples that said you can't do this." - Spencer Silver on the work that led
to the unique adhesives for 3-M "Post-It" Notepads.
"Who the hell wants to hear actors talk?"- H M Warner Warner Brothers 1927
4.2.4 General Impact of Standardization on Innovation

The above sections indicate the importance to a company of having the correct relationship
between innovation and standardization. An innovation, properly exploited, may lift it hugely or
lead to its demise if mishandled. Returns on successful innovations are greater than average101.
Each company must evaluate the risks and rewards of innovation and whether to follow existing
standards or develop new ones.
The participation by so many companies worldwide in so many thousands of new ICT standards
is conclusive evidence that standardization is vital for innovation.
101
Allen, R.H. and R.D. Sriram, “The Role of Standards in Innovation,” Technological
Forecasting and Social Change, Vol. 64, pp 171-181, 2000.
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An interesting finding in a UK survey102 is that companies which are innovators use standards
more, as shown below.
Use of standards ('yes') and innovation activity
80
70
60 Yes
50
40
No
30
20
10
0
Non- Follower Novel
innovators innovators innovators
Figure 4.6: Use of standards by Innovators

an ISUG graphic
Of 2,342 respondents in industry and services in this UK study, only 49 (2.1%) felt that
standards or regulations had seriously delayed their innovation. 26.5% felt that Health and Safety
-and 20.4% that Environmental – standards and regulations gave them information that helped
their innovation.
Other evidence on the benefits of standardization for innovation comes from a DIN study, where
67 % of the respondents stated that a lack of standards hindered innovation, and respondents felt
that participation had a medium i.e. reasonably strong benefit for their technical development103.
A change in policy from proprietary to open standards
According to Dr. Sheldon Buckler, VP of Polaroid, while that company enjoyed a sole position in
instant photography thanks to Dr. Land’s patented camera, Dr. Land would have told you that
“standardization is to innovation as fleas are to a dog” – but later, when its products needed to
interface with PC’s, scanners and printers, Polaroid invested heavily in standardization via a ten-
step Strategic Standardization Management programme. Polaroid is now proud of its
participation in standardization – ‘as a result of Polaroid activity, a critically important working
group on electronic imaging was established’ and has coined the term to ‘operationalise’ – to
ensure that standardization is considered at every stage of product development.
“For developing countries, the international standard is sometimes an irreplaceable support of
technology transfer.”104 Another study suggested about 14% of the members of Technical
Committees were there to ‘gain technical and commercial intelligence.105
4.2.5 Innovation and the Timing of Standards

The above gives rise to a number of dilemmas of timing for companies and governments. For the
company, there is the dilemma of when to stop inventing and trying out variations and when to
move on into standardization. If this occurs too soon, the technology can be stunted and may not
develop. If left too late, others may have started the standardization process, gained allies and
102
Lambert, Ray, "CIS" 1997 community innovation survey, DTI, UK
103
DIN Report see earlier footnote for full details
104
Standards: “Today’s Trade Barriers Are Tomorrow’s Global Markets”: Andrew Grebe, PhD
105
“Some Aspects of the Economics of Standardization - What a Non-Economist Might Find Interesting”, Kai
Jakobs, Computer Science Department, Informatik IV, Technical University of Aachen, Germany
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seized the high ground in the market, i.e. the network (market) may have passed you by. This
dilemma has been represented as shown in the diagram below but arises from the fact that the
shape of the curves can only be known with the benefit of hindsight.106
A recent study on timing says that “when there are network externalities, consumers adopt
conventional technologies too early; the waiting option for a newly emerging technology is not
exercised enough…. the producer of a new technology can partially overcome the problem of too
little waiting by using licensing as a commitment device”.107 The consumer is expected to be
persuaded to wait further by news of the technology being licenced with less risk of stranding
etc.
106
Clarke, D., “The timing dilemma - when to standardize in Innovation”, MIT
107
Choi, Jay Pil and Marcel Thum, (1996), "Market Structure and the Timing of Technology Adoption with
Network Externalities," European Economic Review 42 (1998), pp. 225-244
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4.2.6 Using Standards in Managing Innovation

It may be of use to the innovation manager to have a clear view of the type of innovation and the
standardization required. Combining the stages of development as outlined by Howard and Maidique (as
referenced previously), we can graphically depict the standardization contribution in the stages. This may
be either positive or negative, as mentioned before, so we place positive effects above the line, and
negative below. We assume two quite different conditions – (a) Adaptive (moderate), and (b)
Fundamental or mould-breaking innovation, as the effects also vary according to that parameter. Note:
the sizes of the boxes indicate the relative strength of the standardization role.
STAGE
Recognition/ Development/ Diffusion

Invention Implementation
(a) Adaptive innovation

Installed base
gives a great kick-
Standard start in the market
solutions Existing standards
enable a cheaper New standards are reassuring to
and faster start not much needed buyers
The risk standardization

may be too early is small
(b) Fundamental innovation New standards

essential to give
assurance to
Standard solutions consumers
of limited use
The risk that standardization Exist standards are

could be done too early is difficult to displace
considerable
Installed base of
networked products
is a major obstacle
as it is threatened
with immediate
obsolescence
An ISUG graphic
Figure 4.7: Using Standards to manage innovation
(We have used the standard colours for positive and neutral/negative in low-voltage electricity
for positive and negative above). Note that, for adaptive innovation, the sum of the positives is
far greater than the negatives. For fundamental innovation, the converse is the case. The
diagrams above may also be related to the product lifecycle, a concept linked to some of the
earlier discussion in this chapter. Specifically, early parts of the cycle coincide with low
volumes, high prices and multiple technology solutions. By contrast, mature parts of the cycle
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see high volumes, low prices, agreed technology solutions through standardization and increased
competition.
4.2.7 Other standards and innovation issues
Besides those already discussed, a number of further issues arise:

Intellectual Property Rights
Companies value their IPR highly and these can be compromised by working with others in
standardization. Participating, allowing a standard to develop around a technology that is or may
be proprietary to you, can lead to problems down the line. Examples are the experiences of
Qualcomm/ETSI in mobile telephones development and of Dell with the FTC.108 109 Clear
understanding and agreement before participation is essential. The ability to obtain patents on
software also raises potential problems. In fact, many commentators argue that the patents
system is no longer capable of fulfilling its mandate and a major overhaul is needed. (So many
major companies are now filing patent applications – some file hundreds each week – that the
patent examination process around the world has broken down. Patents have always favoured
those with deep pockets, but the relative breakdown in the patents system means now more than
ever that costly litigation to resolve disputes will be used to test unsearched or unexamined
patents, and that will ensure that the SME or individual will be largely forced out of the patent
system).
Instead of negotiating a royalty rate for IPR (and no-one finds it easy to set ‘reasonable’ terms as
suggested for such IPR/standardization conflicts), Cargill (above) suggests that, particularly for
smaller companies, an exclusive “time-window”, whether it be a year, or six months, may be
more appropriate. Balto and Prywes110 request that it is important that the Federal Trade
Commission formalize rules on the management of IPR issues in and the resolution of disputes
in standardization, and put forward some suggestions of their own.
Participation in Standardization
Companies need standards that provide sufficient guidance to ensure compatibility etc. and allow
for technology transfer. However, standards that not only state what performance is required, but
prescribe how it should be attained (specifying materials etc.) can inhibit innovation. In past
years, limited and narrow industry participation permitted the writing of such standards. An
example was a standard for water treatment, where the technical committee was staffed solely by
experts from mechanical treatment companies. So, possible chemical or electro treatments were
only considered when the National Standards body spotted the deficiency and widened
membership of the committee. Otherwise a range of technologies, innovative at the time, would
have been excluded. 111 In an example from the construction industry, wall ties for double-leaf
walls formerly included dimensioned drawings of the ties with material specifications of
galvanized mild steel material. Now they are written in performance terms and different designs
and materials have emerged (mild steel -wire, straps, round bar: Stainless steel ditto, and various
polypropylene plastic mouldings, giving a range of options in performance and price.
108
FTC Consent Agreement with Dell Computer Corporation) (GTW Associates)
109
110
“Standard-Setting Disputes: The Need for FTC Guidelines”, David A. Balto (White & Case) and Daniel I.
Prywes (Pepper Hamilton LLP)
111
Source: Peter Bonner, former Standards Director of BSI, in discussion with ISUG.
Box 1
:OECD Working Party on Standards as Trade Barriers April 2001 or “Standardization and Innovation” Kai
Jakobs, Rob Procter Robin Williams, University of Edinburgh
Box 2
: 2000 Biennial Regulatory Review of Part 68 of the Commission’s Rules and Regulations, FCC 00-400,
USFCC. An Assessment of the Costs for International Trade in Meeting Regulatory Requirements, TD/TC/WP (99)
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It has been taken for granted for many years that the NSB’s (National Standards Bodies) and
other traditional standards development organizations (SDOs) would involve all relevant
manufacturers, designers and users, in the standardization process, and they have taken and
continue to take this remit very seriously. The more recent participation of consumer
organizations ensures, as has in fact happened for instance, that proper account is taken of the
risk of high-temperature surfaces of domestic appliances, and that they ensure that the interests
of children, elderly and infirm persons are taken into account. The Trades Unions in turn have
their own expert representation in standards committees whenever health and safety issues arise.
Consortia and Standardization outside SDOs
When it comes to innovation, and in particular to information technology products, wide or
inclusive representation may neither be sought nor desired. In particular, single companies may
try to establish de facto standards for proprietary systems. This is rare. Groups of “like-minded
companies” (generally termed “consortia”) frequently form to pursue particular standardization
goals: in fact, in IT, they are about ten times more common than traditional standardization
solutions (Cargill). There is nothing wrong with this – in fact any one of the different standards-
development procedures may be best for consumer welfare in a specific instance. “In high
technology industries, standards set by consensus may be obsolete before they are
implemented…Open standardization procedures may lessen efficiency because of the need for
consensus among competitors, some of whom may have competing proprietary technologies ...(it
is not possible to) determine on an a priori basis whether social welfare will be maximized by an
open or a closed standard” (Balto).
In another paper, Balto argues that “over-inclusiveness may pose more significant competitive
problems than exclusion”. 112 (This would seem heretical in some traditional standardization
circles.) However, another report makes a good case that open standards are best, pointing out
“while one cannot be sure that open standards increase competition in the short run, they do
provide long run insurance that market development will not falter as a consequence of mistakes
made by the dominant firm.113 The trend towards consortia for IT standardization is not, as SDOs
and NSBs often think, only a matter of speed, although this is important. Having the right group
(and a smaller group may be more efficient than a larger one) with shared, clear objectives is the
key requirement.
Timing, and time-to-market, are different aspects of standardization decisions which have a
bearing on the choice or not of the consortium approach. A consortium is likely to work
comfortably with rapidly evolving standards from the early stages of an innovation, whereas the
normal SDO’s are used to dealing with a more mature situation. Consortia will be very
responsive to time-to-market, given their overriding commercial imperative. Swann114 however
argues for some balance: "What looks like excess inertia on the part of standards institutions, or
excess caution on the part of consumers, can arguably be seen as excess haste on the part of the
supply side. … This may not offer much comfort to hard pressed companies who can see no way
of reducing the pressure to innovate when it is excessive, but it is something that governments
should bear in mind".
112
“Access demands to payment systems joint-ventures”, Harvard Journal of Lawand Public Policy 624, pp 660-661
(1995)
113
“Future Bottlenecks in the Information Society”, Report to the European Parliament, Institute for Prospective
Technological Studies, June 2001
114
Swann GMP, The Economics of Standardization, Final Report for the Department of Trade and Industry,
December 2000
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Consortia and related issues are further considered in “A discussion of the Merits of the
Different Kinds of Standards Development” in this study.
4.3 SECTORAL IMPACT OF STANDARDS ON INNOVATION
NOTE: Because of their importance in innovation in a number of sectors, a number of new ICT
consortia are mentioned below and detailed in the Annex, indicating the way they address their
membership and objectives. These are standardized innovations that will have major impacts
within a few years.
Is innovation predictable?
An article in Popular Mechanics magazine in 1949 stated, "Computers in the
future may weigh no more than 1.5 tons."
In 1981, Bill Gates said, "640K ought to be enough for anybody."
"I think there is a world market for maybe five computers." - Thomas Watson,
chairman of IBM, 1943
"If I had thought about it, I wouldn't have done the experiment. The literature was
full of examples that said you can't do this." - Spencer Silver on the work that led
to the unique adhesives for 3-M "Post-It" Notepads.
"Who the hell wants to hear actors talk?"- H.M. Warner, Warner Brothers, 1927.

This sector has a high 9% of turnover spent on R & D. Internationally, R&D spending by
medical technology companies has grown from 5.4% in 1990 to 12.9% in 1998.115 The various
Medical Device directives has led to use of broad horizontal standards on issues such as risk
assessment, analysis and management with supporting standards on sterilization (again with
broad application) and standards for broad categories of devices with only a small number of
vertical standards for specific devices. This procedure, followed because of their observed
success for the Machinery Directive, has ensured that innovation is not impeded.
Conformity to risk analysis and management standards is all that may be necessary for
compliance with requirements of the directives. EUCOMED, the industry association, rated the
impact of standardization in its sector at a very positive +3 to +4 on a scale of –5 to +5.
4.3.2 Aeronautics
Most innovation in the sector is performance-improving, and standards and/or patents do not
appear to have restricted development. Performance in previous years related mainly to speed but
now economy of operation and environmental considerations come first. There is relative
cooperation even between competitors in achieving common technical goals, such as
international standardization, on the basis that it expands the industry. Technologies currently in
focus may offer breakthrough possibilities and standardization is unlikely to be an obstacle –
rather it can be expected to be an aid to cost reduction. These would include material composites,
engine technologies for economical performance and the environment (pollution, noise),
communications and navigation, control – fly-by-wire, and alternative propulsion technologies
such as supersonic, ramjet, etc.
115
Research and Development in Medical Technology: The Levin Group Report No. 1
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As mentioned above, present-day standards in this area are ‘similarity’ or performance standards
that do not restrict innovation. In the emerging widespread adoption of embedded chips and new
sensors across this sector, standardization issues will increasingly relate to software and systems.
An enormous change in communications technology over the next few years will revolutionize
the way manufacturing industry operates. The Internet will allow more choice of software
application components to interact with mission-critical applications. Most of the technology is
in place, but interface standards have yet to be defined. Industry must push for these standards –
or run the risk of being caught up in yet another cycle of costly proprietary solutions.116
STEP At the 2000 UK Process Industry IT Strategy Conference, organised by IChemE and
PRIMA, several speakers referred to the success of IT in many service and manufacturing
industries and contrasted this with the failure of billions of dollars of IT investment over 10 years
to deliver such benefits to the process industries.117 Following on the earlier successes of CAD
(Computer Aided Design), CAM (Computer Aided Manufacture) and FAE (Finite Element
Analysis), there were many incompatible systems hindering wider exchanges. ISO-10303
“Standard for Exchange of Product Model Data”, the STEP project, was backed by leading
engineering companies, to standardize on the meanings of engineering data among objectives.
Boeing ‘bet its shirt’ on it, using it in its design of the 777 with hundreds of subcontractors, even
before the standard was finalized (Allen and Sriram above).
Further detail of major developments planed for STEP are detailed in the Anex.
Automotive "Standards make it possible for more creativity, because you can avoid having to re-
engineer good solutions that already exist," said Keith Termaat, SSB board member of the
USCar standardization consortium for the US automobile industry, and Ford strategic
standardization manager.118 “Standardization gets rid of differences that don't represent added
value".
In the Annex we give details of two major automotive ICT innovation standardization consortia,
- “Flex-ray” for broadband controls, and “Safe-by-wire” for auto safety elements. The
ICT/electrical content of the average car is now well over 30% and will continue to rise, based
on these new developments. Another major innovation, not pursued here, that is gathering
momentum is conversion to 42Volt electrics in the car – becoming essential for economic
reasons as the amount of sensors etc. proliferate, but raising some safety concerns at the same
time.

New standardization will open new markets for this sector. For example, wireless
communications standards for local networks is an issue for applications such as “Domotics” –
household automation - there is a current attempt to unify the possible technologies through an
appropriate standard, AIAP. Future implementation of this standard will take advantage of
existing standard protocols for networking environments, such as Microsoft's Universal Plug and
116
From The Engineer, (UK) 27 February 1997
117
Process Engineering, 01 June 1997
118
USCar Newsletter, Fall, 2001
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Play and Sun's Jinni, and existing wireless communication technologies such as 802.11b and
Bluetooth.119 120 This is detailed in the Annex.
Fieldbus industrial automation systems is another area with conflicting standards vying for
implementation and thereby hindering market development. Efforts to expand the industry so
that engineering and manufacturing companies could automate using the latest technology, have
failed so far due to competing technologies. Now there are calls to abandon the proposed
international fieldbus standard IEC 61158 in accordance with IEC 1131-1 and to start from
scratch. Efforts to date have included MAP, Ethernet and RS485 as well as InterBus, Echelon
and Profibus, and have been hampered by IPR issues. “What a sad future for this single IEC
fieldbus solution after 14 years of effort”.121 122 We attach some detail in the Annex of this
situation, and a new standard OMAC which may help resolve it.

As the market for gas appliances has matured, and gas appliances have a long life, new entrants
and existing appliance manufactures find it necessary to produce innovative variations and
developments for existing appliance types. European standards assist this process by defining the
requirements for certification by the notified bodies123. However, innovation is frustrated for
some pressure equipment for lack of European and international standards and over-reliance on
oil industry and ASME codes. This is aggravated by differing national certification
requirements.124

SALT (detailed in the Annex). Leading companies Cisco Systems, Comverse, Intel, Microsoft,
Philips Speech Processing and SpeechWorks are preparing a data exchange standard, the OPC
DX standard. In a link that is continuous through SGML, Speech Application Language Tags
(SALT) will extend existing markup languages such as HTML, xHTML and XM. This is an
open industry initiative, which will extend XML into voice applications, with major backers. As
an open industry initiative, the SALT Forum will promote the specification and share intellectual
property to develop it. It is hoped to submit SALT to a standards body by mid 2002
A secure Internet payments system (‘Liberty’), led by Sun, is planned to rival Microsoft’s
Standards in Innovation
‘standards provide stability to an emerging industry…are also change agents – accommodate
change in an orderly fashion that allows and encourages industry to implement advances in
technology’
‘standards today often precede the products and services…users demand standards to assure
interconnectability before they will purchase new systems’
(“Industry standards – a key factor for market success, Henry Lime”, AMP, “Standards and
Competitiveness – reports from nine multinational corporations on their use of standards as a
strategic and competitive tool” – ASTM 1998)
119
ibid.
120
From E4: Engineering, 30 July 2001, in Electrical & Electronics
121
From: Design Engineering, 01 November 1998 Added: 15 January 2000
122
ibid.
123
Industry press reports and AFECI
124
Jan Webjoern of VERAX, in correspondence with ISUG
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‘Passport authentication’ service. Over 2000 companies applied to join the Liberty
standardization consortium within 1 month of its announcement, and Microsoft has now
announced that it hopes to make its Passport compatible with Liberty!

A number of successes and failures in software standardization are shown below.
Origin of standard Successful Unsuccessful

Proprietary DOS125 Macintosh
Consortium IEEE LAN126 standard
TCP/IP127
VHS128 Betamax
European GSM129 TV wideband
DECT130
International IEC 950 for information OSI131

technology equipment
ISUG graphic
Table 4.1: Success of Software Standardization
The failure of Apple to follow open systems architecture (with its superior Macintosh platform)
meant it lost out to PCs. OSI development followed best practices but took too long and was
expensive and complicated, so industry standardized on the cheaper and simpler TCP/IP. X25
may have lost out to the Internet because the latter accepted simpler solutions and had far more
consumers in a short time, triggering a network externalities. Some potential clashes between
software interests and innovation are:
Developers must comply with so many standards that their ability to be original is small. One
company complained that in developing software, over 90% of the work needed is to ensure
compliance with standards: “ To be a viable computer system, one must honour a huge list of
large, and often changing, standards: TCP/IP, HTTP, HTML, XML, CORBA, Unicode, POSIX,
NFS, SMB, MIME, POP, IMAP ... A huge amount of work, but if you don’t honour the
standards you’re marginalized. With so much externally imposed structure, there’s little scope
left for novelty. Plus, commercial companies that ‘own’ standards, e.g. Microsoft, Cisco,
deliberately make standards hard to comply with, to frustrate competition”.132
‘Smart’ large developers deliberately make their de facto standards unnecessarily complex to
restrict competition.
Participation in standardization compromises existing and potential Intellectual Property – a
serious issue for many companies
This was confirmed by the ISUG survey, which found:
125
DOS Disk Operating System
126
Institution of Electrical and Electronic Engineers, Local Area Network
127
TCP/IP Transmission Control Protocol / Internet Protocol
128
VHS Video Home System
129
GSM Global System for Mobile communications
130
DECT Digital Electronic Cordless Telephone
131
OSI Open Systems Interconnection
132
“Systems Software Research is Irrelevant” Rob Pike Bell Labs Lucent Technologies, Feb 21, 2000
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• Software product standardization could lead to reduced flexibility when considering the
various design choices.
• Standardization is sometimes regarded as making a negative impact on innovation and
software originality.
In software there is an innovative culture, with many users willing to experiment. In addition
Internet distribution can bypass dominant companies and channels. However, in the PC sector,
unless a new product is for MS Windows, a company will have a struggle for successful
commercialization.
To extend the power of the STEP standard (see mechanical engineering above), groups are being
formed to produce standards for knowledge-based-systems (KBS, or ‘expert systems) and CAE
(Computer Aided Engineering), using Java and CORBA.
While European standards were a success for GSM cellular phones, the de facto mobile Internet
standard, WAP, has not fulfilled its promise – it is little used. This is seen as representing an
opportunity for the NTT DoCoMo proprietary Japanese standard “i-mode” which is widely used
in Japan. Funk says “The literature on industrial standards suggests that NTT DoCoMo needs
gateway technologies to link European users with Japanese technology and contents. Problems
include the difficulties in defining an appropriate set of gateway technologies and in choosing
partners that will effectively utilize network effects at the global level”.133 He goes on to say that
one of NTT DoCoMo’s less successful competitors in Japan, KDDI, may have a larger chance of
succeeding overseas as it utilizes global standards.
133
Funk, Professor Jeffrey L., “Network Effects, Openness, Gateway Technologies and the Expansion of a
Standard’s “Application Depth” and “Geographical Breadth”: the case of the mobile Internet”, Kobe University
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IMPACT ON HEALTH and SAFETY of WORKERS
5. Impact on Health and Safety of Workers

5.1 INTRODUCTION
5.1.1 Health and Safety Standards
Standardization under the “New Approach” tends to be synonymous with “European

standardization” (see Annex): it arose of necessity and is seen as a success model. Previously,
European regional standards organizations were small secretariats with standards activity largely
at national level. As regards health and safety, CEN, CENELEC and ETSI have drawn on the
skills and resources of the National bodies. Under the New Approach, the latest and best ideas of
standardization from around Europe were harnessed, for the safety of machinery and equipment.
The directives make no distinction between non-professional and professional use, and Health &
Safety lines are often blurred between citizens as workers and as consumers. Most Europeans
work, and many items of equipment and tools are used in both working and domestic
environments. For these reasons, the safety provisions of Health & Safety at Work also have a
Consumer Protection impact. Also, standards programs to support the directives aim to cover
professional and non-professional use, and ‘grey’ areas where professional products are used by
non-professionals.
Essential requirements of the Machinery Directive

Type A standard (fundamental safety standard)
e.g. EN 292 Basic concepts, general principles for design
Type B standard (group safety standard)
Type -B1 standard Type -B2 standard

particular safety aspects safety related devices
Fulfilme
e.g. EN 294 Safety distances e.g. EN 953 Guards

Type-C standard (machine safety standard)
e.g. EN 474 Earth-moving machinery
after diagram by KAN

Figure 5.1: European standardization methodology in machine safety
To cope with the large new workload thrust on them, the European bodies developed a
methodology of standardization based on risk assessment and separation of standards into A, B
and C types, a system incorporating best practice in the member states. Developing dedicated C-
type standards for each of the 50,000 or more types of machine would clearly be impractical). A-
and B-type standards cover any machinery safety issues - a few hundred of these will suffice.
There are however good reasons (particularly regulatory needs) for some C-type standards - but
these rely on and need the As and Bs, so careful planning of the latter has a strong effect on
efficiency, borne out by the success of the New Approach. It is expected that some 700 or 800 C-
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types standards will be developed.134 Unlike for the Competitiveness impact, for instance,
(internal) company standards in safety scarcely arise. Indeed, internal standards could be
counterproductive, as a tenet of safety standardization is consistency (standardization in another
word) between expectation and effect (e.g. pressing down your right foot causes acceleration in a
car, a forklift truck or an excavator).
Does the public and industry associate safety with standardization? – The answer is a strong
‘Yes’ - almost 75% of respondents to the DIN study135 saw references to standards as
‘underlining the safety of our products.’ Consumers around Europe also accept the link due to
campaigns of national standards bodies – e.g. BSI’s “Kitemark” in the UK, AFNOR’s “NF”
mark in France, and Germany's "DIN Geprüft" mark from DIN CERTCO.
5.1.2 Cost of Health and Safety Accidents

Human suffering and lost opportunities, are the main effects of injuries and disease. There are
also significant costs to employers and economies. According to the TUTB, there are about 4.5
million work-related injuries resulting in time off work in Europe per year, and about 10 million
workers throughout Europe suffer from work-related accidents or occupational diseases. TUTB
estimates economic losses of 20 billion € per year136 According to ESAT, work-related accidents
in 1998 and 1999 cost the EU 150 million working days per year, with another 350 million days
lost through work-related health problems – a total loss of 500 million days per year. Clearly the
figure for EU/EFTA is higher, although accident rates in the EFTA countries are generally lower
than in the EU.137
ILO data (presented in the Annex) shows that the aggregate cost of occupational injury and
disease ranges from 1 % to 5% of GDP in European countries (the wide variation is due more to
reporting methods and compensation patterns than rates of accident and disease). The cost per
head in Germany fell by 40% in real terms between 1970 and 1998, and the cost of accident
cover to commercial companies fell to 1.31 per 100 claim-payments in 1999 against 1.46 in
1980, a reduction of 10.25% despite inflation (Trade association data). Figures for Japan suggest
a cost of 2.2% of GDP and 3% in the US. Japanese investigations suggest a direct payback factor
of 2.3 for investment in worker safety with a further 0.4 indirect productivity gain.
5.1.3 Methodology
The main sources of the data examined were from national bodies and organizations in Europe,
international statistics bodies, and the Occupational Health & Safety and labour authorities
(ILO). We also consulted trade associations, insurance/assurance groups, Health (WHO) &
Safety authorities and inspectorates of various countries, and experts from e.g. TUTB Trade
Unions standardization experts, CEN/CENELEC, consultants, and leading officers of these
organizations.
We examined accidents and accident rates, particularly accidents resulting in more than three
days’ absence from work or fatality, of most countries, over a variety of time series, for signs of
‘discontinuities’ that might be pursued. In general we ignored minor accidents (although one
134
These different types of standards tend to be usually referred to only by those close to European standardization
processes
135
‘Frequency’ table, page 76 Book 2: “Gesamtwirtschaftlicher Nutzen der Normung, Unternehmerischer Nutzen 2,
Statistisches Material und Auswertung”. ISBN 3-410-14857-4
136
TUTB NEWSLETTER N° 4 NOVEMBER 1996
137
FACTS 19 “Work-related accidents in the EU – the statistical picture 1998-1999, Eurostat.
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example of a ‘minor’ type of accident, on which standards have had a worthwhile impact is
reported in a box below).
Data found included member surveys from KAN in Germany and CRAM in France (relating to
their views on the effects of PPE only for the latter, and PPE and the MD for the former: both
were at early stages for effective assessment).
We did not find coherent data that appeared likely to make any connection between safety,
accidents or health and standardization. An unpublished doctoral thesis by Dr. Speck138
provided the most ‘robust’ evidence we encountered, where we can say that a link is made
between standardization and accident rates for construction machinery. Professor Biegelmeier
has also produced statistics and perspectives on electrical safety which is very persuasive as
circumstantial evidence, while Werner Sterk and Michael Gose of KAN (Germany), Alain
Mayer of INRS (France), and the HSE (UK) helped with data and suggestions in particular areas.
One deduction we made and implemented was that, as fatal accidents are almost invariably
reported, and are more thoroughly investigated and commented upon, than others, we should
concentrate most effort on fatal accident data. We also concluded that there were three ways in
which we might obtain data or useful evidence:
Prevention - statistical evidence of reductions in numbers of accidents, which could be tested for
a link with standardization
Avoidance - accidents that occurred but would have been expected to have been avoided if the
‘machine’ involved complied with present standards
Other impacts, positive or negative, on the health and safety area, including practices and
ongoing developments
While adopting the above approach, we must acknowledge data limitations due to:
a lack of consistency across Europe in classifying accidents;
classification within countries not necessarily being informative;
machinery causes, accounting for a small proportion of accidents, not being detailed (a fall from
a ladder while replacing a bulb may be classified ‘electrical’);
little effort to track accidents/standardization linkages;
standards from the New Approach being too new to show statistical impact. Paul Makin139 points
out that the C-type ENs are largely only in place for about four years. Their effects would not yet
be measurable, taking into account the lead time to get new machines into use and the fact that
replacement of machines happens only gradually.
There is little or nothing published on links between standardization and work safety/accidents.
The European Foundation for Living and Working Conditions140 believes it is difficult to make
comparisons as data is often globalized and/or fails to distinguish aspects to facilitate risk
assessment (e.g. description of the circumstances, machinery that caused the accident or disease,
etc.). Data on sex, age, occupation and economic sector may be included but information on
technical aspects of the workstation is rarely included. The Foundation also states that:
138
"Socio-technical considerations of safety, using the example of Construction Machinery", Dr.-Ing. Joachim
Speck, Saentistrasse 56, D 12277 Berlin, (Thesis 2001, Brandenburg Technical University Cottbus, awarded 'magna
cum laude' )
139
Former CEN Machinery Directive consultant
140
“2nd European Survey on Working and Living Conditions”, European Foundation for the Improvement of Living
and Working Conditions, Dublin, 1996
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• in most cases, data is not comparable between countries because there is no harmonized
system of data collection;
• although existing data is fairly reliable, most of it derives from questionnaires.
An EASHW review141 makes similar points - statistics are not gathered in the same way across
Europe – for instance Germany does not use NACE classifications and Belgium, Germany,
Spain, France, Italy, Luxembourg, Austria, Finland and Sweden attach ‘commuting’ traffic
accidents to work statistics. A large reason for discrepancies between countries is that “two types
of main reporting procedures can be identified in the Member States of the European Union".
Insurance-based systems, in ten Member States and Switzerland, have reporting procedures
mainly based on notification of accidents to the insurer, public (Social Security) or private
according to the case. Reporting procedures in five other Member States (Denmark, Ireland, the
Netherlands, Sweden and the UK) and Norway are mainly based on employers' legal obligation
to notify accidents to relevant national authorities, often the National Labour Inspection
Service142. (Note: From 2001, ESAW/Eurostat aims to classify accidents as to causes and
circumstances, but this is still unlikely to reveal much relating to standardization.143)
This is not to say that Eurostat does not have some good relevant data, but Eurostat itself
frequently recognizes problems with comparability of data (e.g. it comments on "the lack of
available data and the comparability problems experienced by the Focal Points between the
national data and EU data"4). Also, standardization effects have not been a priority as the
statistics show situational- and behavioural factors are most important, with most standards-
related problems having been dealt with in past years. This is an important statement – by the
1980s, all European countries had accident-prevention measures, based on their cumulative
experience with a mix of standards and regulations, that they would only ‘sacrifice’ for European
progress if satisfied their hard-won systems would be improved. Electrical fatalities in European
countries are now typically less than 20% of their level in the early days of electricity, and before
the IEC established standards for safe clearances, insulation, fusing etc. Despite wider electricity
Standardization for machine safety started many years ago. We tend not to realize
how bad it once was!
Machinery: The Industrial Revolution started in the UK and they were the first to realize the
benefits of machine safety – for which guarding was introduced in 1835(Paul Makin, Interview
with KAN, KANBrief NR 3/01)
Pressure vessels: In the latter part of the 19th century, an epidemic of boiler explosions
accompanied the spread of steam power. In 1865, the Mississippi riverboat Sultana exploded,
killing 1,450 Union soldiers just released from Confederate prisons. In 1894, at the Henry Clay
Mine in Shamokin, Pennsylvania, 27 boilers exploded simultaneously, levelling the
surrounding town and killing thousands of people. In 1910, with explosions totalling 1,400 a
year, the American Society of Mechanical Engineers got together to write a comprehensive
boiler code. Quickly adopted by most states and cities, it virtually eliminated explosions.
(Achsah Nesmith ‘A long, arduous march toward standardization” Smithsonian Magazine,
February 1985, p. 185).
141
“The state of occupational health and safety in the European Union – a pilot study” September 2000, “2.3.2
Limitations of the consolidation process”
142
Didier Dupré, Eurostat, Workshop on " Concepts and measurement of European Labour Markets Flexibility /
Adaptability Indices", Brussels, 26-27 October 2000.
143
ESAW-EODS-ad hoc module Health and Safety at Work, in 1999 Labour Force Survey
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use, it is now quite difficult to electrocute oneself!
Τhere is also considerable under-reporting of accidents in some European countries – by about

50% according to surveys in the UK and Denmark Accidents reports in the UK and Ireland can
affect liability, and this may affect the way they are formulated.
Clearly, these are generally the less serious accidents, as virtually all fatalities are reported. The
extent of the non-reported in the UK is shown below, arrived at by comparing Labour Force
Survey data with normal accident reporting data.
Reported/verified
Industry rate %
Mining, quarrying* 100
Transport, storage & communication 75
Public administration and defence 83
Manufacturing 57
Construction 52
Education 39
Health & social work 42
Other social & personal 40
services
Distribution & repair 31
Agriculture 28
Finance & associated services 22
Hotels & restaurants 19
Source: comparison of LFS and RIDDOR rates by UK HSE144
Table 5.1: Reporting rate of non-fatal injuries UK 1999/2000
Large companies with strong safety programmes (e.g. mining) report 100% of accidents but
industries with mobile, casual labour (e.g. hotels) report only 19%. In some countries, notably
the UK and Ireland, where accident compensation is settled by litigation, there may be incentives
to either not report or to report inaccurately.
5.2 GENERAL IMPACT OF STANDARDIZATION ON HEALTH AND SAFETY AT

WORK
5.2.1 Main Points

The ‘public good’ impact of health and safety at work is well served by standardization. A
weight of circumstantial evidence shows standardization has prevented many hundreds of
thousands of accidents and perhaps thousands of deaths in the past 20 years. There is a
persuasive case that current standardization activities can deliver important ongoing benefits.
There are few negatives, but wider participation of parties other than manufacturers might speed
up the incorporation into standards of proven techniques and technologies, with faster safety
impacts.
144
LFS Labour Force Survey ; RIDDOR Reporting of Injuries, Diseases and Dangerous Occurrences
Regulations; HSE(UK) Health and Safety Executive.
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The construction industry has the highest accident rate by sector in Europe (other than fishing,
which is not reviewed here given its small size). Construction suffers the second-largest
absolute number of accidents but the most fatalities (supporting data in annex). For this
reason, we pay particular attention to construction machinery.
Standardization and regulation have been around for many years. The obvious life-saving safety
measures were incorporated into national standards and regulations decades ago. The
‘low-hanging-fruit’ of electrical and machinery safety was picked long ago, machinery
became secondary as a causative factor in accidents and the vast bulk of accidents and
fatalities are now because of human error (workers and managers).
Some reported increases in accidents in recent years relate to higher levels of activity and
changes in industry, not to machinery. Increased economic activity, particularly in
construction, means more hours worked and affects other statistics. Other contributory
factors to higher accident rates include hiring untrained new personnel, more severe
competitive pressures in production, cuts in training and safety overheads and a rise in
casual and contract/sub-contract working.
A high proportion of accidents attributed to ‘machinery’ in statistics, results from improper

use of machinery. ‘Soft standardization’ – signage, displays, controls, handbooks
and instruction manuals – and new techniques for warning and signaling, currently
being applied, will reduce them. This is a logical follow-on to established ‘hard’
standardization. In the GESI study, out of 17,095 construction machinery accidents
examined, only 0.7% (119) could specifically be attributed to manufacturing or
materials defects, the balance were in the area of human-machine interface.
“Nowadays, technical deficiencies play a minimal role in accidents at work: up to
96% can be attributed to preventable operational errors”.145
We infer a reduction in deaths by electrocution of the order of 100-200 per year in Europe over
the past 20 years or so, due to standardization and regulation.
We likewise infer that standardization and regulation is saving in the order of 100 lives per year
in the construction machinery sector.
We demonstrate that standardization and regulation is similarly saving 200-300 lives per year in
the agricultural machinery sector.
We give evidence of further reductions of machine accidents in other sectors.
We demonstrate that standardization programmes under way will deliver significant benefits in
occupational health by reducing effects of unsafe practices.
We describe how standardization in this area is responsive to technology and best practice and
generally ‘progressive’.
145
“Anmerkungen zu einem veränderten Arbeitsschutzkonzept in Sachsen”, Institut für Arbeitsorganisations- und
Sozialpsychologie, TU Dresden, Workshop GESI 1995, J. Tannhauer
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We show the importance of MSD in Occupational Health, now being addressed by ergonomics
in the standardization process.
5.2.2 Prevention of accidents through standardization
INDUSTRIAL ACCIDENT PATTERNS

Standardization is positive in its impact on safety at work: hazards may be anticipated, and so
prevented or minimized, based on lessons of experience. Operational methods, tools and
procedures are optimized and standardized. ‘Standardization’ represented by repetitive work
practices and fixed areas of operation facilitates safer working. This is a principal reason why
accident rates in manufacturing are far lower than in fishing, construction, forestry and
agriculture. Modern technology does help overcome some work-related risks in these industries
when applied through standards.
In the Annex, accident statistics are presented. Even within countries and for fatalities that we
expect to be accurately reported, there are discrepancies based on what is/is not included. Also,
‘industry’ sometimes includes services or construction. However, despite these issues, we can
still see trends, including a continuing reduction in numbers of accidents and in fatalities across
Europe. Accidents rates per sector are also declining. (Accident rates by sector vary considerably
by country, and not just due to discrepancies in statistics. While outside the remit of this study to
pursue, Sweden seems to have the best safety performance of any European country).
MECHANICAL EQUIPMENT
With the exception of one or two short-lived reversals, accidents and fatalities have been falling
for many years. As the proportion for each classification (i.e. fatal, major etc.) by cause, is
consistent over time, this supports the idea that the reduction is general, not selective. The
automobile sector in Germany (graphic in Annex), and eight work operations in the French
engineering sector, clearly show this. Pressure vessel-related accidents in France fell from 1,160
in 1994 to 953 in 1998 (18% down), major accidents fell from 126 to 76 (40%) and deaths
declined to 2146.
There is no doubt that attention to management, behaviour and training has played the major role
in reducing accidents (e.g. workers wearing protective clothing or using protective equipment
more frequently). The evidence is that, just as management organizes and workers train to
prevent accidents, machinery designers provide safer machines. If machine safety standards were
not improving, it seems highly likely that this would show up in the data but it does not. This is
not direct evidence of improvement through standardization, but Speck’s table of frequency of
design-related accidents is. He shows that, for construction machinery/1000 machines in service
(also below), design related accidents halved (to 44 from 87) between 1976 and 1994 – this is a
direct health and safety impact of standardization.
Typical of a modern organized approach to safety, a trial in a number of Danish farms reports
that the number of injuries decreased from 32.6 to 18.2 per 100,000 hours in the control group.
Among the main interventions were increases in the use of PPE (up by between 1/3rd to ½) and
in maintenance procedures including guarding of tractor PTO shafts.147 This is a combination of
146
“Les accidents liés à l’utilisation d’equipements sous pression”, Travail et Sécurité, Février 2001 – No. 604.
147
“Farm accidents – a Danish model for prevention” - European Agency for Safety and Health at Work - How to
reduce workplace accidents 22/11/2001.
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the use of protective clothing (itself standardized, but it is its use that counts) and standardized
PTO shafts (a known cause of accidents where it has proved difficult to harmonize standards).
To the extent that fatalities appear to be declining at a greater rate than accidents in general, as
machinery and electrical causes are more likely to be fatal (see statistics in Annex), this would
support the impact of machine safety standards.
When it comes to ROPS (“Roll-over protection system), this standardized product, its use
enforced by regulation, prevents many fatalities each year. For German construction machines,
ten deaths in 1975 became none by 2000. Extrapolated for a higher number of machines (i.e
multiplied by 1.775, see Speck frequency table below) and across Europe (assuming that
Germany accounts for around 20% of European construction activity), prevention in that sector
is likely to be 80-90 fatalities per year. ROPS applies also to agricultural machinery, (where
prevention of 200-300 deaths per year is likely) and to materials handling equipment.
Standardization based on the Machinery Directive is further reducing accidents, and is

increasingly addressing ‘soft’ issues such as behaviour, now the most significant remaining
cause of industrial accidents, by means of standardized approaches to controls and signage.
ELECTRICAL EQUIPMENT:
In this area, fatalities have been prevented due to use of standardized RCDs and MCBs, backed
by regulation in many cases, and conversion to safer power line safety standards. These impacts
were under way before harmonization, but harmonization has assisted in their cost-effective
implementation.
5.2.3 Avoidance Evidence

Conversation with safety inspectors shows they regard standardization as avoiding accidents.
This anecdotal evidence is supported by data showing ‘avoidance’, i.e. how accidents reduce as
standardization resulting from Directives takes effect. Recent French investigations show
standardization under the Machinery Directive having a very positive impact. A 1998
investigation of 203 fatal or very serious accidents at work in France showed that almost half
were due to non-conformity of equipment. Inspectors noted that risk analysis etc. to ensure
conformity of the existing stock of machines was inadequately understood and performed, or
there was a delay in ensuring conformity.
Attribution of 1st quarter 1998 out 2nd quarter 1998 out Total out of 116
accident of 59 fatal or very of 57 fatal or very fatal or very serious
serious accidents serious accidents accidents
Non-conformity of
equipment 29 24 53
Source: “Analyse qualitiative des accidents du travail sur machines, 1997 et 1er semestre 1998”,
Direction des relations du travail (bureau CT5).
Table 5.2: Accidents due to non-conformity of equipment
If the French experience is typical of the situation across Europe, and experts in discussion
believe it likely is, then almost half of fatal/very serious accidents may in future be avoided due
to the standards emanating from the Machinery Directive. As we pointed out before, the numbers
of accidents specifically due to machine deficiencies are low so the statistical impact will not be
major – but lives will be saved and injuries avoided.
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Paul Makin states (in communication with ISUG) that there never was “Old Approach”
standardization at European (i.e. by CEN and CENELEC) level, and very little at national level.
The machine safety impetus came with the New Approach, with most standards developed after
1990.
Standardization in support of the New Approach Directives gives a neutral forum where
Europe’s experts take best practices from Member States and formulate them into standards. The
ISUG workshops indicated that this has resulted in a 'levelling up' of safety standards across the
spectrum covered by the New Approach.
There has also been an improvement in responsiveness due to the separation of regulation and
standardization. The situation before and after the New Approach is depicted below:
Figure 5.2: Situation before and after New Approach

The entanglement of technical details in regulations in each country meant that adoption of new
technologies in safety was slow and uneven. Under the New Approach, only technical details
need revision, i.e. it is a more direct, procedure.
“In North America, Japan or the EU, only 10% to 25% of national standards are referenced in legislative
or administrative acts. In the former Soviet Union this figure was 100%.148
5.2.4 Spreading of Best Practice in Europe

As indicated above, standardization appears to have raised the level of safety for products -
particularly with standards programmes in support of a New Approach directive. This is
supported by polls of factory inspection engineers conducted by INRS/CNAM in France and
KAN in Germany.
It is also supported by the fact that Safeguard Clauses, where a country that feels its safety level
is reduced by a harmonized EN standard may opt not to apply it, have been invoked in few cases
for New Approach Directives. (In 1999, out of 174 Safeguard notifications invoked for the LVD,
172 relate to wrong application of standards and only two to shortcomings in harmonized
standards. They were for EN 60335-2-9, toasters, and identified a lack of requirement for a
148
Helmut Reihlen, Berlin, “Standards Institutions, Capacity Building and Best Practice, Technical Standardization
for industry and society”, World Bank and OAS Workshop on Trade Facilitation, Regulation and Standards, The
Development Challenge in Central America, Panama, 28 June 2000
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maximum temperature of the non-working surface). This acceptance that standards under the
new approach facilitate improvements in safety exists despite differing national conditions and
practices. (For example, tower cranes are normal on even the smallest building sites in Germany,
and are used only on large sites in the UK: conversely, dump trucks are widely used on building
sites in the UK, but rarely in Germany.) Entanglement in powered harrows was the subject of a
UK Safeguard Clause: within a year increased protection against entanglement was covered in
the EN 708 and the objection was dropped. The safeguard clauses are strong evidence-by-
exception.
The clear approach has facilitated specifically designed safety modules, reducing costs and
adding to intrinsic safety. Standardization is enabling major H & S improvements – individual
controls can be produced at reasonable costs as ‘black boxes’, e.g. to "help designers achieve
improved safety integrity levels, as mandated in IEC61508 and IEC62061 - (the switch) allows
machinery to be safeguarded in full compliance with European standards”149.
It is not surprising that the risk analysis and horizontal standards methods developed for the
Machinery Sector were applied to the ‘NEW’ Medical Devices sector, where Safety is of
paramount importance, to implement the Medical Devices Directive. The results are seen as
successful with a relatively small number of C-type or vertical standards, most of the ENs
relying on horizontal standards with risk assessment. “It appears that even in the case of virtually
completed standardization projects where serious objections are expressed on the part of
occupational health and safety, solutions can be found which do not hold up the standardization
process significantly and which meet with approval of the parties concerned.”150
The larger population catered for by harmonized European standardization, in contrast to smaller
national populations represented by National Bodies, offers a wider database both for statistics
and action. Infrequent accidents, so rare that they might never be tackled in a national context,
are then more likely to be acted upon.
5.2.5 International Adoption

Shortly after publication of EN 292 in 1991, it became clear that it was being recognized around
the world as the definitive standard for machinery safety. It was adopted by the Japanese
Standards Committee for machinery safety and was widely used in China.
In 1990 several European Standards Bodies who were members of CEN and ISO decided that
the fundamental work on machinery safety that had been done by CEN/TC 114 should be
introduced at the international level through ISO. In 1991 ISO 199: Safety of Machinery was
formed with the purpose of using the Vienna Agreement to introduce the CEN A and B-
standards into ISO. The first move was to introduce EN 292 as ISO Technical Report TR 12100
so that it could be used worldwide and experience gained with it outside of the European
environment. This standard has subsequently been revised by a CEN/CENELEC/ISO/IEC
Special Working Group with the intention of it becoming the first truly global safety standard.
Since its inception in 1991, ISO/TC 199 has been responsible for introducing all of the original
B-standards into the ISO catalogue, One of the most notable is ISO 14121:1999 Risk assessment
for machinery safety – formerly A-standard EN 1050. This key standard received a unanimous
vote from all voting countries.
149
IMS, 03 July 2001, in Controls “Switch brings improved safety levels”
150
KAN, “Hazards caused by insufficient stability”.
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At the end of 2000, ANSI standard B11.TR3 was published in the US, “the most significant step
forward in the field of safety in the past 30 years” according to leading US safety expert Fred
Manuele. According to Steve Dukich, Product Manager, Rockwell Automation, “B11.TR3 is not
intended to compete with EN1050; it was developed with the intent of applying the principles of
EN1050 within the US legal system”. (A difference between Europe and the US is an emphasis
on the role of the user in the US version). “In the place of reactive and prescriptive legislation
and standards, the EU Directives represent a remarkable breakthrough in risk-based approach to
machinery and work equipment safety. This approach is currently proposed by ANSI (B11-TR3,
2000) for machine tools in the USA”151
Professor Maso Mukaidono, chairman of the Japanese Machinery Committee, informed ISUG
that the Japanese Institute of Standardization (JIS) has published eighteen of the ISO and IEC
versions of EN machinery standards as Japanese standards. They are all of the popular A- and B-
type (they have used their own JIS numbers so it is not readily apparent from a catalogue
search). The same thing has happened with the C-standards and whilst some standards owed
their origins to work in ISO committees the trend is now for C-standards to be revised at ISO
under the Vienna agreement. Sectors adopting this approach include construction machinery,
cranes, access equipment, industrial trucks, agricultural and forestry machinery.
An example of European practice being adopted internationally is power take-off (PTO) shafts of
agricultural tractors, which traditionally have been responsible for a high proportion of farm
accidents. The European standard EN 1152 has been based on the International Standard ISO
5674: now, EN12965 is being developed to remove ambiguities in 1152 as required by the
Machinery Directive. The ISO 5674 will then be modified in line with EN 12965, and will be
used also in the US.
When ISO/IEC Guide 51 dealing with the incorporation of safety in standards was revised the
ISO/IEC Technical advisory group drew heavily on the experience gained in Europe in
developing the risk-based approach to safety.
5.2.6 Future Developments, including MSD

“From 1998 to 1999, an estimated 350 million working days were lost each year in the EU
owing to work-related health problems, in addition to almost 150 million working days lost due
to accidents at work. A total of around 500 million working days are therefore lost every year as
a result of accidents at work and work-related health problems”.152 Standardization activity under
way could deliver significant safety benefits in:
• R&TTE153, by anticipating accidents and illnesses caused by electromagnetic radiation

due to increasing use of mobile phones and radio control and communication of all kinds.
Europe has taken the lead in this area;
• Noise, reducing the numbers affected and severity of deafness, a long-standing work-
related disability;
151
“Integrating Safety During the Machine Design Stage”, Hani Raafat and Perry Simpson, National Safety Council,
US.
152
2002/02/03 Report by Mr Vigone (IEC) Rapporteur of the OHS Sector to BT - Technical Board
153
R&TTE Radio and Telecommunications Terminal Equipment Directive
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• Musculo-skeletal disorder (MSD), also a big source of workplace disability and suffering,
by use of ergonomics. This is potentially the largest area of health gain and, again,
Europe is taking a lead.
As a result of standards relating to the present Noise/Vibration/Radiation Directives, together

with ergonomics standards, the number of accidents and disabilities relating to machinery and
electricity will be further reduced154. Human error or negligence will then be almost the only
significant cause remaining.
Musculo-skeletal disorders account for between 40% and 50 % of work-related ill-health and
affects over 40 million workers in the EU155. Figures from Sweden, detailed in the Annex, show
that ergonomic reasons account for 63% of work-illness absences, and that such absences are of
the second highest average length, 108 days. In the US, it is estimated that musculo-skeletal
disorders costs up to US $50 bn per year: employers pay between $15-18bn in workers’
compensation. Industries expected to have high costs in compliance are hospitals, hotels,
restaurants, trucking, courier services and grocery stores (OSHA - US).
Europe has taken the lead to incorporate ergonomics best practice in machine design with a five-
part pre-normative standard prEN 1005. The US stepped back in 2001 from a mandatory
ergonomics element in design. Current work in incorporating ergonomics requirements into
standards will have beneficial impacts in reducing MSD. Health and Safety Authorities in
Denmark foresee that European work in ergonomic standardization, will reduce occupational
injury and disease (see Annex).
5.3 SECTORAL IMPACT OF STANDARDS ON HEALTH AND SAFETY IN THE

WORKPLACE

Details are given in the annex of a considerable trawl though safety statistics. Scientifically
discriminating the impact of standardization of machinery in support of the Machinery Directive
is not possible. Machinery currently ranks ninth in causes of accidents in the work place, but
second (to electrical, including machinery and electrical) in fatalities (graphics in Annex).
Machinery as a cause of accidents has fallen over the years along with general accident trends.
These have fallen steadily over 40 years; with significant changes in the number and rate of
accidents in many European countries in the 1990s and into this century.
A good example of how such improvement has been achieved relates to injection moulding
machines. In France, until the 1960s these machines for plastics and rubber caused a large
number of accidents through crushing or severing of upper limbs by unexpected closing of the
mould. An engineer of a French Insurance Fund (CRAM Rhône-Alpes) devised a solution to this
mechanical hazard – a second shut-off device on the power circuit. This proved successful and,
in the 1970s, the number of severe accidents fell noticably in France. European standardization
work on the machines started in 1982-83, and was adopted in EN 201:1985. The standard was
subsequently revised as a C-standard by CEN/TC 145 and published as EN 201:1997156.
154
Occupational illness is also addressed in standardization of chemicals, paints etc., outside the scope of this study.
155
European Agency for Safety and Health at Work Fact sheet number 9: 2000
156
Alain Mayer, INRS, Rapporteur to CEN PEE sector: Personal communication
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Detailed statistics of accidents in France in the 1990s include benefits from the Machinery
Directive. The numbers employed (see Annex) increased during the period, so the fall in the
accident rate is greater than the curves suggest.
Machine accidents I France (from INRS data)
2500
absence from work)
No. (resulting in
2000
(Angle) grinding
1500 Wood drilling
1000 Mechanical presses
(Pressure) casting
500
0
1995-1999
An ISUG graphic based on INRS data.

Figure 5.3: Machine accidents in France I
Machine accidents II France (from INRS data)
10000
No. (resulting in
Saw s
absence from
Welding
work)
5000
Metal drilling
(Other) cutting
0
1995-1999
Figure 5.4: Machine Accidents in France II
Construction Machinery
As pointed out above, construction has a bad work accident record. In a study by Speck for
1980-93, as quoted earlier, over 99% of accidents were due to behavioural or organizational
deficiencies. In 1994, compared to 1976, there were 78% more machines but 11% less actual
accidents. The frequency of machine accidents had fallen by 45%. This improvement was based
on the standard that became EN 474, which has 12 parts for major construction machines. As
Germany was the dominant producer in this sector for local and international companies, the EN
has strong continuity with the DIN standards (data in annex). Detailed analysis focused on
machine details as causes of accidents. The emphasis in standards resulting from the New
Approach is on ‘designing out’ accident risk, and progress is shown below.
Year 1976 1978 1980 1984 1985 1986 1987 1991 1992 1993 1994
No. 80038 81186 85746 86901 86306 87471 88439 111274 115854 121272 142256
machines
Accident 6949 6669 6213 3726 4043 4116 3586 4934 6017 5479 6196
no.
Frequency 86,8 82,1 72,5 42,9 46,8 47,1 40,5 43,8 51,9 45,2 43,5
Frequency: design-related accidents/1000 machines,
Table 5.3: Design-related accidents, construction machinery, Germany (Speck)
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Ways by which standardization helped reduce construction machine accidents are:
• Overload: While only 9% of excavator accidents in lifting are caused by overloading,

they tend to tip over the machine with severe results. Positive experiences with
overload warning devices led to their incorporation in EN 474-5 Hydraulic Excavators
in lifting application (over 95% of excavators).
• Controls confusion minimized: An investigation by the German civil engineering

association found that, of 25 excavators on the market, there were 13 control systems
with different lever and pedal layout157. Some of the machines had 18 controls for the
driver to use, and untrained drivers increased accident rates. Some 15 years later, major
manufacturers in the USA, Germany and Japan agreed a standard layout (ISO 10968 –
apparently referred to as the ‘Euro-standard’) that specifies the placement and
operation of controls for construction equipment. This includes the basic rule that they
must follow the conventions of the motor car.
• Symbols confusion minimized: Unified symbols for operator controls and displays for
use across all machines are described in EN ISO 3767
• Roll-Over Protection Structures (ISO 3471): these were introduced to standards in

1975 when there were about 10 rollover deaths per year in civil engineering in
Germany alone. By 1990 this figure was zero. In the UK, ROPS have cut to zero in the
last 10 years an average of two such deaths per year with dump trucks only. US
statistics show that fatal rollover accidents in opencast coal mining, which were 175 in
1979-84, fell to 14 in 1984-89, when ROPS was introduced.
• Closed Circuit Television: Speck reports that a cement works placed seven CCTVs on
dump trucks and paid for them in less than a year through reduced visibility-related
accidents. Now such equipment is now finding its way into standards (EN 474-6 for
construction machinery, EN 1501 for refuse collection vehicles).
• Safety interlocks: The UK Health and Safety Executive says that inclusion of safety
interlocks in skid-steering loaders EN 474 cut fatal accidents from 2-3 per year to zero.
Agricultural Machinery
Roll-over accidents had a major effect in work vehicles, including agricultural tractors. In the US
there are some 4.8mn agricultural tractors in use (FAO statistics). Rollover deaths with farm
tractors were estimated at 333 in 1990 26. Later, the National Safety Council (NSC) estimated
that about 200 deaths result from agricultural tractor overturns each year (NSC, 1997).158 NIOSH
in “Update” of January 29 1993 estimated that over half of the 4.6mn tractors in use (FAO figure
for 1999) in the US lack ROPS and safety belts. Of these, 61% were manufactured before 1971,
when ROPS became available as optional equipment on farm tractors. Tractors before 1971
generally were not designed to accommodate ROPS. If tractors without ROPS are not retrofitted,
NIOSH estimates that 2,800 rollover-related deaths could occur while these tractors remain in
use (an estimated 31 years). Since 1967, some 40% of 250 persons in unprotected tractor rollover
incidents in Nebraska have died. Only one of 61 persons operating ROPS-equipped tractors that
157
Page 91 of "Socio-technical considerations of safety, using the example of Construction Machinery", Dr.-Ing.
Joachim Speck, see footnote above
158 “The Kentucky ROPS Project: A Summary, Henry P. Cole & Melvin Myers, University of Kentucky.
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rolled over died: this victim was not being personally restrained and was thrown from the ROPS
protective zone during rollover.
The European tractor experience is similar. However, in Europe, older tractors must be
retrofitted, so the saving of lives is greater. The number of tractors in the EU and EFTA is,
coincidentally, also 4.8mn. Sweden (with New Zealand initially, but Sweden was first to act)
conducted the first ROPS experiments for tractors, and then made ROPS compulsory.
The fatality rate in Sweden is reported as falling from 17 to 0.2 per 100,000 tractors while the
proportion of tractors with ROPS increased from 6% to 93%.159 With 172,000 tractors in 1999,
some 21 to 29 Swedish lives are saved each year as a result.
Figure 5.5: Rollover accidents agricultural tractors Sweden 160

Put in context, agricultural fatalities actually rose in Sweden just as ROPS deaths fell, (see
graphic below), so any suggestion of improved safety practices being otherwise responsible for
the reductions in tractor rollover deaths may be discounted.
159
“Rollover”, International Labour Office: Encyclopaedia of Occupational Health and Safety, Bernt Springfeldt,
TUT Finland
160
“Rollover Fatalities – a Nordic perspective”, A. Thelin, Director of R & D, Swedish Farmers Safety and
Preventive Health Association, Journal of Agricultural Safety & Health 4(3):157-160
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Fatal accidents per 100,000 employed, Sweden
16
14
12
10 Farming
8 "Green"
6 All other
4
2
0
1987 1989 1991 1993 1995 1997
Figure 5.6: Adapted, showing rise in farming and “green” (includes fishing etc.) fatalities Sweden161
In West Germany, the fall was from 10 deaths to 2.5 per 100,000 tractors and in Norway from 24
to 4. In the UK there were average 50 deaths per year from agricultural machine roll-over (UK
ROPS in Europe
Beginning in 1974, the EEC issued directives on type-approval of wheeled agricultural and
forestry tractors. In 1977, it issued further, special directives concerning ROPS, including their
attachment to tractors (Springfeldt 1993; EEC 1974, 1977, 1979, 1982, 1987). The directives
prescribe a procedure for type-approval and certification by manufacture of tractors, and ROPS
must be reviewed by an EEC Type Approval Examination. The directives have won acceptance
by all Member States. Some EEC directives concerning ROPS on tractors were repealed as of 31
December 1995 and replaced by the general machinery directive which applies to machinery
presenting hazards due to its mobility (EEC 1991). Wheeled tractors, and some earth-moving
machinery with a capacity over 15 kW (crawlers and wheel loaders, backhoe loaders, crawler
tractors, scrapers, graders and articulated dumpers) must be fitted with ROPS. In case of a
rollover, the ROPS must offer the driver and operators an adequate deflection-limiting volume
(i.e., space allowing movement of occupants’ bodies before contacting interior elements during
an accident). Manufacturers or their representatives must perform appropriate tests.
HSE). Introduction of ROPS from 1974 by standards and regulation has cut this to an average of
one per year.
Fatalities per 100,000 tractors
Country Period 1 Rate Period 2 Rate Inferred lives
saved in 1999
Denmark 1965 30 1980 2 36
Norway 1961-69 24 1979-86 4 28
Sweden 1957-61 17 1979-86 0.3 29
Finland 1980 16 1987 9 14
Table 5.4: Average number of Rollover before and after regulatory use of ROPS
The measured impact of this standardization has everywhere been large. Combining the numbers
of tractors in use in 1999 with the fall in rates above, 107 lives were saved in the Nordic
161
“Fatal accidents in Swedish farming and forestry, 1988-1997”, Anders Thelin, Safety Science 40 (2002) 501-517
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countries alone in that year only! Conservatively, ROPS has prevented at least 200-300
deaths per year in Europe.
ROPS also prevents accidental deaths with construction machinery, forestry equipment and in
other sectors of the economy.
General Machinery
Not all machines will be covered by a C-standard, and designers can use EN 292:1991 and EN
1050 and relevant B-standards to achieve the desired level of risk reduction and meet European
legal requirements. Employers can use the same standards to re-evaluate machines during
modifications or to meet requirements of European employment laws.
In the standards produced by CEN/TC 142 Woodworking, machinery risks have been
significantly reduced by braked motors for circular saws and the correct design of controls.
Provision of safe working methods as information for use will give the workforce effective
training on these machines. This will also occur with:
• EN 280:2001 Mobile Elevating Work Platforms, which has introduced enhanced stability
requirements and comprehensive overload/moment controls.
• CEN/TC 143, which has developed impact tests for machine tool guards.
• CEN/TC 146, which has developed packaging machine standards (the first in the world)now
being transferred into the international arena.
• CEN/TC 153, which has dealt with hygiene risks arising from the use of food in the machine
- another first for Europe.
PPE (Personal Protective Equipment) comments of Dr. Alain, Mayer, INRS
“In at least two European countries (UK “Kitemark”, Germany "DIN geprüft" mark) there
was more than 20 years tradition of national certification that the PPE directive
89/686/EEC extended to other European countries, which required a particularly big
improvement for products imported from outside Europe. The benefit of the New
Approach PPE standards was in taking into account the state of the art not only in terms of
capacity of protection, but in ergonomics, comfort and wearability. The adoption of high
quality standards (agreed by manufacturers, consumers, health and safety institutes and
social partners) and the obligation of mandatory testing for over 90% of PPE items for
professional use, sport, leisure and DIY, in Europe by third parties (notified bodies),
increased the quality of PPE products. At INRS, a notified body for PPE and machinery,
products submitted for certification are rarely in total conformity with provisions of
Directives (perhaps due to fundamental technical non-conformities affecting safety of the
users, poor information supplied for users, or incomplete technical files), and quality must
be improved before they can be placed on the market”.
Assertions such as the above are confirmed by responses of safety experts in Germany
and in France, to questionnaires from KAN and from CNAM/INRS respectively.

Given relatively constant human behaviour over time, the fall in electrical fatalities at work
(mirrored by a fall in the home, where there are no training programmes) indicates greater
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machine, appliance and circuit safety – all built from standardized components. There appears to
be no other conclusion than that reduced fatality figures stem significantly from standards and
regulation.
The data shows that, while all accidents fell, electrical accidents fell far more quickly. The
graphic below for France shows both categories at a base level of 100 in 1970 - by 1995,
electrical accidents had declined more than 70% while ‘all accidents’ declined some 40%. If the
'all-accidents' decline is behavior/training improvement only (and we feel it is not, that improved
machine safety standards kept pace), then improved intrinsic or ‘technical’ safety has to be
ascribed to the further decline in electrical accidents.
In Germany, electrical accidents at work increased162 (see annex) but their lethality decreased, as
shown below, indicating increased appliance and systems safety: when electrical accidents occur,
they are less likely to be fatal.
Germany 1969 - 1998

Deaths as % of electrical accidents at work
0
1969 1974 1979 1984 1989 1994
Adapted from “Elektrounfälle in Deutschland”29

Figure 5.7: Reduction of Electrical Accidents at Work in Germany
We believe the reasons for the major prevention of electrical accidents and particularly of
fatalities are:
• Residual-current devices (the modern earth-leakage circuit breakers), standard (IEC)
EN 61008/9. These were introduced (as reliable electronic devices) from the 1970s and
coincide with significant accident reduction. Their use is now mandated in many
countries and is likely the single greatest improvement in accident prevention. They are
also responsible for reduced construction-site accidents.
• Prof. Beigelmeier argues that plastics in piping, etc. have reduced home electrical
accidents, especially where TT earthing is used. Standard (IEC) EN 60364 allows for
TT earthing, which arose mainly in post-war low-cost reconstruction, but prefers type
TN (now mandated in Austria). This also permits type IT where power continuity is
critical (hospitals etc.) so caters flexibly for high standards.
• Greater usage of Miniature Circuit Breakers (IEC-EN 60898) has reduced fuse-
replacement accidents.
• Double insulation of hand tools (IEC – EN 60664).
162
“Elektrounfälle in Deutschland”, S. Altmann, J. Jühling, D. Kieback, H. Zürneck, BAuA Fb941
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Reduction of electrical versus all work accidents

France 1965-1995 All
Elec only
120
100
80
60
40
20
1970 1980 1990
Adapted from INRS Dossiers 24 August 2001

Figure 5.8: Reduction of Electrical Work Accidents in France
Standardization is making a significant impact that will increase as older appliances are phased
out. The working life of gas catering appliances is about 20 years and there is trade in second
user appliances, some of which are upgraded to current standards where feasible when re-sold.
Figures for the UK show that 80% of accidents are associated with gas in catering establishments
(hotels, restaurants, canteens etc., where they account for 1.8% of accidents according to the UK
Health & Safety Executive). These are associated with appliances without flame failure devices.
It is expected that this cause of accident will be eliminated when appliances have been replaced
by those meeting current standard requirements. Data was not available for other countries
although industry sources believe a similar pattern exists.

The need for credible and convenient test procedures to monitor the work place environment (in
support of requirements) is important. Standardization in this sector provides reference methods
for such monitoring and a testing regime (with EN ISO/IEC 17025) to ensure reliability of the
results. As an example, the "Noise Emission in the Environment by Equipment for Use Outdoors
Directive" is mandatory since January 2002. It aims to control and monitor the noise of
equipment for use outdoors so as to reduce noise nuisance, and to remove technical barriers to
trade arising from different noise requirements in Member States. A CE 'noise marking' label
will need to be displayed on the 57 categories of product to indicate their sound power level.
Noisier products – such as compaction machines, dozers and concrete breakers – are subject to
noise limits, requiring mandatory involvement of a notified body to give accreditation. The
measurement of the noise level of any individual product requires it be surrounded by a 'dome' of
microphones to establish noise output. Standards for these measurements have been developed.
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Differences between European and International standardization for Health and Safety
There are structural obstacles from the European side, to merging European and
International standards as they relate to Health and Safety at Work.
1. Certain international standards can only be adopted in a modified state in the

European corpus of standards as they do not embrace all the essential safety
requirements of the relevant single market directives (e.g. non-electrical hazards
from electrical machinery) or fail to uphold the high level of protection demanded in
Europe.
2. European safety standards should deal with product requirements, but not with
instructions for the user, they are product standards only and do not have a role in
the ordering of the workplace. Member States are entitled to specify national
requirements concerning the health and safety of workers at work (Article 137).
“In short, ‘going international’ has meant scrutinizing even basic concepts like “safety”,
”hazard”, ”risk”, ”inherent design”, etc. It is not just a matter of terminology: it reflects the
very different understanding of those basic concepts in different times, circumstances,
societies, and industry sectors. “EN 292, the internationalization challenge”, Stefano Boy,
“European Health and Safety”, TUTB Newsletter, Issue 17, June 2001.
A TYPICAL ‘SMALL’ SAFETY STANDARDIZATION

In 1996, UK clothing company William Baird reviewed the costs associated with compensation claims
for needle-in-finger injuries during sewing operations. The previous year, there were around 250
claims and about 500 incidents. These accidents were not regarded as a serious safety problem, but
represented about 25% of accidents needing first aid treatment, and are very painful for the person
involved. It cost about GBP 500 (€ 810) to settle each claim, a total of € 195 000 in 1995.
Bairds initiated the design and test of a new guard. Within the first year of fitting them their insurance
premium was cut by 50%. Within two years, needle-in-finger accidents dropped from around 500 to
40: where guards were fitted, no needle-in-finger accidents have been recorded. The guard has an
additional benefit as it provides a barrier when needles shatter, thus additional eye protection was
achieved. Baird employs 6,000: when extrapolated for that sector in the UK, a reduction of over
20,000 accidents and a saving of about € 10 million per year will be achieved. The guard cost € 45 at
first but now costs less than € 5.
This guard has now been adopted in prEN ISO 10821 ‘Industrial sewing machines – ‘Safety
requirements for sewing machines, units and systems’. As soon as this CEN standard is adopted, new
sewing machines will have to have such an encapsulating guard.
“Preventing needle-in-the-finger injuries in the clothing industry – the case of William Baird” –
European Agency for Safety and Health at Work - How to reduce workplace accidents 22/11/2001.
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6. Impact on Consumers
6.1 INTRODUCTION
The ISO states that: “In today's increasingly global manufacturing and trading environment,
consumers expect to benefit from access to a wider choice of goods and services, lower prices
and more information on which to base their choices. They also expect that services and products
will not only be consistent in quality, durability and ease of use, but also safe and ecologically
friendly”163. This chapter asks whether standards contribute to these consumer "wants" and
expectations.
Usher164 has considered the role of the consumer in the global economy and outlined eight
requirements for consumer power – 1) Necessities for survival, 2) Safety, 3) Information, 4)
Competitive choice and quality, 5) Representation in government policy, 6) Redress for poor
goods and services, 7) Education to be informed, and 8) a healthy environment. We believe
standardization impacts on seven of these (the exception being No.5), implying that it an
important topic for consumers. Describing the ways in which it impacts on consumers is the aim
of this chapter.
Historically, the notion that standards are good for consumers has been challenged. For example,
in 1965, Ralph Nader said (about the automobile industry): “Trade product standards often harm
consumers. The history of standards is strewn with abuses: standards essentially written by large
corporations to exclude competitors from the marketplace, standards that misrepresent hazardous
products as safe, standards that boost sales while benefiting only the producer, and standards
designed to head off tough government safety requirements rather than protect the public165”.
However, the potential for such abuses of power by companies to the detriment of consumers has
been reduced by the growing power of consumers in Europe and the wider OECD in recent
decades. In Europe, the role of National Bodies until the late 1980s, meant that the public had (or
should have had) its interests represented on regulations. However, national standards were
sometimes used to create barriers against imports – with such "back door" protectionism was
justified in the "national interest". With this now much less possible in Europe, there is also
higher transparency and a stronger voice for consumers in standardization (although issues
remain as to whether consumer organizations have the resources to fully exercise this voice).
Consumer Protection, representing standardization impacts as a living tree: branches on the left
show the headings under which benefits to consumers fall. These are divided into two categories
- affordability and quality. A tree bearing showing consumer concerns and negative impacts is
shown on the right hand side. These headings (affordability, quality and consumer concerns)
provide a structure of the next section, with sectoral impacts reviewed in Section 6.3.
163
Taken from the ISO website's homepage
164
“Global communications: what about Consumers”, Allan Usher, Consumers International, Lisbon April 3 2001
165
Ralph Nader, Testimony on the Voluntary Standards Accreditation Act, Hearings on S825, Before the
Subcommittee on Antitrust and Monopoly of the Senate Committee on the Judiciary, Ist Sess. 1977
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IMPACT ON CONSUMERS
Affordability Innovation Quality
Health &
Competitive Safety
prices
Reliability
Single Market
Aesthetics
Transparency
Compatibility Variety
reduction
Exclusion
Supplier choice
Design – for - all Aesthetics
Omission
Product choice
Globalisation
Environment
Consumer Protection benefits Consumer Protection deficits

ISUG graphic.
Figure 6.1: Consumers and Innovation

As there is no single impact of standardization on consumers but multiple impacts, this chapter
draws heavily on the other impact chapters in this report. As two consumer benefits fall under
dedicated other impacts in the report (environment and innovation), there are not discussed
separately in this chapter.
6.2 OVERALL IMPACT OF STANDARDS ON CONSUMERS
6.2.1 Overview
As a result of standardization, Ronnen166 concludes: “all consumers are better off, more
consumers participate in the market, and all participating consumers select higher quality”. We
believe that this contention holds true and indeed that the main beneficiaries of standardization
are not companies, but society and the consumer167.
166
Ronnen
167
The one set of corporate gains that could match those of consumers/wider society are those relating to innovation
(see Chapter 4)
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6.2.2 Affordability Impacts

Competitive prices
The Competitiveness chapter showed how standardization leads to large costs savings on most
goods over time and examination of current standardization showed many products would cost at
least 40% more without continuing standardization. As industrial profitability (as a proportion of
revenue) has been relatively stable over time, one can conclude that these large savings are
generally passed on, almost in total, to consumers, with competition being the impetus for this to
happen. Porter168 has emphasized that, in competitive markets, firms cannot earn sustained
supernormal profits as that encourages other firms to enter the market, driving down prices (this
does not prevent the possibility of such profits in the short run).
This partly explains why people at the start of the 21st century have far more material goods than
did people at the start of the 20th century: this refers to the technical sophistication of goods as
well as their quantity and variety. All standard-of-living indicators are rising over time – whether
increases in life expectancy (see Annex 5.5), level of education, working hours, leisure time,
disposable income, ownership of equipment and appliances etc. While this is not solely due to
standardization (nor to any single factor), it would not have been possible without
standardization (see also Competitiveness chapter), which is a crucial factor in rising
productivity.
Standardization has given the consumer access to previously unaffordable products. An early
example was Henry Ford’s mass production and production specialisation, both derived from
standardization. A US report notes: “Mass produced goods were cheaper. Thus many consumer
goods, such as cars, refrigerators, and vacuum cleaners, once regarded as luxuries, became more
accessible to all. Between 1914 and 1924, Ford produced more than 15,000,000 standardized
Model Ts; the cost of which dropped from $950 to $240.23” 169
Schmalensee170 showed that, in a competitive industry, the surplus from an input to production is
passed on to consumers. Standardization directly encourages competition in a variety of ways
(also outlined in the Competitiveness chapter). In a European context, single market completion,
supported by European standardization, has facilitated increased competition and consequent
consumer benefits.
Transparency
Standards enable consumers to compare like with like, to know what they are buying and against
what parameters to test products. “Product attributes cannot always be evaluated by individual
purchasers by inspection or even from prior experience. However, a product's conformance to
accepted standards readily provides an efficient method of conveying complex information on
the product's suitability”171
To express this differently, a consumer could undertake such comparison work himself or herself
but such work would be onerous. “As standardization is a public good, the ‘market’ for
168
Porter, M., Competitive Strategy, Free Press, New York, (1980)
169
U.S. Congress, Office of Technology Assessment, “ Global Standards: Building Blocks for the Future”, TCT-512
(Washington, DC: U.S. Government Printing Office, March 1992
170
Schmalensee, R., "Another Look at Social Valuation of Input Price Changes", American Economic Review, 66
(1): 239-243, (1976)
171
The ABC’s of standards-related activities in the US”, Maureen A. Breitenberg, (US) National Institute of
Standards and Technology, Gaithersburg, May 1987 NBSIR 87-3576
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standardization is likely to be imperfect. Consumers comprise a large group (compared with

producers) and their demand for standardization is unlikely to be articulated as strongly as that of
producers…To estimate the benefits of standards it is necessary to assess their impact on the
consumers’ transaction costs. An obvious starting point would be.. the approach to consumers’
search…in effect, the standardizing body undertakes part of these costs on behalf of the
consumer”172
Consumer groups make extensive use of standards for product tests, as reported in consumer
magazines. For example, Stiftung Warentest’s Test magazine (Dec. 2001) tested Christmas tree
lights for electrical safety (to EN standards 60598 and 61558) – 1 of 17 indoor units, 2 of 5
outdoors and 1 of 3 connectors, failed. Consumers using the equipment outdoors were also
advised to use transformers to an IEC protection designation. The same edition has a comparison
of blood-pressure test equipment for home use and refers to tests to DIN 58130 – now overtaken
by EN 1060. In a similar vein, the French consumer magazine 60 millions de Consommateurs
reported (February 2001) on four types of children’s ski safety helmets, tested to EN 1077, with
one failing on retention strength.
Supplier and Product Choice

Public standards tend to increase the numbers of suppliers, enabling SMEs to compete with large
companies. Mass production tends, on the other hand, to concentrate production and lead to
variety reduction over time. These two forces remain in tension, but in a competitive market, any
evident profits of unusually large size will attract new entrants, facilitated by the openness of the
market due to standardization. In most sectors, therefore, when the ability to move goods freely
internationally is taken into account, standards are a factor supporting the consumer in having an
increased choice of suppliers.
6.2.3 Quality Impacts
In “The Competition Act: 1 Consumer Guide”, the Competition Commission of South Africa lists the
benefits of competition to consumers as – lower prices for consumer goods, product quality and
innovation. Would competition really be possible without standardization? – we doubt it. The
Competitiveness and Quality, and Innovation chapters clearly show how standardization is a principal tool
in attaining those objectives
Health and Safety

According to BauA statistics for Germany in 1996, some 3.2% of home accidents and 2.5% of
home and leisure accidents had a ‘technical’ content. In 1999, some 5,592 people died in
accidents in the home in Germany, against 1,293 at work. While standardization for health and
safety is normally viewed from a workplace perspective, the relevant directives speak of
essential requirements for safety, irrespective of where products are used. Thus the Low Voltage
Directive, the Safety of Machinery Directive and others cover most equipment and appliances
used by consumers. Most of the points in the Health and Safety of Workers chapter therefore
also apply to consumers.
172
The European Standardization System: How Much in Need of Reform is it?” Bernd Woeckener, Dept. of
Economics, Universität Tübingen, Germany, Euras Yearbook of Standardization Vol. 1
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Safety is a combination of many factors and accident statistics are not specific enough to make
provable links between e.g. numbers of accidents and pertinent standards. Nonetheless,
standardized RCDs and MCBs, providing electrical safety protection in the home and in all
buildings, have played a key role in the continuing fall in deaths by electrocution. (This does not
downplay other factors involved - listed in the Health and Safety chapter.) Agreement on the
effectiveness of RCDs comes from the US, where about one person a day dies from
electrocution, roughly half-and-half work and domestic. One report173 estimated that over 60% of
home electrocutions could be prevented if Ground Fault Circuit Interrupters (RCDs in Europe)
were installed. While there are difficulties in classifying accidents (see Health and Safety chapter
and Annex 5.5), greater care is taken in classifying fatal accidents. The dangers of electricity
mean it generates a higher proportion of fatal to non-fatal accidents than other areas.
Fatal home electrical accidents

Finland 1939-1997
15
10
0
'39 '45 '50 '55 '60 '65 '70 '80 '85 '90 '95
Adapted by ISUG
Figure 6.2: Electrical Fatalities in Finland
Electrical fatalities at home in Finland have been reduced by a factor of between 2.5 and 3,
despite many more appliances, and much wider use of electricity, in homes.
Electrical fatalities at hom e - Germ any 1970 - 1999
Germany Former BRD
300
250
200
150
100
50
0
1970 1975 1980 1985 1990 1995
Adapted from “Elektrounfälle in Deutschland”

Figure 6.3: Electrical Fatalities at Home Germany
Fatal electrical accidents at home in Germany fell approx. five-fold in the former BRD. Figures
for all of Germany are not available, but fatalities in the newly-integrated Ostländer declined
after unification.
173
Reported in USA Today newspaper, 19/06/01
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Electrical fatalities Sw eden - hom e and w ork

1897-1996
50
40
30
20
10
0
1897 1917 1937 1957 1977 1997
Adapted from ERA report174

Figure 6.3: Electrical fatalities Sweden
In general, in both the US and European countries, at least 50% of electrical accidents are
domestic. The curve below for electrical fatalities in the US shows a decline of some 30%, a far
lower level of decline than appears to have been achieved in Europe. The reasons are covered
extensively in the H&S chapter (RCDs175, double-insulation, substitution of MCB176s for fuses
etc.) When extrapolated Europe-wide, there can be little doubt that improved EN/IEC standards-
based electrical safety is preventing some hundreds of electrocution deaths Europe-wide every
year. RCDs are becoming increasingly prevalent in Europe – both voluntarily and by regulation
(e.g they must be fitted in bathrooms in Germany in certain conditions), but are less so in the US.
This may largely explains the improvements in Europe although electricity supply at 120 V in
the US is inherently safer than in Europe, 230V.
Consumer electrical fatalities US 1988-

1998
350
300
250
200
150
100
'88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98
an ISUG Graphic
Figure 6.4: Consumer electrical fatalities USA
Other Accidents in the Home
174
Study on the Implementation of the Low Voltage Directive for the European Commission”, DG III/D/1, ERA
Consultants, ERA Report 99-0351 ERA Project 66-01-0581
175
“RCD” is residual current device, a safety circuit incorporated in or added to an electrical socket
176
“MCB” is miniature circuit breaker, an automatically disconnecting switch used instead of a fuse
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IMPACT ON CONSUMERS
Electricity is also a major cause of home fires. The example of electric blankets shows similar
improvements177. About 35% of blankets sold in Europe were sold in the UK and they have been
a significant cause of fires in the home, with some 63% due to a faulty appliance or lead.
Blankets sold to IEC 967 standards since 1993 are considered to give a higher level of safety,
with reliable PVC/PE overheat protection systems; and examination of 182 fire brigade
FDR1reports (mainly 1997-1998) have identified no fires caused by electric blankets
manufactured after 1993.
Num ber of electric blanket fires UK 1985-96
2500
1500
500
1985 1990 1995
Adapted from DTI report

Figure 6.5: Electrical Blanket Fatalities UK
A minor but important modification to EN 60335-2-9, the harmonized European standard for
toasters and similar appliances was made to address the burn hazard from high surface
temperatures and "the use of appliances by young children or infirm persons without
supervision" [Clause 1 Scope]. Many appliances covered by that standard are used by children
and the infirm. The hazard of burns from high surface temperatures on mainly workplace
machinery had been recognised and suitable guidance produced with EN 563. This is now made
specifically relevant to consumer products with the horizontal standard EN 13202:2000.
6.2.4 Extension of Standardization to Sport and Leisure Activities

Experience gained from standardization under the Personal Protection and Equipment (PPE)
Directive is increasingly being applied to benefit consumers in sports and leisure. Standards exist
for, inter alia, lifejackets, mountaineering ropes, ski helmets, cycle helmets (EN 1078), helmets
for young children (EN 1080), boating deck harness. Standards expected in 2002/3 are many
mountaineering supplies, paragliding harnesses. Standards under preparation include diving
accessories, motorcycle protective clothing back protection and martial arts protection. To avoid
confusion (and costs for users) PPE standards covering several sport activities with similar type
and level of risks are to be developed, and an ANEC suggestion to develop more modular
hazard-based standards has been adopted.
Accidents unfortunately will always happen. For example, in recent years, six children were
killed in helmet-related accidents in Europe. Some of the causes were anticipated in EN 1078
and referred to EN 1080 (the children’s’ version of the standard), which has very recently been
amended to gain from these experiences. Feedback of this nature ensures the highest practicable
177
“Electric blanket fires and related issues”, Government Consumer Safety Research, DTI UK
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level of safety. Consumer Association tests rely on the relevant standards (see transparency,
above), and their effectiveness is indicated under Mechanical Engineering and PPE.
6.2.5 Reliability
European airlines told ISUG that the main benefit from standardization to them was as Aircraft
Reliability, followed by Aircraft Safety and Maintenance Quality. (The Competitiveness chapter
lists examples of progress made in reliability – deriving from standardization via mass
production and via quality management systems - usually EN ISO 9000). Reliability
improvements have been greatest in electronics equipment but extend also to more traditional
domestic machines, despite the fact that they offer ever more complex functionality. Such
reliability is a direct benefit to consumers from standardization.
6.2.6 Aesthetics
Opinions about the effects of standardization on the aesthetic appeal of goods differ. On the one
hand, standardization equates with "sameness", e.g. it is remarked that cars look increasingly
similar, partly because they seek the lowest possible drag coefficient CD for which there is only
one single ideal, and potentially standard, profile in a speed range. The variable appearance and
finish of artisan handmade goods is less in evidence with standards. On the other hand, mass
customization, facilitated by standards, ‘renews’ variety (to a greater or lesser extent) and
combines it with lower cost. Also, the ability of manufacturers to engage top designers to design
domestic goods rests on the standards-dependent volumes of mass markets.
6.2.7 Compatibility
Consumer concerns about compatibility centre on:
• New products, i.e. a desire to avoid costly obsolescence of existing equipment through good
compatibility standards;
• Portability, allowing a product to be used while travelling (e.g. on holiday).
Both concerns are central to standardization. Where a product may be networked, the product
standard will be written to cater for its interoperability. This applied traditionally with railways
etc. but extended over time to water and sewerage systems, electricity supply and
telecommunications. Credit cards now work with ATMs globally and camera films are classified
by ISO number. ISO lists also mean that the dashboard symbols in the Japanese car you hire in
Australia are identical to those in the French car you own at home in Norway or that you can
watch MPEG video footage delivered over the Web on any computer.
Portability means portable compatibility. With the (important) exception of the failed attempt at
unifying domestic plug-and-sockets, few portability problems now arise as one moves around
Europe.
6.2.8 Design for all Citizens

Consumer organizations such as ANEC178 continue to represent the interests of children in
standardization. Thus, as well as EN 563 for Surface Temperatures in general, a safeguard A11
was achieved in CENELEC’s EN 60335-2-9:1995 for grills, toasters and similar portable
cooking appliances. This introduced a temperature test of accessible surfaces of metallic sides
178
ANEC- The European Consumers Voice for Standardization
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lower than 25mm below the top surface of the toaster, whose temperature rise shall not exceed
900K.
In December 2001, ISO with IEC, CEN and CENELEC published a guide to help standards
writers address the needs of the elderly and people with disabilities (ISO/IEC Guide 71).
Consumer organizations are increasingly pressing that "Design for all" be taken into account in
standards development. As 10% people living in the EU are regarded as disabled, and Eurostat
has calculated that the number of persons over 60 will increase by 40% in EU countries between
1995 and 2020, manufacturers are not resisting the design-for-all concept.
Following consultations with ANEC, ETSI has drawn up “Generic consumer requirements for
ICT Standardization”, stating that: “When designing, selecting, commissioning, modifying and
standardising ICT systems, certain generic consumer requirements need to be taken into account.
Having considered proposals by ANEC, the ICT Standards Board has adopted the following as
policy, and asked members to ensure that it is communicated to those participating in the
technical work of standardization” - there follows a list of guidelines highlighting design-for-all,
and multi-cultural and linguistic needs.
6.2.9 Evolution of Consumer Protection

The protection given to the consumer vis à vis manufacturers and providers of services improved
considerably in Europe between 1980 and 2000. However, without standardization, Europe
could not have adopted many of its consumer protection measures, nor could it continue to
improve on them. For instance, 2001 plans to improve the warranty period automatically
extended to the purchase of new goods, and used goods through commercial channels, could
scarcely be considered without the improvements in product reliability of recent decades. As
discussed under the Competitiveness Impact, quality is underpinned by product-type
standardization and quality management standards. Manufacturers can now afford better
warranties, based on achievement of better reliability. Without this, the two-year warranty
planned could have had major cost implications for manufactures - in fact, it has been accepted
as reasonable by manufacturers.
6.2.10 Consumer Concerns regarding Standardization
Based on ISUG's desk research, and contact with organizations in the workshops, this section
briefly mentions a number of consumer concerns that appear to exist.
One relates to the level of consumer representation in standardization. In 2000, “ANEC

representatives attended 22 CEN, 9 CENELEC, 6 ETSI, 4 ISO, 3 IEC, 2 EOTC committees, 2
UN-ECE committees and 3 ELSECOM groups” (source – ANEC). Consumer representation in
the National Standards Bodies is uneven and generally low. DIN is one of the most active, and
has a consumer advisory body with 50 external experts available to it, which works on the 10%
of the 24000 DIN standards it considers relevant.179 (Consumers will not be interested in all
standards, e.g those relating to test methods etc.).
Exclusion refers to the perception that, despite progress, consumer interests are not always
adequately represented in standardization. "Design-for-all" raises the question of omission, i.e.
will organizations for disabled people and other minority groups regard general consumer
179
Professor Dr. Edda Müller, Director VZBV (German consumer association umbrella organization), DIN press
release 15 October 2001
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organisations as representative of their needs? However, if one also acknowledges a need to

extend the environmental remit, the standardization process, regardless of resourcing issues,
could be slowed considerably. (The consensus-based system is already under attack for
slowness.) With each extension of ‘interests’, agreement in Technical Committees is more
difficult to achieve and consortium-type standardization becomes more attractive to
manufacturers.
The Swiss inspectorate for electric power equipment (Eidgenössischen Starkstrominspektorrat)

reported that, in 2000, almost 30% of 1,555 samples of electrical goods inspected had safety
deficiencies potentially hazardous to the person. Some 20% were electrically unsafe.180 An ERA
study uncovered evidence of serious defect rates and uneven levels of surveillance around
Europe. Examinations by TUKES, the surveillance authority of Finland, tabulated in Annex 5.5,
show a considerable number of defects in equipment and appliances on the market, although the
situation seems to be improving slowly. Many European countries have inadequate surveillance,
and could be used to dump problematic appliances.
There is also a concern about the speed of standardization for new products. For example, by
2001, there were some five million pairs of rollers for which there are no standards are in use in
France alone. Also, some 14 models of scooters had to be withdrawn from the French market for
safety reasons, but a standard in advance could have prevented the accidents that occurred. As
against that, Europe had led the world in some areas of consumer concern, e.g. EN 50360 Mobile
Phone- Human Exposure to EM Fields. Also, although EMC requirements proceed from the
LVD and not the Directive on General product safety, EN 61000 EMC Limits is reassuring from
a safety point of view when travelling by air or rail, or in a medical intensive care environment
(see Annex 5.5).
6.3 SECTORAL IMPACT OF STANDARDS ON CONSUMERS

The Medical Devices industry rated the impact of standardization as very important, an average
of + 4 from respondents on a –5 to + 5 scale, in the ISUG survey. Hospital patients benefit from
a great variety of equipment and disposables that have benefited from standardization of risk
assessment procedures. Critical equipment and systems in diagnostics and operating theatres are
all the subject of standards to ensure their safety. They also adhere to standards such as those
relating to EMC to ensure spurious signals do not cause malfunction, and electrical equipment
and accessory standards to ensure continuity in the event of power cuts etc. The RCDs, identified
earlier as a major improvement for safety in the home, have a special version of the standard for
electrical conditions of operating theatres (floating neutrals etc.).
6.3.2 Aeronautics
Consumers benefit in two major ways from aeronautics standardization:
• Safety – ISUG surveys show that airlines and aircraft maintenance companies regard
standardization as of major importance in aircraft safety – see survey diagrams in Annex 5.5;
• Cost of flying – this is greatly influenced by aircraft capital cost which in turn seeks cost
reduction mainly by means of standardization. For example, two-engined crossings of the
Atlantic are permissible due to greater engine reliability, and cut flying costs dramatically.
180
“Zu viele mangelhafte Elektrogeräte!” Konsumentinnenforum Schweiz News, 25 Feb. 2001
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6.3.3 Mechanical Engineering and PPE

The main exposure that consumers have to mechanical engineering and equipment is in cars and
transport, which are outside the scope of this study. The once-familiar sight of a car standing at
the side of the road waiting for repair is now a rare experience. Reliability has improved and
maintenance costs have decreased (see diagram in Competitiveness Annex 5.5).
The Machinery Directive applies to machines for the home, such as EN 774 for Handheld Hedge
Trimmers and EN 786 for Lawn Edge Trimmers. When visiting the shops, EN 115 for Escalators
and Passenger Conveyors protect the consumer.
Standards relating to sports and leisure equipment and their benefits to consumers were
discussed earlier in this chapter. There is some information available on the impact of bicycle
masks (see diagram below).
Cycle masks test performance – (Key: Best < 2 , 1, 0, -1, -2, > Worst)
(Adapted from Which? “Cycle Masks On Test” June 1998)
Sample Conforms Particle Total Ultrafine CO2 Breathing Comfort

to percolat- inward particles assess resistance
EN 149 ion. leakage -ment
1 No -1 -1 0 Fail Pass -1
2 No -1 -1 0 Pass Pass 0
3 Yes 1 1 1 Pass Pass 1
4 Yes 1 1 0 Pass Pass 1
5 No -1 -1 -1 Pass Pass 0
6 Yes 1 Pass Pass 0
0 1
7 No -1 -1 -1 Pass Pass 1
8 Yes 1 1 0 Pass Pass N/A
Table 6.1: Cycle Masks performance
EN-conforming masks accounted for four out of eight masks tested. However, they yielded 11 of
the top 12 scores.

The dramatic fall in the numbers of electrical-related fatalities was described earlier in the
chapter. In the household case, the effect of the use of plastic piping in reducing accidents is
certainly a significant if unintended factor in reducing accidents, but that applies only to houses
built since the 1960s approx. and not to the entire housing stock. RCDs, IEC wiring standards,
MCBs instead of fuses, standards calling up double-insulation in hairdryers and other such
dangerous appliances, and higher standards in cables etc. all played a part in achieving this
improvement.
6.3.5 Gas Appliances and Pressure Equipment

All gas standardization is in support of the gas appliance directive (90/396/EEC). (GAD). The
essential requirements of that directive include “Appliances must be so designed and built as to
operate safely and present no danger to persons, domestic animals or property when normally
used”. There are similar essential requirements regarding materials, design and construction.
Reports suggest that the effect of the GAD had been to improve safety for the consumer and that
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IMPACT ON CONSUMERS
has been effected by standardisation, particularly in states where gas appliances were not
previously regulated. Before the GAD, there was national standardization to protect consumers.
However, without national regulation, the voluntary nature of standards did not necessarily lead
to better consumer protection. The main objective of the GAD was to open the internal market.
To do this, it was necessary to ensure consumer protection. While the GAD itself indicated what
was ‘essential’, standardisation enabled these essential requirements to be delivered. It also
assisted the notified bodies and test houses in satisfying themselves that ‘essential requirements’
were met.
The number of recorded accidents attributable to domestic appliance design and construction has
been quite low in reporting from all states for many years. Industry discussions confirm that the
numbers of gas appliances related accidents have been reduced and that this is linked to the
application of European standards.

Annex 5.5 shows the take-up of electronic facilities in banking, shopping, schools and in state
services, built on a multiplicity of interrelated standards. This offers a great improvement in
quality of life for citizens and allows lifestyle changes, e.g. with more people working from
home. This has been made possible by standardized software and hardware interfaces of
computers and communications. The inventor of the Internet foresaw Universal Access: "The
power of the Web is in its universality. Access by everyone regardless of disability is an essential
aspect."181
The earlier point that standardization generates lower costs, but the potential excess profit largely
passes to the consumer, is evident with IT standardization. An award-winning paper182 examines
hypotheses on Productivity, Profit and Consumer Welfare using recent firm-level data on IT
spending by 370 large firms. It finds that IT increases productivity and creates substantial value
for consumers. However, these benefits have not resulted in supernormal business profitability.
The paper concludes that there is no contradiction between increased productivity (based partly
on standardization), increased consumer value and unchanged profitability.

The application of the EN ISO/IEC 17025 Standard ensures that all testing is carried out with
greater reliability and that quoted test results (for example for constituents of interest in mineral
and drinking water, food products, paints, etc. etc) are therefore reliable. The same standard
underlies physical and engineering testing carried out under the Toy Directive and in vitro
diagnostic testing (in medical procedures). Thus consumers can have confidence in relevant data
in environmental matters, and certificates of test and analysis183.
181
Tim Berners-Lee, W3C Director and inventor of the World Wide Web
182
“Productivity, Profit and Consumer Welfare: Three Different Measures of Information Technology's Value”:
Lorin Hitt and Erik Brynjolfsson, MIT Sloan School May 1995, Revised Oct. 1995, MIS Quarterly June 1996
183
As stated earlier, the direct impact of standards on the environment, which then benefits all citizens, is discussed
in a dedicated chapter of this report.
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IMPACT ON CONSUMERS
6.3.8 Food Hygiene and Safety

There is a considerable standardization programme for testing procedures both for quality and
food safety factors. These standards assist manufacturers and the food safety control authorities
to protect the consumer.
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IMPACT ON THE ENVIRONMENT
7. Impact on the Environment

7.1 INTRODUCTION
7.1.1 Standards and the Environment

This chapter considers environmental impacts, i.e. demands on non-sustainable resources, the
creation of waste and the generation of emissions to air and water that arise during production,
distribution, use and disposal of products. The chapter does not review the impact of products
and processes per se on the environment, but the impact of their standardization which may (or
may not) influence the environment.
In the past, without applicable environmental regulations, the design of a product or process was
based on normal commercial considerations and opportunities for environmental input were
minor. Industry, the main driver and user of standards, would normally be reluctant to apply
requirements that might increase costs and reduce sales. In this "free market" approach, any
benefit to the environment from a product (e.g. reduction of emissions etc.) would be incidental,
unless driven by regulation or an identified customer demand.
Most standards (dealing with dimensions, interoperability, materials specification, test

procedures etc.)184 do not impact on the environment. Even for products with a potential
environmental impact, the effect of standardization relates to restrictions or prescriptions beyond
the impact of the non-standardized product. (Indirect impacts on environmental monitoring and
environmental management are considered below.)
European standardization has been increasingly concerned with the potential impact of standards
on the environment. This represents a response to the demands of regulation and international
conventions and to public concern with the environment. The recognition that standards can
improve the environmental impact of products and processes is based on a realisation that
standards affect how a product is used, maintained and treated at the end of its life.
Environmental checklists and guidelines (such as those developed by CEN) now bring these
issues into focus. CEN guidelines for Technical Committees provide a checklist of
environmental aspects to be considered at different stages of the product life cycle:
• Production and pre-production;
• Distribution (including packaging);
• Use;
• End of life of the product.
At each stage, CEN suggests the following be considered:

• Resource use
• Energy consumption
• Emissions to air and water
• Waste
• Noise
184
An analysis by ISUG of standards sent for Public Enquiry by CEN in 2001 shows that some 90% of standards are
in these categories and therefore in themselves have no impact on the environment. The figure is higher for
standards sent by CENELEC and ETSI.
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• Migration of hazardous substances

• Impacts on soil
• Risks to the environment from accidents or misuse
For medical devices, gas appliances and construction products, Sector Policy Papers, Guidelines
and Questionnaires support TCs' consideration of environmental aspects.
The above considerations apply to (most) products. A second area of environmental

standardization addresses management issues such as assessment, performance evaluation and
other management tools. A third area addresses environmental monitoring. We review these
topics below.
The increased emphasis on standards with environmental effects can be good for business. A
1995 paper185 argues that, while environmental standards are often initially seen an undesirable
cost burden, manufacturers that apply them ultimately benefit in more aware markets. Indeed,
potentially onerous requirements can lead to increased competitiveness and innovation and
countries that ignore environmental standards because of implementation costs risk becoming
uncompetitive (the paper argues).
A further debate is on how to achieve environmental objectives. Economists tend to prefer taxes
and subsidies as these allow industry flexibility in how it achieves the objectives and are useful
when policy makers lack information on options available and their costs (as is usual). This
flexibility can also encourage innovation. In contrast, policy makers often prefer regulatory
instruments, which are unambiguous. Regulations might be placed on processes such as the
output of pollutants or the means of end-of-use disposal. Increasingly, environmental objectives
are considered at product design stage. In many ways, imposing a solution at this stage is
efficient as it reduces the need for regulations at later points in the product life cycle. However,
as with standards generally, imposing a solution at this point can reduce manufacturers’
flexibility of operation and, consequently, reduce competition and innovation. In determining
whether to introduce standards for environmental reasons, and how to do so (their "elaboration"),
the issue is whether their social benefits exceed (often high initial) private costs for
manufacturers. A second consideration is whether using market mechanisms may achieve the
aims only in the medium-term, when environmental damage may already have occurred, i.e. at
what stage is it appropriate to provide solutions through which environmental objectives are met
efficiently and economically.
7.1.2 Comments on Method Specific to this Impact

Discussions relating to this chapter were held with:
• the EEB;
• DG Environment;
• industry organizations (e.g. EUCOMED, COCIR, EDMA, AFECI and Orgalime);
• CEN, CMC and Environmental Health desk personnel.
Environmental organizations including the EEB were reluctant to discuss the impact of
standardization (in the sense of formal technical standardization), as they felt standards usually
did not have an impact on the environment (for the reasons stated above), in the absence of
185
Porter ME and Van der Linde C, Green and Competitive: Ending the Stalemate, Harvard Business Review,
September-October 1995
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underpinning regulations or law.186,187,188,189,190,191 Environmentalists felt that, without

regulations, industry has no motivation to take environmental impacts into consideration while
developing standards. Industry and trade organisations told ISUG that industry adopts standards
with reasonable environmental and customer demands but, in the absence of external demands,
will not create costs that have to be passed on to customers.
Conclusions from these discussions were reinforced by the project survey, workshops and
contact with individual experts, and reviews of:
• selected CEN TC business plans192;
• CEN Strategic Advisory Body on the Environment (SABE) documentation;
• European Standards Bodies documents on the environment193; and
• literature and environmental news reports (e.g. ENDS Environment Daily; Greener
Management International; Journal of Environment & Development).
The research was open to examples of standards with a negative impact on the environment.
Some standards have options that could have negative impacts, but it was not possible, at least in
the context of this study, to ascertain how significant their impact on the environment has been.
No examples were brought to our attention that, after scrutiny, were shown to lead to a
deterioration of the environment .
7.2 OVERALL IMPACT OF STANDARDS ON THE ENVIRONMENT
7.2.1 General Impact
From consultations with industrial and standardizing sources, the impact of standardization on
the environment was viewed as positive, i.e. it leads to a reduction of adverse impacts on the
environment. This was based on organisations' and experts' opinions, rather than on data.
Product standardization (even without any environmental regulations) can lead to benefits for the
environment. These include:
• more uniform products, making common disposal solutions cheaper;
186
The need and demand for building sustainability into Standards; Dr. Karola Taschner EEB
187
No Harmonisation of Environmental legislation by delegation to private international Standardization
Organisations” by Karola Taschner. EEB,Brussels Oct 1999
188
Briefing Note for “Hearing on the participation of Environmental NGO’s in Standardization” Brussels 8 June
2000 (+ correspondence with CEN) Karola Taschner EEB
189
“CEN at Work: How the requirement of the European Packaging and Packaging Waste Directive (94/62) are
bypassed by CEN Standards EEB”, Sept 2000
190
“EU Strategy for Sustainable Development Stakeholders Views” April 2001 EEB et al.
191
“EEB asks Commission to Scrap Biofuels Proposal”, Press Release EEB, for example
192
(“Market, Environment and objectives of CEN/TC230 Water Analysis (BT 25/2000); CEN/TC223 Soil
Improvers & Growing Media (BT180/1999); of CEN/TC308 Characterization of Sludges (BT 32/2000); of
CEN/TC264 Air Quality; of CEN/TC292 Characterization of Waste BTC/235/1999; of CEN/TC211 Acoustics; and
Draft Business Plan CEN/TC235 Solid Biofuels
193
BT Paper Draft CEN Position on the EC Proposal for an Integrated Product Policy 22-03-2001; Guidelines to
minimize the environmental impact of products, CEN/SABE/ENIS; CENELEC Environmental Policy Statement
EPS October 1999; Draft CEN Position on the EC proposal for an Integrated Product Policy (IPP) and Comments
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• comparative test methods – e.g. for energy use, allowing classification of energy
consumption and labelling for the consumer;
• exclusion of products that do not fulfil other requirements. Products of poor quality often
have poor environmental performance through short lifespans. Also, health and safety
standards reduce the number of products with potentially dangerous emissions or
substances.
The literature (other than on EN ISO 14001 and EMAS) is divided on the significance of
different effects on the environment and on regulations or regulatory limits (i.e. regulatory
standards) and certification. When standardization in unregulated areas is considered, its impact
has often benefited the environment (as described above), though often not to the degree
demanded by environmentalists. Standardizers have responded to public awareness of the
environment and have developed policies and structures to pay attention to environmental
concerns without conflicting with the other objectives of standardization. Even for sectors
outside this study (e.g. packaging and construction), our research shows an attention being paid
to environmental issues. Early publications on EN ISO 14001: 1996 and the first EMAS
regulations were uncertain that these would benefit the environment, but subsequent commentary
is positive.
Within the scope of the sectors studied, standardization has the potential to have an impact on the
environment. The Environmental Monitoring sector has an indirect but important impact by
providing measuring tools. EN ISO 14001 and EMAS are beginning to achieve a positive impact
and the response from organizations with these systems in place is positive (reflected in the
questionnaire responses and published case studies and commentaries).
The generally positive reactions to the environmental impact of product standards and
standardization are further supplemented by benefits from the updating of older standards in the
light of newer guidelines on environmental standardization.
7.2.2 Impact of EMS Standards on Environmental Performance of Organizations

EN ISO 14001 was adopted by CEN in a parallel vote under the Vienna Agreement.194 The
literature shows that where enterprises have reported on the implementation of ISO 14001,
considerable improvements in environmental performance have often been achieved by ensuring
management and employee attention to relevant issues. These benefits include environmental
benefits that are also economic benefits (listed below) and economic benefits without a direct
environmental benefit, e.g. reduced cost of environmental licences or insurance.
Reported environmental benefits include:

• Reduced waste disposal costs
• Reduced energy costs
• Reduction of penalties and liability claims and clean up costs arising from the reduction
of incidents causing pollution; this in turn leading to reductions in liability insurance
premiums
• Reduced incoming material and resource (e.g. water) costs
194
Under this Vienna Agreement, CEN does not undertake standardization where an ISO standard is being
developed which meets its needs. In practice the European contribution to the process of developing of EN ISO
14001 was considerable and three national standards bodies had previously developed Environmental Management
Standards which were withdrawn when replaced by the EN ISO standard. As the various ISO 14000 series of
standards are developed the process is closely monitored by a working group of CEN’s SABE. EN ISO 14001 and
the other standards of the ISO 14000 series are very much a part of European Standardization.
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• Increased productivity from a variety of reasons directly related to the application of the
standard.
Adoption of standards has been a convenient method to meet the requirements of the voluntary
eco-management and audit scheme regulations. These regulations now include the technical
requirements of EN ISO 14001 in an annex to assist users to meet the regulation requirements. In
addition, when the standard has been adopted companies report benefits in more easily meeting
regulatory environmental requirements. These benefits are particularly important to enterprises
which, prior to implementation of the ISO 14001 Management Systems, had an environmental
improvement programme that had already delivered the earlier listed benefits.
An example of how this effect is realized is provided by the European Welding Federation,
which is preparing a guide for its members across Europe to assist them to obtain registration to
ISO 14000 for a better Environmental impact.195
A team from KPMG, DNV and ICF Consulting was appointed in June 1999 to provide
independent audit and verification of BP Amoco’s worldwide greenhouse gas emissions, with a
targeted 10% reduction for 2005. A report from Det Norske Veritas on BP’s use of ISO 14001
attributes to it savings of 5% worldwide in emissions of greenhouse gases by the application of
the standard. For one installation this approach had resulted in 50% annual waste reduction.
Identifiable spill reduction savings at the Endicott oil field on the North Slope have resulted in
overall annual cost savings of $525,000. BP attributes the success to use of the system in
standardizing its EMS.
A recent empirical study of the impact of ISO 14001 registration on emissions196, demonstrated
that toxic emissions from electronic plants which had a registered (certified) ISO 14001
management system in place were lower than those from other electronic plants which had non
registered environmental management systems in place ( as illustrated below). The author
attributed this to the implementation of the training and communication requirements (Section
4.4.2 and 4.4.3 of ISO 14001) in the registered organisations.
Index of toxic emissions, ISO 14001 certified

v. non-certified electronic plants
Companies
certified to ISO
800 14001
Companies not
700
certified
600
An ISUG graphic based on data in referenced study by Russo

Figure 7.1: Index of toxic emissions
The benefits can also extend to the environmental performance of workers at home. EN ISO
14001 increases employee awareness of environmental issues and further intangible benefits
195
ENDs Environment Daily: Issue 1105 19/11/01 Norway Slashes EMAS, ISO 14001 Supervision and
http://sft.no/nyheter/dbafile5933.html in Norwegian
196
Russo, Michael V., University of Oregon: Institutional Change and Theories of Organisational Strategy: ISO
14001 and Toxic Emissions in the Electronics Industry.
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outside the workplace, e.g. car pooling. In a small number of cases, organizations assist
employees to recycle domestic waste by making their waste collection facilities available to
employees.
The implementation of EN ISO 14001 within an enterprise is also a stepping stone to obtaining
EMAS verification. Again this is not only an additional benefit for the environment but for the
organization.
In a 2001 revision of the EMAS regulations, the technical requirements of EN ISO 14001 were
reproduced as an Annex, showing its importance for eco-management and auditing.
EN ISO 14001 in itself has no specific requirements for environmental improvements. Indeed,
when introduced, it was criticized by environmental organizations as being ineffective. However,
in practice, the discipline of an enterprise-wide environmental management system has impacted
on the environmental performance of organizations adopting it, with its requirements for
environmental programmes, monitoring and measurement, defined procedures, regular reporting
and internal auditing. In general the organizations' cost of implementation and maintenance of
the standard has been more than reimbursed by cost savings arising from better environmental
performance.
Environmental and quality performance of French-owned (St. Genis, France) ST

Microelectronics (ST) US plant ISO 9000 and 14000 certified winner 1999 Baldrige quality
award, also indicates certification levels of their suppliers. ST designs, develops, manufactures,
and markets semiconductor integrated circuits (IC)
Figure 7.2: Environmental Impact Tracking
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Reporting to the SES in August 2001, Tod Delaney of the U.S. Climate Change Taskforce197
provided the following example where ISO 14001 applications were supporting environmentally
sound practices:
ISO 14000 Applications

Environmental aspect EMS EA EPE LCA
Ilumex AIJ Project; Mexico
ENERGY
EFFICIENCY
SUSCOF AIJ Project; Costa Rica Sustainable
Agriculture
Pecom Forestal; Argentina Sustainable
Forestry
WBCSD AIJ Projects (12) Various
Latin America
BP; Worldwide Energy Efficiency

Alcan Aluminum; World-wide Energy Efficiency

A. H. Marks; United Kingdom Energy Efficiency

EMS : Environmental Management Systems (EN ISO 14001)
EA: Environmental Assessment (ISO 14015)
EPE: Environmental Performance Evaluation (ISO 14030 series)
LCA: Life Cycle Analysis (ISO 14040 series)
Table 7.1: ISO 14000 Applications
At end-1999, there were 14,106 certificates of compliance with ISO 14001 worldwide, of which
52% were in Europe. The rate of increase of the number of certifications is about 50% per
annum at present.198 In July 2001, 3,034 sites were verified to EMAS regulations (70% in
Germany where government incentives encourage enterprises to achieve EMAS verification).
Therefore, while this sub-section indicates a positive impact of environmental management
systems standards, the number of organizations that have implemented such systems and
complied with standard's requirements is a small proportion of all organizations
7.2.3 Test and sampling (Environmental Monitoring) standards

The key standard for this sector is EN ISO/IEC 17025 General Requirements for Competence of
Testing and Calibration Laboratories. The standards for test methods are important as reference
methods and are not widely used in Europe for routine testing and measurement199. However, the
development of European standards has included validation programmes, which have led to high
quality standards. The regulation of emissions is reported to have improved considerably with
accurate monitoring standards.200
197
Climate Change and ISO Activities; Tod Delaney, Co-chair, Climate Change Taskforce of the U.S. TAG to
TC207; Member, ANSI Virtual TAG on Climate Change. Presented at SES Conference; August 13, 2001
198
Data from ISO survey of ISO 9000 and ISO 14000 Certificates – Ninth cycle
199
Answers to ISUG survey and ISUG discussions at “The Challenge of Measurement, Environment Safety and
Health" conference, Paris, June 2001
200
Jesper Jerlang of Danish Standards at Review meeting
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The key to Multilateral Recognition and Mutual recognition of test results lies in a combination
of:
• Certified Reference Materials (produced to conform to ISO/IEC Guide 35);
• Inter Laboratory proficiency schemes (that conform to ISO/IEC Guide 43) and;
• the determination of uncertainty of measurement by techniques from the Guide to the
Measurement of Uncertainty (ISO/IEC), developed by BIPM, IEC, IFCC, IUPAC, IUPAP,
OIML and the ISO in 1995.
This last mentioned guide is supported for chemical testing by EURACHEM's Guide to
Measurement of Uncertainty (Edition 2, 2000). Other standards of importance relate to basic
laboratory equipment, e.g. volumetric glassware.201
Therefore, when considering standardization in Environmental Monitoring, one can distinguish

(where possible) between the impact of standards and the availability of supports such as
Certified Reference Materials (CRMs), inter-laboratory proficiency studies, accreditation to EN
ISO/IEC 17025, etc.
Environmental Monitoring Standardization (including standards such as EN ISO/IEC 17025)

ensures credible data is produced to support environmental monitoring regulations of Air, Water,
Soil contamination, Sludges, Wastes and Noise. It also enables credible base line data on
environmental parameters to be established, which supports development of effective regulation.
Data obtained (with testing founded on traceable reference methods and using facilities
accredited to EN ISO/IEC 17025) can also be used to apply penalties (or achieve prosecutions)
under the regulations.
E-commerce means that environmental monitoring can now undertake inexpensive real-time
monitoring of many environmental conditions and changes. Small, versatile devices can be
mobile-internet-enabled and can be configured (even remotely) for active reporting at set
intervals or according to plus/minus tolerances or for passive recording with data downloaded as
required. Telemetry applications range from remote temperature and rain gauge reports to
automatic water sampling, from emission sampling by environmental authorities to simple gas
leak detection (refrigerants, ammonia and other hazardous chemicals) and alerts. These changes
are likely to further increase the future impact of environmental monitoring standards.
201
William Winter, Poulten and Graf Ltd VAM Bulletin Issue 25 Autumn 2001
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7.2.4 Recycling
Waste (scrap, rework) as % of sales Karlee
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
1996 1997 1998 1999 2000
Figure 7.3: Environmental achievement with targeted quality system

Karlee Corp, sheet metal manufacturer in Texas, Baldrige quality award winner 2000, holder of
ISO 9002 with environmental targets, ISUG graphic
As regards recycling, the Austrian government commissioned a report in 1996 on the place of
recycled plastics in Austrian standards.202 A total of 386 standards were selected as relevant,
including standards originating at ISO level, as ENs and from DIN with 145 under development.
The study found that (of the 386) 76 excluded recycled material and 61 excluded reprocessed
material. Just 16 suggested use of either and 51 permitted ‘virgin re-worked’ material. The report
identified some clauses in standards unhelpful to recycling, but pointed to technical reasons why
recycling is difficult or not permitted for particular applications203.
In a report to the Commission204 in February 2000, the importance of standards was emphasised
for the sale and procurement of recyclables and recyclates. To increase the impact, the report
recommended new standards, to increase consumption of recyclables and to improve the
efficiency of exchanges. CEN had taken a number of initiatives to support these
recommendations by 2001, with work underway (CEN/TC 249) on Basic/Fundamental
Standards, Test Methods for Recyclables, characterisation of recyclables and on quality,
conformity and traceability. The report also found that, in general, adequate standards do exist
for metals, paper pulp and various plastics.
202
Űberprűfung von Őnormen auf Umweltrelevanz im Hinblick von Kunstoffs-Recyclingsmaterial”, Ing. Dagmar
Schermann, Ing. Eveline Gaderer, im Auftrag des Bundesministeriums fűr Umwelt, Jugend und Familie, Wien 1996
203
Such reasons were formulated in the documents: CEN/TC155/N889 “PVC-U, re-processable and recyclable
material”; CEN/TC 155/N 1770 “Rules for recycling PE materials for production of (listed products)”; CEN/TC
155/ N 1771 “Rules for recycling of PP materials for production of (listed products).” The subject is also addressed
by CEN/TC 155/N 1820 “An analysis of the current situation and prospects for the development of recycling.”
204
Recycling Forum Report, February 2002.
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Recycling Toner modules
The quality of the finished product has been the main obstacle to the use of recycled printer toner
modules although recycled modules can be up to 60% cheaper than the original. Three German
companies came together in a DIN committee to address the problem and produced DIN 33870,
which delivers toner refilled and tested to the original quality level. In 2000, the companies
involved sold 532,000 recycled modules in accordance with the standard, saving customers €6.5
million and benefiting the environment. The standard may now form the basis of an EN.
(This case won fourth prize in the 2001 DIN ‘Examples’ competition)
7.3 SECTORAL IMPACT OF STANDARDS ON THE ENVIRONMENT
AUTO PARTS PACKAGING SAVES MONEY AND THE

ENVIRONMENT
From 1975 to 1990 the number of parts used in the car industry grew by a factor
of 5 to 150,000, delivered in 40 different packages, most of them one-trip paper,
card or foil. A DIN committee led by Logistik Consulting tackled this and
standardized on one packaging tray made of 100% recyclable polypropylene.
Some 25 million of these trays at a cost of €125 million are now in use with a life
expectancy of at least 100 round trips, roughly one full year’s use. The tray has
already paid for itself after seven trips and will therefore return at least 12:1 per
year on the investment as well as making a significant environmental
contribution. The standard package is now proceeding from DIN to become an
EN.
7.3.1 Medical devices and Informatics

This sector (other than for single use consumables) generally produces products with long life
cycles, i.e. with a lower environmental impact. There are issues for medical device consumables
relating to disposal, e.g. for single-use sterile consumables and sterile packs where these form
part of a device or for plasticized PVC in medical tubing. The justification for these materials is
their clinical efficiency and the safety and health of patients and health care workers.
EUCOMED and EDMA have promoted action for the environment within these constraints.
Standardizers in health care sectors in CEN and CENELEC have been pioneers in developing a
responsible approach to the environment in standardization and were the first to use the draft
CEN guidelines in their standardization. They also cooperated with establishment of the CEN
Environmental Help Desk.
Industry sources rated the impact of standardization of medical devices on the environment as
generally decreasing negative impacts. Some manufacturers have adopted EN ISO 14001 (or
have EMAS verified sites) to ensure production of their products is carried out while striving to
reduce adverse impacts on the environment.

Standardization in this sector has not focussed on the natural environment. However, standards
that impact on the work place can also have an effect the environment. An example is the
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standardization of machines to reduce airborne noise for workers’ safety, that has led to the
reduced environmental noise. From the ISUG workshops, companies in this sector also recognise
that there is scope for more extensive recycling of waste materials (metals, plastics, etc.).

Environmental related issues for this sector include reducing the energy utilisation of products,
and designing products that can be disposed of with minimal impact on the environment.
Standardization has already addressed the first issue with considerable success both in response
to regulations (Energy Labelling of appliances) and voluntarily (for Washing Machines).
Proposed directives205 on Waste Electrical and Electronic Equipment (WEEE) and on restricting
use of certain hazardous substances in electrical and electronic equipment were being addressed
in 2001 by CEN and CENELEC technical committees. The future impact of this standardization
will be to limit the quantity of waste going to final disposal by requiring the design of electrical
and electronic equipment in a more environmentally-efficient way, and by specifying
alternatives to flame retardants and heavy metals, which cause hazardous waste.
7.1.4 Gas Appliances and Pressure Equipment

Controversy on standards for reducing NOx emissions from gas appliances highlights that
customer demand for the low emission appliances specified in boiler and water heater standards
will not, in itself, lead to a shift to these more expensive appliances without regulation.
Standardization can increase the efficiency of gas appliances and reduce gas usage and
greenhouse gas production. Condensing boilers offer the most efficient ways of space and water
heating, but persuading the market to change to these boilers is difficult as they require a costly
redesign of the heating system. CEN Sector Forum Gas has been encouraging the gas appliance
Technical Committees to ensure that environmentally sound options are adopted in standards.
ISUG consultations and the ISUG survey indicated that standardization is providing options that
impact favourably on the environment, e.g.:
• development of more efficient burners with lower unburned gas emissions

• reduction of materials use (mainly steel) in the manufacture of smaller and lighter
appliances providing the same energy output
• Safer gas appliances which increase consumer acceptability of gas appliances and
encourage a move from electrical appliances, therefore leading to improved primary
energy utilization and less greenhouse gas release per unit of useful energy
A US source reports that consensual national efficiency appliances standards have led to
substantial reductions in US energy use, expected to be 2.5% when fully implemented, while
maintaining a strong benefit: cost ratio of more than 3:1.206
205
Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on Waste
Electrical and Electronic Equipment and on the restriction of the use of certain hazardous substances in electrical
and electronic equipment; COM (2000)347
206
.: Nadel S. and Goldstein, D., “Appliance and Equipment Efficiency Standards: History, Impacts, Current Status
and Future Directions”
Page 115 of 115

o

STANDARDIZATION
Volume 2
Annexes to
April 2002
ETD/OO/503207
CONTENTS
ANNEX 1: BRIEF GIVEN BY THE COMMISSION 1
ANNEX 2: THE TAXONOMY OF STANDARDS AND REGULATORY ISSUES 3
ANNEX 3: STANDARDS ORGANIZATIONS 12
ANNEX 4: CORPORATE PREFERENCE IN STANDARDIZATION 30
ANNEX 5: ANNEXES FOR IMPACTS 32
ANNEX 5.1 TRADE AND FREE MOVEMENT 33
ANNEX 5.2: COMPETITIVENESS 45
ANNEX 5.3: INNOVATION 64
ANNEX 5.4: HEALTH AND SAFETY OF WORKERS 75
ANNEX 5.5: CONSUMER PROTECTION 100
ANNEX 5.6: ENVIRONMENT 115
ANNEX 6: SECTOR PROFILES120
ANNEX 6.1: THE MEDICAL DEVICE SECTOR 121
ANNEX 6.2 AERONAUTICS SECTOR 125
ANNEX 6.3: MECHANICAL ENGINEERING SECTOR 129
ANNEX 6.4: ELECTRICAL ENGINEERING AND EQUIPMENT SECTOR 131
ANNEX 6.5 E-COMMERCE SECTOR 134
ANNEX 6.7: GAS UTILISATION AND PRESSURE EQUIPMENT SECTOR 137
ANNEX 6.8: SOFTWARE ENGINEERING SECTOR 139
ANNEX 6.9: ENVIRONMENTAL MONITORING SECTOR 143
ANNEX 6.9: THE FOOD SECTOR 146
ANNEX 6.10: THE NANOTECHNOLOGY SECTOR 150
ANNEX 7: QUALITY FUNCTION DEPLOYMENT 153
ANNEX 8: QUESTIONNAIRES 165
Tables
Table 1: The Taxonomy of Standards ...........................................................................................4
Table 2: Standards Universe, Type of Standard by Goals ............................................................ 6
Table 3: Historic Paradigm Shifts – Ken Krechmer ..................................................................... 8
Table 4: Inspection, Certification of Products, of Quality Systems (EOTC 2000)..................... 11
Table 5: Successful and unsuccessful standards ......................................................................... 21
Table 6: Standardization Processes ............................................................................................. 23
Table 7: Consortia versus Formal Standards............................................................................... 25
Table 8: World Export and Imports of Goods, 2000...................................................................33
Table 9: European Share ............................................................................................................. 33
Table 10: World Exports and Imports of Comercial Services, 2000 ..........................................34
Table 11: Change in concentration of EU Manufacturing .......................................................... 39
Table 12: Applicable standards for Generator Circuit Breaker Systems .................................... 41
Table 13: Typical aero engine costs breakdown (R-R) Pareto principle in standardized parts .. 45
Table 14: Examples of costs reduction on parts from Airbus GmbH: ........................................ 46
Table 15: World-wide issue of ISO 9000 certificates by sector ................................................. 51
Table 16: “Reason for maintaining registration %” ....................................................................60
Table 17: Product Standards and Innovation: .............................................................................64
Table 18: Regulations, standards delayed project....................................................................... 64
Table 19: Knowledge sources ..................................................................................................... 65
Table 20: Accidents at work resulting in absences of >3 days 1994 –1999 ............................... 76
Table 21: Fatalities at work 1994-1999.......................................................................................76
Table 22: Reportable work Accidents (HVBG).......................................................................... 80
Table 23: Recent years ................................................................................................................ 81
Table 24: Fatality rate per 100,000 employed............................................................................. 81
Table 25: Swedish accidents at work 1997-2000 show increases............................................... 83
Table 26: Industrial accidents in Finland (1986 – 1996, electrical only 1990-1996) ................ 85
Table 27: Causes of Accidents (UK)........................................................................................... 86
Table 28: Causes of accidents* (ranked by reference to year 2000)........................................... 86
Table 29: Machinery and electrical accidents (UK)....................................................................87
Table 30: Reported dangerous occurrences UK: causes ............................................................ 87
Table 31: Construction industry fatalities UK 2000/01 ............................................................. 88
Table 32: Fatal accident rate Spain/ 100,000 employed ............................................................. 88
Table 33: Accidents per machine type total all excavators 61%................................................. 90
Table 34: UK Machine Related Fatal Accidents......................................................................... 95
Table 35: Reported work-related diseases in 1999 by suspected cause...................................... 98
Table 36: Mean number of sickness days by cause 1996-1998 ..................................................98
Table 37: Work-related health problems other than accident injuries ........................................98
Table 38: Market surveillance in Finland ................................................................................. 107
Table 39: Medical Technology Markets ................................................................................... 121
Table 40: Mobile Phone Makers Market Share ........................................................................ 132
Table 41: EU Regulations supported (or to be supported) by Standardization......................... 144
Table 42: Assertions from Workshop April 2001..................................................................... 155
FIGURES
Figure 1: CABs per Conformity Assessment Services .............................................................................................................................................. 10
Figure 2: CABs per Country....................................................................................................................................................................................... 11
Figure 3: Standardization in Europe........................................................................................................................................................................... 14
Figure 4: Origin of all CENELEC Standards as of end 2000 (Source: CENELEC ). ............................................................................................... 16
Figure 5: US Standards............................................................................................................................................................................................... 19
Figure 6 : Caterpillar – the shift to International standards ....................................................................................................................................... 30
Figure 7: EU & EFTA producers view of access to the Single Market..................................................................................................................... 34
Figure 8: Regulatory Compexity ................................................................................................................................................................................ 36
Figure 9: Recent and Projected values of B2B and B2C e-commerce ...................................................................................................................... 43
Figure 10: Estimated U.S. Manufacturing Capital and Technology.......................................................................................................................... 48
Figure 11: Accidents at work (Further breakdown by sector) ................................................................................................................................... 78
Figure 12: Fatal Accidents at work (Further breakdown by sector) .......................................................................................................................... 78
Figure 13: Survey of accident causes ......................................................................................................................................................................... 79
Figure 14: Fatal Accidents : frequency by cause ....................................................................................................................................................... 79
Figure 15: National statistics - Germany.................................................................................................................................................................... 79
Figure 16: Numbers employed in selected sectors (France) ...................................................................................................................................... 82
Figure 17a: Fatalities at Work (France)...................................................................................................................................................................... 82
Figure 17b: Accident Rate (France) ........................................................................................................................................................................... 82
Figure 18: Fatal Work Accidents (Sweden) ............................................................................................................................................................... 83
Figure 19: All industrial accidents (Italy) .................................................................................................................................................................. 84
Figure 20: Fatal industrial accidents (Italy) ............................................................................................................................................................... 84
Figure 21: Fatalities at Work (UK) ............................................................................................................................................................................ 87
Figure 22: Percentage machine accidents by Severity (UK) ..................................................................................................................................... 87
Figure 23: Fatal work accidents Germany 1992-98 (BAuA)..................................................................................................................................... 89
Figure 24: Accident frequency by sector 1999 BRD – agriculture not included ...................................................................................................... 89
Figure 25: Automobile industry Germany ................................................................................................................................................................. 89
Figure 26: Fatal work accidents with machinery and equipment, % by activity....................................................................................................... 90
Figure 27: Construction accidents associated with construction machines ............................................................................................................... 90
Figure 28: Accident frequency, excavators ................................................................................................................................................................ 91
Figure 29: Construction Accidents Sweden as compared with EU 15 ...................................................................................................................... 91
Figure 30: Fatal Machine Accidents (Sweden) .......................................................................................................................................................... 91
Figure 31: Electrical Fatalities in Germany from 1965 to 1995 (Work and Home).................................................................................................. 92
Figure 32: Electrical Accidents at Work – Germany 1969 -1998.............................................................................................................................. 93
Figure 33: Electrical Fatalities at Work France 1975 - 1998 ..................................................................................................................................... 93
Figure 34: Electrical Fatalities in Italy 1965 – 1995 (Work and Home) ................................................................................................................... 94
Figure 35: Electrical Fatalities at Work, Sweden....................................................................................................................................................... 94
Figure 36: Fatal Electrical Accidents (Home and Work) Sweden 1897 -1996 ......................................................................................................... 95
Figure 37: Electrical Fatalities at Work UK............................................................................................................................................................... 96
Figure 38: Fatal Electrical Accidents at Work, Finland 1939 - 1997 ........................................................................................................................ 96
Figure 39: Relative severity, electrical accidents and all causes at work, ................................................................................................................. 97
Figure 40: Remaining Life Expectancy at age 20 in Germany (Periods, after WWII: FRG) ................................................................................. 102
Figure 41: Male Heights and Real Wages in Bavaria (19th Century) ...................................................................................................................... 102
Figure 42: Female Heights and Real Wages in Bavaria (19th Century)................................................................................................................... 103
Figure 43: ISUG survey European Airlines 2001 A ................................................................................................................................................ 105
Figure 44: ISUG survey European Airlines 2001 B ................................................................................................................................................ 105
Figure 45: Multifactor Productivity in Germany and France................................................................................................................................... 108
Figure 46: Citizen’s interaction on-line with public administration ........................................................................................................................ 110
Figure 47: On-line shopping, adult population % 2000........................................................................................................................................... 111
Figure 48: On-line banking % of total accounts ...................................................................................................................................................... 112
Figure 49: Percentage of schools with Internet access, 2nd half 2000........................................................................ Error! Bookmark not defined.
Figure 50: Percentage of schools with Internet access, 2nd half 2000...................................................................................................................... 113
Figure 51: Employment by Area .............................................................................................................................................................................. 126
Figure 52: Turnover by Area .................................................................................................................................................................................... 126
Figure 53: Export Market Shares for EU, 2000 (Total Exports Euro166 Billion) .................................................................................................. 129
Figure 54: Mechanical Engineering Production, 2000, Total Euro340 Billion....................................................................................................... 130
Figure 55: Exports Million Euro 1990 ..................................................................................................................................................................... 132
A study on the impact of standardization should analyse which aspects of the economy and of
society have been affected by standards and to what extent. The analysis could also provide an
insight as to how the elaboration of standards affects their impact. The study should identify
opportunities and risks for future developments in European standardization in order to improve
the beneficial effects of standards and standardization policies.
The analysis of the impact of standards accompanied by a sound collection of evidence should
result in recommendations for decision-makers. They should be written in a style that facilitates
the understanding of the findings and the study's application. These recommendations should be
particularly targeted at European and national policy makers, the standards bodies and their
stakeholders.
The study should produce a qualitative and quantitative impact assessment of standards in the
European Union and the EFTA. The overall impact of standardization must be assessed in terms
of outcome.
The study shall be based on a sector approach- It shall analyse the types of standards used in a
range of sectors, it shall assess the impact of these standards on defined key areas of Community
policies related to the competitiveness of enterprises, such as free movement of goods within the
the environment.
The following must be taken into account:
Sectors
The study must cover:

Future growth sectors
Sectors of significant economic and/or social importance. This shall be proven by providing a
relevant profile for the selected sectors (e.g. jobs. turnover and trade) which should help to
indicate links between standardization and socio-economic factors.
Sectors of relevance for Community policies and where standards assist enterprises in obtaining
market access, achieving economies of scale and in performing on global markets.
Sectors where standards support European Community regulation. This should include sectors
covered by the New and Global Approach as well as new fields where standards could possibly
provide support to Community regulation
The study should cover a diverse range of sectors, a maximum of 12, one of which shall be the
medical devices sector. The study should take into account the varying degree of market
concentration in the sectors, their different geographical dimension (national, regional, global);
the varying speed of technological change (traditional, new technology driven). It should also
Volume 3: Page 1 of 188

cover varying characteristics such as services, heavy and manufacturing based industry and
private as well as public sectors.
Types of standards
For each sector studied the impact assessment should concentrate on formal European Standards
(ENs). However, depending on the nature of the sector, other types of standards may have to be
taken into account and the extent to which they are used should be specified. For example, an
explanation should be given as to why in some sectors standards, other than formal ones, are
predominant. A theoretical classification of standards should be avoided. Standards used in
sectors should be categorised along the following criteria:
Procedures used for the elaboration of standards (degree of consensus, openness for
participation, parties involved, etc.);
Geographical origin and application of the standard;
Legal status of the standards (e.g. voluntary, supportive, mandatory, de-facto mandatory);
Classification according to the scope of standard (process/management oriented standard;

horizontal, sector or product specific standard, environmental standard, etc.)
Key areas for impact assessment
The impact assessment has to tackle matters affecting the competitiveness of enterprises such as
the free movement of goods (internal market integration as well as external trade), innovation as
well as health and safety of workers, protection of consumers and the environment.
The economic impact of standards could be assessed by examining market concentration, the
evolution of trade flows, the percentage of the GNP covered by standards, profile of the users of
standards, business practices, contracting, product quality and knowledge transfer.
Particular focus must be given to the degree of market access of SMEs and to the assessment of
conflicting regulation and standards in this respect.
With regard to public interests, issues such as the impact of standards on safely (safe product
design, reported accidents) should be looked at. The use of standards in public procurement
could be studied by analyzing tender and award notices. Also the impact of standards on the
environment (resource use. energy consumption; waste, noise, impact on soil, etc.) could be
studied.
With respect to the impact of standards on technology and innovation the study should examine
the dissemination of technological solutions and lock-in cases. A simple replication of previously
well-documented lock-in situations must be avoided.

ANNEX 2: The taxonomy of standards and regulatory

issues
WHAT IS STANDARDIZATION AND STANDARDS?
It is important to define what we mean by ‘standardization’ and ‘standards’.
ISO/IEC Guide 2 and EN 45020 define a standard as:

“A document, established by consensus and approved by a recognized body,
that provides, for common and repeated use, rules, guidelines or characteristics for activities or
their results, aimed at the achievement of the optimum degree of order in a given
context.”
European Directive 98/34/EEC, formerly 83/189, defines a standard as a subspecies of a

‘technical specification’:” A technical specification approved by a recognized
standardization body for repeated or continuous application, with which compliance is
not compulsory.”
The US National Standards Policy Advisory Committee says a standard is: “A prescribed set of
rules, conditions, or requirements concerning definitions of terms; classification of
components; specification of materials, performance, or operations; delineation of
procedures; or measurement of quantity and quality in describing materials, products,
systems, services, or practices.”
The WTO Agreement on Technical Barriers to Trade defines a standard as:

“A document approved by a recognized body, that provides, for common and repeated
use, rules, guidelines or characteristics for products or related processes and production
methods, with which compliance is not mandatory. It may also include or deal exclusively
with terminology, symbols, packaging, marking or labelling requirements as they apply
to a product, process or production method.”
The Internet Webopedia says a Standard is: “A definition or format that has been approved by a
recognized standards organization or is accepted as a de facto standard by the industry.
Standards exist for programming languages, operating systems, data formats,
communications protocols and electrical interfaces“ and goes on to state that “From a
user’s standpoint, standards are extremely important in the computer industry because
they allow the combination of products from different manufacturers to create a
customized system. Without standards, only hardware and software from the same
company could be used together. In addition, standard user interfaces can make it much
easier to learn how to use new applications”.
The ISO and European definitions are easier to understand but they, together with the WTO,
ignore company standards, industry standards and consortium standards. These should not be
ignored because they are clearly important in daily commercial life. Why should we limit the
definition of a ‘standard’ only to those approved by a ‘recognized’ body? Why limit it only to

those that are ‘not mandatory’? Why insist on ‘consensus’ that would eliminate company
standards?
ISUG decided to use the ISO/EN definition, modified by removal of the reference to recognized
bodies and consensus, updating the reference to ‘document’ to take account of the electronic
media and added ‘technical’ to limit the scope of our definition, viz.:
“A Standard is a real or virtual document that provides, for common and repeated use, rules,
guidelines or characteristics for activities or their results, aimed at the achievement of the
optimum degree of order in a given technical context.”
WHAT THEN IS ‘STANDARDIZATION’
What then is ‘standardization’? Is it purely the process of drawing up and implementing

standards? We feel this definition would be too restrictive.
The NATO “Logistics Handbook October 1997 Chapter 17: Standardization and
Interoperability” says that: “Within NATO, standardization is the process of developing
concepts, doctrines, procedures and designs to achieve and maintain the most effective level of
standardization in the fields of operations, administration and materiel.”
Standards and their use are surrounded, to a greater or lesser extent in different sectors, by a
regime of Regulation, quality imperatives, inspection, mandatory, voluntary or self-certification,
as well as marking and labelling. The combination of all of these in a planned and systematic
manner is, we believe, what is meant by ‘standardization.’ The brief of this study is already wide
enough without our seeking to include an examination of Regulation, Certification, etc., but they
should be referred to in the definition, which, for our purposes, we formulate as:
“Standardization is the process of formulating, drafting, publishing and reviewing appropriate

technical standards for the benefit of individuals, business, government and/or society and of
implementing them with such Regulations, Testing and Certification, Marking and Labelling,
Inspection and Surveillance as is relevant.”
Table 1: The Taxonomy of Standards
The metre is a standard of measurement

Traffic lights are safety standards
Octane numbers of petrol/gasoline are quality standards
‘Not more than 1% shrinkage’ is a performance standard
(taken from NIST NBSIR 87-3576)
There are a number of ways in which to classify standards and listing them enables us to better
understand their influences and significance. We shall examine them under the headings:
Purpose – the classical definitions
Domain – where they apply, is addressed below and

Growing complexity of standardization
PURPOSE OF STANDARDS
It would be difficult to comment on the Impacts of Standardization without a good understanding

of the purpose of standards.
ISO Guide 2 differentiates eight types based on the purpose of the standard:
A basic standard has a broad ranging effect in a particular field, such as a standard for metal that
affects a range of products from cars down to screws.
Terminology standards define words, permitting representatives of an industry or parties to a

transaction to use a common, clearly understood language.
Testing standards define the test methods to be used to assess the performance or other
characteristics of a product.
Product standards establish qualities or requirements for a product (or related group of products)
to assure that it will serve its purpose effectively.
Process standards specify requirements to be met by a process, such as an assembly line’s

operation, in order to function effectively.
Service standards, such as for servicing or repairing a car, establish requirements to be met in
order to achieve the designated purpose effectively.
Interface standards, such as the point of connection between a telephone and a computer
terminal, are concerned with the compatibility of products.
The last type provides a listing of data requirements for a product or service for which values
need to be obtained.
A report on standardization for the US Congress207 mentions three types of standard – Product
Standards, Control Standards and Process Standards. These may be de facto standards drawn up
by the market, by Government regulation or by voluntary consensus. Their results may be
characterized by the following table:
207
U.S. Congress (1992): Office of Technology Assessment, ‘Global Standards: Building Blocks for the Future’,
TCT-512 (Washington, DC: U.S. Government Printing Office, March 1992
Table 2: Standards Universe, Type of Standard by Goals
Standardization Control Product quality Process Interoperability

mechanism
Language customs
Proprietary
De Facto specification VCR standards Bills of lading
Computer interface standards

NSA encryption standards Open network architecture
Auto safety standards
regulations Department of
Regulatory Agriculture ETSI standards for European
Fuel economy telecommunication standards
standards Product classification
standards
Standards for Map-top protocols for OSI
Voluntary medical devices standards
consensus process
Pressure vessel Refrigerator standards Standards evolving legislation
standards
Electronic data inter-
Petroleum exchange standards
standards
SOURCE: Office of Technology Assessment, 1992 (adapted).
The three kinds of standards and three kinds of standards processes can be paired to form a
matrix that scopes the standards universe and the standards setting process and problems to be
analyzed in this study.
Standards Classification for the Machinery Directive

When the European Commission gave CEN the apparently daunting mandate to develop
standards for use in conjunction with the New Approach Directives, the Machine Safety groups
in CEN decided – a decision that led to great clarity of purpose and efficiency – to separate
standards in to a number of categories. These were:
A-type standards giving basic concepts, principles for design and general aspects that can be
applied to all machinery, e. g. terminology.
B1-type standards on particular safety aspects that can be used across a wide range of
machines, e.g. for mechanical equipment, safety distances, surface temperature, noise.
B2- type standards on safeguards, which are concerned with components related to safety that
can be used across a wide range of machines, e.g. two-hand control, interlocking devices,
pressure sensitive devices, photoelectric barriers and guards.
C-type standards dealing with detailed safety requirements for a particular type of Machine, or
equipment, or group of machines: these standards call up appropriate A and B standards.
For most types of product in the Electrotechnical Sector a Type C (product specific) standard is
available. Type C standards are often not yet available for machinery and here the use of a Type
B standard used together with a risk assessment standard is often recommended as an alternative.

DOMAIN
This depends on who/what body has prepared and approved them and on which geographic
areas, industries or applications they have an effect. This may be arranged in ascending order of
importance as:
Company
Consortium
National
Regional
International
In order to eliminate discrepancies between national sets of standards, CEN/CENELEC members

have agreed an obligation to adopt European Standards and Harmonization Documents, at the
same time withdrawing conflicting national standards. In addition, the Vienna Agreement
between ISO and CEN and the Dresden Agreement between IEC and CENELEC provide the
basis for international and European standards to be brought into line as far as possible.
Growing complexity of standardization
The NATO handbook 208says, “the levels of standardization are, in ascending order:
Compatibility
Interoperability
Interchangeability and
Commonality
The term ‘ascending order’ is important here. Does it only mean ‘technical complexity’? We
think not and believe that it implies a preferential order, i.e. that it is more desirable that items
have commonality than that they would be merely compatible. As technology and society
become ever more complex, the challenge to produce ‘higher order’ standards will increase. The
ability of the existing standards development organizations to generate excellent standards of a
lower order is already well established. It is in the higher order standards that they now face a
major challenge.
Ken Krechmer209 developed a Taxonomy Model of standards to include both the their historic
appearance and their ‘credit creation’ i.e. what value they help society to unlock. This Model
introduces a new type at a higher level still.
208
NATO’s “Logistics Handbook October 1997
209
The Fundamental Nature of Standards: Economics Perspective, Ken Krechmer, Fellow, International Center for
Standards Research, University of Colorado at Boulder e-mail krechmer@csrstds.com
The Fundamental Nature of Standards: Technical Perspective, Ken Krechmer, Fellow, International Center for
Standards Research, University of Colorado at Boulder, e-mail krechmer@csrstds.com

Historic Era
Agrarian Industrial Information Systems
Fixed Adaptive
Innovation Trade routes Mechanized Electronic (e.g. Internet
transport telephony)
Credit Private property Invention System Concept
Creation ownership ownership ownership (e.g. ownership (e.g.
(patents) utility trademarks)
company)
Technical Units and Similarity Compatibility Etiquette
standards Reference
Technology Measuring and Powered Linear processes Adaptive
Navigation machines (e.g. mail) processes
(e.g. computers)
Table 3: Historic Paradigm Shifts – Ken Krechmer
The concept of ‘etiquette standards’ has been introduced here, a further stratum overlaying the
currently fashionable compatibility standards. Compatibility itself has multiple dimensions,
including multi-vendor compatibility, upgrade and backward (multi-vintage) compatibility,
product line compatibility, revision level compatibility, etc. Maintaining compatibility as
standards evolve requires an etiquette to negotiate extensions not yet defined. Etiquette
standards 210 define the range and open-ended variability of protocols. These standards are
becoming important because of the widespread use of programmable processors. As example,
the IETF Internet draft Protocol Extension Protocol (PEP) is designed to accommodate
extensions of applications such as HTTP clients, servers and proxies. Etiquettes provide the
framework for bilateral and multilateral negotiations to specify areas left for further study, future
revisions or manufacturer specific options and any open ended requirements. It appears a
reasonable assumption to make that etiquette standards will be of increasing importance in
growth of the Internet and communications.
Egyedi appears to address the same level as Gateway and meta-gateway standards, which, she
says, offer a high degree of flexibility with forward and backward compatibility. “On the one
hand, standards would seem to work as a catalyst for processes of entrenchment (‘lock-in’). On
the other hand, however, standardizing one part of the infrastructure would seem to create
flexibility in the adjacent part (Mulgan, 1990). The latter perspective implies that standards
could be used as a policy tool for infrastructure change. In the EURAS workshop, we foremost
explored this second perspective because it has seldom been addressed.” 211.
210
Baskin, E., Krechmer, K., Sherif M.H. (1998): ‘The Six Dimensions Of Standards: Contribution Towards A
Theory Of Standardization’, Communications Standards Review Palo Alto, CA, USA. (+ AT&T Labs, Paris,
France). Seventh International Conference on Management of Technology, February 20, 1998
211
Egyedi, T., (2001): ‘Report of the 6th European Academy for Standardization (EURAS) Workshop’, 28-29 of
June 2001 at the TU Delft, NL.
THE STANDARDIZATION WORLD

Regulation, certification, marking and labelling: market surveillance
Independent inspection enshrined in the ‘Global Approach are major elements of
‘standardization’
The Commission prepared a policy for conformity assessment in 1989, the so-called Global
Approach, in which the overall policy for both private and public sectors is based on an approach
to product conformity where the key words are competence, quality, transparency and
confidence.
The adoption of this policy by the Council of Ministers on 21 December 1989 was followed on
13 December 1990 by a Council Decision which introduced a series of conformity assessment
procedures covering the design and production stages of product manufacture, describing the
controls required at each stage, those to be confirmed by the manufacturer and those to be
confirmed by an independent third party test house inspection or certification body. The Global
Approach also introduced a series of harmonized standards (the EN 45000 series) to describe the
conduct of these third-party bodies. The responsibility for their correct conduct was placed with
the member states which are called upon to notify the Commission of competent bodies under
their supervision and consequently they are known as Notified Bodies.
The conformity Assessment Modules
The modules may be chosen for different products according to the level of confidence required
in the conformity assessment and specified in the Directive for these products so that both design
and manufacture are included in the confidence given to product conformity. An important
element of the policy is that the agreed level of conformity assessment chosen should not place
an additional legal burden on the manufacture not required for existing safe products. So for
example Module A (see below) is used where a Manufacturer’s Declaration of Conformity is
normally accepted by national legislation without the required involvement of a third-party body.
The modules were designated A to H and three are based on conformity: to ISO 9001 (Module
H), ISO 9002 (Module D) and ISO 9003 (Module E). The Modules cover the following level of
conformity assessment:
A Internal Control of Production (Design and Production)

B Type Examination (Design Only)
C Conformity to Type (Production Only)
D Production QA (Production Only)
E Product QA (Production Only)
F Product Verification (Production Only)
G Unit Verification (Design and Production)
H Full QA (Design and Production)
When incorporated in New Approach Directives, the Global Approach became the uniform basis
for CE Marking.
Result of regulatory standards drivers

As described under Standards Drivers, regulation plays an important role in standardization. The
fact that many regulations refer to standards in itself confers a status on all standards, even if
wrongly so. There is now a network of some 3,242Conformity Assessment Bodies (CABs) all
over Europe that employ over 30,000 people and are registered with the EOTC. For those in
industry who see such bodies just as cost-centres – and perhaps unnecessary – it is very
interesting to note that out of the total registered, 86% offer testing services, 49% calibration and
only 12.6% offer Quality System certification. These figures would be far from the usual
perception.
The value of testing services to SMEs in particular must be immense. SMEs often would have
neither the qualified staff nor the equipment to do the testing necessary for product development
nor preparation to manufacture to a standard. Calibration is of great value to larger firms who
nee to control their own laboratories.
Figure 1: CABs per Conformity Assessment Services
Below we show the national dispersion of these CABs. It is well-known that, in smaller
countries, the lack of wide-ranging test facilities is a negative for new product development
because all testing has to be shipped abroad with delays and higher costs. Also a good
relationship with a test house and its expertise often becomes an extension of such product
development which is more difficult at great distances.

Figure 2: CABs per Country
The statistics for Inspection, Certification of Products and Certification of Quality systems across
all industries and services of Europe (this an activity report, the former were facility-
availability), again shows that Quality System certification, while very important, is by far the
least of the three activities. What is interesting here is that most of the activity is voluntary-
based, although regulatory use of the services ranges from 42% for QS certification through 47%
for product certification and 45% for inspection.
Table 4: Inspection, Certification of Products, of Quality Systems (EOTC 2000)
Inspection Cert. of Products Cert. of Quality Systems

Voluntary Regulatory Voluntary Regulatory Voluntary Regulatory
927 769 789 710 350 250

ANNEX 3: Standards Organisations
ANNEX 3: Standards organizations

EUROPE
EU Standardization Milestones
There have been a series of EU policies developments in the area of standardization over more than thirty years,
to support the Council and Commission objectives of free and fair trade in a unified market within the Member
States.
This is our explanation of the important milestones in that journey: for detailed and precise information the
reader is advised to refer to published texts and other publications that specifically record and explain this work.
The Initial Approach to Harmonization: Milestone 1
From its foundation in 1957 the EEC examined the restraints to internal trade between Member States caused by
differing technical requirements for the same products. When specific problems were identified and justified co-
operative action by the Governments, task forces of the responsible Government Officials were formed to draw
up a single common Regulation for the product concerned that could be accepted by the Council members. Over
a period of more than twenty years this policy was found to be extremely time consuming and it yielded very
little results.
(After Milestone 4 this method of technical harmonization became known as “The Old Approach).
The Low Voltage Directive: Milestone 2
Following a ruling by the European Court on the restricted conditions under which Member States may exclude
from their national market, on grounds of public safety, products which are legally judged safe in another
Member State (the “Cassis de Dijon Judgment”) a specific issue of trade between Member States was addressed
by a Directive which required access be given to electrical goods which provided protection against specified
dangers. The new element in this (the “Low Voltage”) Directive was that technical conformity was referenced to
separately published technical standards of National, European, or International Standards bodies of non-
governmental nature. In addition Member States could designate product marks granted by authorized bodies,
certifying the safety compliance of the products as required by the Directive, which was agreed by the Member
States in 1973.
Information on Standards and Regulations: Milestone 3
In order to ensure that national actions within Member States on the introduction of new and revised technical
standards and regulations did not result in restrictions on internal trade within the EU, in 1983 a new Directive
was agreed which required both Governments and the private Standards Bodies to disclose in advance the
standards and regulations they intended to introduce. This provided both the other Member States and the
Commission with an opportunity to consider whether any of the proposals would be likely to create a barrier to
trade within the Internal Market. The Directive established a Standing Committee of Government Officials, with
a Commission chairman, to review national activity, and with authority to mandate the three parties of the
European Standards System (CEN, CENELEC and ETSI) to draw up and publish Harmonized European
Standards that would support removal and avoidance of barriers to trade.
The Single Market—The New Approach: Milestone 4
The EU Single Market policy of 1985 set out an Action Plan to eliminate Physical, Fiscal, and Technical
Barriers to trade within the Internal Market. The detailed White Paper listed specific issues to be addressed based
on a review of “ The Cost of Non-Europe”, known as the Cecchini Report, and set 1992 as the date by which the
necessary legal framework would be complete. It also contained a Model Directive for the harmonization of
technical requirements for products where Technical Barriers had been identified. This Model Directive was
developed by a working group of Government Officials based on experience gained over ten years operation of
the Low Voltage Directive (Milestone 3). It formalized the approach made in that Directive whereby the
regulated aspect of the product is limited to its so-called “Essential Requirements”, generally those related to
safety, and provided that conformity may be demonstrated by meeting the requirements of Harmonized
European Standards formulated by CEN, CENELEC, or ETSI, in response to a Mandate issued by the
Commission by agreement with the Standards and Regulations Standing Committee. This form of product
Volumeto3:technical
regulation was designated “ The New Approach” Page 12 of 188
harmonization.
CE Marking of Conformity—The Global Approach: Milestone 5
A necessary ancillary for New Approach Directives was an agreed policy on Conformity Assessment for
products. Recognizing that the products on the EU Single Market could be manufactured outside the
Member States, this policy was designated “ The Global Approach”. It is also based on the principle that
a variety of conformity assessment procedures should be available for selection, as appropriate, for a
variety of products, and that this selection should be the least onerous on the manufacturer consistent with
conformity to the Essential Requirements of the Directives concerned. The various forms of conformity
assessment are presented as Modules A to H, and the policy was also known as “The Modular
Approach”. Module A provides for the manufacturer to have total responsibility for product compliance
with the Directive, whereas the other Modules require the authority of a designated test house, inspection
or certification body and three of the modules provide for conformity to be assessed by reference to ISO
9000 Quality Management Standards. Such bodies are designated as competent for individual Directives
by Member States, and are known as “Notified Bodies”. Manufacturers may refer to compliance to the
Harmonized European Standards, rather than the less specific Essential Requirements of the Directive
concerned, under Module A or in submission to a Notified Body for assessment. The importance of these
assessment procedures is that conformity allows the manufacturer to place on the products the “CE”
mark, which indicates compliance with the applicable New Approach Directive and thus assures free
circulation throughout the EU Member States.
Dominated by National Standards Bodies

Until well into the 1980s powerful, well-established national bodies dominated European
Standardization. The citizens of each major European country, as well as its government and its
National Standards Body, firmly believed that their standards were best. In fact there was a great
unwillingness to consider using a standard from another country.
The forerunner of the German National standards body DIN e.V. was founded in 1917. German
businesses had a strong incentive to adopt DIN standards as their use shifts liability to the user
and insurance companies often would not grant policies to those whose products failed to carry
DIN testing and inspection marks. However, with European harmonization, the proportion of the
DIN budget spent on national standardization fell from 60% in 1984 to 30% in 1990 and the
spend on European activities rose from 10% to 35% while international standardization
activities remained at a steady 30% through most of this time.
The French national body AFNOR was founded in 1918 and through most of its existence has
been directly responsible to government. Compliance with AFNOR standards is indicated by an
‘NF’ mark and the importance attached to standardization in France was highlighted when the
French government established with AFNOR a special ‘High Committee’ for standardization in
1984.
The forerunner of the British Standards Institute was founded in 1901 and was the earliest
National Standards Body in Europe. The present name dates from full national recognition in
1929. It established its certification mark, the Kitemark as a valuable recognition symbol for
marketing in the UK in particular. According to the BSI Annual Report 1989-90212, between
1989 and 1990 alone its number of man-days on European work rose from 15,000 to 21,000 and
input to European Committees increased from 2,179 man-days to 9,034. Certification income is
now its single largest income stream.
212
BSI Annual Report 1989/90, p.4
Other countries also have their strong national bodies, with the Italian and Swedish among the
most significant of them, while all of them are of considerable national importance in their own
countries.
Emphasis is on European Regional Bodies

That scene is now totally changed and it is agreed that the European Regional Standards Bodies
are effective and in the driving seat although answerable to the National Standards Bodies. To
quote Linda Lusby of the Standards Council of Canada: “The most successful example of
regional standardization is, of course, Europe. The European Union is well on the way to having
a unified regional standards development and conformity assessment system and there is a lot we
can learn from their experience.”213
“In 1997 BSI published 2000 new standards. Of these 1900 were BS ISO’s, BS IECs or BS ENs.
BSI’s 1,000 standards committees produced only 100 purely national new standards. AFNOR,
BSI and DIN project that within the time frame 2000 to 2002 pure national standards will
constitute a minor part of their collections. Sweden now has fewer than 700 Swedish standards in
its collection of 12,100.”………….
Figure 3: Standardization in Europe
JPG
EU/EFTA
Secretariat
(ASBs)
CEN CENELEC ETSI
AECMA
ECMA
etc.
DIN BSI AFNOR National

bodies Other European
STAKEHOLDER
S’ –UNIONS,
CONSUMERS
(ASBs Associated Standardization Bodies – industry specific such as AECMA for the aerospace industry, or
ECMA, European Association for the Standardization of Internet and Communication Systems
213
Lusby, L.(2000): ‘Comment’, ISO-Bulletin May 2000
The European Standardization System (ESS)
As the then EEC attempted to harmonize European standards, the picture in a number of
countries in 1986 is shown below (from ISO, CEN data etc.). It is surely striking now to see how
incidental even CEN appeared to be in the strong National Standards Bodies movement.
“The New Approach”

The European New Approach to standardization has become almost legendary in a short number
of years, yet its origin was simple and pragmatic. Stephen Oksala says “The European Union
was struggling with implementing a single market, the primary problem was the harmonization
of different legislation in each country so that products and services could be freely traded across
national borders The target completion date was 1992. Previously the Commission approached
this problem in the usual way; government experts wrote the technical regulations. However,
there was so much legislation needed and so few technical experts, that their deadlines could not
be met. Therefore, the Commission adopted a new approach (called, not surprisingly, the “New
Approach”) to leverage the technical expertise that existed in industry. Their scheme was simple
: the regulators would define simple objectives – the so-called “essential requirements” – and
industry would develop the technical specifications that define the requirements to meet those
objectives. A decade later, this novel approach has clearly served its purpose. The 1992
objectives have largely been met and the process continues to allow industry to have a real voice
in the details associated with regulation. It is a model that other governments, including the
United States, are beginning to adopt” (our italics).214
Oksala goes on to credit the New Approach with a major shift in US standardization policy at
national level, in favour of international standards: “It also made it more important to United
States multinationals that wanted to market products that met European requirements. Unless
they had a technical operation in Europe, those companies were shut out of the European
standards process. The natural reaction of United States interests was therefore to advocate that
the work be done in the international standards organizations ISO and IEC and this was
successfully addressed through the creation of the Vienna and Dresden agreements with CEN
and CENELEC respectively. Thus the international standardization processes became even more
important to United States interests because international standardization had become the ‘best
game in town’ for meeting requirements that would apply to European and, eventually, other
regulatory regimes.
In this paper, which won second prize from the Standards Engineering Society, the largest and
most prestigious society of its kind in the world, he states further : “…there is an expectation
that the principle adopted in the European New Approach (regulators define objectives and the
voluntary standards community works out the technical details) will become the preferred means
for preparing technical regulations. And like the New Approach, this places greater importance
on making sure that the standards process meets high standards.” This is praise indeed for the
New Approach as a universal model.
“THE SPEEDING UP GIVEN BY THE ‘NEW APPROACH’ WAS VERY IMPORTANT: THE
STANDARD PRODUCTION WENT FROM 0.81 STANDARDS / YEAR IN THE EIGHTIES
TO 19 STANDARDS / YEAR IN THE NINETIES.” – ALAIN MAYER
214
CENELEC Comité Européen de Normalisation Electrotechnique
CENELEC published 324 standards in 2000 against 353 in 1999 but the number of pages
increased significantly. Of this number, 241 (72%) were identical to IEC standards, 24 (13%)
were mainly based on IEC standards, while 59 (18%) were purely European standards. Staff at
32 persons was down from 36 in 1999, while they had some 15,000 experts from industry etc.
working with them in 370 technical bodies215. “More than two-thirds of our work is not based on
mandates from the Commission, (but is) initiated by CEN members and partners that have an
interest in standardization.” – George Hongler, (Secretary General, CEN) At the end of 2001
CENELEC had 4004 standards of which 820 were harmonized European standards.
Figure 4: Origin of all CENELEC Standards as of end 2000 (Source: CENELEC 216).
Purely
European
17%
Based on
Identical
IEC
with IEC
23%
60%
ETSI
The European Telecommunications Standards Institute succeeded CEPT as the standardization
body at European level for telecommunications in 1988. Its international counterpart is the
International Telegraph Union (ITU). Some of its procedures differed significantly from CEN
and CENELEC and their international counterparts, as:
Individual companies may become full ETSI members;
Voting procedure is less susceptible to minorities opposing standards approval;
Project teams could be installed to develop standards.
The latter two have been taken aboard by CEN and CENELEC. The European Commission
Green Paper on Standardization (1990) viewed ETSI as a potential role model for
standardization bodies.
Important partners in European standardization are:

Workers: Represented by the TUTB
Consumers: Represented by ANEC
“The European Commission has put its weight behind the importance of consumer
representation in standards work, notably with the establishment of a wholly funded body
ANEC, the European organization for consumer representation in standardization. Over
the last ten years, ANEC’s standing has grown immeasurably in CEN, CENELEC and
215
CENELEC Annual Report 2000
216
ETSI and its representatives are now welcomed even in the ICT field in committees
dealing with e-commerce, machine readable cards, smart houses, digital broadcasting,
data protection and so on.”217
Manufacturing and service companies and their associations
Represented by their Trade / Industry Associations (for CEN and CENELEC) and
directly in ETSI and the Associate Standards Bodies (ASBs) such as AECMA.
International
ISO International Organization for Standardization

At the end of 2000, ISO had issued 13,025 standards, 986 during that year. It also is the issuer of
the famous ISO 9000. Its standards development work is carried out through some 2,858
technical bodies in which more than 20,000 experts from all over the world participate. It has a
staff of 164 in Geneva and the equivalent of 500 other persons through its member bodies218.
Europe and the US have traditionally had differing attitudes to international standards. It is felt
that these were based on relative power i.e. the dominant player has a good chance of imposing
its standard on the other players. Where one is in a weaker position then the rule of law becomes
more attractive. That is why the EU invokes international law when in conflict with USA,
whereas the USA is not keen on international law except in certain cases. This is why the EU
tries to harmonize its standards with ISO standards. In fact 85% of all CEN and CENELEC
standards are identical to international standards while only 22% of US national standards are
identical or technically equivalent (this latter figure originated from ANSI and Europeans might
say it is actually far less).
A joint statement by the leaders of ISO, IEC and ITU, said: “If machines, systems or devices
work together, in many cases you have International Standards to thank for it – even if few are
those that realize it.”
United States
Europeans tend not to appreciate the distaste of US business for any avoidable involvement with
government. “One reason for this lack of Federal support (to the private sector) is that members
of the private sector have been extremely reluctant to accept any support from government for
fear of strings attached. They are concerned, moreover, that such support once given might be
withdrawn at any time, given a budget crisis or change in political climate. Moreover, many in
the US standards community would be uncomfortable being cast in a semi-public role. Most
Europeans have little problem in this regard.” 219
It is not therefore very surprising that government plays a minor role in the US standardization
process nor that US business views with a suspicion sometimes approaching paranoia the
‘comfortable’ relationships between European National and Regional standards bodies and
European industry.
217
Blow, J. (2001): ‘Conformity assessment - the added value of consumer participation in standards development’,
ISO Bulletin, August 2001
218
‘ISO in figures’, ISO, Geneva, January 2001
219
US Congress, Office of Technology Assessment (1992): ‘Global Standards: Building Blocks for the Future’,
TCT-512 Washington, DC: US Government Printing Office, March 1992
NIST
The National Institute of Standards and Technology (NIST) is a non-regulatory federal
agency within the US Commerce Department. Its mission is to develop and promote
measurement, standards and technology to enhance productivity, facilitate trade and improve the
quality of life. NIST is a key technical contributor to the US standards infrastructure and
operates metrology laboratories. NIST plays a variety of roles in support of voluntary
standardization efforts that respond to market and industry needs. It provides technical expertise
and facilitates private sector agreement. In addition, NIST supports trade agreements by helping
to build the underlying conformity-assessment infrastructure necessary to harmonize standards
and regulatory requirements across borders. It also coordinates federal agencies’ use of voluntary
standards.
American Society for Testing and Materials (ASTM): The need for safe and economical
structures such as roads and bridges led to the founding of the International Association for
Testing and Materials in 1896. Its mission was to develop standardized test methods. Two years
later, the American Section of this organization was formed and became the forerunner of
ASTM. Since becoming an independent organization in 1902, ASTM has continued to grow and
now produces the largest number of non-governmental, voluntary standards in the United States.
American National Standards Institute (ANSI): In 1918 ASTM was one of five private,
technical society originators of the American Engineering Standards Committee, later known as
the American Standards Association (ASA) and subsequently the American National Standards
Institute (ANSI). ANSI today serves as the coordinator of voluntary standards activities in the
United States and as the agency that approves standards as American National Standards. ANSI
is also the coordinator and manager of US participation in the work of two non-governmental
international standards organizations, ISO and the International Electrotechnical Commission
(IEC).
American Society of Mechanical Engineering (ASME): Another of the major private
standards organizations, founded in 1880 and first issued the ASME Boiler Code in 1914. Today
that Code is mandatory not only in the United States but in many other countries throughout the
world. In 1952 a forerunner of ANSI stated: “Probably no other single standard in America has
done more for national safety than the ASME Boiler Code.”220 It is said that the ASME Boiler
Code may be the most widely used voluntary standard in the world.
Society of Automotive Engineers (SAE): The founding of the SAE in 1910 led to the
pioneering efforts of the American automotive industry to achieve substantial inter-company
technical standardization. Most drivers now take these efforts for granted when choosing motor
oils by SAE designations (such as 10W-40) without being aware of the full significance and
background of the detailed standards development process. SAE is in fact also responsible for
most US aeronautics standards.
The Institute of Electrical and Electronics Engineers (IEEE): founded 1884, maintains more
than 500 standards with 800 more under development. IEEE is responsible for the National
Electrical Safety Code, widely used by governments and regulatory agencies for electric supply
and communications installations.
Underwriters Laboratories (UL) : Most consumers also take for granted the familiar UL mark
on a range of products from electrical appliances to fire extinguishers. Founded in 1894, UL is
220
not only a major standards writer but also operates non-profit testing laboratories. Their mission
is to investigate products and materials with respect to hazards that might affect life or property
and to list those items which appear to pose no significant hazards.
The work of other major US standards organizations, although equally vital, tends to be less well
known outside the standards community. For example, the National Fire Protection
Association (NFPA) has for more than three quarters of a century produced the National
Electrical Code, used in building construction and many other standards affecting our safety
from fires and other hazards. We accept without conscious thought the safety of aircraft unaware
of the standards produced by the Aerospace Industries Association of America (AIA) for
guidance and control systems and many other items. The Association of American Railroads
(AAR) standards similarly affect our railways. Even the quality and size of paper is standardized
through the work of the Technical Association of the Pulp and Paper Industry (TAPPI).
Military Standards: Because of the vast numbers of Military Standards the US federal
government is technically the world’s largest single creator and user of standards, more than
50,000 of them. There is a major effort under way to reduce these in favour of civil standards –
one team involved has substituted 868 standards and inactivated another 2,000 Milspecs. The
intention is to also ‘civilianize’221 as much as possible of the approximately 12,000 non-military
federal standards. The private sector has over 40,000 standards, of which about 25% are ANSI
or, in effect, National Standards. That is a total of more than 90,000 standards produced and
maintained by nearly 700 standards organizations in the US. That number may vary a good deal,
depending on what is or is not included as a ‘standard’ since it does not include the large number
of de facto industry standards that are established not through formal procedures but through
widespread acceptance in the market.
Figure 5: US Standards
Total 94,000
Federal Private sector

Government
52,500 41,500
5,000 adopted 25% ANSI

private sector
Dept. of General 75 other Scientific Trade Standards

Defense services Federal and Associations Development
Professional Organization
admin. agencies s.
38,000 13,500
13,000 14,000
6,000 8,500
(Source, Robert Toth, Toth Associates)
221
US OMB circular A-119, 1976
What are these organizations? Some of them, such as ANSI and ASTM, are primarily concerned
with standards. Others are trade associations interested in all matters affecting their members.
The Electronic Industries Association, for example, has been a standards developer in the areas
of electrical and electronic products and components since 1926. Many professional and
technical organizations are also standards developers – IEEE, ASME, etc..
Still other standards developers are primarily research and testing bodies, such as the National
Sanitation Foundation (NSF), which develops standards for products from a health and
sanitation perspective. The Factory Mutual Research Corporation (FM), another standards
developer, is a ‘product listing’ type of organization like UL.
Standards sales are a major part of the incomes of these organizations which otherwise depend
financially on private corporate support, approximately 80% for ASTM and 66% for NFPA, 28%
for ANSI.
ANSI has the national role

Many of these standards bodies coordinate their activities through the American National
Standards Institute (ANSI), which is a private, non-profit federation of standards organizations.
It has in fact no official status, so it is the ‘’self-designated’ national coordinating body for US
standards development organizations. Nonetheless it is the internationally accepted member
body in the International Organization for Standardization (ISO) and the International
Electrotechnical Commission (IEC).
It is argued “the National Cooperative Research Act of 1984 (NCRA) has caused more change
in the standards process than any single act in the United States in modern times. The original
law was intended to provide a level of antitrust protection to joint research and development
efforts so that firms could cooperate on ‘pre-competitive’ Research & Development activities to
strengthen US industry in a global environment. However in certain industries, most notably
information technology, the cooperative activity that seemed most useful was a mixture of R&D
and standardization – the development or adoption of a technology by key competitors. Over the
last decade and a half many groups have ‘signed up’ under the NCRA and most of them have
had standardization as a significant factor in their work.”222
The Soviet experience

How effective is standardization under a totalitarian regime? It is interesting to examine the
experience of the Soviet Union.
Axel Czaya and Wilfried Hesser223 say that at the end of the 1920s no standardization repository
existed in the Soviet Union that could be compared with Western ones. A lack of appropriate
standards severely hampered the first steps of industrialization. The absence of appropriate safety
standards and quality standards led to a large number of accidents and poor product quality –
problems that had lasted until the end of the Soviet Union. They also refer to a White Paper on
standardization in present-day Russia that is very critical of that system and claims their
standards are “prescriptive rather than performance-based in nature. Every new technology or
222
223
Czaya, A., Hesser, W., ‘Standardization systems as indicators of mental, cultural and socio-economic states’,
University of the Federal Armed Forces, Hamburg
product has to be certified, innovation is consequently hampered.” The picture painted is one of a
powerful country wasting resources and losing efficiencies because of inadequate
standardization. It is ironic that this was a country which had recognized success factors in the
United States which it wished to replicate – industrialization, technical progress and
standardization were at the heart of social change.
The simile of Soviet social engineering in the form of societal standardization did not help the
image of engineering standardization.
Other commentators suggest that the quality of the Soviet standards was not the problem (many
of them conformed with ISO), but public attitudes to the compulsion attached to them. “The
prestige and positive reputation of standards has formed and will last only provided that they are
implemented on a strictly voluntary basis.” The experience of standardization in totalitarian
states proves that magnificently. For example, in 1929 the former Soviet Union enacted a law
which made it a criminal offence to fail to fulfill the requirements of a standard. All standards in
the Soviet Union were strictly mandatory. Although a large number of fine standards was
produced, difficulties with securing their use and conformity with them were ubiquitous.”224
Successful and unsuccessful standards
Origin of standard Successful Unsuccessful

Proprietary DOS
Consortium IEEE LAN standard
TCP/IP
VHS Betamax
European GSM TV wideband?
International Containers OSI
IEC 950 for information
technology equipment
Table 5: Successful and unsuccessful standards

“One such example of a widely accepted international standard is IEC 950 for information
technology equipment and associated business equipment…IEC is recognized throughout the
European Union and is a necessary requirement for CE marking, ..the United States, Canada and
many countries in Latin America and Asia have also adopted this standard.”225
IEC/EN design standards for controls etc. viz. use by BIA in Germany
“A classic positive standards example is the IEEE local area network (LAN) standards. When the
committees first began, about 78 standards variants existed. When they finished, three or four
remained, which kept the market from fragmenting.”226
“For more than a decade, DOS — a clearly inferior operating system to alternatives such as
Apple Computer’s system — dominated the personal computing market because the
Microsoft/IBM combination was able to lock in the PC market.”227
224
Sterk, W. (1999): ‘Challenges to Standardization’, European Commission DG III Industry, Hamburg, May 1999.
225
Sterling, J. (2001): ‘The importance of international standards’, ASTM Standardization News June 2001
226
Trapasso, P., ‘Up close with Carl Cargill, Director of Corporate Standards, Sun Microsystems’, SUN Software
feature story
Unfortunate consequences of ‘Standards War’ between consortia:

the V.90 Internet modem
Two competing standards consortia resulted in major delays in Internet development: * “The
standards battle between the two competing consortia did considerable harm to all parties involved
with 56K modems. Consumers were forced to find an ISP that supported their purchased modem
type (either of the proprietary products, x2 or K56flex). Many ISPs refrained from supporting either
of the two de facto 56kbs modem types due to the confusion caused by a lack of a single industry
standard. Other ISPs were reluctant to divide their capacity between two different 56K modem
technologies, so they invested in only one type. As a result, communication between a user with an
x2 modem and a user with a K56flex modem would not reach the designed speed of 56 kb/s unless
the ISPs on both ends of the communications connection had equipment that adhered to the same
modem type. The confusion led to a market slowdown as consumers postponed purchases of 56K
modems until the industry settled the standards battle.
On the supply side, the slowdown caused significant price cuts by modem manufacturers, which
reduced their profitability and resulted in some companies exiting the market for 56k modems. After
the agreed V.90 standard was finally approved in February 1998, corresponding server firmware was
not available to ISPs until September 1998. This incompatibility continued to slow the market for
56k modems and early adopters of the new V.90 modems became alienated due to a lack of
interoperability. Some modem manufacturers that already committed their internal standard
DSP/microcode implementations were in an enviable position to bring their products to the
marketplace rapidly, regardless of the technical alternatives chosen in the approved standard. In the
past year, prices to computer suppliers for V.90-compatible modems have dropped precipitously (as
low as $29 per unit) through rapid deployment of standards-based V.90 service, connections by ISPs.
V.90 implementations in software are often free to the consumer and offered as a market-
differentiating feature in a product. Examples include notebook computers which frequently feature
V.90 modems implemented in software.
*“Economics of Standards for Telecommunications Access,” prepared for NIST by Michael L. Marx and Jonathan S. Katz, TASC Inc.
SDOs and“Conformity
March 1, 2001. consortia: should
assessment government
now more play a- role
important than standards” Robert in standardization?
B. Toth
“One reason for the lack of regard for standards is that they exhibit some of the characteristics of
what economists call ‘public goods.’ Public goods are those goods whose benefits are available
to everyone and from which no one can be excluded and no one can fully appropriate the
benefits. As a result, public goods are underproduced. Standards often fall into this category.”228
In 1984 the French government declared in upgrading the official status of AFNOR,
“standardization is a Public service.” Sterk also points out that: “Since standardization is a
strategic tool for the functioning of the single market, for competitiveness, for international trade
and as support to regulation and policy, public authorities have a strong interest in the proper
functioning of standardization.”229 “Left to its own devices, the market produces too little or too
much standardization, or standardization of the wrong sort.”230
“.. standards problems differ by industry. In industries such as telecommunications, for example,
the incentive to participate in standards setting will likely be high. If communication systems fail
227
Tassey, G. (1999): ‘Standardization in Technology-Based Markets’, Institute of Standards and Technology, June
1999
228
229
Sterk, W.(1999): ‘Challenges to Standardization’, European Commission DG III Industry, Hamburg, May 1999
230
Tassey, G. (1999): ‘Standardization in Technology-Based Markets’, National Institute of Standards and
Technology, June 1999
to work together, there can be no services to sell. Support for standards setting will also be
greater in industries comprised of a few large companies. They are more likely to see a return on
their investments, since there are fewer to share the benefits. This has been the case, for example,
in the automotive and petroleum industries. Industries subject to Government regulation are also
likely to be actively involved in standards setting, if only for pre-emptive reasons.”231
In the regulatory area, where standards support New Approach Directives, the incentive for
standardization is to make it easier to comply with the Directives and to provide an alternative to
more prescriptive regulations and the imposition of a single solution.
FORMAL STANDARDS VERSUS CONSORTIA
Background.
The development of Consortia (or ‘grey’) standards came about with the explosion of technology
in recent years, much of which has a short lifecycle and window of opportunity, through a
combination of dissatisfaction with the speed of the traditional formal standardization process,
company self-interest and the lack of acceptance of the formal bodies’ IPR policies. Added to
this is the de facto standard, where a single company or a group attempts to leverage technology
to obtain competitive advantage, e.g. Microsoft.
Egyedi explains some of the reasons for this development: “Grey standards bodies range from
non-profit organizations such as the Institute of Electrical and Electronics Engineers (IEEE) and
the Internet Engineering Task Force (IETF) to industrial consortia. An example of the latter is
the Asynchronous Transfer Mode (ATM) Forum in which industries strive for consensus on
technical issues. To qualify as a grey standards forum, consortia must be open and multi-vendor
oriented. The number of such consortia is still growing. It appears to be a phenomenon which is
characteristic for the field of ICT. I can think of two main reasons why ICT competitors
presently cooperate on a larger scale. Firstly, the field is characterized by multiple players in a
growing market. In other words, the good fortune of one player need not occur at the expense of
other players. Secondly, compatibility is a (saleable) feature of ICT products and services and is
generally also a prerequisite for new facilities and services. Both motivations for cooperation
gain force in market that has started to crystallise.”232
She tabulates characteristics of the three types of process, below. (Note, ‘sources of coercion’
are what we term ‘drivers’).
Style of / aspect in Formal Grey standardization De facto
standardization standardization standardization
Process, standards and Successive occurrences Parallel occurrences Standards follow
implementations implementation
Source of coercion Democratic process Multi-party use of Control of the market
standards
Implementation – High Medium Low
independence
Table 6: Standardization Processes

“Consortia initially were created to deal with the ‘clarity and time to market’ problem of the
formal organizations. Consortia, originally collections of like-minded companies, gathered, paid
231
232
Egyedi, T.M., ‘Institutional Dilemma in ICT Standardization: Co-coordinating the Diffusion of Technology?’,
Delft University of Technology
money and joined a ‘specifications club’ to create specifications on a particular topic of
computing. Some early consortia were created to oppose another technical effort ….” Cargill233,
Cargill sees Consortia as US-dominated: “Most of the major consortia are dominated by US
companies; the Open Source movement migrated with Torvalds to the US when he moved;
alliances are started by US multinationals; consortia are usually heavily dependent upon US
firms for their existence. This ability to transform to meet market needs reflects the industry
itself, with its high innovative content. European firms, failing the innovative background that
US firms seem to require for existence, are less sympathetic to the creation of these variant forms
of standardization, preferring their formal national bodies. However, these same firms scramble
to join in alliances and consortia once they’ve been created.”
“One problem with consortium standards is that these may never became full-consensus
standards because they were developed without a rigid approval process. In other words, some
directly or materially affected parties may have been excluded from the process and there was no
allowance for negative votes. While the standard may, or may not, be technically valid, the lack
of due process puts a blemish on commercial application of the standard. In more than a number
of cases, this has led to both civil and criminal litigation. To avoid this, the full-consensus,
voluntary consensus standards have been significantly better in this regard. Over more than 100
years and with more than 40,000 voluntary consensus standards published, there have been fewer
than nine instances where such standards have been challenged in the courts.”234
Orgalime (position paper on International Standardization), representing most of the European

engineering industries, mechanical and electrical, prefers the present formal system of National
Bodies working to CEN, CENELEC etc. as “it ensures that all stakeholders including SMEs can
actively participate in the work.”
The European Eco-label criteria are developed in a shorter time than formal European Standards
and may provide an example of a mechanism to rapidly develop standards required urgently.
Consensus is common to formal and consortia standards

“Consensus-based standards rely on the positive self-interest of the parties involved. Their self-
interest directly relates to the benefits of the network externalities. This encourages mutual
agreements among competing organizations to support the creation of a standard. The nature of
the agreement, however, will depend on the activities of those participating in the consensus235.
The relative merits of formal and consortia standards

Stephen C. Lowell argues that supporters of consortia standards see participation of ‘non-
stakeholders’ as delaying the standards process and that the need for consensus may lead to
‘lowest common denominator’ standards. He goes on to say236 that companies prefer Consortia
standards in three situations :
233
Cargill, C., (2000): ‘Evolutionary pressures in standardization: considerations on ANSI’s National Standards
Strategy’, Sun Microsystems Inc, Sept. 13 2000 Committee on Technology, US House of Representatives.
234
Batik, A., (1999): ‘What price speed?’, 1999 World Standards Day Paper Competition, cosponsored by the
World Standards Day Planning Committee and SES.
235
Baskin, E., Krechmer, K., Sherif, M.H. (1998): ‘The Six Dimensions Of Standards: Contribution Towards A
Theory Of Standardization’, Communications Standards Review Palo Alto, CA, USA, Seventh International
Conference on Management of Technology, February 20, 1998
236
Lowell, S.C. (1999): ‘The Yin and Yang of Standards Development’, 1st prize paper Standards Engineering
Society, World Standards Day 1999
they are afraid that formal standards requirements would threaten their market share or that they
would not fulfill them
a group of stakeholders has such widely divergent preferences that (agreement) of a formal
industry-wide standard would be unlikely
non-stakeholders may assume a ‘purist’ position and delay adoption of a formal standard
Examples of Consortia standards supplanting formal standards include the adoption by the
market of the TCP/IP protocols instead of the OSI (Open Systems Interconnection) already
agreed by ISO as the ultimate in compatibility systems for computers and the Internet. This
appears to have been because the formal standard was too expensive and cumbersome. In
another instance, the mobile telephone standard adopted by the Electronic Industries Association
in the US as ‘TDMA’ was abandoned by many of the major players in favour of the Consortium
standard ‘CDMA’.
A case where Consortium standards got it wrong because of inadequate consultation with users
was MasterCard and Visa issuing Version 1.0 of their SET standard for secure Internet
transactions, in 1997. It has still not been widely adopted, nor has any other.
Formal standards tend to be favoured by industry when financing requirements are very high and
the risks substantial. An example given by Lowell is the Intelligent Transport System (ITS) in
the US, planned to be a nation-wide system to reduce congestion, save energy, reduce transport
costs, to improve safety, road management, toll collection, etc. The view expressed for the
SLDRAM consortium is the opposite however, that one of the advantages of Consortia is they
can easily decide to pursue in an expensive standards investigation and development programme
by sharing the costs.237 This contradiction may be more apparent than real – the project cost of
the former may be some orders of magnitude higher than the latter and very notably the former
would benefit significantly by having ‘buy-in’ of the eventual customer, the local and national
authorities of all kinds.
When Clyde Cramp wrote “Standardization Management at Texas Instruments”238 he postulated,
under “Consortia vs. Formal” (using the term ‘accredited’ for what we call ‘formal’) that “both
are important to an overall business strategy” and tabulated their respective strengths and
weaknesses as follows:
Consortia Formal
Generally faster, to a narrower
Supposedly slower, to a wider market
market
Generally not approved for
Approved for Government purchasing
Government purchase although
specifications
often used
Open and less susceptible to Restraint of Trade and
Closed and more susceptible to
other Justice Department/Department of Commerce
Justice Department or Department of
issues. Participants are often indemnified by the
Commerce inspection
developing organization
Relatively high cost to join Lower or no cost to join
Negotiated Patent Policy Stated, consistent patent policy
Table 7: Consortia versus Formal Standards
237
Tabrizi, F. (1999): ‘Next Generation Memory Devices, the SLDRAM Consortium’, lecture series 1999 of the
US-Japan Technology Management Centre, Stanford University.
238
Camp, R.C (1998): ‘Texas Instruments Standards Management’, ASTM Standardization News, 1998
Kai Jakobs points out that while there is a possibility with a Consortium standard that the
optimal technology (or at least the best alternative available) actually wins, there is also the case
“where different, but roughly equivalent technologies are available, none of which commands
sufficient support to establish itself as the ‘standard’. It may now well happen that this
uncertainty paralyses the market and that potential buyers postpone their purchases in order not
to invest in a losing technology. As a consequence, innovation in that technical domain would
come to a near standstill. Clearly, nobody would benefit from a situation like this. The notion of
‘uncertainty’ is important here. Standards are but a part of a larger socio-economic system,
which does exert a certain amount of influence on standards’ development.”239 He goes on to
say that “the market can – and frequently will – adopt the ‘wrong’ technology when left on its
own.”
“There are, however, cases where greater government involvement can easily be justified. Some
standards – such as health, safety and environmental standards – will have consequences for the
whole Nation apart from their market values. Moreover, since technological impacts transcend
national boundaries, standards setting in these areas will likely require intergovernmental
negotiations. Government support for standards setting can be most clearly justified in the
international arena.”240
Oksala expects that : “The increasing tension inside standards developing organizations to lower
the bar (to compete with consortia) and raise the bar (to make things acceptable to regulators)
will result in a more formal distinction between standards that have a ‘public interest’ component
and those that don’t. This distinction will be recognized by governments and incorporated into
their processes. …(much time will now be spent) debating whether there is a public interest
component in standards that do not affect health, safety and the environment.”241
“Balance of interests is important to the formal process and can take priority over openness. On
the other hand, consortia will have varying degrees of openness but they typically do not care
about the classic balance problem. Consortia also do not depend on the sale of documents for
financial health.”242
Consortia are not the answer to everything.

Oksala243 believes a watershed for consortia standards may arise when at some time in the future
“A consortium will be successfully sued on the basis that its lack of due process caused
economic damage to a company. A major effort will be initiated in both the public and private
sectors to prevent it.”
More serious, however, is their lifecycle: “Over time, however, consortia began to have the same
problems that faced the formal organizations – the common purpose was weakened or obscured
and it took more and more effort to create less and less of a specification….. consortia became a
way of achieving a marketing advantage….and soon there were consortia being created at least
once a month. However, consortia can be expensive and dissolution requires that all participants
239
Jakobs, K., ‘Some Aspects of the Economics of Standardization – What a Non-Economist Might Find
Interesting’, Computer Science Department, Informatik IV, Technical University of Aachen, Germany
240
241
242
ibid.
243
ibid.
disengage simultaneously to avoid being pilloried in the press. As a result, a consortium tends to
remain; participation by the founders is necessary to preclude something bad from happening
while you’re not looking. And since they can’t be closed down easily, it becomes necessary to
continue to keep them on life support, especially if you’ve invested heavily in the creation of the
consortia. The weakness of consortia was that, once they’d had their shot at the initiating
specification, they didn’t go away and they rarely continued to justify their existence.”244
A very successful consortium

“In recent years the focal point of standardization has shifted to a new class of standard setters,
the industry consortia. An example of this new breed is the World Wide Web Consortium
(W3C)… the consortium lists such technology giants as Microsoft, Netscape, Sun Microsystems
and IBM. For a number of reasons, W3C enjoys a great deal of influence in the technology world
today. Among them are the fact that the consortium allows for companies to develop standards
quickly and the fact that the consortium is extremely selective in its choice of members. The
consortium has set the standards for numerous Internet technologies, including HTML,
cascading style sheets (CSS), Document Object Model (DOM) and Platform for Privacy
Preferences (P3P), as well as quite a few XML-based standards. W3C now focuses almost
exclusively on high-level software-based solutions.”245
CARGILL EXPRESSES WHY CONSORTIA MAY TEND TO BE MORE SUCCESSFUL THAN

FORMAL BODIES AND IN HIS VIEW ALREADY DO AND WILL CONTINUE TO, DOMINATE
IT STANDARDIZATION: “IN CONSORTIA, HOWEVER, THERE IS A PRECONDITION THAT
SDOS DO NOT ENJOY – BASICALLY, THE MEMBERS OF THE CONSORTIUM ARE
USUALLY LIKE-MINDED AND USUALLY WISH FOR ACTION TO OCCUR. IN THE MAIN,
THEY REPRESENT A SIGNIFICANT SEGMENT OF THE MARKET WHO HAVE COME
TOGETHER TO CREATE OR CAUSE A SPECIFICATION TO BE CREATED – A
SPECIFICATION THAT THE MEMBERS OF THE CONSORTIUM CAN ACCEPT AND
IMPLEMENT... MEMBER ORGANIZATIONS WHICH PRODUCE PRODUCTS EMBODYING
THE TECHNOLOGY OF THE CONSORTIUM ARE THE INDICATOR OF A CONSORTIUM’S
SUCCESS. AND THIS, MORE THAN ANYTHING ELSE, IS THE REASON FOR THE SUCCESS
OF THE CONSORTIA AND THEIR ASSOCIATED TYPES OF ACTIVITIES, SUCH AS
ALLIANCES. MEMBERS CAN SEE A CORRELATION BETWEEN ACTIVITY AND MARKET
SHARE AND MARKET ACTIVITY.”246
Need for Faster Results

The formal standards organizations are responding to the call for speed, in a variety of ways.
Formal SDOs and Consortia can and do work well together and this is a path to be followed
increasingly.
An example was the formation of the USCAR247 consortium, for joint standardization, by the
three largest auto manufacturers in the US. They gradually merged their activities with the
relevant ‘formal’ US body, in this case the SAE. The result is a successful cost-reduction
244
Cargill, C. (2000): ‘Evolutionary pressures in standardization: considerations on ANSI’s National Standards
Strategy’, Sept. 13, 2000, Committee on Technology, US House of Representatives
245
Seltzer, L. (2001), ‘The Standards Industry’, Internet World, April 15, 2001
246
Cargill; C.F., ‘Consortia and the evolution of information technology standardization’,
247
USCAR: United States Council for Automotive Research
programme and a series of standards which are widely adopted and which are candidates in some
cases for European or International status.
COSTS AND REVENUES OF STANDARDIZATION
“To fund their development activities, consortia may charge fees to members. Funding levels of
some consortia is in the order of millions of dollars. These funding needs can be either met by
enrolling many members or by requiring very large contributions from individual members. For
example, sponsor-level membership in PowerOpen (whose main goal is to foster rapid porting of
software to the PowerPC environment) requires $250,000 in annual dues. Many consortia charge
different rates for companies with different revenue levels, to permit smaller companies to
participate. Again there is no relation between these costs to produce a consortia specification
which is offered to a SDO for de jure standardization and the cost of the eventual de jure
standards – the consortium wants to obtain support for the standard, not to make money from the
sales of the standards document.”
Standards organizations are using the various Copyright laws enforced by government to exploit
a monopoly on the sale of standards which, in some cases, were developed by volunteers who
paid their own participating expenses. Why should organizations such as ISO and ANSI be
allowed to sell standards that were developed for wide public dissemination by volunteers?248
In fact extreme annoyance is often expressed by companies which pay their own expenses to
participate in standards development and then find they must purchase the printed standard.
Their strong anger is not related to the amounts involved and it is completely counter-productive
for SDOs to charge them.
Standards development is difficult, expensive and for the Public Good

“Initial research suggests that a key factor determining outcomes in standards development
bodies is the amount of resources and skills that participants bring to bear.”249
It has been estimated that the development of a major international telecommunications standard
may require in the range of 1,000 person-years of experience, 20 person-years of actual effort
and $3 million250.
“However, information about standards, like standards themselves, is a public good and is
therefore likely to be under-produced. Even when standards related information can be packaged
for sale like other commodities, thus yielding an adequate return, its price may limit distribution
so that people have insufficient information to make sound decisions.”251
Should the SDOs charge for standards

A society of consumers tends to pose the question, “If it has no monetary value, how valuable
could it be?” How credible are our statements of value and integrity if we give standards away
for free? Judith Gire, Professor of Law and Director of the Law Library at Franklin Pierce Law
248
Rada, R., Berg, J. (1995): ‘Standards: Free or Sold?’, Communications of the ACM, 38, 2 pp 23-27, February
1995
249
Weiss, M.B.H., Sirbu, M., ‘Technological Choice in Voluntary Standards Committees’, Op. cit., Footnote 9, pp.
111-132
250
251
ibid.
Center, says: “In my experience as a librarian, when people get their information for free, they
place less value on its usefulness and its integrity.” Professor Gire also said that years ago,
before they charged for the information provided through their law library, users were scarce,
gave less weight to what they received and less respect to the people providing the information.
“But after instituting a pricing policy for research and for the information received, people
started using the library much more and they put a greater value on the information received.”252
Clifford Lynch expresses a completely opposite point of view : “The failure of traditional
standards development organizations to embrace convenient electronic distribution is reducing
the value of their products for many. The move to non-traditional venues like the IETF, the
World Wide Web Consortium and the endless series of ad hoc industry consortia and away from
traditional standards processes is clear. This is not based simply on the slow speed and lack of
agility that characterizes traditional standards development. It is also the result of an end product
that fails to meet marketplace needs and is priced and distributed in such a way as to infuriate the
organizations that played a key role in its creation…It is clear that limiting access to generate
income through the sales of standards documents is now actively counterproductive to the broad
understanding, implementation and use of standards. It should be clear that charging for access
to drafts or to final standards documents via the network is a disastrous error…Standards today,
particularly in information technology and networking, are part of the knowledge base of
education, research and industrial development; it is in everyone’s interest that they be broadly
available. We need a new economic model that continues to insure financial support of the
standards process but not at the expense of access, particularly at a time when the new networked
information environment offers so much opportunity.”253
How should SDOs be financed? Lynch suggests: “Compendiums of many useful standards in
printed form are likely to enjoy a more robust marketplace as reference handbooks rather than
highly priced, standalone standards documents. …There are many opportunities to add value
through tutorial or interpretative material that might be added to the standards proper, perhaps
producing something that is closer to a textbook than a standards document.” (our italics)
252
Lynch, C., ‘The Case For New Economic Models To Support Standardization Efforts’
253
Schoechle, T. (1995): ‘The Emerging Role of Standards Bodies in the Formation of Public Policy’, IEEE
Standards Bearer, Vol. 9, No. 2, April 1995, p. 1, 10.

ANNEX 4: Corporate Preference in Standardization
ANNEX 4: Corporate preference in standardization
There is much evidence to suggest that the corporate customer overwhelmingly wants
International, Regional and Consortium standards, in that order of preference. This view is
supported by SBAC: “Ideally, only International Standards (ISO and the electrical equivalent,
IEC) would exist and be used.” European and American standards are the next preference:
“Generally, American or European (EN) standards, next to ISO standards, are the best option for
maximum standardization due to the size of the potential user areas.”254
This is borne out by a survey conducted by AECMA

The DaimlerChrysler group
ISUG respondents to questionnaires
Caterpillar
Industry Cooperation for Standards and Conformity Assessment (ICSCA) is a group of

corporate standards professionals and business executives from 12 countries, 44 globally acting
companies and 13 industry associations. The companies active in ICSCA account for more than
a trillion dollars of annual revenue and employ more than four million in their facilities around
the world as of mid-1998. It was founded in September 1996, driven by common interests of
globally acting enterprises. A major plank in their programme is ‘one standard, one test and
suppliers’ declaration of conformity’ worldwide. ICSCA companies have resolved to “promote
the use of global standards when regional or national standards embrace similar requirements,”
which unambiguously indicates a first preference for International standards.
70%
60%
50%
International
40%
National
30% Company
20%
10%
0%
1970 2000
Figure 6 : Caterpillar – the shift to International standards

Source: Caterpillar 1998255
There were two reports that suggested the desire for International standards was not as stated.
CEN, in a survey of customer satisfaction, reports that “…62 federations prefer European
standards to international standards. 50 federations prefer international standards to European
254
Allen, K. (1999): ‘Report from the SBAC Engineering Standards Working Party on Cost / Benefits of
Standardization’, February 1999
255
McKim, P.(1998): ‘The importance of participation in Global Standards’, SIES/IFAN Conference Nov. 1998
ANNEX 4: Corporate Preference in Standardization
ones. Most of the federations which did not take a firm position on this purpose, replied that both
are useful and that it depends on the subject.”
The DIN Report256 also contradicts that view and respondents rated company standards higher
than industry. Respondents felt that industry standards offered more than industry or wider
standards (Tables pages 124, 136 and 148 Book 2), but the reaction was not strong for any of
them. Indeed, a further question (standards applied, page 176 Book 2) indicates that that
unaltered wider-level standards are used three times more than adapted or company standards.
Also, replies on the values of different types of standards in purchasing and sales are more in
favour of higher-levels of standardization (do. Pages 190, 202 and 214 Book 2).
The main demand coming from the Corporate sector is
One standard – an International standard
One test – an approved test house system whereby one test will be a passport throughout the
world
256
DIN Report:“Gesamtwirtschaftlicher Nutzen der Normung, Unternehmerischer Nutzen 1, Wirkungen von
normen: Ergbnisse der Unternehmensbefragung und der Experteninterviews.” ISBN 3-410-14858-2
“Gesamtwirtschaftlicher Nutzen der Normung, Unternehmerischer Nutzen 2, Statistisches Material und
Auswertung.” ISBN 3-410-14857-4
“Gesamtwirtschaftlicher Nutzen der Normung, Volkswirtschaftlicher Nutzen, Zusammenhang zwischen Normung
Deutschland.” ISBN 3-410-14859-0

ANNEX 5: ANNEXES FOR IMPACTS
ANNEX 5: Annexes for Impacts
IMPACT ON TRADE AND FREE MOVEMENT
IMPACT ON COMPETITIVENESS
IMPACT ON HEALTH AND SAFETY OF WORKERS
IMPACT ON CONSUMERS

ANNEX 5.1 Trade and Free Movement

A. Further Details of EU Trade Statistics
Eurostat data show that the EU is the world's largest exporter of goods and the second largest
importer.
Table 8: World Export and Imports of Goods, 2000
World Exports and Imports of Goods, 2000

Exports % World Trade Imports % World Trade
(bn euro) (bn euro)
EU 15 937.9 17.5 1,026.8 18.0
USA 837.4 15.6 1,343.0 23.5
Japan 518.3 9.7 409.0 7.2
Canada 298.5 5.6 285.0 5.0
China 299.1 5.6 243.8 4.3
Hong Kong 213.6 4.0 233.7 4.1
Rest of World 2249.8 42.0 2,167.6 38.0
Total 5354.6 100.0 5,708.9 100.0
The above figures exclude intra-EU15 trade. This trade (for goods) was worth 1,550bn euro in
2000. Including this trade, the EU15's share of world exports in 2000 was about 36%, and about
35% of imports.
Reviewing the above by product shows that the EU had a trade surplus in the areas of chemicals
and machinery/vehicles but deficits in other areas.
Table 9: European Share
Share of EU Exports Share of EU Imports Trade Bal. (bn euro)

Food and Drink 5.4% 5.4% -4.6
Crude Materials 2.0% 4.9% -31.4
Energy 3.2% 14.4% -117.4
Chemicals 13.6% 6.9% 57.3
Mach. and Vehicles 46.6% 38.1% 45.5
Other Articles 29.2% 30.3% -38.3
In the area of services, the EU was the largest importer and the second largest exporter in 2000.

Table 10: World Exports and Imports of Comercial Services, 2000
World Exports and Imports of Commercial Services, 2000 (bn euro)

Exports Imports Trade Balance
EU-15 291.1 286.1 +5.0
USA 297.8 215.7 +82.1
Japan 74.1 125.5 -51.4
Canada 40.3 45.4 -5.1
China 32.7 38.9 -6.2
Rest of World 457.7 489.5 -31.8
Total 1,193.8 1,201.2
The above data are taken from a Eurostat news release257
B. Study on Attitudes of EU/EFTA Companies on Effect of 1992
This study supports the evidence presented in Section 3.3.2 of the main report. The diagram
below shows the views of companies in the EU and EFTA areas regarding the effect of the
Single Market. In particular, it indicates a major reduction in "formalities", which contribute
directly to trade transaction costs.
Figure 7: EU & EFTA producers view of access to the Single Market

(Source: Ifo Institut)
257
EUROSTAT news release (2001): ‘The EU Figures for the Doha Conference’, Qatar 9-13 November 2001.
C Difficulties in Linking Standards to Trade
The main report refers to the fact that it is difficult, from an econometric perspective, to link
standards to trade. A number of reasons for this are:
the number of other factors changing at the same time. As with the Single Market Programme,
harmonized standards often develop in the context of wider changes to trade barriers, making
it difficult to pinpoint the trade effect of changes to standards regimes;
linked to this is the fact that pressure for standards harmonization often emerges from companies
as they expand their trade. Thus, other factors may already have started to push trade
upwards and may continue to operate and strengthen;
the role of multinational enterprises. As standards harmonize, one effect is to make it easier for
companies to operate on a genuinely multinational or global basis. Direct investment inflows
into the EU in 2000 were estimated at 125.1bn euro by Eurostat, up 448% on the 1992 figure
of 22.8bn euro. This means that trade patterns ex ante are difficult to compare to those ex
post as global production patterns have changed;
differences across sectors are so great that one cannot compare sectors with and without
harmonized standards and draw conclusions in relation to the impact of standards on trade;
there is a time lag between agreement of harmonized standards and any effect on trade (e.g. a
directive may need to be translated into national law and companies take time to adjust their
behaviour).
D. ROADING REQUIREMENTS FOR CATERPILLAR PRODUCTS IN DIFFERENT

EU COUNTRIES
A 2001 paper258 presented the picture below of model changes and adaptations to meet European
market requirements. It shows how the ‘roading’ requirement for a typical agricultural machine
such as an agricultural tractor, varied around the European ‘Single Market’. It is clear that Road
Traffic Regulations in the member countries are among those which can compromise an
otherwise harmonized standard. However it is true that otherwise the requirements are
harmonized within Europe – this quirk applies to machinery with “on-road” and “off-road
possibilities”.
258
Hedberg, W. (2001): ‘The Global Market Sector Concept’, Presented at the IFAN World Trade and
Standardization Conference, Berlin, Sept. 2001
Note: upper part of matrix- country requirement; lower part: manufacturers’ solutions
Figure 8: Regulatory Compexity
E. Standards, Aid and Trade

Standardization is not always neutral but can benefit certain countries or companies. This fact
also arises in relation to aid provided to developing countries in relation to standardization. The
benefits for developing country and donor country alike are described as follows in a 1992 US
Congress report: “Most countries - developed and underdeveloped - view standards as part and
parcel of their industrial infrastructures. Not surprisingly, therefore, foreign aid programs often
focus on standards. This is a mutually advantageous arrangement. Industrialized countries are
eager to help developing countries set up their standards programs. If they can influence the
choice of standards in the developing world, trade will likely follow. Developing countries also
welcome such assistance. Standards can help them create a national market”259
For example, the Japanese ‘Ministry of International Trade & Industry’ (MITI) has sent technical
experts to five countries to assist in the developing standards programs. In the Philippines, the
Japanese International Cooperation Agency conducted a 500 person-day study of the national
259
standardization system and provided $23m to establish three regional labs. The Japanese
Government also paid for people to go to Japan for relevant training. The EU has also provided
assistance in this regard, e.g. to countries in Eastern Europe and to a number of gulf-states.
Bilateral support has also been provided by individual EU countries, e.g. by France to Poland,
and by EU trade associations, e.g. CECAPI, the electrical manufacturers' association, has
provided input to the development of Brazilian standards. The same is true for the U.S. (e.g. it
was working with China to develop its standards regime in 2001).
Influencing other countries' standards regimes applies not only to developing countries. For
example, the US Embassy in US-Saudi Arabia has noted: “Saudi product standards that are
incompatible with U.S. products, promulgated prior to 1989 with assistance from Japan, the UK,
Germany, and other countries, have diminished U.S. export opportunity by $100m to $500m
annually. Since the inception of the (U.S.) National Institute of Standards and Technology
Roundtable Program, no standard incompatible with U.S. products has been promulgated, and
efforts are underway to achieve revision of the earlier, damaging (i.e. to US trade) standards”260
F. Gradual Move to International Standards

Standards were traditionally a national prerogative. K. H. Conduit explained in 1928: “Very little
has been accomplished in international standardization . . . Until international trade is conducted
on a basis less strongly flavored with nationalism, and industrial education has made more
progress, there will apparently be little economic justification for extensive standardization”.261
In this world, the adage was that "trade follows the flag". James Thomas, President of the
American Society for Testing and Materials commented at a standards conference in 2001: "Fifty
years ago, this conference would not have been possible. There was no global trading as we
know it today. Standards were developed largely for local consumption. But standardization is
evolving and we are evolving with it."262
Standards exist at national level, across groups of countries (such as the EU) and at a
global/international level. They can be viewed at three distinct levels, with internationally agreed
standards at the top. Over the past 50 years, there has been an ongoing shift from the national
level standards to standards at the two higher levels.
The DIN study found that the level of standards chosen by companies depended on their trade
patterns. One reason for this is that companies have no need to move to international standards
until the benefits described earlier are achievable (i.e. trade justifies it). A second reason is that
the standards themselves are likely to emerge partly as a result of pressure from companies that
have begun to operate at an international level. The development of international standards is
therefore partly demand-driven. The converse of this is that in sectors with traditionally low
levels of international trade (e.g. construction products), international standards have been slow
to emerge. In recent decades, the number of such sectors has declined and this has coincided
with the shift to international standards. Indeed, some hope the future will have only
international standards. The SBAC says: “Ideally, only International Standards (ISO and the
electrical equivalent, IEC) would exist and be used. … American or European (EN) standards,
260
NIST quoting the US Embassy in Riyadh in 1991 on the US and Saudi Arabia Standards Program, NIST and the
American and Saudi Roundtable
261
Conduit, K.H. (1928): ‘The Economic Aspects of Standardization’, Standards in Industry, The American
Academy of Political and Social Science, Notes from the Annals, 1928
262
Thomas J. A. (2001): ‘The Evolving World of Standards - How Best to Meet the Needs of the Marketplace’,
IFAN International Conference of Standards Users, Sept. 2001, Berlin
next to ISO standards, are the best option for maximum standardization due to the size of the
potential user areas”.263 This is supported by an AECMA survey and by EU companies
responding to the ISUG survey as part of this project.
Linking the levels of standardization back to the type of trade that results from standardization,
data from the DIN study "confirmed the hypothesis that international standards promote intra-
industry trade more than national standards do". This fits with the picture presented in the main
report. A reason for international standards is therefore that a rising proportion of trade is intra-
industry e.g. France both exports motor vehicles to Germany and imports motor vehicles from
Germany (52% in 1990) between component makers and final manufacturers. A further factor is
that with the rise of global corporations, much international trade is also becoming intra-firm.
Although firms may have their own internal standards, the search for competitive components
means that common standards can facilitate domestic companies' involvement in international
trade, albeit in competition with third countries.
Another theme is that standards are not necessarily neutral. Because of this, countries have
realized that influencing the development of international standards may lead to a "payback" for
companies from their countries. Lowell (1997) makes the case for involvement in international
standards committees from a US perspective: “The top ten U.S. export industry sectors, which
include aerospace, automotive, telecommunications, plastics, and petroleum, have heavy U.S.
participation in the development of international standards. These types of advanced technology
products are directly influenced by international standards, and they accounted for an U.S. trade
surplus of $25.8 billion in 1993. In contrast, there was a trade deficit of $141.6 billion in those
areas where either there are few international standards or an absence of U.S. participation in the
development of the international standards. Obviously, the factors that affect trade balances are
numerous and complex and many of them have little to do with standards. Nevertheless, the
correlation between international standards, U.S. participation, and U.S. trade surpluses seems to
be more than a coincidence."264
The drive for international standards to support international trade led to the Technical Barriers
to Trade Agreement agreed as part of the GATT Uruguay round. Hebner (1999) points out that
this agreement gives preference to international standards as a basis for the individual countries'
standards and encourages developers of national and regional standards to defer to international
standards.265 The trend has meant increased work for all of the international standards
organizations such as the ISO, the IEC, the ITU, the BIPM and the OIML.
G. EU Standards, Industry Concentration and Price Convergence

As well as coinciding with higher extra-EU and higher intra-EU trade, there is evidence that the
move to EU standards coincided with greater levels of concentration in EU industry and a
convergence of prices across the EU. Davies, Rondi and Sembenelli (1996)266 reviewed levels of
263
Allen, K. (1999): Report from the SBAC Engineering Standards Working Party on Cost / Benefits of
Standardization, February 1999
264
Lowell, S.C, ‘The Modern Day Archimedes: Using International Standards to Leverage World Markets”
265
Hebner, R. (1999): ‘Standards and Trade - Who Really Cares?’, Technical Standards and Standardization
Processes, Proceedings of a Lecture Series presented by US-Japan Technology Management Centre, Stanford
University, June 1999
266
Davies, Rondi, Sembenelli (1996), quoted in Panorama of European Business 1999
concentration in EU manufacturing industry, but split total manufacturing into three levels of
sensitivity to completion of the Single Market. Their results are shown below.
Change in Concentration of EU Manufacturing, 1987-93 (Top 5 Companies)
1987 1993 1987/93 (% change)
All Manufacturing 24.5% 25.7% +1.2%
By Sensitivity to Single European Market
High 29.0% 32.4% +3.4%
Medium 24.1% 23.9% -0.2%
Low 23.5% 25.0% +1.5%

Table 11: Change in concentration of EU Manufacturing
Commenting on these figures, the Panorama of European Business 1999 remarks that: "Market
concentration … appears to have remained more or less constant on average: in the typical
industry, the top 5 firms account for 25.7% of the market - a 1% point increase since 1987. …
(However), 'no change on average' conceals a multitude of significant differences and changes
between individual firms and industries. In particular, concentration has tended to arise … where
the EU anticipated major structural effects of the Single European Market programme. (This)
suggests that there has been an impact resulting from the establishment of the Single Market,
where major welfare effects - besides lower prices from increased competition - were expected
from the removal of market imperfections and consequent exploitation of economies of scale".
The 2001-2002 "Cardiff Report" on progress in the internal market indicates that price
convergence occurred in the 1990s in the EU. In 1990, the co-efficient of price variation was
21.4%. This decreased to 17.8% in 1995 and to 14.4% in 1998, before increasing slightly to an
estimated 14.7% in 2000267.
H. Mechanical Engineering
As in other sectors, when new product possibilities arise, companies look for standards to help
develop the market. Thus, in composites, the European Pultrudrers Group of the European
Organization of Reinforced Plastics/Composite Material approached CEN in 2000 requesting
standards for its products to further increase their commercial potential268. Reference to
standards is also expected by companies to assist sales (see advertisement sponsored by VDMA
representing 80% of European air compressor capacity below).
However, a European power plant manufacturer told ISUG that, while one model (with minor
variations) is required across Europe, different models are required for Japan and the U.S. The
Caterpillar example, mentioned earlier and contained in the annex to this chapter, also shows the
challenges still facing some manufacturers in supplying a single product across the EU and
EFTA. Ongoing trade barriers (even if reduced) may be partly due to the challenge for standards
of keeping pace with technology development. The Secretary General of the European
Committee for Co-operation of Machine Tool Industries noted in the CEN Newsletter of June
267
ibid.
268
‘Checking out composites’, The Engineer, 07 December 2000
2001 on factors influencing standards that "most important is the timing: standards are usually
out of step with the rate of technical development".
“Compressors – safe and economical use” – published by VDMA representing well over 80% of
European capacity in that market (Atlas Copco, Boge, Gardner Denver, Ingersoll Rand, Kaeser,
Mehrer, JAB, Sauer, Compare, Haug, Schneider, Blitz, Alup, EcoAir) in all main European
languages, underlines the quality of their products by stating that they are all made in accordance
with European Safety Standard EN 1021 –1 and under ISO 9000 Quality Management System.
(Trying to persuade to buy only original-manufacturers’ parts).
I. Electrical Equipment
Electrical equipment is more saleable if it is demonstrated to comply with relevant
standardization. Electrical utilities will not permit connection of non-standard devices, both for
safety reasons and to protect network assets. Sales literature for electrical equipment usually
highlights standards compliance in a way that does not apply to mechanical equipment. Unlike
the latter, electrical compliance is difficult to verify – expensive test facilities are usually needed,
so buyers rely more on test evidence. This may be verified by reference to sales literature and
stated goals of manufacturers, which make extensive reference to standards (see examples below
from ABB, Alstom and Siemens).
Matthias Funfschilling, President of the IEC, at an IFAN conference in 2001, outlined how the
IEC CB Scheme issues test certificates, which are useful as an introduction to international
trade.269 They give mutual acceptance that a product meets IEC standards (some 85% of EU
standards are also IEU standards), and convey savings because a product doesn't need to be re-
tested. There are 40 countries and some 3,300 manufacturers in the CB Scheme. In 1995, the
Scheme issued some 6,000 certificates. By 2001, that figure had grown to 19,600.
The EU’s licensing of technology based on ETSI standards facilitated the well-documented
spread of wireless telephones in the European market, highlighting the importance of the
relationships between standards and trade in goods and services. Guido Gurtler of Siemens270
pointed out while US suppliers meet harmonized European markets, European suppliers meet a
rather split US market, particularly regarding electrical safety requirements, as these are handled
differently in the U.S. at federal, state and local level.
269
Fünfschilling, M.R. (2001): ‘What Industry Needs’ 10th IFAN International Conference, 27-28 September 2001,
Berlin (Germany)
270
Guertler, G. (2001): ‘Mutual Recognition Agreements (MRAs), Goals and Effects’, 10th IFAN International
Conference, 27-28 September 2001, Berlin (Germany)
1. Applicable standards for Generator Circuit Breaker Systems
Item Standard
Generator Switchgear IEC 60694
Circuit-Breaker IEEE C37.013
Disconnector IEC 60129
Earthing Switch IEC 60129
Starting Switch (SFC, Back-to- IEC 60129
Back)
Short-Circuiting Switch IEC 60129
Braking Switch IEC 60129
Current Transformer IEC 60044-1, ANSI C57.13
Voltage Transformer IEC 60044-2, ANSI C57.13
Surge Arrester IEC 60099-4
Surge Capacitor IEC 60358
Seismic Requirements IEC 61166
Degree of Protection (IP-Code) IEC 60529
Source: ABB trade literature
Table 12: Applicable standards for Generator Circuit Breaker Systems
2. List of contents for ABB Contactors, motor protection:

“Standards, Specifications and Certifying Organizations, Certifications and Approvals, CSA and
UL Approvals, Terms and Technical Definitions, Standards and Utilization Categories, Degrees
of Protection, Climatic Withstand of Devices, Connections, Tightening Torques for Contactors,
Contactor Relays and Accessories, Co-ordination with Short-circuit Protection Devices”. ALL
the headings where standards are not mentioned are in turn referenced to standards.
3. Emax - Standards and certifications:

“Emax circuit-breakers and their accessories comply with the international Standards IEC 947,
EN 60947 (harmonised in 17 countries by CENELEC), CEI EN 60947 and IEC 1000, together
with the following European directives: "Low Voltage Directives" (LVD) No. 73/23/CEE (and
subsequent variants); "Electromagnetic Compatibility Directive" (EMC) No. 89/336/CEE”.
4. Directives and approvals:

“The circuit-breakers and residual-current circuit-breakers comply with the International
Standards IEC 947 and IEC 898, the European Standards EN 60947 and EN 60898, and the
National Standards based on them”.
5. SCADA
SPIDER SCADA provides for an efficient monitoring of the power system with a powerful and
versatile graphical user interface. ABB can provide communication with a variety of protocols,
from standard IEC 60870 series (e.g. -101 and-104) to a long range of proprietary but open
protocols, like ABB RP 570/571 and Harris DNP 3.0. SPIDER provides also for inter-center
communication on wide-area networks such as IEC 60870-6/TASE.1 (ELCOM) as well as
support of the IEC 60870-6/TASE.2 (ICCP) protocol”.

271
Siemens example :
Programmable controllers listed as complying with: European Community (CE) Low Voltage
Directive 73/23/EEC, EN 61131–2: Programmable controllers – Equipment requirements, _
European Community (CE) EMC Directive 89/336/EEC, Electromagnetic emission standards:
EN 50081–1: residential, commercial, and light industry, EN 50081–2: industrial environment
Electromagnetic immunity standards: EN 50082–2: industrial environment full of references to
EN’s for Environment conditions for Transport and Storage and Operating, for EMC, conducted
and radiated, and immunity.
Alstom statements272:
1. “Transmission & Distribution has consolidated its position in Protection & Control markets
through the successful launch of an innovative and standardized range of protection
equipment”
2. Transport Strategy “Our strategy is to sustain our market position and to achieve product
superiority in our chosen markets, Through global product standardization, continually
improve the quality and time to market of our products and services.
Press releases samples:

From Design Engineering, 01 January 1997
1. New circuit breaker: “The accuracy and discrimination of the Allen-Bradley 140L operating
characteristics conform to EN 60947-2 whilst the requirements for separation and disconnection
are fulfilled to IEC/EN60204-1”.
2. New Siemens metalclad switchgear: “NXAIR P meets all requirements for the American
National Standards Institute (ANSI) and the International Electrotechnical Commission (IEC)”
J. Pressure Equipment
In early 2002, CEN Technical Committees directly related to pressure equipment were:
TC 54 Unfired pressure vessels
TC 69 Industrial valves
TC 210 GRP tanks and vessels
TC 267 Industrial piping and vessels
TC 268 Cryogenic vessels
TC 269 Shell and water tube boilers
TC 286 Liquefied petroleum gas equipment and accessories
CEN Technical Committees that were not specifically working on pressure equipment but have
at least one item of pressure equipment were:
TC 23 Transportable gas cylinders
TC 70 Manual means of fire fighting equipment
271
Siemens sales literature for Programmable Controllers
272
Alstom Annual Report, 2000
TC 102 Sterilizers for medical purposes
TC 114 Safety of machinery
TC 144 Tractors and machinery for agriculture and forestry
TC 182 Refrigerating systems, safety and environmental requirements
TC 194 Utensils in contact with food
TC 232 Compressors-safety
TC 282 Installation and equipment for LNG
K. Electronic Commerce
The projected growth in electronic commerce is shown below.
Figure 9: Recent and Projected values of B2B and B2C e-commerce

E-commerce still accounts (in 2002) for only a small proportion of total world trade so the direct
effect of standards has been limited to date. Standards have applied to electronic commerce since
it emerged in the context of Electronic Data Interchange (EDI) for business-to-business (B2B)
transactions in the 1980s. These standards were developed by UN/EDIFACT (Electronic Data
Interchange for Administration, Commerce and Transport) committees, with variations on
central EDI standards for different sectors.
E-commerce standards are now developing as a mix of industry consortia standards and those
developed by standards organizations. For example, CEN/ISSS (its Information Society section)
has set up an Electronic Commerce Workshop to ‘track key standardization developments’ and
has a number of e-commerce sectoral workshops. Internationally, the European Commission, the
US, the UN Commission on International Trade Law, the OECD and the WTO are developing
legal frameworks to support global e-commerce. Issues being discussed include jurisdiction
issues, trade regulations and compliance, intellectual property, contracts, encryption and
authentication procedures, privacy protection and cross-border data protection.

L. Environmental Monitoring
ISO has developed standards for three types of Eco-label:
Type 1 Multi criteria based 3rd party certified schemes

Type 2 Self-declaration
rd
Type 3 3 party certification of selected criteria.
D.G. ENVIRONMENT with its Type 1 Eco-label has provided criteria for products that, while
not standards in the sense of formal consensus-based specifications prepared by European
Standardization Bodies, are developed in a transparent way with drafts circulated and
commented on by member state bodies that consult industry and then published in the Official
Journal. While the impact of Eco-label “standardization” on trade or the environment is
negligible at present, it could be significant in future.
The use of the European Eco-label has been slow with 17 product groups and 83 licensed
companies in June 2001. However a campaign by D.G. ENVIRONMENT in Autumn 2001 was
expected to increase interest in the label. There is also evidence of interest from industry
associations, some of which feel the parameters are too tight. Non-EU trading partners have said
that the European Eco-label could be a barrier to trade as, if European consumers select products
with the Eco-label, this could favour EU manufacturers that were consulted in the development
process.
M. Food Safety and Hygiene

CEN Technical Committees working in this area in 2002 are:
CEN/TC 174 Fruit and Vegetable Juice - Methods of Analysis
CEN/TC 194 Utensils in contact with food
CEN/TC 275 Food Analysis - Horizontal methods
CEN/TC 302 Milk and milk products - Methods of sampling and analysis
CEN/TC 307 Oilseeds, vegetable and animal fats and oils and their by-products - Methods of
sampling and analysis
CEN/TC 338 Cereals and cereal products.

ANNEX 5.2: Competitiveness:
ANNEX 5.2: Competitiveness

Cost reduction seen as the major benefit of standardization. The most-sought benefit or
impact for attendees at Workshop #1, as emerged from the QFD analysis, was to “improve
competitiveness”, and by that they meant to reduce costs.
Increase competition: About 60% of DIN Study respondents felt that standards both facilitated
foreign competitors and assisted entry to new markets (Table page 90 Book 2 – DIN Report
(2000)).
The cost savings chain examples in the impact chapter– drawing time, materials management,
raw materials purchasing, are contained in the SBAC report5 and are described below.
UK Industry aeronautics cost saving examples:

At an engineering cost rate of £stg. 35/hr. in 1999:
Saving on drawing time only - number of drawings calling up the standard = 640, time taken to
detail process on each drawing = 2 hours,
time taken to reference standard. on each drawing = 2 minutes,
time taken to produce the process standard = 80 hours.
Saving by specifying a Standard = £41250 per year or € 67,600
Reduced Part/Specification Search Times –

Typical number of project personnel = 600;
average number of such searches per week = 4 average search time without standards department
= 1 hour;
15 minutes average search time with standards dept = 6 minutes success rate of such searches =
60% annual cost of a typical standards dept = £216,000 (standard hour rate for 12 men for a
year)
Weekly saving = (600 x 4 x £35 x 1.25 x 0.6) - (600 x 4 x £35 x 0.1 x 0.6) + 216000) 52 weeks
saving @ £53806 per week
Saving via Reduced Engineering Search Time = £2.8 million per year, € 4.59 million.
If project time scale is 10 years, then £28 million, € 45.9 million is saved.
Production or Purchasing of a common mass produced part, e.g. a rivet

If 500 rivets are purchased, they cost 122 each, 10,000 rivets cost 38 each.
The saving per 10000 rivets is = £8400. Note, a typical UK engine manufacturer purchases over
2 million rivets per year and therefore saves £ 1.68 million or € 2.75 million per year.
Further remarks, and examples of cost reductions from Rolls-Royce
Table 13: Typical aero engine costs breakdown (R-R) Pareto principle in standardized
parts273
Parts % of engine by number % of engine by cost

Non- standard parts 6-7 80
Standardized parts 93 20
273
Allen, K. (1999): ‘Report from the SBAC Engineering Standards Working Party on Cost / Benefits of
Standardization’, February 1999
Bolt A cost R-R £250 to make, standardization reduced this to £50.
Bolt B was offered by reputable Eastern European approved supplier with far lower wage costs,
at £14 each. Due to standardization, R-R was making it with slightly better material for £
1.50 each.
Rolls-Royce is metric; Pratt & Whitney and GE are imperial. Pratt & Whitney reduced pipe
diameters down to 7 or 8 standards, Rolls -Royce reduced to 3, years ago. One of the drivers for
standards is collaborative working for better long-term return. 9 people work full-time on
standards in R-R.
A single engine for an Airbus may have approximately 40,000 parts, and its development costs
will range between say US$ 500M and 2 Billion, depending on whether it is an adaptation or a
new design. The ratio of standardized to non-standardized parts for the Airbus is stated to be
15:1.
Effects ratios
Table 14: Examples of costs reduction on parts from Airbus GmbH:274
Type of Price for non-standard Price for standardized Effects Ratio

component part (DM) part (DM)
Washer 16.04 0.128 125.3:1

Bolt 6.30 4.43 1.4:1
Set-screw 50.95 1.11 45.9:1
Screw 42.45 17.83 2.4:1
Pivot bearing 588.75 37.70 15.6:1
Bush 15.00 4.50 3.3:1
EADS275, with 43,000 employees and sales of $ 9 billion, has 20 standardization staff.
‘Typical’ costs reduction or effects ratios 10:1 according to Frank Jaeger, 15:1 according to Lars
Hoops/Prof. Hesser – in contacts with ISUG.
The DIN Study found more than 60% of respondents viewed compliance with standards as
adding to costs in terms of tests etc. but amongst those responding there was an average
estimated 3:1 effects ratio (page 548 Book 2).
What outcomes are there from cost-cutting in the aeronautics sector?

Consumers are likely to enjoy cheaper and safer air travel as a result, and more workers will be
employed, as, instead of shedding jobs through higher specific outputs, the cost of the good
produced, i.e. aircraft and ultimately air travel, is decreased, and it is well proven from recent
experience that the air travel market is highly elastic. Cost reduction in Aeronautics leads to:
Cheaper, and thereby more, air travel for the public
Growth of the industry with higher employment
274
. “Company standardization as a strategic management tool: the influence of standardization in the construction
process on competitive strategies”, Lars Hoops and Wilfried Hesser, Proceedings, 6th EURAS Workshop 2001
275
EADS: European Aeronautic Defence and Space Co
Military costs savings through standardization
Under the US military programme for cost reduction276, the activities of one standardization
team (C41 EWS Specification and standards acquisition reform) saved US$ 48 million in the
year 1998 The US Navy revised its life raft standards, modifying the FAA standard and savings
of 77,500 man-hours accrue over the first 7 years based on existing life rafts being replaced at
9% per year. At the US Annual Defense Standardization Program Award Ceremony, the
Honorable David Oliver, the Principal Deputy Under Secretary of Defense for Acquisition and
Technology stressed the importance of the Defense Standardization Program, saying, “in the past
year, the savings are in excess of $100 million, and we expect to (save) a billion dollars over the
next several years.”
One of the first standardization activities of the USCAR automobile industry standardization
programme was to reduce the number of types of cigarette lighters from 30 to 4, with major cost
and quality benefits.
US military conversions to civilian standards brought significant cost savings –examples of

such documented cost savings include:
Naval SCBA (Self-contained breathing apparatus) has yielded an annual saving of US$ 4.9
million.
ASTM standard F 1387 “Mechanically-attached pipe fittings” was produced to replace
Milspecs, the case study shows a 10-year cost of US$ 750,000 and 10-year savings of US$
58,800,000 – a savings ratio of 77:1.plus significant quality improvement.
Aircraft batteries were standardized, resulting in improved performance and increased safety.
The costs for the programme was US$ 8.6million, the savings a staggering 289.6 million over
system lifetimes. A further ‘minor’ component, the vent caps, cost a further 0.7million to
standardize with a saving of 165 million. The total benefit/cost ration was 49:1.
‘JASSM’ Joint air to surface standoff missiles were deliberately developed using standard
components as far as possible, and cost 25% of comparable units, at an actual cost of US$
347,000 each they were 10% below target and 50%below ceiling price.277
Offshore Oil Industry

In the offshore petroleum industry, standardization has cut costs and improved safety.
The petroleum industry spends about US$ 20 B on materials and equipment per year. Many
suppliers tell them that standardization saves them 15-30%, they choose to recognize a saving of
only 1%, which is $200M; against for them as an industry a standards spend of 8M, a ratio of
savings of 25:1. This is basis of their participation in ISO TC 67 which is working on approx.
130 standards of which about 50 have been published. This committee works in tandem with TC
115 (centrifugal pumps) and TC 118 (compressors). They have already achieved ISO 13706 air-
cooled heat exchangers and ISO 15547 plate heat exchangers. . A successful example of progress
is introduction of wellhead Xmas-tree standard EN ISO 10423278. Shell spend about US$ 250M
per year on these alone. (Source: N. Reeves, Shell).
276
Defense Standardization Program Journal, May-June 2000
277
‘Defense Standardization Program Office Case Studies’, available as booklets through http://dsp.dla.mil on the
request form
278
EN ISO 10423: Petroleum and Natural Gas industries, Drilling and Production Equipment
Environment – energy
“(Consensual national appliance efficiency standards) are producing substantial reductions in
U.S. energy use (more than 2.5 percent of U.S. energy use, once existing standards are fully
implemented) while maintaining a benefit-cost (i.e. effects) ratio of more than 3:1.”279
The electrical industry and EMC

A competitive electric power supply is a must for any modern country. Reliability is essential, to
be competitive. European power supply systems have been increasingly in danger of becoming
almost uncontrollable, due to increasing harmonics which arise due to the proliferation of
electronic controllers, producing non-sinusoidal AC. Some studies show that if supply voltage
total harmonic distortion is allowed to reach 8 % then the supply network could prove
unworkable.280 This ERA study finds “the implementation of the EMC Directive was a defining
event in Europe” - that EMC standards have given major power quality benefits, mainly to
equipment connected to less than 1 kV. It also finds that the direct resulting costs to power
industry have been minimal. Eurelectric (Union of the Electricity Industry), in “Detailed
explanations, Eurelectric view on the implementation of the EN 61000-3-2 & 3 standards”
September 2000 asserts that “The overall asset value of the European electricity network would
have to be increased by at least 10%” if the EMC Directive were not implemented.
Standardization, technology and investment drive costs down continually

Unit output costs have decreased by 28% in the US 1947 to 1994, with output X 3.25 greater and
unit labour costs X 12.5 greater. This confirms that the average worker can buy far more now
with his/her wages, for each hour worked, than in the past.
Figure 10: Estimated U.S. Manufacturing Capital and Technology281

.
279
Appliance Standards Awareness Project, 20 Belgrade Avenue, Suite 1, Boston MA 02131 –
http://www.standardsasap.org/
280
‘The impact of international and European standards upon power quality’, ERA Report 99-0009: Quality and
Security of Supply in Electrical Networks, IEE Conference Proceedings, 16th – 17th February 1999, London, UK,
ISBN 0 7008 0693 8
281
U.S. Bureau of Labor Statistics Working Paper 351 November 2001
QUALITY
Impact of standardization on Quality through variety reduction

The great strides made in statistical quality control in recent decades would not have been
possible without standardization. These are based on (a) use of statistical methods in production,
and, (b) field-use feedback and correction.
Use of statistical methods in production. Quality assurance and control procedures utilize
control charts which track the statistical basis of defects and failures. If, for instance, a
company chooses that it should produce a part or component with a mean time to failure of 5
years, they will know exactly how many will have failed at 4 years 6 months, how many will
still be functional at 6 years etc. Combined with the techniques of ‘Value Engineering’ (value
engineering may be stated simplistically as ensuring that parts and assemblies have little or
no unnecessary residual function when they reach the end of their design lives - they should
in effect be useless at a pre-determined point, and all such components on an assembly
should ideally reach that point at the same time) the failure point may be predicted very
accurately. This has applied in particular to electronic solid-state devices.
Feedback and correction based on experience in the field. For products that undergo
significant stresses and abuse in application, this feedback and correction leads to design
improvements to eliminate defects and failures. Machines are modified and procedures
improved to reach the required level of quality. - Premature failure in the field is so
expensive for a manufacturer in today’s consumer culture that it helps maintain a focus on
continuous improvement. Transport – cars etc. are a good illustration of the undesirability of
field-failure.
Standardization has delivered the continuous volume production, both through its
Variety reduction effect, and

Increased volume effect due to multi-product and wider platform use (e.g. the GSM
telephone standard increasing the volume of a particular type of chip)
which has been essential to this major quality advance.
To realize how it has impacted, consider how, perhaps 20 - 30 years ago or so, when the numbers
of cars on the roads were far lower than today, the sight of a broken-down car at the side of the
road was commonplace, and how rare it is now. Yet the number of man-days required to own a
car is less than ever before.
Although this major impact of standardization on quality was expected from the time of the
earliest attempts at mass-production, its incontrovertible reality is not often appreciated282
282
‘Eli Whitney and the birth of American Technology”, Constance McL. Green, Little, Brown & Co. / Boston,
Toronto, 1956.“Voluntary consensus standards win over the Department of Defense”, Defense Standardization
Journal, August 2001
QUALITY MANAGEMENT SYSTEMS - THE ROLE OF ISO 9000 QUALITY STANDARDS
“The pre-eminent standard in the area of management is the international quality management
standard ISO 9000. Such standards are more important to an organization’s success than are
technical standards”.283
Background
Although first published by ISO in 1987 the ISO 9000 standards ‘sprang’ out of the earlier UK
standard BS 5750 of 1979. This standard showed the value of a uniform approach to describing
the elements of a Quality System in a typical factory: for more than twenty years before that
Quality Control management was practiced from text books and experiences reported in QC
societies and journals. Initially the emphasis was given to Statistical Quality Control with trend
analysis of process variables, based on the famous sampling plans of US MIL-STANDARD-105.
This connection was maintained with the publication in 1963 of the US military standard MIL-
Q-9858
In the 1960’s and 1970’s Japan became a serious challenger for world industrial and consumer
markets, based on exceptionally high quality at a competitive cost. The Japanese had espoused
the ideas of QA and QC guru Edward Demming as the main plank in their post-war industrial
‘risorgiamento’. The MITI of Japan established a special control body whose quality approval
was essential to obtain an export licence. Now they were conquering world markets as they
targeted them, and ‘made in Japan’, within 20 years, turned from being derided as poor quality to
unqualified acceptance as the best.
The UK in contrast saw its industrial base decline, year on year. The UK Government placed its
hopes in a White Paper (aimed at improving the efficiency of British manufacturing and the
competitiveness of British products in world markets by improved quality through greater use of
standards) published in 1982 on “Standards, Quality and International Competitiveness “ - (70).
A British national campaign was launched to encourage industry to adopt BS 5750, anticipating
work already under way in ISO for an international Quality Management System. Fortuitously,
the ISO 9000 standards were published shortly after the launch of the EU Single Market strategy
of 1985 with its emphasis on the harmonisation of technical standards, and on common
conformity-acceptance criteria.
Impact
Because of the wide application of ISO 9000 in all sectors and at all levels of company size these
standards have made the greatest impact of any published voluntary standards. They have
impacted strongly on industry and service operations throughout Europe, and world-wide. While
figures for non-ISO 9000 third-party certification are not available, it is safe to say that the ISO
9000 represents more than. The following figures indicate clearly the extent of the impact.
Widespread use by place and sector

Geographic spread
ISO 9000 is ubiquitous in Europe: one measure of that impact is that by the end of the year 2000
a total of 220,127 certificates which have been inspected by third-party certification bodies were
283
held by companies in Europe (54% of the world total of 408 631.284 This compared to 190 248 in
1999, and included some hundreds in each Cyprus, Luxembourg and Malta. There were 3826 in
Austria, which had only 3 in 1991! France showed the least interest of the larger countries at
17170 compared to the UK (63725), Germany (32500) and Italy (30367). Sweden (4358) had
relatively few compared to its industrialisation and to smaller countries. Of the six highest
growth countries three are European (Italy, Spain, and the Czech Republic)-- the others being
China, Japan, and Republic of Korea. Companies in 158 countries use ISO 9000.
Sector Number of ISO 9000 certificates issued

Metal & Metal Products 40713
Electrical & Optical Equipment 38148
Machinery & Equipment 23027
Wholesale/Retail Trade 18530
Rubber & Plastic Products 18036
Chemical Industry & Products 14790
Transport/Storage 13181
Other Services 13160
Food Sector 11440
Transport Equipment 9072
Table 15: World-wide issue of ISO 9000 certificates by sector
What is ISO 9000?

ISO 9000 standards are a series of voluntary standards that can be adopted to structure and
operate a QA function within an organisation. They involve the participation of operating
departments from the Order Processing Department to the Production Functions and to the
Shipping Department (possibly Site Installation Staff). Such a QA system became known as a
Quality Management System to stress its role as a management function replacing the earlier
concept of an end-of-line test and inspection function whose narrower role was to prevent poor
quality products being shipped to customers. A Quality Assurance or Management System (QA
or QMS) has process control as an essential basis, including measurement against targets and
corrective actions, leading to lower costs and customer satisfaction due to good quality goods
and/or services.
Why did ISO 9000 grow so rapidly?

We believe that there are four main reasons:
Customer Confidence
The ISO 9000 series of Quality Standards has been and continues to be to build Customer
Confidence. The likelihood of accompanying process quality control, reduction in scrap cost, is
secondary to the extension of direct linkage to the customer. – In the DIN study, over 90% of
respondents gave “sending out a positive quality signal” as a reason for involvement with
standardization (page 76 Book 2 Table ‘frequency’.
Most individual customers have limited bargaining power in quality, with only power to move
from one supplier to another, and they welcomed the ISO 9000 series as a basis to evaluate the
284
Hesser, W., Meyer, R. (1993): p.352, and ISO 1982 p.15

effectiveness of the Quality System operated by their manufacturer/ service provider. Larger
customers, with in-house product quality-acceptance systems, used the growing familiarity with
the language of ISO 9000 in many cases to look for ISO 9000 certification as the opening to
commercial consideration. Confidence was reinforced when the supplier could claim
independent third-party certification. At a time of growing consumerism, retailers and
wholesalers were looking for increased supplier responsibility. ISO 9000 was the answer to
their prayers.
Competition
First the Japanese began to outsell US and European companies in consumer goods in particular,
based largely on their superior quality (which was indeed demonstrably true). A Quality
Platform was needed to fight back. The UK promotional campaign struck a chord and became a
way of indication a superior quality position. Those companies that qualified to ISO 9000
promoted this and the growth of the sentiment became self-reinforcing with marketing messages
coming from all sectors, through all media, from both government and private interests. Such
campaigns were virtually unknown prior to that and they made a great impact at all levels of
Industry and commerce. 50% of DIN respondents saw standards as ‘differentiating us from our
competition’ – as above.
Use in EU Global Approach and Quality Promotion

The adoption of ISO 9000 standards in certain modules of the Global Approach to conformity
testing and certification is an important basis to assure adequate Manufacturing Control for the
purpose of CE Marking of certain products. Indeed it is interesting to find that where ISO 9001
or ISO 9002 is given as an alternative to Type Testing and Verification the majority of
manufacturers choose the ISO9000 module since they consider it to be the more comprehensive
check. In addition this application of the standards in support of CE Marking under nationally
regulated Directives resulted in their adoption by manufacturers for the” Manufacturers
Declaration” (Module A) where, although not a specified requirement, an ISO 9000 Quality
System was seen to provide a good basis for the legal commitment implicit in placing the CE on
products.
The Global approach helped create a market for ISO 9000.
Many major corporations in the US misread the European situation and felt ISO 9000 was going
to be a sine qua non to sell in Europe “However, the major impact of the New Approach on
certification arose from the belief in the late 80’s that European regulatory harmonization was
going to require certification to the ISO 9000 management systems standards. As it turned out,
there was never actually a general requirement for either third party certification or the specific
use of ISO 9000. But the expectation that it was going to happen led corporations around the
world to get certified, and once the bandwagon got rolling, the fact that the expected bandleader
never got on the wagon was of no consequence. It was inevitable that the approach would then
be adopted for other disciplines such as environmental management, and modified to meet
specific needs for industries such as automobiles and aerospace”
In practice, in some sectors – medical equipment in particular – use of an ‘approved’ quality

system is a requirement (Council Decision 93/465/EEC), and ISO 9000 is in effect the only
such ‘off-the-shelf’ approved system.
ISO 9000 became the accepted language for QMS

The widespread use of ISO 9000 led to its becoming an introductory ‘handshake’ or protocol for
quality between firms. Companies that relied on each other for supply and purchase found it
easier to track and communicate problems. Eventually many large purchasers began their ‘new
supplier registration’ process with the question “are you registered to ISO 9000” – and if you
were, you jumped ahead some pages in the questionnaire, a subtle but strong encouragement for
its adoption. The message was, and remains ‘we find ISO 9000 acceptable for quality
considerations: if you have it we can communicate, if not, you will have to explain everything’.
The success of ISO 9000 was now sealed.
A victim of its own success

Loved or hated, no other standard has been as widely used – even the cynics who see no benefit
in it would have to recognize the size of the industry it has spawned – 3242 Conformity
Assessment Bodies (CAB’s) employing 30,000 people in Europe alone.
The companies who tend to denigrate ISO 9000 are as a generalization:

very large international companies (although by no means all of them) who already had
sophisticated quality systems, and
small SMEs run by owner-managers who resent ‘interference’ (i.e. marketplace pressures to
certify to ISO 9000).
John Wilson of the WTO quotes Deloitte & Touche Management Consulting 1993 that the cost
of registration to ISO 9000 for firms operating in North America averages about $245,000 per
firm including the costs of re-audits by ISO 9000 registrars, and that IBM Corp. estimates that
initial costs of certifying its plants to ISO 9000 totalled $100 million. If costs are as high as
reported here, perhaps critical reaction is not surprising – perceived exploitation by CAB’s has
aroused much resentment.
ISO 9000 was a victim of its own success. It is not a quality standard – uninformed
managements may have thought it was – but a system for quality management that in itself was
never expected to give any particular guarantee of quality. Criticisms (quite valid) of the content
and intent of ISO 9000 are, we believe, largely and perhaps completely addressed by ISO
9000:2000.
However, ISUG contends that the overall impact of ISO 9000 has been extraordinarily positive,
evidenced by 54% of the world’s third-party certified approvals being held in Europe, an
amazing 220,000 companies in manufacturing and services. Some claims made for it include:
It is a ‘lingua franca’ or common language of quality systems enabling easier producer – supplier
relationships.
Some companies claim that improved staff communications is a the main benefit
Where it is offered as an alternative to Type Testing and Verification, most manufacturers
choose it: therefore, it is the easiest option
In providing standardized training in quality management systems, it makes quality personnel
more ‘interoperable’.
Without ISO 9000 (or some other standardized quality management system) it is inconceivable
that even a fraction of companies would have a sophisticated quality system, or that
European harmonization could have been achieved.
Europe has benefited from it to catch up with Japan’s quality level.
It has been of great value to SMEs who gain a market-entry potential from it.
It provides a suitable platform and lead-in to the Environmental management series ISO 14000.

Large companies that have seen their (marketable) quality advantage eroded by ISO 9000 (vis a
vis SME’s) may choose to build a new higher-order quality platform.
In view of its central importance – many people in business recall only ISO 9000 when
‘standards’ are mentioned– should CEN and CENELEC take a more active role in it as ISO has
done?
Some of the sectoral versions or developments of ISO 9000 may be restrictive and pose a threat
to Free Trade.
Problems and criticisms

There have been a number of persistent criticisms of ISO 9000, some very real, some based on
perception.
Compulsion - Unfortunately the importance of ISO 9000 led to considerable confusion and for
some time its use to support CE Marking for specific products resulted in its being seen as
compulsory to place many products on the European market. Many companies who were
basically hostile to any form of regulation, signed up for ISO 9000 in the false belief that it
would be essential. Others reluctantly joined because they felt it was a marketing imperative.
No guarantee of quality: ISO 9000 is a quality management system: it has had no stated
product quality targets. This led many sceptics to deride it as guaranteeing consistent low
quality, a condition that could arise only in theory and hardly in practice. The President of
Firestone Tires, which is involved in serious allegations of defective quality, suggests that the
ISO 9000 version used by Firestone was, in a way, to be blamed: this is an extraordinary
assertion which appears to misunderstand the standard and its use. However, a management
person not familiar with quality management systems could suffer from a false confidence that
ISO 9000 would fix all quality problems.
Certification bodies perceived to be profiteering: As the Regional standards in Europe were

not directly involved, promotion of ISO 9000 was largely by benefiting parties – Certification
and Inspection bodies. Coupled with the notion of compulsion, their charges became highly
resented and ISO 900 began to be seen as purely a moneymaker for such bodies. A comment
from a questionnaire returned to ISU, about certification, reads, “Anyway, someone has created a
money machine”
CE marking: The rules concerning the placement of the CE mark are so complex that there is
almost an industry in explaining them. Publicity from some of the Certification bodies adds to
the mystery involved. A situation where toys and electrical appliances are imported to Europe
and perhaps an increasing number of them, self-certified and CE marked, are found by the
Surveillance Bodies to be fundamentally in breach of safety requirements (34) - contrasted with
the mandatory use of the mark for say Medical Devices, is bringing the mark into disrepute. The
certification playing-field is also not perceived to be level – one body may pass, and another fail,
the same product against the same test criteria. This appears to be the case far too frequently, and
there is a need for ‘calibration’ of the Test Houses, and removal of their certification powers
where necessary.
If action is not taken, CE marking may become an irreversible marketing liability.

Sectoral use, akin to trade barriers
It was intended that ISO 9001 would be applied for sector-specific needs, rather than a
proliferation of sector specific QMS standards. This hope has been breached, as ISO 90001 was
found inadequate for Medical Devices and the sector specific EN 46001 and EN 46002 have
resulted (international equivalents ISO 13485 and ISO 13488), likewise for the Food Industry
where at international level ISO 15161 has been developed by ISO TC 34 to provide
interpretation for the application of ISO 9001.
ISO 9000 2000 – the way forward

ISO/TC176, the international technical committee responsible, revised the standard with needed
improvements in a new edition “ ISO 9000:2000, more correctly EN ISO 9000 (72). “. The
revised ISO 9000: 2000 enhances the standards by strengthening the two significant areas of
Continuous Improvement
Customer Satisfaction
It has been stated that organisations must “recognise that there is a cultural gap between the new
requirements as compared to the previous 1994 edition” (69). Evidence is emerging (including
ISUG questionnaires which will report later) that this initiative has addressed and remedied the
previous shortcomings of ISO 9000. It is also accepted that self-certification to it will become
usual within some years. We feel that this change warrants some initiative by the European
Commission with industry to support the new edition.
However, it is said that in 2002 the majority of new ISO 9000 certifications are still to the older
version (Loucas Gourtsoyannis, Normape, at ISUG review meetings). The urgent need for
grading and monitoring of the Test Houses and Certifiers is unchanged.
The European position on ISO and related systems

ISO 9000 acquired such importance that many companies, European and other, began to regard
use of it as compulsory. The EC was sensitive to this development, not least because of the
concern expressed by industry interest groups and companies as well as by quality experts such
as those in the European Organisation for Quality (EOQ). As part of the SPRINT Programme for
innovation and technology transfer the Commission under took a comprehensive study the
results of which were published in “ Quality Promotion In Europe” (71) in 1994. An initiative
taken by the European Commission in 1993 to broaden the implementation of ISO 9000 to
emphasise the general Quality Improvement of companies, including a European Quality Week
and Quality Award largely addressed this situation. It is regrettable that the industry-based EU
Quality and Certification bodies did not sustain this. The year 2000 revision of the standards
provides an opportunity for those interests to revive this European Quality Promotion Campaign.
The recent position taken by the European Commission (36) to support work on an OHS
management standard is welcome and will give interested companies with beneficial experience
of ISO 9000 and ISO 14001 an opportunity to implement a comprehensive operational
management system covering all three areas. Peter Bonner, in discussions with Totus, pointed
out that about 70% of ISO 9000,of ISO 14000 and other such management systems standards,
are system-related, the other 30% quality - or respectively environment-related. This means that
it is easier and less costly to add on other such standards once one is in place. This ease of
adoption is corroborated by the de Vries study.

A further development from a technical committee of ISO has been the development of guidance
standard for the application of ISO 9001 principles to Food Hygiene. While it clear that the EU
priority is the strengthening and harmonisation of the national food safety regulations including
those controlling hygiene practices it is hoped that the new ISO 15181 will be recognised in a
supporting role by the European Food Safety body now being created. The implementation of the
ISO 9000 principles for control of Food Hygiene should be used to increase operator
responsibility in meeting legal requirements.
QS 9000, EFQM, TQM and Six-Sigma Management

The word-wide interests in Quality Assurance were active long before ISO 9000 was developed
and published. Major associations of quality experts at national and international level (such as
the Institute of Quality Assurance in the UK, the American Society for Quality Control in the
US, and the European Organisation for Quality (EOQ)) and influential corporate quality experts
in large companies (such as Siemens, Philips, General Electric, Hewlett-Packard, Honeywell
International, Motorola, General Motors, Ford, and AT&T) have considered ISO 9000
inadequate and too dominated by third-party certifiers. This has lead to a number of initiatives
aimed at replacing the ISO 9000 with alternatives schemes for Quality Management.
In Europe quality experts introduced the European Foundation for Quality Management (EFQM)
self-assessment model and in the US both Total Quality Management (TQM) and Six-Sigma
Management have been adopted as alternatives to ISO 9000. Although supporters of the standard
may be disappointed to have it considered “ second best” it should be recognised that the experts
involved in introducing these alternatives have a long history in the techniques of Quality
Management particularly within their own companies and they do not consider it necessary to
rely on the expertise of an ISO technical committee. The widespread use of ISO 9000 shows that
these alternatives as used by large companies and others have not inhibited its general use, nor
are they incompatible with it.
“One standard, one certification”

A further reaction started in 1994 when Hewlett-Packard, Motorola and a number of other
companies formed a lobby group of large companies with multiple operational locations
worldwide whose corporate expenditure on third-party certification services had become of
concern. Without exception the companies involved supported the ISO 9000 standard and
audited implementation of it at operational level, but they considered this could be conducted in-
house by their own corporate Quality Audit staff (as had been the case for implementing
company Quality Policy for over twenty before ISO 9000). In 1999 this lobby group were
unsuccessful in having ISO undertake their request for a corporate version of ISO 9000, since the
standards body considered this issue a matter for negotiation directly with the certification bodies
in consultation with their accreditors. Consequently individual companies have negotiated
appropriate arrangements to be eligible for reduced third-party audits and inspections based on
adequate corporate controls recognised and approved for Corporate Certification by a
certification body. Such an arrangement recognises the expertise within these large companies
without sacrificing the integrity of the standard.
More about sectoral QMS use of ISO 9000

Of greater concern has been the introduction of three sectoral certification schemes which,
although they have much in common with ISO 9000, are private supplier approval schemes
controlled by groups of companies within the automobile industry, the aerospace industry, and
the telecomm equipment industry. These schemes are respectively designated QS 9000, AS
9000, and TL 9000. All have as basic requirements for suppliers quality systems the content of
ISO 9000 but impose additional clauses specific to the individual industry. For example TL 9000
contains ISO 9000 and eighty-eight additional telecomm specific requirements which have been
set out by the QuEST Forum-- Quality Excellence for Suppliers of Telecomm Leadership, and it
became compulsory for 127 suppliers in January 2001. For each of the three approval schemes
the companies within the industries control the independent certification bodies that are accepted
to operate the audits and inspections. The derivation of these supplier approval schemes is the
use of a single Quality System specification based on ISO 9000 and a co-operative single audit
and approval system so that for example a supplier receives an approval to supply General
Motors, Ford, and Chrysler rather than three separate quality specifications and audits. It will be
seen the objective of the three schemes is to replace individual supplier approval schemes and
thus save the vehicle manufacturers the costs of duplicating audits. However the arrangement for
accepting independent certifiers appears to allow the manufacturers to control the number and
location of them. There does appear to be a possibility that these three schemes could result in
barriers to trade even to the extent that there is no formal consultation in deciding the
requirements added to ISO 9000.
CEN-CENELEC and ISO 9000

Although European representatives participate with their international colleagues in the ISO
technical committees, now that the parallel voting has assured the revised ISO 9000 is now a
European Standard --formally EN ISO 9000, CEN/CENELEC have no involvement in their
implementation in Europe. Because of the high level of third-party certification already in
existence the role of advising on the changeover to the revised ISO 9000 is being filled by the
certification bodies. This of course serves to perpetuate the image that “ ISO 9000 is principally
about selling certificates”.
Taking account of the fact that EN ISO 9000 remains for the foreseeable future the most
important standard in Europe and continues to have the widest impact in all sectors and in
supporting the Single Market it is surely perverse that the European Standards System
CEN/CENELEC has no involvement other than an administrative one related to the national vote
for its adoption. Compare this situation with ISO where a regular newsletter is produced and the
annual survey on world -wide certifications covering both ISO 9000 and ISO 14001, illustrating
their wish to be involved in the implementation not only the final vote on an agreed standard.
(Lack of CEN and CENELEC follow-up to the implementation of European Standards is a

consistent issue that has arisen throughout this study. The European Bodies give their entire
attention to the consultation activity required to produce the agreed ENs, since this is the end
target of the Mandates accepted from the EC. This contrasts with the situation in National
Standard Bodies where the IMPACT of new and revised standards whether national, European,
or international is a matter of great significance. At its simplest level the income from the sale of
standards is important to the national bodies and they are aware directly if standards are being
purchased. This issue will be addressed in the recommendations of this report).
At this time the recent publication of EN ISO 9000 provides an opportunity to formalise EU
support for the new texts. This support should be centred on the standards bodies
CEN/CENELEC and nationally with links to the certification bodies through EOTC, and to the
accreditation bodies through EA (European Accreditation).

It also provides the European Commission led by DG Enterprise to consider again the value of
Management Standards in support of legislation beyond the New Approach Directives.
Third-Party Certification and Notified Bodies

While the major theme of this review is the Impact of ISO9000 on Competitiveness rather than
as a regulatory instrument the role of third-party certification and EU Notified Bodies has been
and continues to be important. It does not come within the scope of this review of “ Impacts” to
consider in detail the operation of the third -party bodies. However a relevant study was
conducted by the EC in preparation for the new edition of the standards in the form of a
questionnaire to 210 of the more than 1000 Notified Bodies on the subject “The ISO 9000
Standards and the Implementation of the Quality System Modules of the Global Approach”
There were replies from 92 Notified Bodies (a response rate of 43%) from which the
Commission was able to draw positive conclusions both as to the preparedness for the 2000
edition of ISO 9000 and to the few problems that the bodies had experienced in ten years of the
Global Approach. The main problem seemed to be related to reconciling a voluntary and
commercial approach to the use of quality management systems on one hand and using such
systems to ensure compliance to regulatory product requirements on the other. The Commission
commented that there should be no contradiction between these two approaches, but the onus is
on the manufacturer to ensure compliance with Directives. One issue of difficulty is the fact that
ISO 9000 standards are not product oriented enough considering the specific objective is
assurance that products comply with Essential Requirements, which are mainly safety features
best, defined in product standards. The Commission accepted that this problem should be
addressed in a review.
Certainly this review would support this conclusion and comment that ISO 9000 must not be
expected to fulfil more than its scope as a quality system standard.
Role of Governments and EC

From the above review it is confirmed that Quality Management System ISO 9000 series
standards have made an important Impact and have established a significant role in supporting
the Quality Competitiveness of companies in all sectors of manufacturing and services. In
particular these standards continue to provide an important support to EU Directives but their It
is recommended that Governments and the EC arrange with industrial interests including the
certification and Notified Bodies to repeat during 2002 a “ Review of EU National and Regional
Schemes and Measures in the Field of Quality” previously conducted in 1992, taking into
account developments in trade which have occurred in the past ten years and in particular areas
currently considered to have poor quality inhibiting Competitiveness.
The absence of European Standards Body involvement through CEN/CENELEC in

implementing ISO 9000 -the most widely used standards in Europe; is believed to be why the
ISO 9000 standards are associated with certification bodies. CEN/CENELEC should be
encouraged to remedy this by more closely identifying themselves with ISO 9000, without
appearing to diminish the role of ISO.

Studies on the effects of ISO 9000

A Canadian study
(“Management systems standards, the story so far: Canada’s experience with ISO 9000, ISO
14000 and QS – 9000”, Standards Council of Canada, October 2000) of businesses’ experience
with the ISO 9000, ISO 14000 and QS-9000 management systems standards was based on nearly
3,000 telephone interviews with Canadian private-sector businesses. It included a large sample
of businesses registered to ISO 9000, ISO 14000 or QS-9000, and also a large sample that are
not registered to the standards in sectors which could be expected to have an interest in them.
Most registered firms had used a formal quality management system prior to implementing and
registering to ISO 9000. Nearly two-thirds of the non-registered organizations were using some
type of quality assurance system, generally an informal, in-house system
Results: Registered organizations had a highly positive attitude toward ISO 9000. A significant
majority of firms felt that the standards make organizations better global competitors. Virtually
all of the registered organizations surveyed (99.5 percent) intended to maintain their registration.
Registered organizations also had a very positive attitude toward ISO 14000. The notion that
organizations do not benefit from adopting ISO 14000, for example, was unanimously rejected:
despite some problems, organizations familiar with both ISO 9000 and ISO 14000 believed both
series to be highly compatible.
The survey shows that ISO 9000, ISO 14000 and QS-9000 appear to be effective tools that can
make a real contribution to improving a company’s practices, performance and bottom line.
Firms that had registered to the standards, or that had applied them without registering, were
very nearly unanimous in declaring that the standards had led to genuine benefits. Not only were
users able to maintain or expand their customer base, they also saw improvements in employee
awareness of quality and the environment, in management practices, and in the quality of their
products and services. 285
ICSCA/University of Minnesota study
A study “Rule-Bound and Autonomous”, carried out by the University of Minnesota for the
ICSCA sent postcards to manufacturing firms registered to ISO 9000, in the US, inviting them to
fill out a questionnaire on the Internet. 1150, about 20%, did so.
A main conclusion was that ISO 9000 certification may be an excellent means by which one can
enhance the quality process but by itself certification doesn’t necessarily correlate with improved
quality. The version of ISO 9000 that would have been adverted to should never have had any
pretensions to correlate with quality (although it may have frequently been oversold by
commercial interests on that basis) - the recent revision of course has addressed that. The
reasons for maintaining registration, as depicted below, appear to be very positive.
285
“Management systems standards, the story so far: Canada’s experience with ISO 9000, ISO 14000 and QS –
9000”, Standards Council of Canada, October 2000.
Table 16: “Reason for maintaining registration %”
Reason/extent Very low Low Medium High Very high

Operational 4.8 10 28.2 36.7 20.2
benefits
Customers’ 6.3 11.7 23.3 29 29.5
demands
Not to fall 9.4 15.2 25.8 31.5 17.6
behind
competition
Adapted from “Value of management system Certification” – George T. Willingmyre at IFAN Conference, Berlin
Sept. 2001
Dutch study286)
The investigation was carried out by NEN - Netherlands Standardization Institute in co-operation
with Tilburg University, TIAS Business School. As it was felt that questionnaire results are
superficial, the researchers interviewed quality managers in 26 organisations and added insights
from literature to their findings. Some of the main findings were:
Most apply ISO 9000 because customers require it or the organisation wants to establish an
image of quality.
Most organisations have succeeded in making their quality management system more effective
during recent years.
There was no observable evidence that ISO 9000 contributed to the performance of the
organisations: many interviewees believe their quality management system has enhanced
customer satisfaction, but have no supporting evidence.
Full integration of an ISO 9001 quality management system with an ISO 14001-based
environmental management system appears possible but rare: integration of management
systems leads to synergy, and the shift is to ISO 9001:2000 is expected to facilitate that
integration.
ISO 9000, particularly the 2000 version, works well with other quality instruments.
There appears to be a remarkable difference in internal audit frequency, and the standards for
auditing are unknown.
Comments on certification and assessment by independent third parties confirmed wide variation
of approach and contribution, not only from one party to another, but even dependent on the
individual inspector from the third party.
Standardization of Quality Systems themselves: objectively it is also true to say that a

standardized quality management system (such as ISO 9000), which enables gathering and
benefiting from cross-company experience on a wide basis, conveys significant benefits in the
development of such systems against isolated customized systems. – The improvements made
possible in quality from the experience and statistics of dealing with large numbers applies
equally to the systems themselves.
286
De Jong, A., De Vries H.J., Wentink, T (2002) “ISO 9000 in de praktijk - Onderzoek naar toepassing van de ISO
9000:1994-normen in Nederland.” Nederlands Normalisatie-instituut, Delft, The Netherlands, 82 pp, 'ISO
Management Systems', May/June 2002. (“ISO 9000 in practice – Results of research on the application of ISO
9000:1994 in the Netherlands”).
Legal impacts of standards (and how the elaboration of standards affects their impact –
product liability)
It was asserted at Workshop #1 that major differences arose between the US and Europe in
product liability due to a combination of legal system (Common versus Civil Law, respectively)
and the standards systems including the European emphasis on Hazard Assessment. There is
clearly a major difference in the number of cases, size of awards, use of ‘class actions’. The US
courts appear to take the view that standards, in their case arising out of vested interests, are at
the lowest common denominator level. The European view appears to be different perhaps partly
due New Approach Directives. It is suggested that there is a lower risk of litigation with
European standards more due to its higher status. Fear of litigation is an important driver for
standardization in the US.
The Institution of Electrical Engineers view is: “It needs to be considered whether or not
compliance with standards is a sufficient defence from the perspective of the CE Marking
legislation, or indeed any other legislation. Clearly it will only be a defence from a product
liability perspective in so far as compliance with standards reflects good practice, or perhaps
even best practice. This will not always be the case. The CE Marking legislation that has been
discussed not only looks at standards but requires some other additional mechanism, in order for
a product to be considered “safe” from the perspective of that CE Marking legislation. For
example, the machine safety legislation requires the product be built to the relevant safety
standards and for it to meet the health and safety requirements set out in the relevant Annex 1. In
many circumstances compliance with standards will be insufficient because the standards are
inadequate. They may be inadequate because they are old or because the legislation requires
some further test to be passed: for example that the essential health and safety requirements set
out in its Annex A are met. Clearly, if the safety standard is old, compliance will not guarantee
that there is no liability for incidents. Even where the standard is current, thought still needs to be
given to risks that may not be adequately dealt with in the standard - see the case of Balding v
Lew Ways Limited (The Times 9th March 1995). Therefore suppliers need to be certain that not
only are they following all relevant standards but that the standards that they follow reflect “good
practice”.
“The United States Supreme Court on May 17, 1982, rendered its decision in favor of
Hydrolevel, a manufacturer of low-water fuel cut-off devices, in the case of the American
Society of Mechanical Engineers (ASME) v. Hydrolevel. It found ASME liable for conspiring to
restrain trade since two subcommittee officers, serving as volunteers but acting in the name of
ASME, issued a misinterpretation of a standard and produced an adverse effect on the
competitiveness of the plaintiff. Similarly, the Federal Trade Commission held hearings on
standards and certification and uncovered “substantiated complaints of individual standards and
certification actions that have, in fact, unreasonably restrained trade or deceived or otherwise
injured consumers.”
“The predictions made by Dr Keller in 1998 have been vindicated. He pointed out that what
Europe had done was achieve a more formal kind of relationship between legislation and
standards and as the world got together ‘the outcome of regional legislative changes [was]
sometimes visible worldwide’. The arrangement facilitated the move to mutual agreements
between trading blocks because legislators and standardizers were working better together” –

“It is common for an industry to initiate formal standards development when they deem the
liability risks unacceptably high. For example… liability lawsuits involving fires produced from
glass candle-holder breakages motivated candle makers and glass companies to join with
consumer groups on the ASTM Committee F-15 to begin labelling and performance standards
for glass candle holders” 287.
“The law is that non-compliance with an industry standard can be put into evidence but may not
indicate that the product is defective. Compliance with industry standards may be a good
defense but is not conclusive.
Governmental standards and regulations are different. Non-compliance is almost absolute proof
that the product was defective. And, unfortunately, compliance with governmental standards and
regulations related to safety are not an absolute defense.
So, manufacturers try to comply with all applicable safety standards and regulations, be they
official or industry. We hope our insurance companies consider this when they set the
premiums, but my experience says they don’t consider it heavily. They assume people comply
with standards. And, since compliance is helpful but not a defense, it is not a big factor.
Standards are very helpful in defending cases in the U.S. But plaintiffs always argue that
voluntary industry standards are minimums and were created by the industry to protect
themselves without really making the product safe enough”288
“(1) In the U.S., compliance with standards is viewed as the floor, not the ceiling, for liability. If
a manufacturer does not comply with an established industry standard, the manufacturer is likely
to be held liable for injuries related to the product. On the other hand, even if the manufacturer
complies with the standards, it can still be found liable if a jury decides that the standard sets too
low a threshold for safety. Consequently, in the U.S., standards have done little to control
products liability litigation.
(2) Standards may play a different role in Europe, however. While I am not conversant with
civil law systems, European judges may decide that compliance with industry standards is
enough to eliminate liability. This area probably falls more within your expertise than mine.
(3) There are broader reasons why product liability litigation is rampant in the U.S. but not in
Europe. First, at least in the U.K., a plaintiff brings a claim at the risk of having to pay the other
side’s legal fees if he loses. In the U.S., there is no such risk. Second, the jury system has a
tendency to produce higher damages awards and decisions that are based more on emotion than
law. Third, class actions can be particularly lucrative for U.S. plaintiffs’ attorneys; to my
knowledge, there is no class action device in civil law systems”289 .
“The use of standards is, next to compliance with statutory safety requirements, an important
factor in the framework of legitimate safety expectations. He who uses standards strives for a
product without defects. (…) Safety however, is often but one aspect of standards which stands
in relation to others and can be qualified by these other factors. Standards, moreover, do not
always correspond to the latest technical possibilities. Therefore, compliance with standards
cannot be held necessarily to mean and prove that the product in question is really without
defects. If, however, the producer has manufactured the product in compliance with standards in
such a way as is usual and recognised in the sector concerned regarding the product in question,
287
Lowell, S C. Defense Standardization Program Journal (US) May-June 2000
288
Kenneth Ross of Counsel, Bowman and Brooke LLP in correspondence with ISUG
289
Peter J. Goss of FAEGRE & BENSON LLP in correspondence with ISUG
and this mode of production is accepted by the public at large and by public authorities, then a
presumption exists that the product corresponds to the legitimate safety expectations of the
public”290 .
“There are also intangible benefits, such as the favorable impression standards can have on a
jury. The company is seen as one interested not just in making a buck but one whose employees
have a concern for safety and raising the level of quality among all manufacturers and suppliers
of the product. Arguments such as this are also helpful in combating punitive damage awards
where the intent of the manufacturer is at issue. This of course assumes proper motives and
considerations in creating the standard”291.
290
Begründung des Gesetzentwurfs der Bundesregierung für ein Gesetz über die Haftung für fehlerhafte Produkte,
BT-Drs. 11/2247, p. 19. (Translation Cf. J.) Falke
291
Using Standards in Defending Product Liability Cases” Steven W. Hansen, ASTM Standardization News
February 1996 (Vol. 24, No. 2)

ANNEX 5.3: Innovation
INTRODUCTION
The UK’s CIS survey found that, among all enterprises, Manufacturing and services, 27.4 % felt
that standards had helped innovation: this compared very well to 16.6% who felt that
Universities had, and 20.7% that consultancy enterprises had.
Product Standards have provided technological knowledge for

innovation
Cumulative
Frequency Percent Valid Percent Percent
Valid no 1159 72.6 72.6 72.6
yes 438 27.4 27.4 100.0
Total 1597 100.0 100.0
Table 17: Product Standards and Innovation:

Source: CIS Survey, “Standards & Innovation”, UK
Only 2.1% saw standards as significantly delaying innovation with 1.8% saying it had stopped it
entirely
Regulations, standards seriously delayed the project
Cumulative
Frequency Percent Valid Percent Percent
Valid no 2292 97.9 97.9 97.9
yes 49 2.1 2.1 100.0
Total 2341 100.0 100.0
Missing System 1 .0
Total 2342 100.0
Table 18: Regulations, standards delayed project

Source: CIS Survey, “Standards & Innovation”, UK
Standards help develop the market

In the past, standards were set only after a product had been developed. Today, with rapid
technological change, many standards are being set before a product is fully developed.
“Due to the rapid evolution of new technology products, deep-rooted differences in regional
standards have not had time to develop and are not evident” Joan Sterling, Director, Intertek
Testing Services ASTM Standardization News June 2001.
According to Brian D. Unter, VP of Hewlett Packard, compliance with IEEE’s POSIX (Portable
Operating System Interface) standards was essential for 30% and heavily influenced another
35%, of their multi-billion $ UNIX sales.
Participation in standardization helps technical progress

Other gains than those purely associated with a successful proposal may result from
participation in standards setting. Many committee members only participate for reasons related
to intelligence gathering. For example, information regarding strategic moves of competitors or
recent technical achievements may be gained, yielding a better evaluation of a company’s
position relative to its competitors. A recent survey showed that about fourteen per cent of
committee members belong to that category [Spring 95]. Moreover, a company’s reputation may
rise due to its commitment to standardization, which (potential) customers may associate with a
dedication to high quality”
Some negatives in software

The need to comply with a plethora of standards constrains software originality.
ANALYSIS OF THE ROLE OF STANDARDS IN INNOVATION FROM VARIOUS

PERSPECTIVES SHOW A LARGE POSITIVE IMPACT.
Government spending on standards appears as a major contribution to the innovation process.
Little evidence of standards acting as a constraint on the ability to innovate”
Standards play an important role in disseminating technology, see table below
Table 19: Knowledge sources292
Sources of Novel innovator % Follower innovator Non-innovator %

Knowledge %
Commercial 97 50 24
sources
Science base 31 5 4
Technology 51 31 14
intermediaries
Knowledge pools 74 27 17
Standards & 51 25 9
regulations
IPR
“Many standards organizations require the owner of any proprietary technology that is essential
in order to meet a standard to agree to license the proprietary technology on a non discriminatory
basis with reasonable terms and conditions. These policies are intended to provide some
protection to companies who will need to license the IPR from the company whose technology is
eventually embedded in the standard. In FTC Vs Dell, Dell lost its IPR when the FTC found that
Dell had participated in a standards activity which resulted in a standard that incorporated Dell
IPR. However, Dell had not disclosed that they had an IPR in technology that was referenced
and later demanded licenses. Important standards development organizations (ANSI, ITU, IETF)
are currently reviewing their IPR policies to refine the mechanics of compliance, elaborating for
example the nature of required statements from IPR holders and what is to happen if an IPR
holder does not submit the required statement”.
More about Dell

In 1996, the Federal Trade Commission (FTC) precluded the Dell Computer Company
from enforcing its patent rights in a technology that was required to comply with a
standard. The FTC took this action because the company participated in the development of the
standard but failed to disclose that its IPR was essential to comply. Further and as a result of that
incident, per the FTC, the company must maintain procedures to assure that it will not fail to
292
Ray Lambert, CIS Survey, “Standards & Innovation”, UK

disclose such IPRs in future standards development activities or it will lose the rights to those
IPRs as well. FTC reasoned that it is well and good for an IPR holder to reap the rewards of an
IPR if the marketplace voluntarily selects the innovation, but it is unfair to unreasonably exploit
an IPR if that IPR becomes important only because of its status in a standard. FTC concluded
that by demanding royalties after the standard was approved, the company unreasonably
restrained competition when it did not disclose its IPRs during the approval of the standard. 293
Businesses invest heavily in standards committees to create standards that are compatible with or
utilize their technology. However, corporate standards strategists must trade off the benefits of a
standard’s reference to the company’s proprietary technology against possible constraints on
exploiting their intellectual property rights (IPRs). IPR and high stakes global market share is
central to current debate about third generation wireless standards. In testimony before Congress
Spring 2000, John Major, Executive VP at Qualcomm said "Qualcomm holds more than 130
patents relative to CDMA, has approximately 400 patent applications pending around the world,
and has licensed 55 companies to manufacture equipment based on this standard. …We believe
that the third-generation standards process should recognize and respect the intellectual property
rights of patent holders; We believe that markets, rather than governments, should guide the
timing and deployment of third-generation services" In this regard, the European Union has
legislation underway specifically mandating the use of the telecommunications standards under
development within ETSI. The Commission is to "take all necessary measures, where
appropriate in cooperation with ETSI, to promote a common and open standard for the provision
of compatible UMTS services throughout Europe A Working Group has issued an interim report
proposing several alternatives how to proceed in terms of addressing IPR issues in connection
with the Third-Generation Mobile Communications standards. Alternatives under consideration:
(1) agreeing to a maximum amount of total royalties to be paid in connection with a single
standard, (2) forming a Forum which has as a requirement for joining that a company agree to
license any related IPR and (3) establishing an independent group to analyze whether a patent is
"essential" for implementation of a standard. The outcome here could be globally significant
precedents how IPR will be treated in the case where multiple IPR holders have interests in the
standard. (GTW Associates January 1999)
Several years ago and as a consequence of the Qualcomm incident, the European
Telecommunications Standards Institute (ETSI) proposed an IPR policy that would have
required IPR holders to identify and agree to license IPRs that might be the subject of future
ETSI standards. Thus just to secure the right to participate in ETSI standards committees
required a commitment to license technology that might be adopted. US industry resisted this
policy as going too far and ETSI abandoned the proposal.
SPEED OF STANDARDIZATION
The European Telecommunications Standards Institute (ETSI) has created a new deliverable to
be called an ETSI "Technical specification." Currently ETSI Standards are balloted to the whole
ETSI membership for 60 days and must achieve 71% of a weighted vote of those who reply.
Technical Specifications will require only a vote of the technical committee.
The European Committee for standardization (CEN) is implementing a similar approach for
lesser consensus documents called the CEN Workshop Agreement. Workshops will be open to
293
FTC Consent Agreement with Dell Computer Corporation) (GTW Associates)
participation by anyone from anywhere. Approval will be based on consensus of the participants.
As noted elsewhere CENELEC has no such fasttrack approach, so works with CEN as necessary.
The International Electrotechnical Commission, IEC, offers a new option called Industry
Technical Agreements (ITAs). ITAs will be used by industry where business and trade in high-
technology products and services may not need international consensus standards. The IEC has
also revised its procedures to add a new category D liaison expressly to become more attractive
for consortia/fora. The IEC anticipate the new category may be attractive to, "manufacturer
associations, commercial associations, industrial consortia, user groups and professional
societies." IEC requires such liaisons to, "be multinational with individual, company or country
membership."
The IEC’s first Industry Technical Agreement (ITA) is aimed at defining the specifications for
standardized multimedia platforms that will allow end-users to access a range of multimedia
services via a single platform. The Open Platform Initiative for Multimedia Access (OPIMA), a
consortium currently comprising more than 40 companies and organizations and which is open
to all interested parties, agreed in September to use the IEC’s ITA mechanism to bring this
specification to market. This first ITA is scheduled for completion by September 1999. The
IEC’s ITA is a new product, which delivers industry specifications for fast-moving technology
sectors in months, rather than international standards which serve the traditional industry sectors
but which can take years to develop. ITAs are designed to enable industry to launch new
products or start production once the ITA specifications have been agreed. ITAs are different
from international standards in that they do not go through the same consensus procedure and are
not produced within the committee structure used for developing standards. ITAs were launched
by the IEC in response to calls from industry for a new and rapid means of achieving de facto
industry specifications.
The Council of ISO in resolution 21/1998 offered an "Industry Technical Agreement" service
similar to that offered by the IEC.
ISO approved new procedures to be used at the discretion of those ISO technical committees for
which speed of standards development is a paramount consideration. As a result, two new types
of standard "Publicly Available Specifications" and "Technical Specifications" will be
normative documents representing reduced levels of transparency and consensus, but which
nevertheless seem to respond to market requirements in at least some sectors. These streamlined
procedures recognize that in the elaboration of an ISO International Standard, three different
levels of consensus are achieved. The first level comprises a consensus between individual
technical experts in an ISO working group, during what is called the preparatory stage in the ISO
process. Once this consensus has been attained, the next part of the ISO process involves the
formulation of national consensus positions and their negotiation in the ISO technical committee
or subcommittee until an international consensus is reached. Finally, this consensus is then
exposed to the full ISO membership, and, in many countries, national public reviews are carried
out to ensure that by the time the final text of an International Standard is agreed, any party
potentially interested in or affected by a standard has had the opportunity to contribute and make
their comments.
Industry fora and consortia have increasing market impacts particularly in the information
technology industrial sector as they develop standards in their common interest. They often
register under the antitrust shelter provided by the National Cooperative Research and
Production Act (NCRPA) of 1993 to protect themselves from the risk of normal anti-trust treble

damages and liability for a plaintiff's attorneys' fees. Consortia usually adopt reasonable
procedures to achieve consensus within their membership.
OMAC – and FIELDBUS

Profibus International, a major player in the field, believes that the standard claimed to enable
fieldbus compliance will fail to deliver and the Profibus user group worldwide has reaffirmed its
call to stop work on the proposed international fieldbus standard IEC 61158. They complain that
after 14 years of development of the standa, there are at least three different implementations in
the offing, none of which will be interoperable. At the automation level, where speed - or more
accurately bandwidth - is all important, ethernet is being applied to many of the common
protocols to provide some long awaited standardisation. Ethernet has been accepted universally
in the office environment, so why not on the factory floor. The TCP/IP protocol used by ethernet
is used by the Internet.
Moving on from the suggested failure, a commentator notes that a new standard “OMAC” (Open
Manufacturing Architecture Controller) for industrial control is proposed, and considers how
and where might it be implemented, and believes it may solve the automation-standardization
problems.294
Some years back, GM (General Motors) defined a standard “MAP” (Manufacturing Automation
Protocol) for industrial automation. An expensive form of fieldbus, MAP was way ahead of its
time. In the last 10 years even the cheaper fieldbus implementations have struggled to gain
acceptance in manufacturing. But now there is progress. In place of the token-bus protocol
chosen for MAP, networks based on Ethernet and RS485 have taken hold. From its experience,
GM has kept away from the network and focused on the software. The OMAC proposed by
Chrysler, Ford and GM is a much more pragmatic approach to opening up the world of
manufacturing automation.
Reflecting the growing complexity of manufacturing automation, OMAC is focused on the
problem of maths-intensive control, which is not the PLC's traditional strength. Systems need to
be reconfigurable so that algorithms can be changed easily. The traditional distinction between
CNC and PLC-based control is also blurring.
In an automotive plant, the demands on CNC and PLC can vary widely. For example,
component manufacturing using CNC machines is generally high speed and high volume. Die
machining is low volume but needs long, continuous machining operations. Vehicle body
assembly, chassis painting and general assembly are typically implemented using PLC-based
discrete-event control.
These systems are now being tied together using networks or fieldbuses, making it possible to
integrate processes. Ideally, CNC and PLC functions will be supported on the same platform in
varying proportions. The hardware that makes this possible is a modular controller.
Instead of trying to bring a whole new set of programming interfaces and protocols to an
industry that is never keen on changing, OMAC makes use of existing standards.
At the user interface level, this means Microsoft Windows running software that can provide a
user interface that follows the basic guidelines contained in the EIE-441 standard. For reliability
reasons, much of the attention has fallen on Windows NT, and a number of equipment suppliers
have already standardised on this operating system in favour of Unix.
294
Edwards, C. (1998): ‘Open road ahead for manufacturing control’, Design Engineering, 01 February 1998
Split into a number of interworking modules, OMAC-compliant systems may employ motion
control and discrete-event control as well as sensor interfaces, all based on a design that makes
use of common hardware buses such as ISA, PCI or VMEbus.
The motion and discrete event control parts of an OMAC controller also make use of existing
standards. A motion controller has to be able to understand EIA-274D profiles. However, the
most important standard in OMAC is arguably the one used for discrete-event control, and for
coordinating tasks in the controller. For those jobs, IEC1131-3 is needed if the controller is to be
considered ready for OMAC.
In contrast to previous efforts at standardisation in industrial control, OMAC does not demand
the use of a particular network or fieldbus to link controllers together. In fact, GM's Powertrain
Group has implemented two completely different schemes in the USA and Europe for its latest
projects. As there is currently no clear winner in the marketplace, GM has selected Interbus-S for
its next major programmes in North American plants. Although not a vendor-independent
standard, Interbus-S was picked because there are a large number of components that support it.
Also, Interbus-S allows both messaging and I/O transfers across the same network, so that
motion profiles can be downloaded to tools dynamically.
For similar reasons, GM Europe's Assembly and Powertrain operations selected Profibus-DP as
their standard device-level network.
Similarly, Europe does not have to adopt the US-oriented OMAC. A number of European
projects have been assembled under the banner of the OSACA (Open System Architecture for
Controls within Automation Systems). However, it is considerably more abstract than its
American cousin although there are vague plans to align the two once they are complete. The
defined interfaces in OSACA are at a lower level than those in its US cousin, so they do not
prevent OMAC-compliant tools from generating software that fits the OSACA model. Given that
a number of traditional PLC suppliers in Europe have adopted IEC1131-3 as well as entrants
backing modular designs, there are major portions of OMAC that can easily be adopted, with or
without the work from OSACA. Also, since the PC forms the backbone for much of the
hardware, OMAC has received enthusiastic backing from industrial PC and software suppliers
such as Imagination Systems, Intellution, Microsoft, Nematron, RadiSys, Venturcom and
Wonderware.
Microsoft Windows NT for OMAC?

After years of neglect, Microsoft has woken up the manufacturing market with ambitious plans
to have Windows NT running on just about everything on the factory floor.
One potential problem that faces any machine builder aiming to build an OMAC-compliant
system is whether Windows is cut out for the job. OMAC does not demand that Windows be
used throughout. Many implementations are likely to separate the real-time control portion of a
controller from its Windows-based user interface, running them on separate processors.
However, a number of the vendors putting together OMAC software are trying to use Windows
NT as a real-time system. Nematron's OpenControl software uses technology from Imagination
Systems to do just that.
The discussions as to whether Windows can really handle real-time applications has taken on
almost theological proportions. Often the demands of the application will determine whether a
Windows-based system can handle all of the real-time tasks, or not. It seems likely that new
entrants, offering systems based entirely on PC hardware will tend to favour a Windows-only
approach. A closely coupled link between a real-time processor and a Windows engine, perhaps

across a VMEbus or CompactPCI backplane, offers the existing PLC and CNC vendors a way of
offering OMAC compliant hardware without completely redesigning their systems.
Although there are perhaps not that many companies in Europe that will adopt OMAC in its
entirety, the fact that it has three automotive manufacturers and Boeing behind it will at least
grab the attention of PLC and CNC suppliers. A lot more systems will adopt Windows and
IEC1131-3, even if they are not going into an OMAC-based plant.
Sensors for OMAC

Split into a number of interworking modules, OMAC-compliant systems may employ motion
control and discrete-event control as well as sensor interfaces, all based on a design that makes
use of common hardware buses such as ISA, PCI or VMEbus.
I/O DEVICES
EIA (Electronic Industry Association) US
EIA-274D standard describing motion profiles of machine tools
EIA-441 overview standard for user interface formats
IEC1131-1 International specification to standardise the programming languages of PLCs.
“Safe-by-wire” consortium
Five automotive safety and automotive electronics companies have formed Safe-by-Wire, an
industry consortium for the development of an industry standard automotive safety bus targeted
for use in restraint systems.
The consortium represents a cross-section of automotive suppliers including Autoliv, Delphi
Automotive Systems (acting through its Delphi Delco Electronics Systems division), Philips
Semiconductors, Special Devices, and TRW, through its Automotive business. The Safe-by-
Wire consortium has agreed to co-operate in the selection of standards for a sensor and
deployment bus for the next generation of safety systems. The consortium is open for anyone to
join. Each company is allowed to participate as a contributor to or as a promoter of the
specification without paying license fees or royalties. Members agree to work together to define
the best overall bus solution to meet the unique requirements of a safety system.
Future safety systems will require numerous safety components and sensors, including adaptive
air bags for driver and front passenger seat positions, knee bolster air bags, side impact air bags
for all outboard seat positions, seat belt pretensioners, rollover air bags, seat belt buckle
switches, side impact and under-hood crush zone sensors, weight sensors, occupant sensors and
seat position sensors.
By defining a standardised bus interface for the sensors and restraint components, crash sensor
design may be substantially simplified, allowing rapid customisation and reduced development
costs.
“FlexRay” Consortium
Formed in September 2000 to develop a standard for high-speed bus systems for distributed
control applications in automobiles, existing FlexRay Consortium member companies include
founders BMW, DaimlerChrysler, Motorola, Philips Semiconductors and Bosch as well as GM
and others.

The introduction of advanced control systems, such as steer-by-wire, brake-by-wire and central
vehicle control which combine multiple sensors, actuators and electronic control units are
placing greater demands on today's communication protocols.
Standardisation of the FlexRay protocol will enable automobile manufacturers to lower
development and production costs, as well as simplify the introduction of new electronic control
systems into vehicles.
The FlexRay protocol is designed for use in chassis control, body and powertrain applications
that require high levels of communication bandwidth and deterministic fault tolerant data
transmission. In addition, it will complement the major in-vehicle networking standards CAN,
LIN and MOST by adding a high-speed protocol for the most demanding systems.
BMW, DaimlerChrysler and GM will jointly define the requirements for the FlexRay protocol.
BMW, DaimlerChrysler and GM intend to use FlexRay in advanced application series-
production within the next few years. GM will play a key role by identifying cost-effective ways
to implement the protocol across a wide range of vehicles based on its current portfolio. Bosch,
who joined the FlexRay Consortium in August 2001, brings expertise in engine and braking
system electronics along with experience in developing CAN and TTCAN.
Motorola will provide the data link layer, originally offering a stand-alone communication
controller, with future FlexRay protocol integration planned for 16- and 32-bit microcontrollers
in its extensive portfolio.
Philips Semiconductors is developing the physical layer and will offer transceiver test chips
initially for evaluation, then later to the broad automotive market.
Design-for-all and Domotics

The V2 technical committee meeting of the National Committee for Information Technology
Standards (NCITS) is planning to develop voluntary consensus standards for an Alternative
Interface Access Protocol (AIAP).
A major goal underpinning development of these standards is to allow mobile technologies such
as cell phones, handheld computers and other devices, to function as universal remote consoles
for common electronic and information technology devices and services. With such standards, a
personal digital assistant could be used to program VCRs, set the home thermostat from work, or
if the user's eyesight is failing, act on voice commands to program a coffeepot or activate a home
alarm system.
The technical standards would also allow someone with a disability to use an assistive
technology device like a Braille-based notebook to access automated teller or fare machines and
electronic products in the home.
The AIAP standard could also ease the burden of recent US government regulations, such as
Section 255 of the Telecommunications Act and Section 508 of the Rehabilitation Act, to
provide access to electronic and information technologies by people with disabilities. Standards
also would simplify or eliminate customisation of assertive technologies to individual devices.
Future implementations of the standard will take advantage of existing standard protocols for
networking environments, such as Microsoft's Universal Plug and Play and Sun's Jinni, and
existing wireless communication technologies such as 802.11b and Bluetooth.

Major developments planned for STEP295
There is little argument with the premise that improved data integration is good for business,
particularly integration which eases its flow and flexible re-use beyond individual businesses and
applications, and across business lifecycles from conception to de-commissioning and re-
deployment on future projects.
In essence the purpose of STEP, the ISO-10303 Standard for Exchange of Product Model Data,
is to standardise on the meanings of data about engineering things. The objective is to remove a
major obstacle to this sharing and exchange of information and to complement the general drive
towards openness of IT systems and software. In some industries, particularly the aerospace and
automotive sectors, STEP is proven technology in general use.
STEP can be viewed as an important bridge between the technology and the soft issues. STEP is
an engineering standard and the data modelling theory may look like science, but the essence of
STEP is the meaning of data. Application Protocols (APs), the major parts of STEP, contain
libraries of standardised definitions of engineering data. However, these definitions are not
`defined' by scientific theory, but are `discovered' by analysis, agreement and iteration between
users of the information.
As well as being involved in STEP development and project execution activities described later,
Foster Wheeler has been re-developing its own information systems strategy. The principal
feature of this strategy is FLAIR, the Foster Wheeler Lifecycle Asset Information architecture
(see figure) and the core of FLAIR is the principle of data integration by standardisation of
meanings.
Although the data integration and standardisation objectives are widely accepted, few people in
the process industry would accept STEP as fully proven in the bottom line. However, there is
already a threefold drive to create a strategic framework such as FLAIR at this stage:
Firstly, the pace of change in IT continues to be so great that planning future STEP
Developments in Europe exploitation cannot be left until the potential is fully proven and
developed in detail. Secondly, the potential changes are so far reaching in terms of `business re-
engineering' possibilities, that the cultural changes needed cannot simply be switched on once
STEP becomes a shrink-wrapped solution. Finally, the complexity of the detail is such that fully
detailed STEP solutions will not arise from standards development alone, without the iteration
provided by early implementation
The key players in European process industry STEP developments have been EPISTLE,
POSC/Caesar, PISTEP and SPI-NL (see panel for details). Virtually all the major operators and
contractors with significant European operations are members of at least one of these consortia.
Foster Wheeler, for example, is an active member of EPISTLE and PISTEP.
PISTEP and SPI-NL, the UK and Dutch industry consortia, are dedicated to providing a forum
for co-operation on data exchange in general and STEP in particular. PISTEP published the
Process Plant Engineering Activity Model, adopted by most other consortia as a useful block
model overview of the whole process industry lifecycle, allowing the problem to be broken down
into manageable components and permitting focus on each individually.
SPI-NL has had significant success in attracting the involvement of suppliers, other than
software suppliers. One SPI-NL project `SPIN-Off/2' produced the most convincing
demonstration to date of the exchange of real process plant engineering data between real
applications. The demonstration involved several main engineering contractor applications
295
Glendinning, I., Foster Wheeler Energy Ltd, Reading, UK, Process Engineering, 01 June 1997
interacting with their data warehouse, exchanging data two-way with an instrument supplier, and
vessel supplier and a piping fabricator, before handing over the data to the client-operators' data
warehouse, which was seen interacting with their maintenance application and with the supplier
of a replacement for a failed pump.
In Europe, the main focus has been Application Protocol AP221, that part of STEP applicable to
Process Plant Schematics and Functional Data. There are several initiatives considering the
interfaces between this and other related or overlapping APs, and other developing industry data
exchange standards such as Fieldbus. But AP221 represents the core aspect of process plant
engineering distinct from other engineering sectors.
Merging models
EPISTLE and POSC/Caesar had both adopted the EPISTLE `Generic Entity Framework' as the
basis of their data models, and both were effectively developing separate versions of AP221. The
EPISTLE-generated draft version of AP221, with an early version of the class library, was issued
to ISO late in 1996 for circulation by ISO amongst member national standards organisations with
a view to publication as the `Committee Draft' (CD) version later this year. Whilst there had been
some divergence between EPISTLE and POSC/Caesar, both organisations have agreed that a
merging of their models and class libraries is both feasible and desirable. A target is to achieve a
workable, merged and self-consistent version of the associated AP221 class library during 1997.
However, the events which have given STEP the biggest boost in the European process
industries, have been decisions by several significant major projects to adopt STEP data
management in their execution.
The complexity of a major multi-platform, multi-completion UK North Sea project currently in
its EPC (engineering, procurement and construction) phase, and the organisational complexity of
the partnership of operators and contractors undertaking it, were driving forces for this project to
use a novel data sharing and exchange approach. The project is committed to managing all
engineering data principally via AP221 and using the POSC/Caesar class libraries as a basis. It is
well into implementation of its data repository and an important aspect of the progress to date,
has been feedback on the adequacy of the data model and class libraries and on the process of
mapping data in existing `legacy' systems into the developing standard model.
Another example is a partnership, including Foster Wheeler Energy (FWEL), that late last year
was awarded the lump-sum turnkey EPC phase of a major Middle East LNG plant project. This
project is committed to creating the Engineering DataBase as an AP221-compliant STEP Data
Warehouse, to be built and used during the EPC phase and to form the basis of data handover of
engineering data into the operating phase. Development of the software specification and
shortlisting potential suppliers has progressed, in parallel with engineering using proven systems
and training of the project team in the implications of STEP AP221. As noted above, FWEL has
also made a corporate commitment to data integration via standardised data definitions in its
FLAIR framework and the dissemination of this strategy within the company directly supports
the project commitment and training.
Another European project which has made a commitment to exploiting STEP from the earliest
planning stages is a phased development over several decades to extend the life of an extensive
network of gas production platforms, operated by a major EU state gas company.
Also, three Norwegian offshore operators, closely associated with POSC/Caesar have made a
commitment to their first implementation of STEP for lifecycle data management on each of
three offshore development projects. One has already selected software and is moving into the
implementation phase.
As well as these examples, there are several other major process plant operations around Europe
already exploiting or planning to exploit STEP APs, either for existing or new projects.
While it is too early to claim bottom-line benefits from any of the STEP implementations above,
many of the demonstrators have proven the feasibility of sharing and exchanging information
this way. Each of the organisations involved is predicting major benefits; for example, `step
changes', `breakthrough' or `paradigm shifts' in performance. There is, however, a need for
benchmarking and establishing base case performance now, if benefits of the kind predicted by
these organisations are to be demonstrable.
Another optimistic feature in European use of STEP has been the formation of a European
Process Industries STEP User Group, which is already proving valuable to its members in the
exchange of ideas about implementation and plans to overcome difficulties.
Given the degree of uncertainty in quantifying the predicted benefits, it is significant that many
of the organisations involved are making the leap of faith to basing their strategies on the success
of data integration based on STEP principles, and that some organisations are translating this
faith into commitment on real capital projects. Foster Wheeler has made both commitments; to
the corporate strategy in FLAIR; and to delivering benefits on a real major capital project.
Glossary of STEP terms

EPISTLE European Process Industry. ESPRIT EU/Industry joint funded IT exploitation
projects. FLAIR Foster Wheeler Lifecycle Asset Information architecture. PIEBASE Process
Industries Executive for Business Advantage through Sharing and Exchange. POSC The
Petrotechnical Open Software Corporation. POSC/Caesar Joint standardisation project of POSC
and Norwegian Caesar Offshore consortium..PRIMA The (UK) Process Industry Manufacturing
Advantage consortium. SPI-NL The Netherlands Process Industries Consortium.
E-Commerce
SALT open system tagging language to extend uses of XML
A group of technology leaders (Cisco Systems, Comverse, Intel, Microsoft, Philips Speech
Processing and SpeechWorks International) are co-founding the so called SALT Forum to
develop a royalty-free, platform-independent standard that will make possible multimodal and
telephony-enabled access to information, applications and Web services from PCs, telephones,
tablet PCs and wireless personal digital assistants (PDAs). Speech Application Language Tags
(SALT) will extend existing markup languages such as HTML, xHTML and XML. Multimodal
access will enable users to interact with an application in a variety of ways: they will be able to
input data using speech and/or a keyboard, keypad, mouse or stylus, and produce data as
synthesized speech, audio, plain text, motion video and/or graphics. Each of these modes could
be used independently or concurrently. The SALT specification is designed to make both
multimodal and telephony-enabled applications and services faster and easier to create, deploy
and use.
This will result in several benefits. End users will be able to use SALT-based applications
speech, text or graphical interfaces independently or together, while developers will be able to
seamlessly embed speech enhancements in existing HTML, xHTML and XML pages, using
familiar languages, technologies and toolkits.
As an open industry initiative, the SALT Forum will promote the specification and share
intellectual property to develop it. The forum founders expect to make the specification publicly
available in the first quarter of 2002 and to submit it to a standards body by mid 2002.

ANNEX 5.4: Health and Safety of Workers
NEW APPROACH AND HEALTH AND SAFETY OF WORKERS.
One of the main barriers to implementing the Single Market was those areas subject to an
entanglement of regulations – national, regional, city and borough etc. – with standards and
codes of practice: the Construction, and the Health and Safety at Work (in effect ‘Machines’)
sectors presented particularly wide-ranging problems. The establishment in each country, to a
greater or lesser extent, remained convinced that their ways, established over many years, were
best, and were very resistive to any changes. To bring about the necessary change for Health and
Safety at Work, European Directives were issued, - for Safety of Machinery, Low Voltage
equipment (itself not a “New Approach” directive having being implemented in 1973 long
before the New Approach, but it has similar effects), Personal Protective Equipment, Gas
Appliances and Pressure Vessels, and equipment for use in potentially explosive atmospheres.
The Directives laid down (as simply and tersely as was found possible) the “essential
requirements” that had to be met. Only products meeting those essential requirements may be
placed on the market. To make it easier to comply, the European standards bodies were given
mandates to develop harmonized standards that would, when accepted, be presumed to conform
to those requirements – but manufacturers remain free to choose any other way of complying.
Thus European standardization was given a kick-start by the adoption of what came to be known
as the “New Approach” directives in 1984. The New Approach adopted a new way of preparing
directives - the means of harmonizing national regulations – that eliminated many of the delays
in preparing them. The New Approach was based on the premise that:
The Directive establishes and need only address the “Essential requirements” to be met
The Harmonised Standard gives a presumed technical means of meeting the legal requirements
(Note – a harmonized standard is not proof of compliance with a Directive, and manufacturers
are free to find their own way, other than use of such a standard, of complying – in which case
they must be able to demonstrate the validity of their chosen alternative approach).
Since some Member states were using National and local safety regulations as barriers to trade,
the first tranche of New Approach Directives were exclusively directed at harmonizing national
safety regulations. Eventually some 20 sectors were the subject of these directives.
The Commission began work on the Machinery Directive in 1984 and began negotiations to
‘mandate’ CEN and CENELEC for the preparation of supporting standards. This led to the
formation of CEN/TC 114 Safety of Machinery in 1985. This was a significant event for
machinery safety within Europe. Prior to the formation of TC/114 there had been no wholly
Europe based approach to machinery safety and it enabled the leading machinery safety experts
– mainly from national authorities – to get together and review what European manufacturers
and users wanted. The machinery regulations then prevailing were largely prescriptive and had
been in place for many years. They did not reflect the needs of modern industry which was using
computer based technology nor did they deal effectively with many risks – such as noise and
toxic materials. As a consequence of the New Approach, TC/114 developed an entirely new risk
evaluation based approach built on a three-stage methodology of risk reduction and elimination:
Intrinsic design measures

Provision of safeguards
Provision of information for use
EN 292 Safety of Machinery and EN 1050 Risk assessment for Machinery safety were then
developed. These two standards give the basic methodology, philosophy and methodology for
dealing with any machine and any combination of risks – for both professional and non-
professional use. It cannot be emphasized enough what a breakthrough these standards
represented. They were adopted through the Europe and subsequently became accepted at a
global level. A complete program of machinery standards, based on a rationale of preventing
duplication of effort, was instituted:-
A-standards – EN 292, EN1050 and EN 414 – these give the basic approach and are mandatory.
B-standards – give basic information on safety devices, ergonomics and noise, design of control
systems etc. There are some 130 standards in the program.
C-standards – giving the requirements for specific machines or groups of machines. There are
some 550 standards in the program.
This approach was regarded as successful and CEN and CENELEC went on to prepare programs
of supporting standards for some 20 New Approach Directives.
(Note - It should be remembered that the Single Market also required Employment Directives
from Directorate General Employment and Social Affairs, but standards programmes didn’t arise
for them).
Conformity of European statistics

Economic Number Number Incidence rate (number per 100 000 employed)
activity Employed 1998 1999 1994 1996 1998 1999 Trend %
1998 94-98 96-98 98-99
(1000)
136 150 4 678 586 4 850 120 4 539 4 229 4 089 4 206 -9.9 -3.3 2.9
Total *
Agri hunting 5 092 345 766 373 340 6 496 6 771 6 790 7 510 4.5% 0.3 10.6
forestry
Man’fing 30 156 1 354 762 1 369 376 5 071 4 660 4 492 4 546 -11.4 -3.6 1.2
Constr’n 10 375 830 873 883 045 9 014 8 023 8 008 8 261 -11.2 -0.2 3.2
Services* 7 509 440 143 461 309 6 139 6 018 5 862 5 999 -4.5 -2.6 2.3
(ESAW – Eurostat)
* includingTransport, storage, communication – transport has a high accident rate
Table 20: Accidents at work resulting in absences of >3 days 1994 –1999
The numbers of fatalities continue to decline, as shown below, despite the general increase. More
than half the accidents at work related to transport (Eurostat).
Table 21: Fatalities at work 1994-1999
Economic Number Number Incidence rate (number per 100 000 employed)
activity Employed Volume 3: Page 76 of 188
1998
(1000)
1998 1999 1994 1996 1998 1999 Trend %
94-98 96-98 98-99
Total 136 150 5 476 6.09 5.18 5.03 -17.5 -3.0
Agri 5 092 631 14.0 12.9 12.4 -11.4 -3.9
hunting
forestry
Man’fing 30 156 1 101 4.6 3.9 3.7 -19.6 -5.1
Constr’n 10 375 1 330 14.7 13.3 12.8 -12.9 -3.8
Services* 7 509 883 13.7 12.1 11.8 -13.9 -1.7
* including Transport, storage, communication
(ESAW – Eurostat)
Accident Statistics of Germany

“The statistics of fatal accidents of the different institutions have different sources and reflect different
populations. The statistics of the Ministry of Labour (Bundesministerium für Arbeit und Sozialordnung:
Bericht zum Stand von Sicherehit und Gesundheit bei der Arbeit) shows figures that result as an addition
from the following three sources:
1. Hauptverband der gewerblichen Berufsgenossenschaften - HVBG (accidents in
industrial sectors),
2. Bundesverband der landwirtschaftlichen Berufsgenossenschaften - BLB
(accidents in agriculture) and
3. Bundesverband der Unfallkassen - BUK (accidents in public sector).
The statistics of the Bundesanstalt für Arbeitsschutz und Arbeitsmedizin - BAuA shows figures from
statistics of fatal accidents that include those cases that were profoundly investigated by the inspectorate of
labour and the corresponding questionaire was filled in and sent to the BAuA. (Road accidents and
accidents in agriculture are not investigated by the inspectorate of labour (but other institutions) and hence
are not included. The statistics of the Hauptverband der gewerblichen Berufsgenossenschaften-HVBG
include those cases which are registered by one of the 35 gewerblichen Berufsgenossenschaften”.
(Dr. Burkhard Hoffman, Director HVBG)
“The following statistics on the occupational disease situation cannot be compared to those of other EU
Member States, since the data on occupational diseases are collected differently in each EU Member
(Coordinated German Response to the Information Project ”The State of Occupational Safety
Health in the European Union (including the Risk sector project)” Germany March, 10th 1999

Figure 11: Accidents at work (Further breakdown by sector)
Figure 12: Fatal Accidents at work (Further breakdown by sector)
Machinery
Survey, accidents > 3 days absence
Work environment,
structure
Struck by falling object
Frequency
Transport within company
Tools
Solid objects and articles
Struck by moving object

0 2 4 6 8
Causes Manual handling
Sli ti f ll

Figure 13: Survey of accident causes296
Fatal accidents, frequency of cause Electricity
Entanglement.entrapment
Electricity + machinery
Frequency
Dangerous machinery
Pedestrian traffic routes
Slips Trips Falls
Falling, collapsing objects
0 2 4 6 Leaping from platform
Accidents ith ehicles

Figure 14: Fatal Accidents : frequency by cause297
Fatal work accidents Germany 1960 - 1998
6000
5000
4000
3000
2000
1000
0
1960 1965 1970 1975 1980 1985 1990 1995
Figure 15: National statistics - Germany298
1980 1990 1999 2000

Reportable work accidents 1.541.214 1.331.395 1.185.382 1.144.262
per 1000 fully employed 76,35 52,09 38,72 37,10
workers
Fatal work accidents 1.807 1.086 977 825
Percent change
10 years -31.8% -10% -15.6%
-cumulative -45.9% -54.3%
296
Abstracted from “The state of occupational health & safety in the European Union – Pilot Study” – European
Agency for Safety and Health at Work, ISBN 92-95007-00-X
297
ibid.
298
Source: Bericht zum Stand von Sicherheit und Gesundheit bei der Arbeit 1998
Table 22: Reportable work Accidents (HVBG)
Source: the Federation of Commercial Trade Associations (HVBG)

Year 1999 2000 2001
Reportable work 1.071.043
1.185.382 1.144.262
accidents:
Fatal work accidents 820

977 825
Table 23: Recent years

Source: HVBG Sankt Augustin 04.07.2001
The first curve shows the numbers of fatal accidents each year from 1960 to 1998, with the
arrow indicating the time of reunification and a rise in the totals employed and the number of
accidents. The fall continues following unification, and into very recent years as confirmed by
the 2 tables.
UK
The fatality rate for the UK shows a deterioration in 2000/01 (the rate for accidents in general
did not increase). The rate for the self-employed is traditionally far higher than for employees,
and was 2.4 in 00/01 against 0.9. The employee rate had halved from 1,4 in 91/92 to 0.7 in
99/00, before increasing again in 00/01. The size of the construction industry, which has one
of the highest accident rates, means that changes in construction activity have a major
effect on the numbers of accidents.
Year 91/92 92/93 93/94 94/95 95/96 96/97 97/98 98/99 99/00 00/01*
Rate 1.5 1.4 1.2 1.1 1.0 1.1 1.1 0.9 0.8 1.1
(* provisional)
Table 24: Fatality rate per 100,000 employed
– Source UK HSE
FRANCE
Accidents in France also showed decline in serious accidents and fatalities. Accidents at work
fell 12.26% from 1992 to 96, but began to rise again, +0.8% 96 to 97, +1.5% 97 to 98 (as
employment rose), and an estimated + 2.2% in 1999 over 1998 (CNAM) The rate however
continued to decline.
Number employed selected industrial sectors France

16.0
15.5
Millions
15.0
14.5
14.0
13.5
1995 1996 1997 1998 1999

Figure 16: Numbers employed in selected sectors (France)
SOURCE: INRS
Fatalities at work, France
1200
1000
800
600
400
200
0
1991 1992 1993 1994 1995 1996 1997
(The ‘selected industrial sectors’ are as shown in the impact report)

Figure 17a: Fatalities at Work (France)
Accident rate France
50
Rate per 1 milion hours
40
worked
30
20
10
0
1992 1993 1994 1995 1996 1997 1998 1999
Figure 17b: Accident Rate (France)
Adapted from Synamap Dossier 1310/2001

Sweden
The growth in the reported accidents rate increased for the second year running in 1999, by 13
per cent. Despite these increases, the levels remain considerably lower than they were when
work injury reports were at their peak, in the late 1980s. Between 1988 and 1993, the work
accident frequency fell by more than half. The fall that began during the boom years accelerated
with the downturn, and many activities with hazardous working environments were put out of
business.
Table 25: Swedish accidents at work 1997-2000 show increases
Year 1997 98 99
No. occupational . 28 159 31 491 33 062
accidents
7.2 7.7 8.1
FREQUENCY/1000
WORKERS
Source: SWEA/ISA National Social Insurance Board
The numbers of fatalities, however, continued to decline - the long term decline in Swedish
accidents, like that of other countries, has been very significant
Fatal work accidents Sweden 1955-1999
500
400
300
200
100
0
'55 60 65 70 75 80 85 90 95 99
Figure 18: Fatal Work Accidents (Sweden)299
299
Nordin,H., Bengtsson, B., (2001); “Occupational Accidents and Work-Related Diseases in Sweden” Swedish
Work Environment Authority, January 2001
Italy
All industrial accidents - Italy 1995 - 1999
800000
600000
400000
200000
0
1995 1996 1997 1998 1999
Total Temporary injury Permanent injury
Figure 19: All industrial accidents (Italy)
Fatal industrial accidents Italy 1995-99
1350
1300
1250
1200
1317
1282
1150
1200 1214
1100 1169
1050
1995 1996 1997 1998 1999
Figure 20: Fatal industrial accidents (Italy)

Abstracted from INAIL data

Sectoral, and Causes of accidents
Finland
Number Fatalities Injuries

CATEGORY
Electrical 376 40 375
Chemical 369 4 56
Pressure vessel 202 10 38
LPG 82 24 54
Explosion 51 2 25
Natural gas 33 0 8
Transport danger- 31 0 3
ous materials
Transportable gas 32 0 9
containers
Elevators 19 4 15
Table 26: Industrial accidents in Finland (1986 – 1996, electrical only 1990-1996)
Source ERA report on LVD

UK
Manufacturing:
Fatal accidents, Employee 5, Self-employed 3, Member of public 1, Total 9
Causes of Accidents – top five %

Manual handling 43.4
Slips/trips/falls 18.2
Contact moving machinery parts 12.9
Injured by falling object 6.9
Injured by hand tools 5.8
Table 27: Causes of Accidents (UK)
1998 1999 2000** Total**

Manual handling/lifting 1,811 2,368 2,416 (35.2%) 6,595
Slips/trips/falls – same level 600 532 1,531 (22.3%) 2,663
Contact moving machinery parts 387 430 481 (7.0%) 1,298
Fall from height 680 859 398 (5.8%) 1,667
Falling object 386 522 384 (5.6%) 1,292
Injured by person – malicious 107 322 343 (5.0%) 772
Hand tools 113 109 302 (4.4%) 524
Road traffic accidents (RTA) 185 204 233 (3.4%) 622
Collapsing/overturning objects 111 99 220 (3.2%) 430
Transport excluding RTA 208 192 172 (2.5%) 572
Exposure to harmful substances 175 214 130 (1.9%) 519
Injured by person non-malicious 107 82 103 (1.5%) 292
Injured by animal 20 41 62 (0.9%) 123
Contact with electricity 44 33 34 (0.5%) 111
Fire/explosion 54 62 27 (0.4%) 143
Table 28: Causes of accidents* (ranked by reference to year 2000)

The figures in the above table are extracted from the HSE’s annual reports for 1998, 1999 and 2000.
** In the Annual Report 2000 the HSE listed the causes of accidents by percentages. The total number of
accidents on which the percentages are based is given as 6,865. The numbers by cause have been
calculated by HSR and are rounded off. The three-year totals are calculated by HSE.
YEAR 1996/97 97/98 98/99 99/00 00/01

FATAL
Contact with 15 19 18 13 16
moving machinery
Electrical 12 16 12 9
contact/discharge 15
MAJOR NON-FATAL
Contact with 1 915 1 696 1 779 1 611
1 703
MOVING
MACHINERY
Electrical 210 258 221 231 183
contact/discharge
OVER 3-DAY
5 686 6 015 5 677 5 624 5 229
515 493 461 504 462

Table 29: Machinery and electrical accidents (UK)
In 1999/2000 Manufacturing accounted for 11 out of 13 fatal accidents resulting from contact
with moving machinery, and Construction for 6 out of a total of 12 electrical fatalities.
Fatalities at work UK 91/92 to 00/01(p)

400
300
200
100
0
91/92 92/93 93/94 4/95 95/96 96/97 97/98 98/99 99/00 00/01
Figure 21: Fatalities at Work (UK)300
Percentage machine accidents by severity UK
30 Percent of fatalities
(mean 20)
25
20 Percent of major
(mean 16)
15
Percent of accidents
10 (mean 11)
5
0
96/97 97/98 98/99 99/00 00/01(p)
Figure 22: Percentage machine accidents by Severity (UK)301
Table 30: Reported dangerous occurrences UK: causes

(manufacturing only, fatal, major, >3-day)
Year 1996/97 97/98 98/99 99/00 0/01

Collapse or 1 056 1 139 1 072 1 111 1 041
overturning
of machine
Pressure 209 208 183 158 175
vessel
300 failure
UK accidents abstracted data, Health and Safety Statistics 2000/01, HSE, UK
301
ibid.
Cause Number
Falling from a height 47
- of which 29
roofs/ladders/scaffolds
Struck by a plant or goods 18
vehicle
Collapsing buildings &
overturning plant* 18
Table 31: Construction industry fatalities UK 2000/01
*18 workers trapped by something collapsing or overturning, mainly collapsing buildings, and overturning
plant/vehicles” (i.e. the latter is < 9).
Spain
23% of fatal accidents in Spain are in the construction sector
Agricultural 13,0 13,5 11,0 7,8 9,1 9,1 8,8 8,5 9,6 10,5
Non agricultural 14,5 13,4 12,3 11,5 10,9 10,2 9,9 10,4 9,8 9,3
All Industry* 14,8 14,3 14,0 12,8 12,7 11,6 12,7 12,8 11,1 10,7
Construction 33,9 31,3 28,0 29,0 30,8 31,4 29,9 29,8 27,4 25,6
Services 10,4 9,5 8,8 8,3 7,3 6,6 6,1 6,8 6,7 6,2
TOTAL 14,2 13,4 12,1 11,0 10,6 10,1 9,8 10,1 9,8 9,4
*Manufacturing Industry 12,7 12,7 12,8 11,4 11,6 9,3 10,8 11,3 10,2 9,7
Table 32: Fatal accident rate Spain/ 100,000 employed
(source - El Ministerio de Trabajo y Asuntos Sociales)

Germany
Fatal work accidents Germany 1992-98 (BAuA)
700
600
500
Fatalities
400 West
300 East
Germany
200
100
0
1992 1994 1996 1998
Figure 23: Fatal work accidents Germany 1992-98 (BAuA)
97
67
57
40
16 22 23
r'n
c.
ry
lth
g
ec
e
ad
in
et
st
el
ea
st
in
Tr
du
h/
e
on
H
M
on
ec
in
C
St
al
et
M
Figure 24: Accident frequency by sector 1999 BRD – agriculture not included
Accidents Lost days

/million hrs. x 1000
Figure 25: Automobile industry Germany
Source: VDA abstracts

39.40%
19.70%
12.20% 11.90%
7.20%
3.70% 4.10% 1.80%
p.
ip
s
p
s
g
/c
c.
er
ol
ui
in
qu
ui
is
To
eq
ld
dd
M
eq
.e
r'n
fo
La
s
af
e
'n
st
es
ag
od
on
Sc
oc
or
Pr
Pr
St
Figure 26: Fatal work accidents with machinery and equipment, % by activity
(Speck)
Hydraulic excavator
Wheeled loader
D'line excavator
Bulldozer
Attach'd. excavator
Crawler loader
Grader
Dozer
Scraper
Figure 27: Construction accidents associated with construction machines
Construction Accidents % Fatal

machines
accidents
Hydraulic excavator 1564 38 13
Wheeled loader 1199 29 3
Dragline excavator 680 17 4
Bulldozer 306 8 0
Attached. excavator 226 6 0
Crawler loader 41 1 3
Grader 29 1 0
Dozer 9 0 0
Scraper 9 0 0
(Speck)
Table 33: Accidents per machine type total all excavators 61%
90
80
70
60
50
40
30
20
10
0
1976
1978
1980
1984
1985
1986
1987
1991
1992
1993
1994
Figure 28: Accident frequency, excavators
Speck
A slight rise 1985 – 1986 coincided with increased activity in the sector – this is usual as less
experienced operatives are hired. The rise in 1991 – 1992 coincided with German reunification,
again lack of experience with some machines, but the rate began to fall again in 1993-1994.
Construction accidents incidence
Sweden v. EU 15*
10000
Total accidents > 3 days
(incidence rate per 100k
8000
employed)
6000 EU 15
4000 Sweden
2000
0
1993 1994 1995 1996
Figure 29: Construction Accidents Sweden as compared with EU 15

Fatal machine accidents at work, Sweden
15
10
0
1989 90 91 92 93 94 95 96 97 98 99
Figure 30: Fatal Machine Accidents (Sweden)

AGRICULTURAL MACHINERY
Agricultural machines are the 2nd highest machine-related cause of accidents more-or-less
throughout Europe (construction being first). In the 1980’s, 5 to 8 fatal accidents involving
entanglement of the lower limbs occurred each year in the UK, in Finland in the 1990’s 29-42
accidents per year and in Sweden 32 such accidents were reported between 1992 and 1997 (note
these are non-fatal accidents). Examples from Germany indicate many accidents of that kind
with combine harvesters.
From German statistics (Speck), - confirmed elsewhere (comments by Safety inspectors, Ireland)
- maintenance while stopped, is second only to accidents getting in/out as the greatest danger for
construction machines.
EXAMPLE FROM US
In a US military standardization programme, aircraft batteries were standardized, resulting
in improved performance and increased safety. Routine maintenance intervals improved by
between 3.4:1 and 44:1, and replacement interval in flight hours by from 8:1 to 42.6:1. These
improvements greatly increased battery reliability in use in critical flying situations.
ELECTRICAL
Electrical fatalities Germany 1965-95 (Work and home)
350
300
250
200
150
100
50
0
65 70 75 80 85 90 95
Figure 31: Electrical Fatalities in Germany from 1965 to 1995 (Work and Home)
Source – Biegelmeier

Electrical accidents at work - Germany 1969-1998
2000
1500
Total
1000
HT only
500
0
1969 1974 1979 1984 1989 1994
Figure 32: Electrical Accidents at Work – Germany 1969 -1998

Adapted from “Elektrounfälle in Deutschland” 302
France
Electrical fatalities at work France 1975-1998
80
70
60
50
40
30
20
10
0
1975 1980 1985 1990 1995 2000
Figure 33: Electrical Fatalities at Work France 1975 - 1998

Source: Adapted from INRS
302
Altmann, S., Jühling, J., Kieback, D., Zürneck, H., ‘Elektrounfälle in Deutschland’, BAuA Fb941
Italy
Electrical fatalities Italy 1965-1995 (Work and home)
650
600
550
500
450
400
350
300
250
200
65 70 75 80 85 90 95
Figure 34: Electrical Fatalities in Italy 1965 – 1995 (Work and Home)
Source – Biegelmeier
Sweden
Fatal electrical accidents at work, Sweden

7
6
5
4
3
2
1
0
1989 90 91 92 93 94 95 96 97 98 99
Figure 35: Electrical Fatalities at Work, Sweden

The trend in Sweden is also strongly downward, although construction electrical accidents,
which are usually a large portion of the total, are not included.
A curve representing ALL electrical fatalities in Sweden from the early days of electricity shows
extraordinary improvements despite greatly increased use electrical of appliances and tools.

Fatal electrical accidents (home and work)
Sweden 1897 - 1996
50
40
30
20
10
0
1900 '10 '20 '30 '40 '50 '60 '70 80 '90
Figure 36: Fatal Electrical Accidents (Home and Work) Sweden 1897 -1996
Based on “Study on the application of the LVD”, ERA Report 99-0351 to DG Industry
UK
The UK trend of a fall in fatal electrical accidents continued in 2000, (overall fatalities rose).
1996/97 97/98 98/99 99/00 00/01
YEAR
FATAL
Contact with 15 19 18 13 16
Moving m/c
Electrical 15 12 16 12 9
contact/discharge
MAJOR NON-FATAL
Contact with 1 703 1 915 1 696 1 779 1 611
Moving m/c
Electrical 210 258 221 231 183
contact/discharge
OVER 3-DAY
Contact with 5 686 6 015 5 677 5 624 5 229
Moving m/c
Electrical 515 493 461 504 462
contact/discharge
Table 34: UK Machine Related Fatal Accidents
Source – UK HSE data

Electrical fatalities at work UK
20
15
10
0
96/97 97/98 98/99 99/00
Figure 37: Electrical Fatalities at Work UK

UK accidents abstracted data, Health and Safety Statistics 2000/01, HSE, UK
Finland
Fatal electrical accidents at work, Finland

1939-1997
20
15
10
5
0
'39 '45 50 '55 '60 '65 '70 ''75 '80 '85 '90 '95
Figure 38: Fatal Electrical Accidents at Work, Finland 1939 - 1997

Based on “Study on the application of the LVD”, ERA Report 99-0351 to DG Industry
A comparison of total, work, home and other electrical fatalities in Germany and Italy in the
period 1960-1965 shows significant falls in both. It is striking that, with a smaller population,
Italy has many more fatalities.
This is not, on its own, a compelling argument that standardization has reduced electrical
accidents: Prof. Biegelmeier shows that the numbers of deaths due to lightning strikes in
Germany and Austria fell in similar manner. His explanation of the former is the increasing use
of plastics and other electrical insulants in the home and office: “human electropathology has not
changed in recent decades” he rightly remarks. We do not, however, find the linking of the
curves persuasive, as presumably the vast majority of lightning deaths occur in the open where
the effects he mentions do not exist. Also, there are vastly more electrical tools and controls of
every kind in use – using the construction machinery analogy (Speck), over twice as many
towards the end of the period.

Although electrical accidents are now a small part of all accidents, they are more significant
among fatal accidents as the illustration below, for France, indicates.
(In 1998 alone, electrical accidents in France cost 10.1 Million € - INRS).
1 Fatal 1
10 Serious 70
100 All accidents 1000
Electrical only All causes

Figure 39: Relative severity, electrical accidents and all causes at work,
An ISUG graphic based on data from France (INRS)
This diagram shows that fatality is 10 times more likely with an electrical, and permanent
incapacity 2.5 times more likely, than for ‘all causes’. Electrical fatalities throughout Europe are
now only a fraction of their level of 10 years ago and it is true to say that some low hundreds of
lives are being saved each year.
It would be reasonable to say that human behaviour has not improved much - if anything, we
have all become more casual with electrical equipment. There appears to be no other
conclusion than that the reduced deaths are due significantly to standards and regulation –
Residual-current devices (the modern earth-leakage circuit breakers), standard (IEC) EN
61008, and 9. Theses devices were introduced from the 1980’s onward and their appearance
coincides with significant accident reductions. Their use is now mandated in many countries
and is likely the single greatest improvement in accident prevention.
There is no doubt that, as Prof. Beigelmeier argues, plastics in piping etc. has reduced home
electrical accidents especially where type TT earthing is used. Standard (IEC) EN 60364
allows for TT earthing, which arose mainly in post-war lowest-cost reconstruction, but
prefers type TN which has now been mandated in Austria. This standard also permits type IT
where power continuity is critical – hospitals etc., so is flexibly catering for the highest
standards.
Higher usage of MCB’s (IEC-EN 60898) has also reduced fuse-replacement accidents.
Double insulation of hand tools (IEC – EN 60664)
Note on RCD’s
For the less safe TT earthing systems, type A RCD’s are safer than type AC. The UK has about
15% of the less safe TT earthing, Germany 40%, France 45%, Ireland effectively nil. Although
RCD figures are lower for Germany per head of population than other countries, Type A are
mandated in Germany as well as the Netherlands, and recommended in several other countries. It
is thought that use of Type A accounts for lower fatality rates in Germany compared to France
with similar levels of TT.

OCCUPATIONAL DISEASES - CAUSES
Sweden
Cause Ergonomic Social/ Chem/bio. Noise Vibrations Total

Organization substances
Number 11,980 3096 1,885 876 128 19,099
Percent 62.7 16.2 9.9 4.6 0.7 100
Table 35: Reported work-related diseases in 1999 by suspected cause
Cause Ergonomic Social/ Chem./Bio Noise Vibration Average

Organizational Substances of all
Mean
no. 108 115 57 N/S 34 93
days
Table 36: Mean number of sickness days by cause 1996-1998
EU-15
Diagnoses group Number Percent

(estimated)
MSD 4,094, 276 53.1
Stress, anxiety, depression 1,399,825 18.2
Lung disorders 587,105 7.6
Cardiovascular 319,434 4.1
Headaches/visual fatigue 262,462 3.4
Hearing disorder 207,028 2.7
Infectious diseases 196,193 2.5
Skin problems 195,262 2.5
Other 450,321 5.8
Table 37: Work-related health problems other than accident injuries303
Denmark: comments of the H & S Authority

Trends: Lifting heavy loads
“Unfortunately, the positive technological development, which has reduced the lifting of heavy
loads, has neither implied the expected decrease in incidence of back disorders among workers in
the highest risk groups nor for the working population as a whole. Actually, the amount of
reported cases of back disorders has been stable for the latest six years It is expected that still
more and still better technical aids will be developed in the future. The introduction of
CEN Standards, among other things including requirements for ergonomics and design of
machinery, will promote this development. Further it is expected that the use of the technical
aids will increase especially within larger and medium size enterprises”.
303
Didier Dupré, Eurostat “Work-related health problems in the EU 1998-1999”

New Approach standardization background
Machinery standards are developed as type:
A – ‘General’, sizes of holes so you won’t get a finger caught or broken, clearances etc.
B – ‘Horizontal’, relating to components, guards, safety controls such as pressure switches, interlock
systems, and
C – ‘Vertical’, each one is for a particular type of machine.
Machines are divided into two groups, 1) about 95% ‘put on the market’ with manufacturer’s
declaration of conformity with the Essential Requirements, 2) about 5% ‘more dangerous’ (list
specified by the EC), require type certification by a notified body, or must be completely in line with
an EN – examples - woodworking machinery, cold metal presses (but not hot metal presses as it is
assumed that their temperature makes them almost ‘untouchable’).
About 300 standards have been published to date, almost all CEN, some CENELEC (e.g electric
drills, electric chainsaws) – manufacturers have asked for about 700.
“PPE” (Personal Protective Equipment) – there are just over 150 EN’s, - gloves, boots, eyewear, ear
defenders, mainly CEN, with a few CENELEC relating to electric shock risk.

ANNEX 5.5: Consumer protection
BACKGROUND
(See contribution from Bruce Farquhar in Annex 12 Part 3)
Some US commentators in the early years of colour television were equally convinced that
France’s espousal of the SECAM standard instead of PAL was designed to protect France from
Americanization at that time.304
“Few people question that three-holed notebook paper will align with the three rings in most
notebooks, yet such confidence would not be possible without standards. While driving we are
on the lookout for hexagonal, not round or square-shaped, stop signs, just as we know that
inverted triangles indicate where traffic should yield. These are just a few of the thousands of
standards that impact on our lives”305.
What are the consumers’ interests and concerns for a product or service?
They may be listed as follows:
Availability (as against non-availability, viz. the Soviet Union)

Affordability
Choice
Fitness for purpose – they do what they are supposed to ‘Forward and backward
do
integration’ – other
Safety
Information products will not be
Ubiquity of use unnecessarily made
Other benefits and penalties for the consumer obsolescent or
The effects on the elderly and disabled, and unusable.
Moves to ensure safer ‘sport and leisure’ products for
consumers.
Availability, Affordability and Choice:
“Standardization reduces consumer choice”.
At first glance, apparently true. It is easy, at a superficial level, to assert that standardization
reduces consumer choice. The first move in standardization (apart from measuring and weighing
properly) is to cut costs by increasing production volumes through reduced variety. And in this
vein also is the greater likelihood of market consolidation between producers that may further
reduce choice.
While the above is true, the picture is far more complex.
304
Robinson D.P, ‘Standards – help or hindrance’, Dolby Laboratories Inc., Technology Standards and
Standardization Processes, Stanford University
305
GIFAS NIST NBSIR 87-3576
Companies, to obtain the volumes in the market upon which their investment in mass
production is based, need to conduct much more market research than where they offer a
large variety where some products may be ‘right’. Thus they are obliged to try harder to
provide what the consumer really wants, the consumer benefits from a more highly
refined product offer.
Against a background of standardization, companies are far more likely to try to differentiate
products and so increase the customer’s options – again based on market research; so
different customer tastes tend to be accommodated.
By greatly cutting costs, the consumer is likely to be able to afford what he/she could not
before, or to afford the ‘de luxe’ version.
The design of the standardized product in appearance and fitness-for-purpose, will be at a far
higher level than that of the non-standardized product.
Replacement parts will be more readily available; the product will be usable in more if not all
locations. - ‘Choice’ is meaningless if a product is unusable due to non-availability of a
small part.
Trade and Free Movement impacts without doubt offer the consumer a wider choice of
products and produce from around the globe (particularly evident in seasonal fruits and
vegetables).
Mass customization -
An important development for the consumer in recent years is that the convergence of
technologies has enabled production units to BOTH employ the productivity benefits of mass-
production AND customize at the same time. This is the ultimate marketing dream, where every
consumer is a segment of ‘one’. Without cost-reduction ‘losing stride’ the consumer may now
specify exact parameters of a product from a wide range of choices – colour, configuration,
extras – in many cases. An example of recent European -manufactured laptop computers
typically carries 10 or more configuration options (Dell Inspiron – each laptop is built to exact
customer configuration and delivered within approximately 3 days ex-works. 10 options give
factorial 10 (10!) choices.
This is common in other industries such as automobiles and homes. The Henry Ford mass-
production solution of a black colour only is well and truly dead.
Based on standardized products and manufacturing systems, the consumer has wide
personal customization options as never before in history.
Consumers have more meaningful choices where standardization is playing a full part in design,
production and removing barriers to trade.
(Individual, unique works of art etc. are not included in the above arguments).

Life Expectancy Increased (supporting point in 6.2 Part 1of this Report)
The 3 illustrations below are taken from a study by Jörg Baten306,
Life Expectancy data (3 diagrams – figure nos. shown are from the original reference)
Figure 40: Remaining Life Expectancy at age 20 in Germany (Periods, after WWII: FRG)
Figure 41: Male Heights and Real Wages in Bavaria (19th Century)
306
Baten, J., ‘Anthropometrics, Consumption, and Leisure: The Standard of Living’, University of Tübingen.
Figure 42: Female Heights and Real Wages in Bavaria (19th Century)
The height-real wages correlation is extraordinarily close.

From the early 19th to late 20th century, conscription records show that men in the Nordic
countries were 15cm and those in Italy 11 cm. taller over time.
Fitness for purpose

In the first instance, a free efficient market will of itself eliminate products that are not fit for
use, and this will happen in any free enterprise market where capital is available. This
mechanism alone should be adequate, and is the best one in the long run. While this
‘elimination’ is taking place, there could, however, be many bad experiences for individual
consumers, and that is not acceptable.
In ‘fitness for purpose’ we are not considering safety, which we refer to later, but only
‘functionality’ – the cutter cuts, the radio receives broadcast signals etc.
Where there is a product standard this question will be adequately addressed: the product will
indeed be fit for purpose. And performance criteria will be agreed – the consumer can be
confident that performance will be as per the label.
The majority of consumer products do not have a product standard (a ‘vertical’ or C-type
standard per CEN and CENELEC) and do not therefore enjoy that protection (they do enjoy
considerable safety standards in all cases).
There are however two types of sanction on an offending product:
Manufacturer’s Reputation, – a very powerful motivator, and
Legal liability under common or civil law or as a last resort EU law.
‘Fitness for purpose’ is almost another term for ‘quality’. The exceptionally positive impact of
standardization on quality is described later. “Of course, the achievement of reliability can result
directly in the improvement of quality in products. The application of ISO 9000 concepts in the
motor industry probably relates directly to the fact that people no longer talk about ‘Friday
afternoon cars’; the greatly increased reliability of our brown and white goods means we can
concentrate on the colour and configuration of the fridge or toaster rather than worrying about
whether it will perform”307. This is clearly a positive consumer impact.
307
Blow, J. (2001): ‘Conformity assessment - the added value of consumer participation in standards
development”’, ISO Bulletin, August 2001
SAFETY
This is a Public Good issue, in which Europe has taken the lead with its various Directives for
machinery, as well as pressure vessels, electrical goods, electromagnetic compatibility and
medical devices and equipment. These are all areas where the European Commission has laid
down Directives for product safety.
The Commission, when issuing the Directives, asked the Standards Bodies to respond and to
prepare standards and standardization that would implement them. The Commission also trusted
the Standards Bodies to achieve acceptable safety levels, confirming that compliance with the
standards, while not mandatory (except in some cases such as medical devices) would offer
comfort to manufacturers that they meet the somewhat onerous requirements. – In effect the
Commission offered the stick – ‘you absolutely must achieve a high level of safety’ – and the
carrot – ‘if you do it this way you may take it that you are doing what you need do as regards
safety’ which in turn is a legal defence – not an absolute defence but likely a persuasive one in
almost all cases.
In preparing or ‘elaborating’ the necessary standards, the procedures give strong comfort that
consumer interests are being protected. The technical committees comprise representatives of all
EU and EFTA countries, many of which have, to a greater or lesser degree, a consumerist remit.
If the product is of particular consumer interest, the European consumer representative
association, ANEC, will be represented. This process tends to lift the European Standard which
results, the EN, to the best level of all the National standards combined – the evidence for this is
very clear in the very small numbers of so-called “Safeguard Clauses” invoked by member
states, where they are not happy with some safety aspect of a standard. The standard may not
then be published until the invoked clause is resolved. Safeguard clauses are discussed at greater
length under “Health & Safety at Work”.
European and international standards for electrotechnical products are concerned with the
following hazards: Electric shock, Fire, Mechanical injuries skin burns and injuries caused by
radiation or contact, as well as some environmental hazards under the following conditions:
Intended or expected use, Intended or expected duration of use, Expected fault conditions
Expected abnormal use.

Supporting Diagram to Section 6.3.2 in Part 1 of this report
Aeronautics
Airlines - impacts of standardization, scale -5 to +5
5
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
Costs of Availability Inventory Maint.speed Maint. Aircraft Aircraft
parts of parts quality reliability safety
Figure 43: ISUG survey European Airlines 2001 A
Large manufacturers (aeronautics) impacts of standardization, scale -5 to +5
2.5
1.5
0.5
0
products
Inv'ory
Suppliers
Quality
Europe
etition
Costs
SalesWorld
Comp
Sales
New
Figure 44: ISUG survey European Airlines 2001 B

Design – for – all requirements
The design is useful and marketable to people with diverse abilities

The design accommodates a wide range of individual preferences and
abilities (left-handed, the pace a person can work at)
Use of the design is easy to understand, regardless of the user's
experience, knowledge, language skills, or current concentration
level.
The design communicates necessary information effectively to the user,
regardless of ambient conditions or the user's sensory abilities.
The design minimizes hazards and the adverse consequences of
accidental or unintended actions.
The design can be used efficiently and comfortably and with a minimum
of fatigue
Appropriate size and space is provided for approach, reach,
manipulation, and use regardless of user's body size, posture, or
mobility.
(TELEMATICS project 1109 “INCLUDE”)

SAFETY TECHNOLOGY AUTHORITY (TUKES), FINLAND – MARKET
SURVEILLANCE KEY DATA 1995-2001
1995 1996 1997 1998 1999 2000 2001
688 707 973 853 1247 904 1024 Results of products tested
Result:
137 147 242 172 314 261 235 Complied with
25% 20% 25% 29% 23% relevant standards
180 220 238 275 396 327 431
24% 32% 32% 36% 42% Minor divergences
305 306 431 371 470 253 313
44% 43% 38% 28% 31% Substantial divergences
66 34 62 35 67 63 45
6% 4% 5% 7% 4% Serious divergences
Action taken:
272 323 371 387 416 332 513 Notices issued
89 104 116 152 148 79 71 Delivery to retailers banned
139 92 169 78 139 86 107 Total sales bans
22 10 34 9 29 41 23 Recalls from end users
Market surveillance activity:

2566 2615 2290 2135 2721 2431 2333 Outlets visited
33 83 91 63 186 192 190 Importers, manufacturers visited
Table 38: Market surveillance in Finland

(supporting 6.2.4 Part 1 of this report)
Information
A consumer who buys a product made to a standard is receiving a large amount of independent
information.
Labelling
Europe-wide transparency in pricing
On-line information now available
Ubiquity of use
‘Forward and backward integration’ – other products will not be unnecessarily made obsolescent
or unusable.

Other Benefits for the consumer
Impact of Standardization (and benefits to consumers)due to Manufacturing Multifactor
Productivity
Multifactor productivity is a residual that registers those changes in the sector’s real output
(GPO308), which are not due to variations in labor and capital inputs. This would include
technological changes, gains in organizational efficiency ( some of which will arise from
standardization), changes in the skill composition of labor input, and the benefits from research
and development.
Lysko309 found that capital substitution for labour was secondary to MFP for most of the period
examined.
Figure 45: Multifactor Productivity in Germany and France
Europe leads in restricting electromagnetic radiation
In the case of possible risk from electromagnetic radiation from mobile phones, the
standardization activity is active in setting limits – in a partial vacuum, as no one knows if there
are safe/unsafe limits or what they may be. European action is anticipatory in this instance. Olle
Johansson,310 stresses that “It is very important to realise, that "no accepted proof for health
effects" is not the same as "no risk". Too many times, "experts" have claimed to be experts in
fields where actually the only expert comment should have been: "I/we just do not know". Such
fields were e.g. the DDT, X-ray, radioactivity, smoking, asbestos, BSE, heavy metal exposure,
depleted uranium, etc. Often a "no risk"- flag was raised before true knowledge came around.
Later on, the same flag had to be quickly lowered, many times after enormous economic costs
and suffering of a great number of human beings”.
308
GPO:Gross Product Output
309
Lysko, W. (1995): ‘Manufacturing multifactor productivity in three countries’, Monthly Labor Review July
1995, US Dept. of Labor
310
Johansson, O. (2001): ‘Protection from exposure to electromagnetic fields’, AEC Newsletter Feb. 2001
Standards bodies are increasingly protecting the public in technical matters:
“Who can effectively represent the public interest and make policy in a progressively technical
environment? The task is increasingly falling into the realm of standards bodies.
A New Role for Standardization Originating largely from the specific needs of private enterprise,
contemporary standards groups have to consider not only technical issues (such as
communication protocols and interoperability), but also broader social issues, including safety,
security, privacy, quality, and consumer and environmental policy. The standards groups
comprise what is essentially a “grassroots” democratic forum, where voluntary standards are
developed through an open-door consensus process and achieve their credibility by virtue of the
participation of the stakeholders”.311
Standardization delivers innovation ‘with a guarantee’ for the consumer: “The reason users
want open standards is to keep vendors honest via competition. This usually promotes best-of-
breed products and allows them to prosper. Product innovation is a by-product of a proper
standards process. From a user point of view, standards protect investments. The standards act
almost like a guarantee that a vendor will remain the best, because its willing to implement the
latest standards”312
Impacts on the elderly and disabled
The EU and EFTA made the important decision that the needs of the elderly and disabled should
be taken account of in the standardization process.
Standardization of communication systems, computers and software has opened further
convenience benefits for consumers, beneficial particularly to the elderly and the disabled, some
of which are:
Shopping (on line) from the home

Banking on line
Distance learning up to the highest level in every imaginable subject
Improvement of learning at school
Access to state and local services on line
311
Jones, P., Hudson, J., ‘The gains of standardization from reduced search costs’, School of Social Sciences,
University of Bath, UK
312
Cargill, C.F., ‘Consortia and the evolution of information technology standardization’, Sun Microsystems, Inc
Back up information for section 6.3.6 of Part 1 of this Report Impact on Consumers of
Electronic Commerce Sector
(Source Eurobarometer Oct. 2000)

Figure 46: Citizen’s interaction on-line with public administration
More than 50% of Europeans have been in on-line contact with public administration: there is
great variance country-to-country, with citizens in the Nordic countries making most use of the
Internet including submitting forms.

Figure 47: On-line shopping, adult population % 2000
Source Taylor Nelson Sofres: PriceWaterhouse Coopers
A recent Eurobarometer survey (October 2000) found that only 4.7% of European citizens shop
regularly, and 13.8% occasionally, on-line, and two-thirds who browse the shopping, abandon it
before ordering, indicating a possible lack of confidence in the system.

Figure 48: On-line banking % of total accounts
(source EDC Bank of International Settlements)
This survey from 2000 shows that on-line banking is becoming very usual for European citizens.
The Switzerland figure percentage is due to the high number of bank accounts.

Figure 49: Percentage of schools with Internet access, 2nd half 2000
(Source, European Commission)
Moves to ensure safer ‘sport and leisure’ for consumers.
In the past few years, the considerable experience amassed by CEN in particular in implementing
the ‘PPE’ Personal Protective Equipment Directive which addresses the safety of such
equipment, has increasingly included sport and leisure equipment such as Helmets for horse
riding.
The access which is given in the European standards system to individual consumers in Member
States is illustrated by the experience of a parent whose son died as a result of a riding accident
while wearing a standard Equestrian Helmet. When EN 1384 was subsequently published with
no increased requirement for lateral crush protection, Mr. Downes obtained the support of the
Irish NSB (NSAI) to successfully lobby through the Consumers Association of Ireland and
ANEC, the BEUC affiliate, to have the European standard considered for improvement of the
protection to be provided for side-on impact encountered in a fall under a horse. As a result the
EC has issued a mandate to CEN by which two European Research Organizations will assess
whether the standard needs to be strengthened in this regard.
Medical and health Standardization
Medical and health Standardization can and will at the same time improve and bring down the
costs of caring for elderly and disabled: “Universal Design and Standardization - We anticipate
that universal design and standardization will begin to facilitate flexible configuration of home
technologies for special needs. While these custom environments will be expensive relative to
the environments that serve the needs of the general population, standards for device/system
interoperability and information exchange will drive costs down. An emphasis on human factors
will help to guide development of truly useful assistive technology that promotes cost-effective
independent living. Based upon the growing understanding that the home environment can
actually contribute to patient wellness, the elder care market will investigate technology that
promotes independent living as an alternative to the resource-intensive assisted living
arrangements commonly utilized today. …The cost of these systems will be reasonable, since
they will be constructed with commodity technologies that adhere to universal design
standards”313.
As the essential requirement (quoted above under health and safety of workers) of the Directives
relates also to the “safety of patients” and patients are the consumer in the case of medical
devices, it is again central to the Directive itself and supported by standardization.
This support by standardization is stated to have assisted the achievement of the goals of the
directive mainly through the application of the Risk Analysis and Risk Management standards
supported by biocompatibility and clinical evaluation and related standards, and by standards on
sterilization.
313
Bank, A. (1988): ‘The Myth of Free Standards: Giving Away the Farm’, CSSinfo
Disaster Protection of Consumers
An area of concern in the past has been the provision of medical emergency supplies for
disasters across state borders. Standardization has assisted in reducing the problems of such cross
border activities by standardizing the labels and symbols of devices (e.g. blood bags etc.) and
ensuring the interoperability of medical gas lines and cylinders, etc.
(It is noted that for long lasting equipment such as medical gas cylinders, that while the
European Standards are accepted by all member states, some states with a large investment in
medical gas cylinders colour coded by national standard requirement, have been provided with a
long transition period to phase in the new equipment).
Role of the GAD (Gas Appliance Directive)
Replies to ISUG QUESTIONNAIRES indicate that the number of gas appliances related
accidents have been reduced and that this is attributed to the application of European standards.

Annex 5.6: Environment
Further comment on Emnvironmental Management Standards
James E. Haklik314, reported that users of the ISO 14001 standard found it had a positive impact
on the environment from its application, arising from the requirements in it for:
Awareness of their impact on the environment.
Acceptance of responsibility for those impacts
The expectation that harmful impacts will be reduced or eliminated
The placement of responsibility for environmental impacts upon all members of the community
or organisation.
He concluded, contrasting the attitudes of peoples who live close to the environment to those of
industrialised societies: “Thus, ISO 14001 provides a foundation for sustainability. It is
consistent with the practices of native groups that achieved a sustainable relationship with the
lands that gave them life. More must be placed upon the ISO 14001 foundation to create a
complete sustainable system, but it is an excellent beginning. The benefits of this foundation will
accrue to all of us.”
National Pollution Prevention Roundtable315 also found that ISO 14001 was a useful tool for
pollution prevention, in spite of its not having specific environmental performance requirements.
They concluded this even though they remarked “Voluntary representatives from standards
organizations and industry from around the world developed the ISO 14000 standards. Not
surprisingly, this has evoked scepticism from public advocacy groups and the environmental
community, which to date have been largely excluded from participation in the development of
the standard. Many fear that the standards will be used by industry as proof of commitment to
improved environmental performance, without any guarantees that such improvements will
actually occur.”
There are a considerable number of reports of enterprises claiming that the implementation of
ISO 14001 within their organisations generated considerable benefits (improvements in
environmental performance) by ensuring management and employee attention to environmental
issues. These benefits extend from environmental benefits which are economic benefits for the
enterprises themselves (reduction of energy costs, raw material purchases, waste disposal costs,
environmental incident cleanup / remediation costs) to other economic benefits which do not
necessarily bring any environmental benefits – reduction in costs of application and maintenance
of environmental licence and costs of insurance and some increases in market and market image.
In addition companies report benefits in more easily meeting regulatory environmental

requirements when the standard has been adopted. These later benefits are particularly important
to enterprises that prior to the implementation of the ISO 14001 Management Systems had an
active environmental improvement programme in place that had already delivered the earlier
listed benefits.
314
Haklik, J.E., ‘Considering ISO 14001 and Sustainable Development’, Transformation Strategies
315
ISO 14000 Workgroup (1998): ‘ISO 14001: A Discussion of Implications For Pollution Prevention’ White Paper,
January 28, 1998
Some concerns and criticisms of EN ISO 14000
At the same time, concern has been expressed regarding the ISO 14000 standards. These
concerns have focused on their impact on firms' environmental performance, their effect on
market access for small and medium sized enterprises, and the decision-making procedures by
which they were set. Critics claim that in each of these areas the ISO 14000 standards fall short,
and that as a result the standards are in effect less of an environmental measure, and more a
mechanism to enhance the international trade competitiveness of large industrialized countries’
firms and of transnational corporations.316
“The stakes are high, and ISO 14001 has galvanized interest in major issues of corporate
environmental management. Is this standard a useful new tool for environmental management, or
is it a condition that will be imposed on the marketplace?” asked the United States – Asia
Environmental Partnership of the top 500 Fortune companies317.
Their findings included that (apart from trade demands etc.) the application of environmental
management systems (EMS), coupled with the requirement that suppliers to such top companies
would themselves in turn have environmental management systems either based on, or certified
to ISO 14001, had a positive impact on the environment, when that was the goal of the
companies applying or demanding an EMS. All of these (top 500 Fortune) companies had as
their goal an improvement in their environmental performance beyond that required by
regulatory authorities.
However, these companies reported; “End-use customers, focusing on price and quality, often do
not see the relatively minor environmental impact of their individual purchases. Bulk
manufacturers, by contrast, are aware of the aggregate impact of their products. They believe,
however, that they cannot act without consumer demand and education, which would allow the
producer to build in additional environmental costs.”
Product-Orientated Environmental Management Systems (POEMS)
It is regarded by many that the complete application of EN ISO 14001 and EMAS II encompass
the environmental impact of products at least to some degree. The full impact of this has not
emerged yet, but there were positive reports on it at a workshop organised by the European
Commission in May 2001.318 .
The ISO 14000 Series of Standards

Many of the following have already been adopted as European standards, while others are under
consideration for adoption.
ISO 14001:1996 Environmental management systems - Specification with guidance for use.
Scope: This International Standard specifies requirements for an environmental management
system, to enable an organization to formulate a policy and objectives taking into account
legislative requirements and information about significant environmental impacts. It applies to
316
Clapp, J. (2001): ‘ISO Environmental Standards: Industry's Gift to a Polluted Globe or the Developed World's
Competition-Killing Strategy?’, Yearbook of International Co-operation on Environment and Development
2001/2002 , London: Earthscan Publications, 2001.
317
www.usaep.org/gem/report.htm
318
report available on the web at http://europa.eu.int/comm/environment/ipp/ems.pdf
those environmental aspects which the organization can control and over which it can be
expected to have an influence. It does not itself state specific environmental performance criteria.
This International Standard is applicable to any organization that wishes to implement, maintain
and improve an environmental management system; assure itself of its conformance with its
stated environmental policy; demonstrate such conformance to others; seek
certification/registration of its environmental management system by an external organization;
make a self-determination and self-declaration of conformance with this International Standard.
ISO 14004:1996 Environmental management systems - General guidelines on principles, systems

and supporting techniques.
Scope: This International Standard provides guidance on the development and implementation of
environmental management systems and principles, and their co-ordination with other
management systems.
The guidelines are applicable to any organization, regardless of size, type, or level of maturity,
that is interested in developing, implementing and/or improving an environmental management
system.
The guidelines are intended for use as a voluntary, internal management tool and are not
intended for use by EMS certification/registration bodies as a specification standard.
ISO 14010:1996 Guidelines for environmental auditing - General principles.

Scope: This International Standard provides the general principles of environmental auditing that
are applicable to all types of environmental audits. Any activity defined as an environmental
audit in accordance with this International Standard should satisfy the recommendations given in
this International Standard.
Currently being replaced with an ISO 19011 standard combining quality and environmental
auditing.
ISO 14011:1996 Guidelines for environmental auditing - Audit procedures - Part 1: Auditing of
environmental management systems.
Scope: ISO 14011 establishes audit procedures that provide for the planning and performance of
an audit of an EMS to determine conformance with EMS audit criteria.
ISO 14012:1996 Guidelines for environmental auditing - Qualification criteria for environmental
auditors.
Scope: This International Standard provides guidance on qualification criteria for environmental
auditors and lead auditors. This International Standard is applicable to both internal and external
auditors. Criteria for the selection and composition of audit teams are not included; reference
should be made to ISO 14011 for further information on these subjects.
ISO 14015:2001, Environmental assessment of sites and organizations,
ISO 14020:1998 Environmental labels and declarations - General principles

Scope: This International Standard establishes guiding principles for the development and use of
environmental labels and declarations. It is intended that other applicable standards in the ISO
14020 series be used in conjunction with this International Standard.
Where other International Standards provide more specific requirements than ISO 14020, such
specific requirements take precedence.
This International Standard is not intended for use as a specification for certification and
registration purposes.

ISO 14021:1999 Environmental labels and declarations - Self-declared environmental claims
(Type II environmental labelling)
Scope: This International Standard specifies requirements for self-declared environmental
claims, including statements, symbols and graphics, regarding products. If further describes
selected terms commonly used in environmental claims and gives qualifications for their use.
This International Standard also describes a general evaluation and verification methodology for
self-declared environmental claims and specific evaluation and verification methods for the
selected claims in this standard.
This International Standard does not preclude, override, or in any way change, legally required
environmental information, claims or labelling, or any other applicable legal requirements.
ISO 14024:1999 Environmental labels and declarations - Type I environmental labelling -

Principles and procedures
Scope: This International Standard establishes the principles and procedures for developing Type
I environmental labelling programmes, including the selection of product categories, product
environmental criteria and product function characteristics; and for assessing and demonstrating
compliance. This International Standard also establishes the certification procedures for
awarding the label.
ISO 14031:1999 Environmental management - Environmental performance evaluation –

Guidelines
ISO 14040:1997 Environmental Management - Life cycle assessment - Principles and framework.
Scope: This International Standard specifies the general framework, principles and requirements
for conducting and reporting life cycle assessment studies. This International Standard does not
describe the life cycle assessment technique in detail.
ISO 14041:1998 Environmental management - Life cycle assessment - Goal and scope definition
and inventory analysis
Scope: This International Standard describes in addition to ISO 14040 the requirements and the
procedures, necessary for the compilation and preparation of the definition of goal and scope for
an LCA by performing, interpreting and reporting an LCI.
ISO 14042: Environmental management - Life cycle assessment - impact assessment

ISO 14043: Environmental management - Life cycle assessment - Interpretation
ISO 14048: Environmental management - Life cycle assessment - data exchange (under development)
ISO/DTR 14049 Environmental management - Life cycle assessment - Examples of applications of ISO 14041 to
goal and scope definition and inventory analysis
ISO 14050:1998 Environmental management - Vocabulary

Scope: This International Standard contains definitions of fundamental concepts related to environmental
management, published in the ISO 14000 series of standards.
ISO/TR 14061:1998 Information to assist forestry organizations in the use of Environmental Management System
standards ISO 14001 and ISO 14004
Scope: This Technical Report is designed to be used in conjunction with ISO 14001 and ISO 14004. It provides a
link between the management system approach of ISO 14001 and the range of forest policy and forest management
performance objectives, including SFM principles and intergovernmental Criteria & Indicators, that a forestry
organization can consider. It also provides references to the ISO 14000 series of International Standards, application
of forestry laws and regulations, and the other matters that a forestry organization can take into consideration as it
implements an environmental management system.

This Technical Report, like ISO 14001, does not propose any forestry-specific requirements. Its content is not
normative in any sense, but is intended to be informative. Moreover, it does not establish performance levels for
forest management. This Technical Report therefore cannot form the basis for environmental performance claims
and does not create a product label.
ISO Guide 64 1997 Guide for the inclusion of environmental apsects in product standards.
Scope: This Guide covers the consideration of environmental impacts in product standards. It is intended for
standard writers; its purpose is to raise awareness that provisions in product standards can affect the environment in
both negative and positive ways; to outline the relationship between product standards and the environment; to help
avoid provisions in product standards that may lead to adverse environmental impacts; to emphasize that addressing
environmental aspects during the development of product standards is a complex process and requires balancing
competing priorities; to recommend the use of life-cycle thinking and recognized scientific techniques when
addressing environmental aspects of a product being standardized.
In order to achieve the purposes listed in 1.1, this Guide sets forth some general considerations that should be taken
into account when developing product standards that achieve a proper balance between product function and
environmental impacts; outlines ways in which provisions in product standards may affect the environment during
the stages of a product's life cycle; addresses techniques for identifying and assessing the environmental impacts of
provisions in product standards; highlights some ways to reduce adverse environmental impacts resulting from
provisions in product standards. To reflect the diversity of environmental impacts that products can have, this Guide
may need to be supplemented by sectoral guides.
Draft International Standards

ISO/DTR 14032
Environmental management - Examples of environmental performance evaluation (EPE)
ISO/DIS 14042
Environmental management - Life cycle assessment - Impact assessment
ISO/DIS 14043
Environmental management - Life cycle assessment - Interpretation

ANNEX 6: SECTOR PROFILES
The Sectors
Medical Devices and Informatics

Aeronautics
Mechanical engineering
Electrical equipment
Electronic Commerce
Gas appliances & Pressure Equipment
Software Engineering
Environmental monitoring
Food Hygiene & Safety
Nanotechnology

Annex 6.1: The Medical Device Sector
The Medical Device Sector is ‘one of the most complex industries in the global marketplace’ as
is stated in the ‘European Medical Technologies and Devices Industry profile 2000’ published by
EUCOMED. It covers a very wide range of products: aids for the disabled, active and passive
implantable devices and others such as anaesthetic/respiratory, in vitro diagnostic, dental and
ophthalmic /optical. The range of electromedical and imaging equipment is constantly growing
as is the range of single use (disposable) devices and surgical (reusable) instruments.
Within Europe, the European Commission and other authorities have identified a number of key
health priorities. Where medical technologies play a vital role, cardiovascular disease, cancer and
diabetes have been identified as primary targets for reduction and improvement for patient health
in Europe. Medical Technology has contributed significantly to the health and well-being of the
citizens of Europe and has been supported by a regulatory and economic environment which has
encouraged development and rewarded innovation. The European industry is second in size and
diversity only to the USA and is a forward thinking, innovative industry.
Medical Technology Markets

Based on information from ADVAMED (formerly HIMA) the world market for medical
technologies and devices can be divided into six primary areas : 28% surgical medical
instruments, 26% disposables and implants, 17% in vitro diagnostics, 13% electrical equipment,
10% imaging and 6% for dental care.
World market: €160 billion in 2000

Europe:.......... 24.5%....€39 billion European market: €39 billion
USA:.............. 41.5%....€60 billion Germany: 36%......€14.3 billion
Japan:............ 15%.......€24.5 billion France:..... 19%.. ..€7.6 billion
Rest of World: 19%.......€36.5 billion UK:.......... 10%......€3.9 billion
Table 39: Medical Technology Markets
In vitro diagnostic devices, electromedical and anaesthetic/respiratory equipment are the major
exports. Exports from the EU are dominated by a few countries such as Germany, Ireland, Italy
and the UK. The UK exports 20% of production outside the EU, Germany 17% and Ireland
exports almost all of its €2.5 billion production. Major markets are USA, Japan, CEEC and
Australasia.
Structure
The medical technology products market has many niche product lines with a modest market
share and requiring specific manufacturing or distribution skills. The result is that there are many
small and medium size companies that concentrate on a single product line or on a specific
geographical area. The vast majority of EU companies have an annual turnover of less than €7
million although there are a few with sales in excess of €40 million. There are 7,000 individual
medical technology business entities in Europe. The medical technology industry is dominated
by small companies: SMEs (up to 250 employees) make up 94% and about 70% have less than
50 employees.

Based on current knowledge and data from major countries EUCOMED estimates that the
European (EU) medical technology industry employs 311,500,319 with Germany at 110,000 and
the UK at 50,000 topping the individual country rankings.
Eucomed members estimate their 2001 turnover at €45 billion and investments up to €1.54
billion (source: SEC data for Public Held Companies). In Ireland alone a recent survey of 50+
companies in the sector indicated that committed capital investment to 2000 of €972 million will
be accompanied by further investment of €470 million over three years to the end of 2003, an
increase of 48%. Growth of production is currently around 5– 8% per annum in Europe, with
significant discrepancies between individual countries. Expenditures per capita show a much
higher penetration of medical devices in USA and Japan than in Europe.
The industry is innovation driven, with 9% and more of turnover spent on R & D and much of
that occurring in smaller enterprises which account for 70% of employment in the sector.
Internationally research and development spending by medical technology companies has grown
steadily from 5.4% in 1990 to 12.9% in 1998.320 As a percentage of sales it equals that of the
pharmaceutical industry.
Internationally small medical technology companies “have been disproportionately responsible

for the innovation and early development of truly novel devices.” Companies with less than €5
million sales spent more than 200% of sales on R & D while companies with €5 million to €20
million spent 50% of sales on R & D.321 The high rate of innovation reflects also, of course, the
short product life-cycle.
PRO-ACTIVE STANDARDIZATION
Reflecting the industry itself the standardization activities for medical devices is pro-active and
ground breaking in its approach to providing standards in support of regulation. All the industry
associations take a strong interest in standardization. EUCOMED is an associate member of
CEN and has a high level of input into European and International Standardization.
The emphasis of their standardization interests has been on:
Quality Systems (including the revision of ISO 9000 series)

Risk Management
Global Medical Device nomenclature
Horizontal issues with ISO TC 210
Biocompatibility
Sterilization
Standards for non-active devices.
Their Standards Focus Group manages its standardization activities by using and developing :
‘key contacts’ from within their membership to act as ‘champions’ for individual key standards
projects within CEN and ISO
a project management system and database to support the work of these experts
319
EUCOMED Medical Technology Brief 2001 and Eucomed Member Associations, AdvaMed 2001
320
Research and Development in Medical Technology: The Levin Group Report No. 1
321
Ibid.
a ‘tracking system’ to monitor the evolution of scores of individual standards projects
means of identifying and prioritizing key issues.
Their Environmental Focus and Standards Focus Groups have also ensured that environmental
aspects are addressed in standards and pioneered the environmental check list matrix further
developed in the CEN Environmental Standardization guidelines. (See matrix in the
Environmental Impact chapter).
COCIR, the European Coordination Committee of the Radiological and Electromedical Industry,
has a similar approach to Standardization with respect to CENELEC and IEC. As medical
devices of interest to COCIR and to EUROM IV are electrical or use electricity the proposed
directives on Waste from Electrical and Electronic Equipment (WEEE) and in the restriction of
the use of certain hazardous substances (ROHS) in electronic and electronic equipment gives a
focus to standardization work to find specific solutions that fulfill the regulatory requirements
while keeping costs under control. For COCIR much of the equipment of interest is large capital
equipment with a long life expectancy.
The importance of standards to the Medical Device Industry.

The July 2001 “Industry Report on the functioning of the Medical Devices Directive 93/42/EEC
(MDD)” follows the general line of argument that current directives foresee sufficient numbers
of complementary tools/measures to address concerns with regard to the working of the
directives without recourse to revision of the directive (which they would not recommend).
Among such tools are the use of standards currently been developed or revised. 322
“EUCOMED is proposing that under the directive manufacturers literature reviews should be
carried in accordance with ISO 14155 Part 1 ‘Clinical Investigation of Medical Devices for
Human Subjects, General Requirement’, and where clinical investigations are required that a
Clinical Investigation Plan be developed in accordance with ISO 14155 Part 2 ‘Clinical
Investigation of Medical Devices for Human Subjects, General Requirement; Clinical
Investigations Plans.’
Instead of wholesale reclassification, Technical Standards should be used to add relevant pre-
/post-market clinical requirements in respect of specific device types and materials.
To resolve confusion in the definition of ‘legal manufacturer’ the current revision of the
harmonized standard EN 980 might offer a satisfactory solution.
With regard to the extension of the concept of Common Technical Specifications (CTS) from the
IVD to the AIMDD and MDD, which is regarded as inappropriate, it is suggested that
“Diligent application of risk analysis and management coupled with the use of appropriate
harmonized standards would achieve an equivalent level of safety and control as a CTS.”
In making the case for not changing the product classification of orthopaedic implants the same
report (Annex 4) points to the existing standards EN 12010 Total Joint Replacements, EN 12563
Total Hip Replacements, EN 12564 Total Knee Replacements, and EN 14602 Osteosynthesis
Devices together with the several horizontal standards to which orthopaedic implants must
conform in practice, including :
biocompatibility EN ISO 10993

Risk Analysis EN 1441 and ISO 14971
322
Industry Report on the Functioning of the Medical Devices Directive 93/42/EEC(MDD); EUCOMED.
Clinical Investigations EN546 and ISO 14155
Sterilization EN 550/2/4/6/7
Labelling EN 1441 and EN 980
Packaging EN 868
Quality Assurance in Design and Manufacturing EN 46001/2, EN 724, ISO 134858, ISO 14969.
MEDICAL INFORMATICS
Medical Informatics is an essential and increasingly pervasive element of all healthcare activity.
It is also an academic discipline where health, information and computer sciences, psychology,
epidemiology and engineering intersect.
The standardization objectives and definition of Medical Informatics, now more commonly
Health Informatics, are defined by the scope of ISO/TC251 established in 1999: “standardization
in the field of information for health, and health information and communications technology
(ICT) to achieve compatibility and interoperability between independent systems. Also to ensure
compatibility of data for comparative statistical purposes (e.g. classifications) and to reduce
duplication of effort and redundancies.”
The scope of CEN/TC251 Health Informatics, the national based European standardization
technical committee formed in 1990, is expressed differently but means the same:
“standardization in the field of health information and communications technology (ICT) to
achieve compatibility and interoperability between independent systems and to enable
modularity. This includes requirements on health information structures to support clinical and
administrative procedures, technical methods to support interoperable systems as well as
requirements regarding safety, security and quality.” A number of European pre-Standards,
especially in the area of health-cards, have been the starting point for ISO/TC215 work items and
standards.
A wide range of other organizations engaged in health care standardization and applications
includes the American Medical Informatics Association (AMIA), European Federation for
Medical Informatics (EFMI), IEEE P1073, HL-7, Digital Imaging and Communications in
Medicine (DICOM), Strategic Health Informatics Network in Europe (SHINE). NETLINK
brought together participants from France, Germany, Italy and Canada and has presented its
results at ISO and G7 health care working groups level. This project is the basis of the Sesam
Vitale health-card extensively used throughout France.
However, despite these developments and activities the increasing need for internal and cross-
border communication of health information within Europe is not being met. Work is underway
within the eEurope initiative but the difficulties are immense. Introduction of technology within
the national European national and regional/local healthcare systems is a major task. The
benefits are clear and yet at present there a real implementation of individual patient data only in
rare instances for a limited number of countries despite many pilots and IST funded projects.
Attendees at the ISUG workshop pointed out how standardization would improve patient safety
and reduce the risk of error by healthcare professionals.

Annex 6.2 Aeronautics sector
Pioneering the ‘Knowledge Society’

“Aeronautics is a key asset for the future of Europe. Its direct contribution to economic prosperity is a
measure of its success in pioneering the “knowledge society” that the European Union is now urgently
seeking to achieve. As users, developers and suppliers of advanced innovative technologies, aeronautics
companies know the value and importance of continuously developing human skills.
“Many of the 400,000 people directly employed in the industry are highly skilled ‘knowledge’ workers,
well practised in the use and exploitation of advanced technologies, including the new digital information
technologies. Others push forward the technological frontiers in research laboratories, developing the
knowledge that is crucial for keeping the industry’s firm grip on world markets. Many of the fruits of
their research also find applications in markets quite distant from aeronautics that need the technologies
but lack the resources to develop them.”
“European Aeronautics: A Vision for 2020” report for the European Commission January 2001
STRUCTURE OF THE INDUSTRY

Based on data from the Association of the European Aerospace Industry (AECMA), we can
estimate that the EU and EFTA aeronautics sector accounted for 1999 sales of more than €65
billion and an EU balance of trade surplus of €22 billion. It generates direct employment of
approximately 400,000 people and indirect/outsourced employment of a further 700,000 people
or more.323 The European aerospace industry comprises about 700 companies with a further
80,000 suppliers, many of which are SMEs. Significantly, it invests a consistent 15% of its
turnover in research and development, currently running at over €9 billion annually.
Europe’s share of the world’s aircraft order books is now around 50%, even though more than
85% of passenger aircraft currently flying have been built in the USA. In the civil helicopter
market, aircraft designed and built in the EU now hold around 32% of the world market while in
regional jet and turboprop aircraft European manufactures have held a market share of more than
60% for the past decade.
The industry has become more concentrated in recent years, driven by mergers and
rationalization in the context of global competition, led by the USA. This has led to the growth
of larger players such as BAe Systems and EADS, each with annual sales of over €20 billion.
European Aeronautic Defense and Space company (EADS) was formed by Daimler-Chrysler
Aerospace (DASA), Aerospatiale Matra, Lagardère, French state interests and Spain’s CASA
(SEPI). An agreement with Finmeccanica made it Europe’s largest aerospace company and the
third largest in the world. Since June 2000 EADS has owned 80% of Airbus, with the other 20%
owned by BAe Systems of the UK.
EU/EFTA companies are therefore growing in scale and large companies now account for some
80% of the regions’ production. This restructuring and growth in company size has been long
desired by the European industry. Europe’s position in the global market is shown below.
323 This profile uses information from the Association of the European Aerospace Industry (AECMA) and from the European Commission
report A Vision for 2020” of January 2001.
Employment by area, total 1.23 Million
6%
35%
50%
3%
6%
EU Japan Canada USA Other
Figure 50: Employment by Area
Turnover by area, total €198 Billion
3%
33%
53%
6%
5%
Figure 51: Turnover by Area
While France, the UK and Germany account for the vast bulk of the industry in Europe, there are
strong specialized or subcontract companies throughout Europe, and the significant maintenance
and overhaul business is also spread Europe-wide. The fortunes of the sector are strongly linked
to the fortunes of the airline industry and to defence spending. Aeronautics saw growth in the
late 1980s and early 1990s but low or no growth from 1992 to 1995. Growth recovered in the
late 1990s, with cumulative 1995-99 growth of 45% in output and 10% in employment. The
military market gradually decreased in importance in the 1990s, down to 30% of total output.
Product Areas
The main product segments in EU/EFTA sales are :
Final aircraft products 46%
Engines 15%
Maintenance 27%
Other equipment and structures 12%.
Engine supply is highly concentrated. Large engines are dominated by GE, Pratt & Whitney and
Rolls Royce (the only European company). In medium/small engines, main manufacturers are
AlliedSignal Engines, Rolls-Royce Allison, GE, Pratt & Whitney Canada, Williams International

and two joint ventures (with European participants). Turbomeca (France) is an additional player
in turbo engines. There is increasing international collaboration on engine innovation, design,
development and manufacture. The combinations of companies in such consortia evolve as new
products emerge and some of the largest consortia are European-led such as MTU, SNECMA
and Fiat Avio. Such collaboration on innovation extends to SMEs which share the industry
characteristic of a high R&D spend as a proportion of revenue compared to companies in other
sectors.
Maintenance yielded total 1999 turnover of almost €16 billion from the EU. The large
maintenance units of European airlines are particularly important, accounting for 52% of that
total.
Standardization
AECMA has about 2,000 standards published and another 1,000 or more or under development.
The industry’s focus, apart from the obvious primacy of safety, is on costs and competitiveness.
For example the demand by aircraft operators for interchangeable parts is driven principally by a
desire to reduce inventory costs. Similarly, military customers (traditionally national) now see
the wider use of commercial standards and variety reduction as essential to cost reduction
through greater supplier economies of scale and competition as well as lower inventory costs.
The European standardization body is AECMA-STAN, which works directly with CEN and has
a unique permission from CEN whereby it publishes prENs or ‘pre-standards’ itself, following
which of course they must complete the rigorous CEN approvals process. This assists the
sectoral requirement for the faster introduction of standards. AECMA and the US SAE cooperate
in a number of areas including drawing up equivalence information to increase
interchangeability of parts. A quasi-standardization programme with certification for electronic
component management (Avionics Working Group) has been established by the EU and US
industries under the IEC (aircraft may be in service for 30-40 years while electronics
components are obsolete within a few years at most, thus necessitating standards comparisons
and special testing of these parts).
Certification procedures are mandatory and cover design, operations, maintenance, and
licensing standards of all aircraft in all territories. In Europe, the JAA (Joint Aircraft Authority)
represents the civil aviation authorities of 29 European countries. The JAA has a Certification
Group responsible for certification of new aircraft and engines. After the completion of a JAA
certification programme, all JAA member countries can issue a ‘Type Certificate’. The JAA and
its US equivalent are working to harmonize requirements, as a single global certification is
desired by the industry.
Compliance with the many layers of standards, inspection, certification and airworthiness
certification is a major cost for the aeronautics industry and in its airline customers, operating in
an increasingly competitive and currently depressed market: “The airline industry is subject to an
ever-increasing proliferation of inspections, reviews and audits … over 70,000 audits a year are
performed, costing in excess of US$3 billion. Underlying this large cost is a wide variability in
both operating and audit standards and their application. IATA intends to introduce a set of
International Standard Audits (Operational Quality Standard or OQS) audits … to improve

safety and save cost.”324 In a variety of surveys, by AECMA as well as ISUG’s, companies made
clear their preference for international standards to cut costs.
324
IATA press release No. 21, May 2001

Annex 6.3: Mechanical Engineering Sector
Mechanical engineering and equipment covers a vast range of goods from complex final
products such as handling and lifting equipment and construction machinery on the one hand, to
machinery used in other industries: machine tools, food and beverage machinery, mining and
quarrying equipment, machines for textile and leather production, pumps, compressors, engines
and heating, ventilating and air conditioning equipment and even valves and machined parts such
as gears. It includes supplies to the automotive and aerospace industries but not the finished cars,
airplanes, etc. and neither does it include metal fabrications and structures.
It is difficult to draw the line in a large and diverse sector like this, but the numbers and values
indicated for this sector by the pan-European industry association Orgalime indicated a 1999
output level of €355 billion. This represents a 42% European share of the world market of
approximately €845 billion, almost exactly double that of either the US or Japan. Europe is thus
clearly the world leader in this sector, which makes it of major economic importance to the
Union. The output of the sector mirrors world economic activity and grows and declines roughly
in line with it, year-on-year output rarely changing by more than 2-3%.
Mechanical engineering in the EU sells two thirds of its production on the EU market. Exports to
third countries amounted to €116 billion in 2000, nearly a quarter of which was destined for the
United States, the most important single market for the EU mechanical engineering industry. EU
exports to NAFTA and Asia are each 28%. In both regions together, we sell nearly 60% of EU
exports. Central and Eastern Europe is the third most important region with 14% of total exports,
while ‘other western European countries’ take 13%.
Export markets shares for EU, 2000 West Europe except

(total exports Euro116 billion) EU WEE
Central and Eastern
Europe CEE
11% 13%
Other asia
5%
14%
Japan
China
23%
USA
5% 26%
3%
NAFTA remainder
Figure 52: Export Market Shares for EU, 2000 (Total Exports Euro166 Billion)
Abstracted by ISUG from a VDMA report
Mechanical engineering in the EU has to compete internationally with competitors in the USA
and in Japan. It has its crucial counterparts in these two countries, not only in competitive terms
of production volume but also in terms of technological standards. An estimated three quarters of
world machinery production is contributed by the EU, the USA and Japan together. The EU and
Japan are both net exporters, while export and import values are nearly equivalent for the USA
mechanical engineering industry. The EU and US machine markets are nearly the same size. The

US market has expanded most strongly over the last ten years but mechanical engineering in the
EU has been surprisingly successful in defending its position.
Structure of the Sector

Germany accounts for almost 40% of the EU total output. Some way behind follow the UK with
12% and then France and Italy at a broadly similar level so that these four countries account for
over 70% of EU production. Total EU employment in the sector is believed to have now passed
2.5 million which makes it one of the largest branches of industry. The industry has a large
proportion of SMEs, often family companies. There are reckoned to be of the order of 140,000
companies, of which 120,000 employ less than 20 persons while only about 800 major
enterprises employ over 500.Because it is labour intensive, employment is gradually shrinking:
some 12% of jobs in the industry have been lost since 1990 while output grew 21% in value.
Productivity rose from nine persons per €1 million sales in 1989 to seven in 1999 due to
increased efficiency and automation.325
Mechanical engineering production 2000 total Euro 340 Germany

billion Sweden
5% Italy
3%
10% 3% 39% Spain
3% UK
NL
France
Austria
11%
Belgium-Lux
4% 18% 4%
Others
Figure 53: Mechanical Engineering Production, 2000, Total Euro340 Billion

Abstracted by ISUG from a VDMA report
This European industry is both modern and innovative. Looking at patent applications as an
indicator of technological development, the mechanical engineering industry stands out. A 1996
study carried out for the Commission by the IFO Institut shows that 45% of world patent
applications originated in the EU, while Japan and the USA accounted for only 20 % each. This
is far above the average for other industrial sectors.
Standards
CEN is the standards body responsible for the sector. About 40% of its standards are rooted in
those of the international standards body ISO. The Machinery Directive (MD) is the main
influence on European standards. There are now 340 of these completed, including almost all of
the horizontal standards while 380 remain for completion by 2006, of which almost all are
machine-specific or type C. Other Directives that apply are: Pressure Equipment, Lifts, and
‘ATEX’ (equipment in potentially explosive atmosphere).
325
Source: VDMA
Graphs: VDMA report presented at 18th Mechanical Engineering Dialogue meeting, Brussels by Anke Uhlig, Dr.
Ralph Wiechers , 27.11.2001

ANNEX 6.4: Electrical Engineering and Equipment
Sector
This is a very broad sector that includes all forms of electrical and electronic equipment, from
large electric motors, generators and transformers to telecommunications apparatus to electro-
domestic appliances and consumer electronics. It also embraces electricity distribution and
control apparatus, cables, batteries and accumulators, lighting equipment and electro-medical
equipment and extends to electronic components, industrial process control equipment and
computers and peripherals of all kinds. The range continues to grow: for example, about 30% of
purchases by the automotive industries are now electrical/electronic, while according to Dr.
Ryoiku Togei of the Electronic Industries Association of Japan, 45% of manufactured goods
traded globally now have some electro-technical content.
Many standards apply right across the sector while others are very specific or specialized. A
number of EU Directives apply, e.g. the Low Voltage Directive (LVD) as well as the
Electromagnetic Compatibility Directive (EMC), Radio & Telecommunications Terminal
Equipment (RTTE) and ATEX Directives.
The International standardization body is the International Electrotechnical Committee (IEC) and
its European counterpart is CENELEC. It has been one of the core areas of standardization for
many years. In fact there are many of the world’s most ‘mature’ standards that have been
working away quietly in this sector almost since standardization began. It is also a very
international sector. Over 80% of CENELEC’s standards have come from IEC standards that
dominate world trade. The USA is the only important exception, using its own NEMA standards,
of which many are close to IEC.
The European influence in this sector is characterized by the ‘New Approach,’ under which the
Low Voltage Directive and later the Electromagnetic Compatibility Directive was issued. Now,
the newer RTTE Directive includes personal safety and exposure to radiated waves. This sector
tends to focus more on energy efficiency than others and energy labeling is active for some
appliances. One of the organizations in the sector, CECED, which deals with domestic
refrigerators, has implemented a voluntary energy efficiency programme of its own design for
which comparative tests to independent standards were essential. The sector appears to have
been chosen for the first application of ‘greening’ to standards, an issue that is under intensive
and ongoing discussion between the various parties.
European position in Technology

The 1999 output of the combined sector in Europe, EU + EFTA, was approximately €435
billion. Electrical and electronic products accounted for €388 billion and instruments €47 billion,
of which Germany produced about a third. However, in the telecomms sector the meteoric
development of production in Sweden and Finland is bringing increasing weight to these
countries. Employment is reckoned at over 2.1 million people in the overall electrical/electronic
engineering industry in Europe.
Europe accounts for approximately 30% of world trade in the sector, led by companies such as
Siemens and ABB, is the clear leader in non-consumer electrical engineering equipment.
European imports, however, slightly exceed exports due mainly to consumer electronics.
Exports m illion Euro 1990
3000
2500
Europe 11
2000
USA
1500
Japan
1000
500
0
1987 1989 1991 1993 1995
Figure 54: Exports Million Euro 1990
Adapted by ISUG from Zvei. Ifo Institut

Table 40: Mobile Phone Makers Market Share
Gartner Dataquest
The rate of innovation in the sector is highest in the large production sectors, when measured by
Mobile phone makers:
Market share, Q3 2000
Nokia 30.6%
Motorola 13.3%
Ericsson 9.7%
Siemens 8.6%
Alcatel 5.6%
Panasonic 5.4%
Others 26.8%
the usual yardstick of percentage of sales of newer products. There are major changes arising in
the next few years in electricity generation, such as distributed generation, micro-CHP and local
use of fuel cells. These are areas in which European electrical engineering companies like
Siemens, the undisputed leader, have already established strong positions. For many years,
Siemens has been the largest applicant at the German Patent Office and it is also leading the
number of patent applications in Europe generally and sixth in the USA. ABB has patented
advances in windings for dry transformers and motors. Siemens reported sales of €82 billion in
2001, ABB Group €26 billion and Alstom €24 billion. Other European world leaders in this
sector include Alcatel, Ericsson, Nokia (€ 30 billion) and Philips (€35 billion).
Role of SMEs
SMEs have assumed greater importance in the electrical engineering industry, stimulated by the
outsourcing activities of the large manufacturers. These include manufacturing of printed circuit
boards and their in-line assembly with guaranteed high quality. Some SMEs are active in niches
with high innovation potential, e.g. controls for electric motors, combining high-energy
electronics with computers and software to optimize the control of electric motors. Others focus
on market niches for special applications such as automated road tolling systems, and signage.
Standardization Issues of Interest

In standardization, there are several issues of particular interest in this sector. In regard to
Electromagnetic fields (EMF) there are some differences of opinion between appliance
manufacturers and electricity generators as to where EMC should be attenuated. US
manufacturers are not happy with the EMC Directive and related standards. Waste from
electrical and electronic equipment (WEEE) is another area where the EU is moving to require
action from this sector. Bans on specific substances are under discussion while it is clear that
better energy efficiency of electrical and electronic equipment will be a perennial issue.

ANNEX 6.5 e-Commerce Sector
Business-to-Business (B2B) activity is still the main area of electronic commerce activity and is
expected to remain the fastest growing sector well into this decade because of the rapid
deployment of enabling technology along the supply chain in most industry sectors. Many
examples of ‘best practice’ and World Class status are simply not possible in manufacturing and
distribution without e-commerce systems.
The value of global e-commerce sales is estimated to reach €5.3 trillion (5,300 milliards) this
year, representing growth of 66% on the €3.2 trillion in 2000.326 We can speculate that such
exponential growth represents a first wave of general adoption by multinationals and will
inevitably slow down. But that hardly matters in terms of the significance of e-commerce for
global trade.
Despite the extremely rapid growth in Business-to-Consumer (B2C) e-commerce sales (see
Figure 9) since the beginning of the World Wide Web, they still account for a very small share of
the world’s retail sales. Even in the USA, which still accounts for the bulk of Internet
transactions, sales in the final quarter of 1999 were equivalent to about 0.66% of retail sales.
Apart from the US, only about 10% of Internet users ever make purchases and these are typically
small value transactions. In Europe, B2C penetration is just 0.2% of retail sales, although some
countries are on a par with US levels, notably Sweden, the Netherlands and the United Kingdom.
More recent surveys of the trend in online consumer purchasing in 2000 show, according to an
Ernst & Young Special Report “Global Online Retailing” that the rate of purchasing by online
consumers is clearly accelerating. In certain sectors, however, e-commerce sales have achieved
quite a significant level of penetration with, for example, the Web accounting for over one
quarter of share trades in the United States. More generally, a study by the Boston Consulting
Group on B2C e-commerce (1999) found that the Internet in the United States and Europe
accounts for more than 2% of equity brokerage services and sales of computer hardware and
software, books, music and videos. Globally, these commodity products are still the top sellers.
The Ernst & Young report found that clothing is becoming more important and it now ranks in
the top five categories in the U.S. and Canada. Other categories, like health and beauty products,
sporting goods, flowers and toys are showing increased consumer shopping penetration.
Not too surprisingly, goods and services that can be delivered over the Internet, such as software
(from operating systems though applications to games), financial and investment services and
gambling are growing the most rapidly and have a large potential to gain a sizeable share of the
overall market.
According to a report from Forrester Research, 327 consumer B2C e-commerce in Europe is
showing signs of fulfilling its promise. European online retail spending in 2001 is estimated at
€4.1 billion, a 60% increase over 2000. UK consumers account for almost 35% of all online
spending in Europe, with growth of 116% from 2000 to 2001. Travel is forecast to be the biggest
application at €727 million, and European shoppers will spend €489 million on new PCs and
related hardware and €365 million on consumer electronics like new DVD players, according to
326
Source: Deloitte & Touche, Feb. 2001
327
Forrester Research BV, 27 November 2001
the survey. It also shows that the number of online Europeans has grown substantially: between
January and October 2001, 24% more Germans visited the web, 31% more British and 35%
more French.
In contrast, the main sectors for B2B transactions are motor vehicles, shipping, chemicals,
industrial and high technology equipment, with an increasing number of companies in these
sectors integrating their supply chain through the Internet.
Relevant Standards
E-Commerce is probably the clearest proof of the importance of standards because it is built
totally on software standards. E-Commerce cannot exist without standards – could not have been
conceived without standards. It is also growing and evolving at an exponential rate unique in
economic history, as are the development speed, complexity and proliferation in the standards
that are being written to meet its needs. Most of these standards have resulted from the work of
industry consortia formed in a highly competitive market that required innovative protocols. That
means that much of the discipline of traditional standardization procedures has fallen to the
necessity for speed to market of workable standards. On the other hand, it would seem that the
instant communications capabilities of the Internet, sheer economic dynamism and calibre of
expertise applied contrives to produce – in record time scales – standards that are in most
respects as fit for their purposes as those more traditionally written.
The foundations of e-commerce activity now rest on three layers of standards
Telecommunications Standards: this is the fundamental layer, built on a body of standards

internationally ratified and proven over more than half a century. They have had to cope with the
evolution of traditional PSTN (public service telephone network) engineering and with totally
new technologies, such as computer control and optical fibre signal transmission, and have
successfully done so with hardly a pause in the engineering progress.
The Transport Layer: This second layer comes from the IT world and essentially governs the
network transmission of all digital data. The most obvious and important standard is TCP/IP
(Transmission Control Protocol / Internet Protocol) because it is the universal data transmission
standard for the Internet. There may be technically more sophisticated networking technologies
possible, but TCP/IP has proved reliable, consistent and robust in a helter-skelter world of
extraordinarily rapid development and is long since universal. TCP/IP has also become the
dominant protocol in Local Area Networks (LANs) and Wide Area Networks (WANs) and is
fundamental to the convergence of voice and data. In essence, TCP/IP has enabled multimedia
content from the individual PC all the way up to the World Wide Web.
The Top Layer of standards, however, is concerned with applications and content. It brings us
immediately into the realms of rapid change, competing technologies and standards/protocols
that very often have no more authority than IT industry working groups or are indeed ad hoc
solutions from corporations and alliances anxious to get a product or service on the market as
speedily as possible. This is a sector where the working of consortia standards has been taken to
a new and somewhat frantic level.
The Standard that Started the World Wide Web

The World Wide Web is an incredibly significant invention, a new all-purpose multimedia
communications medium – based on a standard. The graphical and colourful top skin that is so
often confused with the Internet proper is based on the HTML or HyperText Markup Language
standard for the graphic presentation of data – colour, typeface, movement, halftones (photos),
etc. on a computer screen using browser software after it has been carried over the Internet in
packets using TCP/IP. The enormous impact the Web has had on the popular acceptance and use
of the Internet is likely to rank as one of the greatest cultural shifts in world history. First
proposed by Tim Berners Lee at CERN in 1989, the World Wide Web started to grow with the
first Web browser software to use the HTML standard in early 1993, NCSA Mosaic. By June
1993 the Web had less than 200 sites, but more than doubled by the end of that year to over 600.
Doubling about every six months, the number of web sites had passed 100,000 by the end of
1995. By the end of 1996 the total had passed 250,000, but figures are hard to verify, as there is
no single central registry or authority.328The number of people with an Internet connection
passed the one million mark in 1994. By August 2001, says research firm Nua, there were an
estimated 513.4 million users worldwide.329 Europe had 41.6 million Web connections at Dec.
2001 and 46.5 million Dec. 2002: this will rise to 58.8 million by Dec. 2005.330
Global Commerce Initiative

The Global Commerce Initiative (GCI) is a global user group with more than 300 member
companies created in October 1999 to improve the performance of the international supply chain
for consumer goods through the collaborative endorsement of recommended standards. Europe is
well represented by Auchan, Casino, Danone, Delhaize, Nestle, L’Oreal, Philips, Tesco, and
Unilever. European Article Numbering International (EAN) and the US Uniform Code Council
(UCC) have made a major contribution to the GCI’s efforts towards speedy standardization of
Internet trading in the consumer products industry with the first in a series of electronic
commerce standards. While it may be superseded in time by more formally representative
international body/bodies, GCI merits active observation by and collaboration with European
trade and industry organizations and authorities.
328
Gray, M., (1996), http://www.mit.edu/people/mkgray/net/internet-growth-summary.html
329
http://www.nua.ie/surveys/how_many_online/index.html
330
Probe Research, report Jan. 2002

ANNEX 6.7: GAS UTILISATION AND PRESSURE
EQUIPMENT SECTOR
1. The background of the Gas Appliance Industry
Natural Gas (NG) is used by 70 million domestic customers and 2.6 million non-domestic
customers in Europe (over 200 million World). LP Gas is used by an estimated 3 million
domestic customers and 0.5 million non-domestic customers in Europe. Gas is used for central
heating, space heating, water heating and cooking. Small markets also exist for refrigerators, air
conditioning, decorative fuel effect fires. Intra-community trade in gas appliances grew 62%
1990 and 1994 following the introduction of the GAD. The Gas Cooker market in Europe was
reported to be 5.3 million units in 1999. Water heaters (mainly gas) 2.5 million units in 1999. In
the specific case of gas wall mounted heaters and water heaters the total manufacturing turnover
of European Industry is just less than €30 billion with 14,500 employees.
Gas appliances are regulated under 90/396/EEC. The requirements of 92/42/EEC apply to gas
hot water boilers (No standards harmonised under this directive, as yet), 97/23/EC (PED) to
some components and gas for automotive use 98/37/EC, 98/79/EC (Machinery Directive) to
larger non domestic equipment and 93/68/EEC (CPD) to fixtures associated with the appliances:
and UNECE WP/29 regulations apply to use of gas for automotive use.
Gas metering will be subject to the Measuring Instruments Directive (not yet published).
2. Surveys
Questionnaires re: Safety and the Environment sent to 150 organizations and individuals in the
industry, notified bodies, test houses and European and National Gas Supply organizations etc.
Replies from Germany indicated that hard data was not available and would be costly to collect.
No accidents associated with appliances recorded. A UK reply also indicated that data re
appliance accidents were not gather for domestic appliances (a total tally of .173 for the year
2000 gas related accidents were reported but for domestic situations it is known that these are
mainly related to installation and fluing problems, perhaps peculiar to the UK The UK Health
and Safety Authority does gather data on industrial gas incidents. A Belgium reply indicated that
no data was available on the total number of gas related incidents but provided data on total
domestic accidents and appliance related accidents. The accident rate averaged over the 5 years
for which data was provided (1995,1997,1998,1999, 2000) was 8.6 per million meters total or
4.9 per million meters appliance related. On a European scale – if these ratios were valid for all
Europe this would indicate that about 700 gas related incidents or 400 gas appliance related
incidents a year might be expected. (This agrees with the UK data for 2000). The Belgium data
noted a reduction in incidents each year for the last 3 years most notably for appliance related
accidents.
All respondents reported that Gas Appliances standardization had effected improvements in the
impact on the environment through miniaturisation (less materials used in manufacture,
specifying less environmentally damaging materials , more rational use of energy, and Carbon
monoxide emission reduction. Belgium reported that they also led to a reduction in NOx
emissions but the UK respondant remarked: “If NOx emissions have improved the appliance
manufacturers have not capitalised on this in sales literature etc. Quoting NOx emissions does
not sell appliances in the UK.”
4. Gas Appliances and Pressure Equipment Sector: Pressure Equipment
This sector is defined by the scope of application of the two directives the Simple Pressure
Vessels Directive 87/404/EEC and the Pressure equipment Directive 97/23/EC.
As pressure equipment is a component of a wide range of equipment (including some gas
appliances, LP gas cylinders and tanks and fittings; refrigerators, compressed gas equipment etc.)
it is of major economic importance.
The Simple Pressure Vessels Directive 87/404/EEC and the Pressure Equipment Directive
97/23/EC.
Over 760 standards are either developed (670, already ratified) or under development.
12 EN standards are referenced in the Official Journal for the simple pressure vessel directive
(41 mandated standards) and 41 for the PED (another 230 harmonised standards have or are
being developed, 75 harmonised support standards – not for publication in the Official Journal -
and 375 supporting standards – also not for publication in the Official Journal).
The single most important draft standard prEN 13445 (Unfired pressure vessels), expected to be
published in all its 7 parts by the end of 2002, (part 3 – design – extends to over 1500 pages), is
eagerly awaited for by the European equipment industry. Existing conflicting national and
industry codes (A. D. Merkblatt, CODAP, Swedish SPVC, Italian VSR, Swiss SVDB and
ASME Code) are specified by purchasers in different markets. The situation is further
complicated by national regulations which specify different materials and local inspection and
certification requirements. The results of ISUG surveys are reported on in the Impacts Section
below.

ANNEX 6.8: Software Engineering Sector
Due to its size, growth rate and contribution to the performance of all sectors of the economy,
the software industry is a remarkable engine of economic growth around the world, and holds
enormous potential for the future.
Software is an integral part of many systems in a very wide range of application domains, such
as
Aircraft and Spacecraft
Automotive
Commerce and Banking
Computing & Communication
Education
Health
Home systems
Public and private administration
Telecommunication.
Software is not always evident: in value and employment, software services like running a
network for inter bank balances, and embedded systems are much bigger than office suites. A
luxury car today has 50-60 processors which all need to be "filled" with software (environment-,
security-, navigation requirements).
The software contribution to different industrial sectors is however difficult to quantify; the
packaged software industry is a better example for a more systematic sector profiling.
The packaged software is the software that is developed for and used by multiple parties (as
distinct from customer software, which runs on a single user’s information system). Some of this
software is used “as is”, while other forms of packaged software are purchased with considerable
“value added services”, including training, maintenance, installation and customization.
The packaged software offer comprises application tools (such as word processing, spreadsheets,
databases, ..), application solutions and systems software utilities, including operating systems,
operating systems enhancements, networking products and data center management software.
US Department of Commerce data (US Industry and Trade Outlook, 1998) show that the global
market for packaged software was $109.3 billion in 1996 and was estimated to double to $221.9
billion by 2002;
According to a study by Price Waterhouse (commissioned by Business Software Alliance in
1998) the total value of the packaged software market in Western Europe was $37 billion in
1996, with a strong demand projected to grow at an average rate of 10 per cent per year,
resulting in retail sales of $59 billion in 2001. According to the same report in 1996, the total
direct and indirect employment generated by this industry was 334,181 jobs throughout Western
Europe; a conservative assumption of employment growth rate suggests that the industry will
generate a further 92,283 jobs by 2001.
A more recent survey performed by Business Software Alliance estimates that the international
packaged software market will continue to grow, and the grow rate will accelerate to an average
of 17.3 percent annually between 2000 and 2005 (compared with an average annual market
growth rateof 15.1 percent between 1990 and 1998).

The same survey points out that, despite the high pay and growth in the number of jobs, the
software industry has always experienced a shortage of qualified applicants; this will remain a
challenge in the coming years.
It should be considered that the economic impact of the packaged software industry extends
beyond these data as software provides the tools necessary to improve efficiency and
effectiveness of the whole industry, to re-engineer existing business processes (and to define new
ones). Consumers also benefit from packaged software, both from direct use – more and more
homes are now equipped with PCs – and from the social benefits of the Information Society.
The packaged software market is both complex and dynamic. Several trends are altering the
nature of packaged software industry.
Multimedia: Emergence of multimedia products, which combine video, animation, pictures,

voice, music, graphics and text are bluring the line between formerly distinct products and
industries; the international alliances that dominate this field are an indication that multimedia
products will be developed globally.
Downsizing: Distributed computing with client/server solutions is most common in corporate

IT, in conjunction with keeping the economical functions of the mainframe environment,
preferably with identical GUIs and operation procedures.
Client/Server Solutions: This trend combines equipment from different manufacturers,

performance classes, and applications in a network with the server managing data transaction,
and the client handling the presentation and local application processing. As a result of the trend
toward distributed networking, standard software products must be able to run on various
platforms and in a variety of network configurations. Thus, suppliers of utilities/tools software
can create new features and functions to allow the end-user to utilize the expanded application
areas.
Outsourcing: Outsourcing of software and IT services is becoming more and more popular in
medium-sized and even smaller firms who engage specialist teams for specialist IT tasks such as
web server operation and maintenance; this allows to concentrate on core revenue generating
activities. Outsourcing is growing also in the public sector, due to various Government
provisions that allow computer support services to be contracted out to the private sector.
Piracy: Software piracy, the unauthorized production, copying or distribution of copyrighted

software products, is an issue for the software industry. Estimated 1997 piracy rates for one
software market segment, PC business software products, range from a low of 27% in the United
States to as high as 98% in Vietnam, while the European average stands at 43% (Business
Software Alliance data).
Open source software: the open source software is an increasing portion of the developed
software; it is a matter of software protected by copyright, which source code is available and
which license allows to use it, adapt it and redistribute it.
SOFTWARE ENGINEERING STANDARDS

The main source of software engineering standards are ISO and IEC, through their Joint
Technical Committee JTC1, whose task is standardization in the field of Information
Technology. In particular the Subcommittee SC07 works in the area of software engineering and
precisely its area of work is: processes, supporting tools and supporting technologies for the
engineering of software products and systems. Many work items handled by SC07 come with the
support of professional and commercial organizations and communities, many of whom have or
have requested a formal liason with SC07: IEEE Computer Society, NATO, IFPUG
(International Function Point User Group), QuEST (forum for quality in telecommunications).
Most of the software engineering standards concentrate on the development process more than
on product characteristics, treating all software as belonging to the same generic domain,
regardless of the purpose of its use.
Two main reasons for that may be identified.
The possibility to easily modify software product functions makes it difficult to standardize
them and to define a minimum level of functionality or a minimum level of other quality
properties.
In addition software is integrated in a very large number of systems for a very wide range of
applications; this means that the common notion of a standard as a benchmark to compare
similar products is difficult to apply, while the process standards give a possibility to define
requirements applicable to different sectors.
Some aspects of product standardization however exist; the main objective in this case is to
ensure interoperability between products from different suppliers: this is a critical market issue in
many application domains (e.g. telecommunications); on the other side software product
standardization could lead to a reduced flexibility when considering the various design choices.
Software product standardization is mainly related to software development tools (design tools,
measurement tools) and to communication protocols and interfaces.
Study "The Economic Impact of Patentability of Computer Programs"

The European Commission identified the absence of EU-harmonised legislation on the
patentability of computer programs as a potential barrier to industrial growth, competitiveness
and the development of the Internal Market.
Considerable debate has taken place in Europe recently about the patentability of computer
software. Some consider that patents, as in other technology sectors, can promote innovation, by
providing adequate protection of the resources required to develop high-performance software;
this can deliver greater incentives for further investments in innovation. On the other side others
believe that patents could weaken fair competition and discourage innovation.
The aim of this study and of the following consultation launched by the European Commission is
to help the Commission to identify the best approach to achieve the right balance between
promoting innovation and ensuring adequate competition.
The full text of the study (issued in October 2000) may be downloaded from:
http://europa.eu.int/comm/internal_market/en/indprop/study.pdf
The main topics of the study are:

the current legal situation in Europe, US and Japan in relation to computer program related
inventions,
the economics of the patents system for computer programs realted inventions.
The study appears to favour a harmonisation and clarification of European patent laws on
software based on the status quo in Europe; but it puts forth doubts whether economic efficiency
could be achieved by strengthening patent protection in the software industry.
The study approach consists mainly in the analysis of economic literature; for that reason the
study cannot give us useful suggestions both from the methodological and from the data
gathering side. However some key factors identified for patentability in the software industry can
also be relevant to standardisation:
the balance of the positive and negative impacts on the efficiency of patents includes the
trade-off between:
the incentive given by the patent system to innovation: the patent owner can profit
from the invention and reach a temporary monopoly in the market
the anti-competitive impact: the patent will exclude competitors and the monopolist
will charge higher prices to consumers and users.
key factors (typical for the software industry) influencing this trade-off are:
very rapid progress of innovation (products have shorter lives or need constant updating);
technological change in the form of many incremental steps (built on earlier developments);
high costs of initial development relative to the actual production costs, but initial cost often
small in relation to what it is in some other industries;
low costs of production (in relation to development) and importance of scale economies in
production and distribution
“network effects” are pronounced: de facto standardisation can create dominant positions.
After the study publication consultations were launched via the Internet to help the Commission
to identify the best approach to the issue so as to strike the right balance between promoting
innovation and ensuring adequate competition in the market place; the results are published at:
http://europa.eu.int/comm/internal_market/en/indprop/softanalyse.pdf

annex 6.9: Environmental Monitoring Sector
Background:
1. Size and structure of the sector
This is not yet known: it is not a recognised ‘sector’ in statistics, yet has been growing in
importance in recent years. Much of it would traditionally have been part of the Laboratory
Equipment industry (which in turn produces € 48 Billion output per year in Europe). A feature of
the sector is that its services portion is probably bigger than manufacturing. The public service
segment is large. Its function is to provide a basis for environmental action and follow-up.
2. Scope:
Testing and sampling for Air, Water and Soil Quality and Environmental noise. Associated
standardization for testing quality management, certified reference materials, inter proficiency
studies.
3. Importance:
Support for environmental improvement by ensuring:
Acceptable base line data

Support for environmental studies
Actual monitoring in support of regulations
Practices supporting environmental improvement
4. Potential End users of Environmental Monitoring Standards:
Reference and other environmental monitoring laboratories

Certifiers of automatic measurement systems
All enterprises to support the monitoring requirements of Environmental Management
Standards, Life cycle analysis, and environmental performance assessment.
Product Manufacturers (Eco labels)
Certification bodies (Environmental Auditing).
Test houses (noise, emissions, etc.)
Actual use of Environmental Monitoring Standards:

The standard of most importance was stated to be EN 45001, superseded in December 1999 by
EN ISO 17025, “General Requirements for the Competence of Testing and Calibration
Laboratories”. This standard is the basis of the requirements of the national accreditation systems
and of the requirements of the EA (European Co-operation for Accreditation) for the
accreditation of testing (and calibration) laboratories.
In the case of continuous Emissions Monitoring systems (CEMs) Continuous Ambient air-
quality Monitoring systems (CAMs) two European National Environmental Agencies have set
up Certification Systems. These certification systems operate under EN 45011 and rely on

performance standards drawn from relevant CEN and ISO standards, where available. The two
agencies which already have Certification systems are those of the UK (Environment Agency)
and Germany (UBA). It is expected that other countries will follow suit.
CEN TC 264 “Air Quality” has recently (first meeting October 2001) established a working
group (WG22) to look at certification requirements of AMS (automatic measurement systems
covering both CEMs and ambient air quality monitoring systems), and harmonisation across
Europe
Apart from those certification systems for continuous monitoring equipment or automatic
measurement systems, it appears that the EN or ISO standards for air quality or water quality
testing are generally regarded as one of the optional sources of test methods.
Attention to the use of certified reference materials, satisfactory performance in inter laboratory
proficiency schemes, accreditation (EN ISO 17025) and uncertainty of measurement studies to
validate the test results and to demonstrate their fitness for purpose are generally regarded as
more important than the use of EN or ISO environmental monitoring standards. Only when the
EN or ISO standard is specified in European or National regulations do test laboratories across
Europe feel obliged to use them.
No assertions relating to the Impact of Standardization in the Environmental-monitoring sector

as such arose from the April Workshop. However it was asserted there was poor implementation
of EN 45001 (assertion No. 54). A questionnaire to examine this assertion sent to the EA
members indicated that that this assertion was based on lack of information on the role of
accreditation bodies.
Noise Emissions in the Outdoor Environment

Members States are required to adopt European Directive 2000/14/EC331 relating to the noise
emission in the environment by equipment for use outdoors by 3rd July 2001. Examples of
products that are mentioned in the Directive include compaction machines, builder’s hoists and
winches, welding and power generators, compressors, and lawnmowers and trimmers. The
standards being developed for noise measurement will find application in the support of this
directive.
Table 41: EU Regulations supported (or to be supported) by Standardization
Regulation / No of Standard No of WI No of these

Directive issued from ISO TC
Mandated Other Mandated Other
Sludge 86/278/EEC - (8) 13 (10) - (1)
91/271/EEC
Air Quality 88/609/EEC 9 (4) 20 (9) 0 (3)
89/369/EEC
89/429/EEC
94/67/EC
96/22/EC
99/30/EC
2000/66/EC
COM(2000)47
331
Official Journal L162 on 3rd July 2000
Water Quality 76/363/EEC 19 (74) 17 (39) 24 (78)
98/83/EC
Environmental EMAS Reg 5 (5) 2 (1) 7 (6)
Management 84/450/EEC +2 CR
Other Environmental Standardization
Waste - - (2) - (28) - (0)
Soil improvers - - (8) - (5) - (0)
and growing (1 CR)
media
CR = CEN Report,
Brackets ( ) denote non mandated standards
WI = Work Items (Standards at various stages of development)
Eco-Labels
ISO has developed standards for three types of Eco-label:
Type 1 Multi criteria based 3 party certified schemes

Type 2 Self declaration
Type 3 3rd party certification of selected criteria.
Regulations: DG ENVIRONMENT with its Type 1 Eco-label has set about providing criteria
for products which while not standards (in the sense of formal consensus based specification
prepared by the European Standardization Bodies) are developed in a transparent way by having
drafts prepared by a single body or consultants circulated and commented on by national
member state bodies who in turn consult the industry. The specifications are then published in
the Official Journal.
However the use of the European Eco-label has been slow with currently (June 2001) 17 product
groups and 83 licensed companies. However with a campaign of DG Environment currently
underway, it is expected that interest in the European Eco-label will increase.
There is also evidence of increased interest, particularly from industry associations such as
European Leather and Tanners Association who argue that some specified parameters are too
tight.
Non European trading partners have been complaining that the European Eco-label could be a
barrier to trade, for if European consumers start selecting product with the European Eco-label
there will be a demand for products conforming to the criteria set which could favour these
European manufacturers who were consulted in the development process.
The impact of Eco-label “standardization” on trade or the environment is therefore negligible at

present but from reactions of both international trade and from some industry associations could
be significant in future.
The European Eco-label criteria are developed in a shorter time than formal European Standards
and may provide an example of a mechanism to rapidly develop standards required urgently.

ANNEX 6.9: THE FOOD SECTOR
The European Community owes its origins to agreements to give stability for European heavy
industry, and for farmers in the form of the CAP (Common Agricultural Policy) to which major
food exporters such as the US and Australia are opposed. The agro-food sector is of major
importance for the European economy as a whole, with every household spending on average
about 20% of its disposable income on food and drink. The food and drink industry has annual
production worth almost €600 billion or about 15% of total manufacturing output. An
international comparison shows the EU as the world’s largest producer of food and drink
products. The industry is in fact the third largest industrial employer in the EU with over 2.6
million employees or about 11% of all employment in European industry. This is a sector with
relatively low concentration, with about 30% of employment in small and medium enterprises
and just over 26,000 firms employing 20 or more.
Production is wide-ranging, covering both first- and second-stage processing, in a sector

displaying relatively stable overall growth of around 2%, although there are significant variations
between the various branches that make up the food and drink industry. Exports of processed
products from the food and drink industry of the EU to third countries are once again on the rise
after two years of moderate growth. According to data from Eurostat an increase of 13% in value
terms to nearly €40 billion was registered in 2000.
Exports of products from the EU food and drink industry represent more than double the exports
of agricultural products. On the other hand, imports of basic agricultural products exceeded those
of processed products by €3.4 billion. The trade balance for processed food products is therefore
positive, increasing from €5.3 billion in 1999 to €7.4 billion in 2000 and contributes to the
reduction of the deficit resulting from basic agricultural products.
On the other hand, the agricultural sector has an annual production of about €220 billion and
provides the equivalent of 7.5 million full-time jobs. Exports of agricultural and food and drink
products are worth about €53 billion a year. All in all, the economic importance and the ubiquity
of food products suggest that there must be a prime interest in food quality and safety in society
as a whole, and in particular by public authorities and producers to satisfy both the requirements
and concerns of European consumers.
In this project the Food Industry sector was considered as a future area for the application of
voluntary standards. It is recognized that the Food Industry remains highly regulated as a
consequence of the well-established national arrangements and that recent experience shows this
to be essential in obtaining and retaining consumer confidence. However the introduction of
Hazard Analysis Critical Control Point (HACCP) controls by the Food Hygiene Directive
(93/43) has in effect introduced the concept of producer responsibility which is the basis upon
which the voluntary standards system operates. Standards are already serving the food industry
by setting out internationally agreed test methods for analysis of foods and the wide adoption by
the food processing industry of ISO 9000 Quality Management Standards. Taken together there
is evidence that voluntary standards will have an increasing impact in the Food Industry.
A major step in the control of food safety throughout the EU was the White Paper on Food
Safety (COM/99/719), which led to the establishment earlier this year of the European Food
Safety Authority (EFSA) and is an important development aimed to strengthen existing national
regulatory controls. The essence of EU Policy is contained in Chapter 6: Controls. “A
comprehensive piece of legislation will be proposed in order to recast the different control
requirements. Thus will take into account the general principle that all parts of the food
production chain must be subject to official controls.”
Understandably, in the light of the experience in recent years of food safety problems crossing
between member states, an important aspect of the new regulatory regime will aim to have a
harmonized Community approach to the design and development of the national control systems.
Standards in Support of Regulatory Controls

In creating the Community approach to harmonizing the national control systems for
manufactured goods it is surprising that there no mention of standards in the White Paper.
However, there is considerable importance given in Chapter 3 to Scientific Advice and how it
can be presented and retained for access in the future by networks of member state institutes. It
seems self-evident that this will and must include network utilization of the EU standards system
both at national and European level. The scientific basis of the existing regulatory controls is
already able to offer Mutual Recognition of test data on food products between test centres based
on common application of ISO and CEN standards. While it is regrettable that the White Paper
makes no mention of standards it is certain they will continue to have a role in supporting the
harmonization of the regulatory control system. How the necessary scientifically based standards
will be developed remains to be decided, but whatever network undertakes the task there will be
an emphasis on industry consultation and the well established standards development methods of
national standards bodies with the wider European and world-wide bodies CEN and ISO.
For the Food Producer it is considered that standards will have specific significance in areas that
require uniform methods of food analysis. The important control aspect for safety has become
traceability and this has become an area in which EU Directives and Regulations set the
requirements. Food analysis methods are published by CEN as a result of the work done by the
technical committee CEN/TC 275– Food Analysis. Significant European standards from this
group include methods for the detection of Pesticides and PCBs (EN 1528) and Salmonella (EN
12824 based on ISO 6579). In addition it is preparing standards for the detection of Genetically
Modified Organisms (GMOs), Escherichia coli 0157, Staphylococci, Domic acid in mussels and
Aflatoxin in peanut butter, all of which take account of work being done beyond Europe in ISO.
Another technical committee CEN/TC 302 – Milk and Milk Products has identified and adopted
as European standards (ENs) a number of ISO standards defining methods of sampling and
analysis for the Fat Content of Milk (EN ISO 1211), of Whey Cheese (EN ISO 1854) and of
Cream (EN ISO 2540) and has a further Work Programme of 21 items in this field.
The European Food Consumer

It is apparent that the European consumer has a reduced confidence in the safety of food. The
European Consumer’s Organization (BEUC) with its associated body ANEC (for consumer
representation in standardization) consider that standards could play a strong role in building
consumer confidence. They envisage standards covering the food chain to provide safety and
hygiene together with adequate information principally by package labelling to allow the
consumer to make an informed choice. ANEC strongly supports, for example, the activity of
working group CEN TC/275 WG11 that since February 1999 is drafting standard methods for
the detection of Genetically Modified Organisms in food and ingredients. The consumer interest
has also been addressed by the development in CEN/TC 275 of the European standards for

methods for detection of irradiated food (EN 1784, 1785, 1786, 1787 & 1788) to support
labelling with accurate information as required by the Framework Directive of February 1999.
The role of standards is essential in the provision of agreed methods of analysis so that the
presence or absence of chemicals, toxins, microbes, vitamins, etc. can be determined so that food
on sale can be declared safe for consumption. This includes standards produced by CEN to test
the migration of chemicals from materials in contact with food, which have been developed by
CEN TC 194.
According to CEN, concerns were raised by industry (Unilever Research laboratory) and
standardization bodies (NEN Netherlands, AFNOR France) about the need for validation of
rapid microbiological methods. The outcome was the establishment of Microval, a European
certification organization for the validation and the approval of alternative methods for the
microbiological analysis of food and beverages. There is also a standard (prEN ISO 16140) for
the validation of alternative methods for this microbiological analysis, prepared by the CEN/TC
275.
The whole issue of food labelling is a consumer issue in many EU Member States. In particular
the increasing plethora of ‘marks of approval’ on different food products that are trade- or
processor-based has resulted in great confusion. While this not directly a standards issue it could
be addressed by the introduction of harmonized rules for product marking based on declaration
of conformity to a standard requirement for safety and hygiene, leaving product quality claims to
be considered entirely as promotional or advertising material.
The new European Food Safety Authority (EFSA) is an independent authority based on scientific
fact finding which has as its core objective the placing of responsibility for safe food with the
producers, processors and suppliers rather than with the regulators. Now that the EFSA has been
formally established the Commission should consult it to formulate a clear policy linking
regulations and standards for the food industry with the specific aim of establishing a Single
Safety Regime, planned for the unique needs of the food industry and essential consumer safety.
A partnership on standards involving the different elements of the food industry may involve the
creation of a forum of Member States interests based on a regional version of the Codex
Alimentarius delegates supplemented by industry representation. It should also be considered
that the EFSA will be expected to act in the interest of the consumer and operate in a more
transparent manner than a government regulator and so consultation with competent
representatives of all interests will be necessary.
Issues
There are important and continuing major issues:

Continuing reform of the CAP, particularly as new members, such as Poland, join, and also
bearing in mind the need for strategic self-sufficiency
Better quality controls to avoid incidents such as the BSE outbreak coupled with a tightening of
traceability regimes in Europe
Controversies about genetically modified foods, where there may be some distance between the
Community and the US
Possible continuing differences of view with the US in particular on additives and growth
promoters.

Universal Description, Discovery and Integration
A standard that was developed for a need identified in advance by proponents of web services is
poised on the brink of making the kind of impact that addressing conventions (‘plain’ language,
not the underlying IP addresses) had on Internet email: UDDI is the meeting place for Web
Services. An information database of Web Services, a UDDI registry stores descriptions about
companies and the services they offer in a common XML format. Just as businesses list their
products and services in a telephone directory, Web service brokers use this specification to
register services that service requesters can then discover and invoke. Web-based applications
interact with a UDDI registry using SOAP messages.
Conceptually, the data in a UDDI registry can be divided into three different types of telephone
directories: a white pages section that provides business contact information, a yellow pages
section that categorizes businesses and services, and a green pages section that provides
technical information about the services that a business offers. A typical example of UDDI usage
is a stock-ticker application that can automatically locate a Web service that offers stock quotes
using a standardized API.

ANNEX 6.10: The NANOTECHNOLOGY SECTOR
“Nanotechnology cannot be defined in terms of dimensions alone. In fact, it represents a

convergence of the traditional disciplines of physics, chemistry and biology at a common
research frontier.”
Commissioner Phillippe Busquin, Joint EC-NSF workshop Toulouse, October 2000
A useful and simple definition of Nanotechnology is ‘The development and use of devices that
have a size of only a few nanometres.’ This is manufacturing at the molecular, submicroscopic
level, three to five atoms per nanometre. Still at the very early stages, it is predicted to be the
definitive technology of this 21st century. We are not just looking at incremental improvements
to the technology of today – almost all authorities believe that this will be another Industrial
Revolution, comparable to steam power, electricity, communications or the computer.
It is inherently multi-disciplinary and involves physicists, chemists and biologists in studying,

researching and engineering ever smaller structures. Nanotechnology has the potential to impact
significantly on materials sciences and on manufacturing processes, on electronics and
information technology, on medicine and health by allowing for new diagnostic systems and
monitoring systems for bodily functions. Nanotechnology can play an important role in space
exploration, monitoring of the environment and the use of energy resources. It can offer new
ways for biotechnology and agriculture. Nanotechnology has an enormous variety of
applications in the fields that are already distinguished, such as: nano-materials, nano-electronics
and nano-biotechnology. As it also offers the prospect of manufacture-without-waste, it seems to
be most appropriate for the 21st century from an environmental point of view.
Although the science is still in its infancy, the first nanotechnology products are already on the
market and include for instance new semi-conductor lasers and computer hard-disk drives based
on giant magneto-resistance. Novel materials are being marketed, such as spectacles with
scratch-resistant nano-coatings or sunburn lotions containing ultraviolet-absorbing nano-
particles. The bio-chip arrays currently being produced are revolutionizing the design and output
of gene analysis in the fields of biotechnology and biomedicine and are currently used in high
throughput screening for detecting disease, as well as for gene sequencing in the Human Genome
Project.
The new ‘science of the small’ holds out the promise of economic potential almost beyond
imagination. The world market for nano-electronics alone will be worth many hundreds of
billions of euros in products such as more powerful computers, and memories with higher
storage densities designed for use in telephones, cars and the multitude of consumer and
industrial applications that are microprocessor-controlled. The fabrication of nano-structures will
yield materials with new and improved properties for use in organic solar cells, anti-corrosion
coatings, tougher and harder cutting tools, photo-catalytic air purifiers, longer lasting medical
implants, and for transport industry. Nano-biotechnology will provide biosensors and
biomaterials. Here, the impact on medicine and human health will be far-reaching, ranging from
ever-increasing sophisticated DNA-chips and precision drug delivery systems to ever-more
biocompatible materials.

European Leadership and Research
The vast potential and future importance of nanotechnology has been recognised by the EU since
the Fourth Framework Programme 1994-1998 through which 80 projects in this field were grant
assisted. Funding of the order of €45 million annually was provided In the 5th Framework
Programme, 1998–2002. The Sixth Framework Programme 2002-2006 has set this field of
research as one of three Thematic Priority Areas, covering “Nanotechnology and Nanoscience,
Knowledge-based Multifunctional Materials and New Production Processes and Devices.” The
sheer range of significant scientific and economic opportunities involved is clearly indicated by
the following extract from the European Commission call for expressions of interest in relevant
research projects:
Nanotechnologies and Nanosciences

Nanotechnologies represent a new approach to materials science and engineering. Europe enjoys
a strong position in the nanosciences, that needs to be translated into a real competitive
advantage for European industry. The objective is twofold: to promote the creation of an RTD-
intensive European nanotechnology related industry, and to promote the uptake of
nanotechnologies in existing industrial sectors. Research may be long-term and high risk, but
will be oriented towards industrial application. An active policy of encouraging industrial
companies and SMEs, including start-ups, will be pursued, amongst others through the
promotion of strong industry/research interactions in consortia undertaking projects with
substantial critical mass.
Long-term interdisciplinary research into understanding phenomena, mastering processes

and developing research tools:
The objectives are to expand the generic underlying knowledge base of application-oriented
nanoscience and nanotechnology, and to develop leading edge research tools and techniques.
Research will focus on: molecular and mesoscopic scale phenomena; selfassembling
materials and structures; molecular and bio-molecular mechanisms and engines; multi-
disciplinary and new approaches to integrate developments in inorganic, organic and
biological materials and processes.
Nanobiotechnologies:
The objective is to support research into the integration of biological and non-biological entities,
opening new horizons in many applications, such as for processing and for medical and
environmental analysis systems.
Research will focus on: lab-on-chip, interfaces to biological entities, surface modified nano-
particles, advanced drug delivery and other areas of integrating nano-systems or
nanoelectronics with biological entities; processing, manipulation and detection of biological
molecules or complexes, electronic detection of biological entities, micro-fluidics, promotion
and control of growth of cells on substrates.
Nanometre-scale engineering techniques to create materials and components:

The objective is to develop novel functional and structural materials of superior performance, by
controlling their nano-structure. This will include technologies for their production and
processing.
Research will focus on : nano-structured alloys and composites, advanced functional
polymeric materials, and nano-structured functional materials.
Development of handling and control devices and instruments:

The objective is to develop a new generation of instrumentation for analysis and manufacture at
the nano-scale. A guiding target will be a feature size or resolution of the order of 10nm.
Research will focus on : a variety of advanced techniques for nano-scale manufacture
(lithography or microscopy based techniques); breakthrough technologies, methodologies or
instruments exploiting the self-assembling properties of matter and developing nano-scale
machines.
Europe has firmly identified nanotechnology as a priority area and so have other leading industrial
countries. Its importance to the US national interest, for example, has been recognized in the
establishment of the National Nanotechnology Initiative three years ago, with multi-agency federal
funding of $519 million in 2002.
Why and When to standardize

The cross-agency, integrated approach which the European Commission is taking to the
coordination of all research and development programmes in the nanoscience and
nanotechnology fields in itself suggests that the standardization approach should also be
considered and begun at this nascent stage. Concentration now on preparation of information
standards, metrics, test methods, and horizontal standards, to the extent possible, will facilitate
the most rapid development of the technology.

ANNEX 7: Quality Function Deployment
Overview
In order to effectively engage stakeholders in data gathering, analysis and development of recommendations, The
Impact of Standardization User Group (ISUG) has chosen to use Quality Function Deployment (QFD) as the
interactive customer focused methodology for the first workshop.
QFD General Methodology
QFD (Quality Function Deployment) is a planning and analysis tool that helps to identify and evaluate potential
responses against needs. QFD was developed in Japan in the late 60s and one of its first applications was as a design
aid in the KOBE shipyards to improve customer satisfaction and to shorten the time to delivery of new products. It
is now applied to evaluate and improve products, processes and services.
The QFD process constructs a House of Quality with the following information:
WHATS: Structured list of stakeholder wants and needs. The data is in the form of a tree diagram and its
structure is usually determined by qualitative market research (column)
Importance of benefits and needs (ranked column)
HOWS: high level description of the features of proposed product, service or process (row)
Team’s judgement of the strength of the relationship between each feature and the customer wants and needs i.e
between the Hows and the Whats
Team’s judgement of implementation relationships between the different features (roof: this half matrix
resembles the roof of a house hence the term House of Quality)
Evaluations and benchmark goals. This is the computed rank ordering of the features based on the weights
assigned in the relationships. It can include comparative information on “competitor’s” performance and
specific target benchmarks.
Planning matrix is an important extension to the core HOQ. It contains a series of columns that represent key
strategic product/process/service planning information and “embarrassing” questions so called because
many organizations either don’t know the answers or cannot agree on the answers. (e.g. How important is
this need to the stakeholder? How well are we/others doing in meeting this need today? Tomorrow?)
There are optional additional matrices and relationships that can be added e.g. cross correlation within the HOWS.
The definition and range of axes and cells for any QFD are determined by their ability to be useful in the analysis
and in how they can help determine future steps and resulting actions that are agreed based on the data presented by
the process.
QFD on the Impact of Standardization
The starting point of our QFD is the Customer Requirements i.e. the needs being addressed and the corresponding
benefits being derived from standardization. The customer’s needs/benefits are normally derived from the actual
words of the customer by any of several methods. In our case we start with the assertions some of which have
already been circulated to all participants. The first step will be to have a series of round robins to get additional
assertions from all participants in each of the Breakout themes.
List of stakeholder / customer needs and benefits expected from standardization. Data will be developed in round
robin sessions relevant to each of the benefit dimensions of the study e.g. innovation, competitiveness, trade,
health and safety etc
Affinitize the data i.e. structure in a tree diagram, where possible supported by market experience and data. This is a
group wall charting exercise.
Each breakout will establish a high level description of the methods and sources used to provide information and
measure on impact and satisfaction in qualitative and quantitative terms. These are the features referenced in the
general methodology above.
Team’s judgement of the strength of the relationship between each feature and the wants and needs i.e. between the
Hows and the Whats. Guidance will be provided on the weights and other parameters during the Workshop.
Team’s judgement of implementation relationships between the different features may not be necessary. It will only
be tackled if there is time available.
Evaluations and benchmark goals. This is the computed rank ordering of the features based on the weights assigned
in the relationships. It can include comparative information on deliverables other than ENs for example and
address specific target benchmarks.
Planning matrix is a critical part of the Impact of Standardization QFD. It will be used to agree the specific analyses
to be undertaken during the next phase of detailed desk and field research leading up to the Study
recommendations and the second workshop to be held in September 2001 timeframe
Summary
QFD is a structured process, a visual language, and a set of interlinked engineering and management charts which
uses proven quality management and problem analysis tools. It captures value measures and statements from the
stakeholders in their own words/terms. The result is a systems engineering process that prioritizes and links
development directly to user needs and assures product/process/service quality as defined by the
stakeholder/customer/user. The QFD process is being used to ensure that there is a systematic approach to
identifying and quantifying the benefits expected and derived from standardization. In particular the intent is to
include all major requirements identified by the stakeholders who participate in the first Workshop in addition to
meeting the specific DG Enterprise requirements on the study.
Reading list
Extensive information is available on the use of QFDs in the literature. Examples of published material includes:
"Quality Function Deployment: the unused tool" by V, Bouchereau and H. Rowlands in Engineering Management
Journal, February 2000 pages 45-52
"Advanced QFD; linking technology to market and company needs" / by M.Larry Shillito (Wiley, 1994)
Quality Function Deployment: how to make QFD work for you / by Lou Cohen (Addison-Wesley, 1995)

Table 42: Assertions from Workshop April 2001
# Action Has Resulted in … Measure / Analysis Examination results
1 TRADE Easier and faster logistics at Cost and speed of pre- and Documented in Egyedi study
reduced cost post- containerization Referred to in Interim Report.
COMPETITIVENESS Improved commerce and rate and degree to which old No further action intended unless Steering Group wishes.
profitability way has been replaced (Robust case, further data could be extrapolated).
Standardization of bulk container sizes Econometric analyses required
to factor out other
parameters
2 INNOVATION Industry came together (operators, Market growth and trends Data is available
providers, manufacturers) to achieve Changed communication system, all (Effect on Public Policy e.g. Directive 98/46 on high speed trains, shall
Specification of the GSM system interoperability across country, attributable to standardization be considered)
making use of the frequency bands number portability, services, etc e.g. application in signaling
chosen for high-speed trains
3 CONSUMER Has improved DIFFICULT to isolate effects of the Written on extensively in Interim Report
PROTECTION quality of organizations and standard. Consider
Creation of a quality management products (esp in SMEs) growth in ISO 9000
standard (ISO 9000) and its application e.g. reliability of certifications
components in the reduced scrap
automotive industry reduction in failure rates
reduced lead-times
4 FREE MOVEMENT Eliminated national barriers to Import/Export trade statistics for Seen as a building product.
Agreement on a series of European trade for many SME's France, Germany and the Not planned as major item
standards for fibreboard / MDF / There is no big manufacturer Scandinavian countries
chipboard in CEN/TC112 Enlarged marketplace
5 INNOVATION Has enabled professionals/consumers Availability of different brands in Accepted to be true – no plans to pursue
Development of ISO film speed grades to purchase film in nay country as different markets e.g. 1970 vs. 2000
appropriate to needs
More competition and increased
marketplace
6 INNOVATION Demonstrates the role and impact of #options (few, many, Many and repeated efforts to obtain information from Company sources
standardization of watch batteries standardization in market standardization (IEC)) and European Battery Mnfrs. Assn. – promises, but no delivery.
development
7 SAFETY Established a universal Degree of implementation Not seen as part of our general remit.
Standardization of icons, symbols, communication language Will review if required.
pictograms References to these in OJ and in Examined only under Safety of Machinery.
Trade enabled without special labels legislation
garment care labels required
8 SAFETY – CONSUMER Better UI Not yet pursued as item in its own right as it falls into and between
PROTECTION Avoid social exclusion sectors.
“Use for all” standards for a specific
community, e.g. tactile standards, ITU
Standards for raised dot on central key
Guidelines for websites (s/w)

9 CONSUMER PROTECTION Subject of present EU Directive -
Standards and standardization as
answers to fears about EMF
10 TRADE Assertion confirmed but felt to be too weak for inclusion in report.
Availability (whether or not for
purchase) of international
standards in all countries e.g.,
Japan
11 SAFETY Improved standards for Failed to get good responses from Institutes of Corrosion – assertion, in terms
Corrosion protection of steels protecting steels in the offshore of standards, appears incorrect, but
industry
12 SAFETY Certification of Welders Not a standardization issue, not being pursued
Impact of professional Welding (Personnel certification)
Certification Standards
13 Degree to which EDIFACT EDIFACT The costs and benefits of business-to-business EDI are both potentially very high, and the impacts vary substantially from
standards are used firm to firm as many case studies and textbooks have shown. Standardization is just one parameter. The outcome is
(Measure / Analysis dependent on re-engineering efforts within organizations as much as on rationalization of relations between organizations and
their information systems across the supply chain. “the socio-economic environment, the quality of foresight in management
DEGREE TO WHICH USED) decisions and the level – local, national, regional or global – at which implementation occurs all play a major part in defining
the outcome”. EDIFACT while relatively successful has had many sectoral variants at the data description level. It is now
increasingly being replaced by Internet based systems. See #28 below.
14 INNOVATION As evidence of implementations
Data on downloads from ETSI and use
website of specs and upgrades
15 COMPETITIVENESS Obtain AECMA study on “Return on All available AECMA studies have been obtained,
standardization investments”
16 INNOVATION, TRADE No design constraints Pursued with KAN, German experts, INRS, now with John Deere and other
Contribution of standardized Extensive range of what can be manufacturers, referred to in Interim Study, not as robust as hoped
Power take-off (PTO) drives connected, improved safety /
elimination of accidents
17 EN50121 Electromagnetic Problems in meeting the Time taken to provide proof of
specification and degree of compliance – Delay.
standardized testing required.
All possible interactions have
not been considered in advance.
18 EN45545 Fire safety. (As with Good standard, but there are Approval time. Not in our remit
materials to be found in trains). numerous exceptions. National
operators set their own
standards. The standard needs to
be extended.
19 Minimal operating standards for Scarce hospital funds get Price competition amongst suppliers. Companies’ presence in market.
surgical instruments. redirected. Less product differentiation. Public procurement.
Companies have been forced out of Demand for calibration services.
the market because were not selling
right equipment. Opportunities for
innovation have been lost.

21 Construction Products. EOTA New products require either EU Has been an obstacle to innovation Assertions are correct, but it is not intended to pursue them.
specification. standard or EOTA specification. compared with other sectors. Construction products are only sector where all standards are mandatory.
Good example but not amongst CEN standards in pipeline but
our sectors. national. standards will cont to
apply.
22 98.70 Petroleum products (sets Some crudes are not acceptable. Shortage of refinery products. Loss of Outside our remit.
critical parameters: Cetel Index, profitability. Less competition and
sulphur content, etc). industry dominance. More
Good example but not amongst competition for some crudes.
our sectors. Investment in new refining capacity.
Problems of availability.
23 ENVIRONMENT Standards are about to come into This is a future issue.
effect following industry There is a CEN BT Taskforce (TF 118) developing standards for “Solid Recovered Fuels” from non-hazardous, mono – and
Biofuels consensus. mixed wastes with the purpose to stimulate the solid recovered fuels market. (ref e 69, e 70)
CEN /TC 335 Solid Biofuels deals with products from agriculture and forestry and vegetable wastes
Liquid Biofuels are stated to be within the scope of CEN/TC 19 (private communication Guido de Jongh CEN/CMC) they do
not appear in their current business plan nor work programme.(e 74, e75)
The EU Commission Dr. Franz Fischler spoke on the 18th September 2001 regarding an EC initiative to promote bio-ethanol
and bio-diesel. (e 72)
However the EEB claim that the EC’s proposals “make no economic or ecological sense”. (e 73)
The controversy is also being debated in the US (e 52)
Standardization for bio-fuels is wider than the characterisation and the testing of these fuels as the equipment for utilising
these fuels should also be standardized. This is a matter for a variety of equipment and machinery TCs.
24 ENVIRONMENT Would be reduced availability. Sales of MTBE will fall. Not a standardization issue at this stage. It is subject to controversy with opinions
Potential MTBE ban (a high by the Scientific Committee on toxicity, ecotoxicity and the environment (CSTEE)
octane chemical substitute). (e 2)
25 INNOVATION May prevent use of alternative Technology neutrality is very
technologies. Innovation and important (classic result of “poor
Third generation UMTs. promotion of alternatives will standard”).
become difficult. Choice will be
reduced.
26 Single UNIX specification No longer sufficient for Some products have succumbed. A single UNIX specification arrived to late. By then Windows had won the desktop
companies to have a code, but Market consolidation. Have extended war. A rough projection of the UNIX market from 1988 to 1998 based on IDC's
must now meet specification the sales of UNIX (compared with MS numbers gives us about $250 Billion, and HP says that 30% or more of that market
(since 94). NT) due to renewed consumer is standards driven. This translates into a $75 Billion lost impact over 10 years.
confidence. Has been more These numbers indicate the apparent "lost opportunity" from the GUI (Graphic
differentiation on quality (rather than User Interface) fiasco and show what inability to reach consensus can actually cost
price) and greater sales and in real missed business opportunities.
investment.

27 E-COMMERCE 80% of MNEs are using two systems. The current impact of standards in relation to internet e-commerce (especially SME business to consumer) is limited
EDI for Internet trading. A framework is now becoming because there are too few generally accepted standards above the transport protocol level. Since the growth in the internet –
(There are several substitute available for e-commerce. many so called interoperability ‘standards’ from different sources (formal, consortium activities, industry alliances) are
world standards including Development of new XML system competing with one another (see recent CEN Workshop Agreement on Frameworks, architectures and models for e-
UN & ANSI. Has been will benefit SMEs for whom EDI was commerce, for an overview). Many issues of trust, confidence and privacy need to be resolved before there is a significant
agreed that UN standard expensive. increase in this channel and utilization of consensus standards
will apply).
and the expense of conversion. THE OECD WORKING PARTY ON INDICATORS FOR THE INFORMATION SOCIETY HAS PREPARED A USEFUL
Good example, but future one! STATUS REPORT ON “DEFINING AND MEASURING E-COMMERCE” AND IS CONTINUING THAT WORK TO
DEVELOP A FRAMEWORK FOR MEASUREMENT PRIORITIES IN E-COMMERCE. MEMBER STATE STATISTICAL
OFFICES ARE AN IMPORTANT PLAYER IN THESE DISCUSSIONS AND ARE THE KEY TO ENSURING CONSISTENT
STATISTICS AND INTERPRETATIONS ACROSS THE COMMUNITY. IT IS ENVISAGED THAT A MULTIPLIER
APPROACH (AS IN MATUURA’S WORK AND FOLLOW ON REPORTS) MAY BE THE BEST WAY TO ESTIMATE AND
TRACK THE IMPACT OF STANDARDIZATION IN THIS BROAD AREA. THIS HAS THE BENEFIT OF BUILDING ON
THE OTHER VALUABLE STATISTICAL WORK IN THIS AREA.
28 Assertion: Promote TS (& Bring experts into system rather than Example: developments in electronic
CWA) rather than EN. keeping them separate in committees signatures. Joint operations between ATTENTION HAS BEEN DRAWN IN THE STUDY OBJECTIVES TO THE
“Quick & dirty standards and forums (for a). CEN & ETSI have led to POSSIBILITY OF OTHER DELIVERABLES. THE CURRENT USE OF SUCH
could be very effective in specifications being developed within DELIVERABLES NEEDS TO BE BETTER UNDERSTOOD. HOWEVER THEY
fast-moving sectors”. one year. ARE RELATIVELY NEW AND THERE IS LITTLE HISTORY OR EXPERIENCE IN
THEIR USAGE TO DATE. NOTWITHSTANDING THIS THE NEED FOR
FLEXIBLE POLICY MECHANISMS IS RECOGNISED AND MORE
WORKSHOPS AND ADDITIONAL DELIVERABLES ARE BEING AGREED AT
EUROPEAN AND INTERNATIONAL (ISO/IEC/ITU) LEVELS. PROMOTION
AND MONITORING OF THESE AND OTHER NEW DELIVERABLES WILL BE
AMONG THE PROPOSED STUDY RECOMMENDATIONS.
29 TRADE Standards in the telcoms area have International trade since Directive .
RTTE Directive. (Has been led to easier trade in terminals. took effect.
a transition period). No longer need more than one
associations approval.
30 SAFETY; Set up European A single point where all such data Accurate, timely, detailed statistics, To be considered among suggestions in final report
Agency for Accident Europe-wide are brought together – available
Statistics eventually, basis for decision-making
and improvements
31 SAFETY; List all Presumption of conformity is EU Commission standing committee Safeguard clauses have been listed and being actively pursued with various
safeguard clauses added to withdrawn so that TC may improve 98/34 parties, back-up statistics have not been found (‘before’ statistics only)
EN standards standard No.s of such clauses added, accepted
by member states, data provided with
request for clause(s), accident data
before and after addition Cases made
for new clauses, EU OJ, French
report safeguard clauses MSD 1-
handed chainsaw EN 703
32 SAFETY; Incorporation of Reduction in electric appliance Accident statistics Have not been able to find any causal links, statistics too general, human factors
IEC double-insulation accidents overwhelming,.
requirement in electric
appliance standards
33 SAFETY; Incorporation of Reduction in relevant appliance Accident statistics Not a standardization item – wiring regulations, national, regional and municipal.

ELCB’s in certain electric accidents Evidence shows continuing decline of electrical accidents and ELCB’s probably
appliance standards have a major effect.
34 SAFETY; Improved safety Improved safety for agricultural Improving the safety provisions of the Associated with assertions no 16 and 31.
suggestions for agricultural workers standards – ask the TC experts
machinery, from German
research and tests
35 SAFETY; New product – New products will be tested in same Quick response to new products Under consideration for recommendations
no standards, e.g scooters. way.
Test houses to set up Basis for standards fast-track
common test sheets
36 SAFETY; More emphasis Better standards with accidents less Accident statistics TUTB ref. Cement mixer trucks deaths
on ‘foreseeable misuse’ likely This may be supporting evidence in safeguard clauses case.
from wider representation
on TC’s – example of
cement mixer deaths while
cleaning
37 SAFETY; Include specific Better standards with accidents less Accident statistics KAN consultant Michael Gose (interview) has taken place
‘safety experts’ in TC’s likely
38 SAFETY; Due absence of Issue of standards will make clear if No.s of machines not complying with -This assertion is correct until all horizontal standards are in place,
some horizontal standards they do not include the essential the essential requirements
e.g. noise, EN’s are issued requirements, manufacturers must
incomplete, so this should then provide otherwise
be clearly stated
39 SAFETY; Harmonized Safety reduced in certain Comparison of selected safety features KAN review ref. Germany
standards may lead to lower member countries KAN review and similar in France refutes this by questionnaire to safety engineers,
safety where best practice in use comments are included in Interim report
is not adopted
40 HEALTH; reduction of noise Positive health impacts to users Data and statistics of Test Institutes, -EU Commission report
and vibration of consumer and due less noise and manufacturers test data that has to - CEN Noise consultants
commercial products be sent to the Commission - TUV ANEC reports
41 CONSUMER PROTECTION; Better consumer and other National bodies attendance at TC’s To be included in Final Report
More balanced representation in interests impacts in preparation fully funded – time, costs, travel
EN TC committees of standards, more consensus on
their application
42 CONSUMER PROTECTION; Limited problems from installed Reports on incidences from hospital Personal contacts with some hospitals and EMC consultants suggest this not
Interference from GSM devices base of equipment, disappearing intensive care units around Europe worth following
on emergency systems reduced due effects of standards
due EMC Directive

43 CONSUMER PROTECTION; Lower child safety due industry Reduction in relevant child-car New Accident Statistics Agency – to be considered as per assertion 43
Another example of lack of domination of TC’s accident statistics
consumer representation leading
to lower safety – ISOFIX
universal child car restraint
systems would reduce incorrect
installation dramatically, and
70% are currently wrongly
installed
44 CONSUMER PROTECTION; Development of ATM’s, credit Credit card v. cash transactions, in a True –
Standardized size for credit cards card payment worldwide, country.
improved safety (less cash), No. of people using credit cards when
ability to travel etc. traveling
45 CONSUMER PROTECTION; Worldwide development of No.s of films Not in our remit

standardized dimensions and photography, no.s of films used; Development times
exposure ratings of film short development time enabled
due standards
46 FREE MOVEMENT; choose 2 Compare inter EU/EFTA trade Comparison of trends and market Still being pursued, opposite may be true– unlikely to support theory due
categories of machine – one, for the 2 categories – second shares structure of textile machine industry.
textile machines + non- category should demonstrate
completed C-standard type, more movement
second, C type
47 FREE MOVEMENT; Member Technical barrier to trade, 1.EN 60335-2-27 deviations France Not of great relevance but under questioning
states implement decrees reduced circulation of the good and Spain, UV sun-tanning
deviating from EN’s within the EU appliances.
2. EN 60335-2-24 Listerine, France,
refrigerators
48 TRADE; The US and Japan do Despite ‘robustness’ and record No. of manufacturers with 2 standards Trade associations
not use IEC standards: where of these standards, their non-use – IEC + a US one
they do they modify them, as is a technical barrier to trade
does EU to a lesser extent
49 INNOVATION; EMC Directive Enables more widespread use Numbers of non-compliant products We shall try to ask a suitable question, but the reply may be that more non-
has aided innovation of electronic devices complying products are on the market than before.

50 FOOD The implementation of Improved safety of food Number of Salmonella cases recorded Information to be obtained from national food safety authorities and members of
EN12824(based on ISO6579) products being traded between and evidence of control of outbreaks CEN/TC 275
provides a standard method for EU Member States when they occur
the detection of Salmonella
contamination in food
51 MEDICAL DEVICES: Reduced risk to patients Traceably in practice goes beyond the hospital / clinic or doctor in Europe. Data sought from EUCOMED and EDMA on
Standardization of traceability in this. From information to hand the traceability required in European standardization (Based on the essential requirements of
implants (traceability extends the directives) are working well.
only to supply to hospital) ‘Mistake’ statistics QUIC website: www.quic.gov. repeatedly unavailable – accessed by http://www.ahcpr.gov/qual/quicfact.htm

52 MEDICAL DEVICES: Reduced risk to patients ‘Mistake’ statistics QUIC website
Standardization of electronic www.quic.gov. see assertion no. 51
data for drugs, devices, and
patients – systems hospital to
hospital vary at present.
53 COMPETITIVENESS; Lower risk of litigation with Costs of preparation of standards Review in Volume 27 2000 William Mitchell Law School, University of
Common law (US etc.) does not European standards, more Minnesota. The 741-page review was obtained and read. No references to this
permit use of Hazard Analysis competitive preparation of specifically. It was raised with some of the authors, who were unaware of it.
for standards, Civil law (most of standards Interim includes some comments,
Europe), does
54 ENVIRONMENT Competition between #s of certificates each has issued This assertion seems to arise out of mis-understanding of the role of EA
consultancies, certification (European co-operation for Accreditation) and its national member bodies as
Poor implementation of ISO bodies, accreditation bodies: against that of Certification bodies (accredited or otherwise).
45000 (ISO 45000 in itself is Action: EC should clarify
fine) responsibility of these groups
55 ENVIRONMENT People complying with trees planted vs. trees cut down This is a controversial area explored in literature (e.g. e54) and widely held
standards are encouraged to do (sustainable forest resources) opinion of the environmental NGO’s. This has been discussed in Section 25 of
environmentally unsound things toxic emissions (heating appliances the Interim report.
(they may have no choice) standards)
Action: Political decision to be
Standards do not incorporate taken on how much
environmental requirements (or environmental protection can be
do. are not good enough) the subject of standards
56 ENVIRONMENT People use a different standard
they prefer (because voluntary)
Environmental standards are not
mandatory
57 ENVIRONMENT Results in lower standards Measuring pre-legislation vs. post-
Inferior products can’t be legislation levels permitted
Higher standards replaced by rejected or it is difficult to do so
lower standards (but some AN 95 doesn’t work
countries “lower” requirements Action: Look at overall
were raised) (E.g. heating European levels; some think
appliances; NOx emissions overall level of cars emissions
higher than allowed by national has been reduced.
legislation in Austria, Germany,
Switzerland)
58 ENVIRONMENT Lower costs and increases Company cost records
efficiency for companies (and
ISO 14000 for Environmental presumably improved
Management Systems environment/better for society)
59 ENVIRONMENT Overall emission has been By looking at levels before and after Not a standardization issue directly. A different meaning for the word “standard”
Legal requirements for reduced Note: some Member States’ levels as in use for this study – a regulatory issue.
standards: cars should have a will have come up and some gone
max level of emission down, but look at the overall level in
Europe

60 BATNEC (Best Available Advantage expected Can’t yet be measured BATNEC underlies all standardization of products (See Section 25 of the Interim
Technology not entailing Report)
excessive cost) are developed +
adopted by Commission to
prevent pollution in water, soil,
etc.
(alternatives to standards)
61 ENVIRONMENT Solves problems of manufacture No of tyres A successful CEN CWA has been hailed as a solution to the waste tyre problem (e
of tyres: too many used ones 58) (CWA 14243-1 Post consumer Tyre Materials and Application Part 1)
Tyre recycling initiative is
underway by CEN Workshop
Agreements
62 CONSUMER Raised quality of large industries Individual companies complaints and Trade associations, test houses, certification bodies
PROTECTION and SMEs across Europe other data Literature source of benefits
Magazines and consumer associations: can they associate certain standards with
ISO 9000 series Increased competitiveness Extra data, marketing info from consumer satisfaction?
companies
Consumer satisfaction ?
Note: ISO 9000 taken as a

replacement for type testing: this
was a political decision
(negative)
63 TRADE, Removal of trade barriers, Extent of export/import GSM situation already commented on. Indexed price comparison over a number of
increased economic activity years would not isolate standardization from manufacturing economies – not to be
CONSUMER PROTECTION Reduced price to consumers. Cost to consumer for any group of pursued.
products (adjusted for inflation over
New Approach Directives and Don’t have to adjust products for last 15-20 years) Individual companies, trade associations
supporting standards (and in different Members requirements. Companies profit and time to market Consumer association
general all standards) Cheaper products Consumer pricing
Improved profitability
Quicker to market
for Ericsson (mobile phones)

64 COMPETITIVENESS Reduced Cost in manufacture Official standards Trade Associations
Cost reductions due to and purchase Trades statistics Companies
replacement of company Bigger markets and profits Company data National sources
specifications or National
Standards by International
Standards.
65 CONSUMER PROTECTION Reduction of radio interference (developing area) Market surveillance Authorities; Regulators; Companies
between products
EMC Directive
→ Harmonised standards

66 TRADE Removal Barriers to Trade. Cost of testing 50-10 KDM in one Runs contrary to some suggestions we have obtained.
Positive (Road Construction Reduction of costs. European company.
Machinery) Improvements in safety and
Mature environment
Standardiz Cost reductions 2- 4%
ation
+ system
CEN 474 (979?)
EN 500
More companies on Global
Market Place ISO Standards
67 Standardization can lead to Exchange of knowledge and Start now to compare before and after! Industry (surveys)
innovation in, for example, new experience;
electronic control systems Cost reduction;
(refers to construction cheaper even though more
machinery and earth moving complex electronic controls
equipment), ISO, being drafted.
68 Standards can only lead to Market is not working Refers to a construction product, and to pressure vessels, where standardization has
enhanced trade if there is Loss of opportunity not yet harmonized.
political, legal and economic Benefits expected not obtained
commitment by all parties More world wide competition Road machinery circulates freely despite lack of vertical standards.
(refers to Pressure Equipment /
Plastic pipes) Nothing concrete to follow here.
Problems: No EU Standards for
on the public road machinery /
conflicting national requirements
exist
69 Bad standards (which are Standards not followed in Clearly a truism, no follow up.
voluntary) have less adverse practice
impacts than do bad laws!
70 Market surveillance self- Sub-standard goods and illegal Sub-standard goods, misdeclared as being in conformity, are certainly on the
certification can lead to are on the market market
problems.
Many SME’s are not able to go
through the same process
71 Standards and/or regulations can Reduction in product variety. Individual complaints. Considered in Interim Report. Question included in MD notified bodies.
sometimes inhibit innovation. Use of single technologies. Variety of products. Patent numbers considered irrelevant in this context.
Lack of technical progression. More patents than standards.

Annex 8: Questionnaires
SEE SECTION 1.6.5 IN THE MAIN REPORT

Questionnaires sent to the following groups.
Aeronautics – 4 types
ALS (Airlines)
LMF (Large Manufacturer)
MOS (Maintenance and Overhaul)
SME (Small and Medium sized Enterprises)
Environment
Questionnaire Re EN ISO 14001 / EMAS to Individual Companies and Manufacturing Associations (for
Members who have Implemented ISO 14001 / EMAS)
Questionnaire to Environmental Organisations Governmental and Non Governmental)
Gas Utilisation
Gas utilisation accident statistics and benefits to the environment
EN 45000
Questionnaire Regarding the Impact of the EN 45000 Series of Standards
Biomass and Biofuel Organisations
Questionnaire to European Biomass Association and Other Biofuel / Biomass Organisations
Environmental Monitoring
Questionnaire to environmental Monitoring Laboratories
Medical Devices
Questionnaire to notified bodies for Medical Devices
Questionnaire re the use of standards in the purchase or public procurement of medical devices
Software Engineering
Questionnaire re Software Engineering
General
An Early questionnaire sent to Trade Associations
NOTE: To reduce their size the questionnaires have been “run-in” to each other.

Questionnaire 1
IMPACT OF STANDARDIZATION 10-MINUTE QUESTIONNAIRE
Airlines ‘ ALS’
Name
Position
Company
E-Mail
Address
Tel.
Fax
Which type of aircraft do you mostly operate (please a)

Airbus Boeing

McDonnell Douglas Mixed fleet

Other (please specify) Helicopters

STANDARDS APPLICATION
Which are the main standards are used in your organization?
Please list mainly international and European, but also national, company and any other type of standards
STANDARDS IMPACT
Do you think that standards have an impact on the following? Please rate the impact from
–5 to +5 (negatives for
negative impact and positives
for positive impact).
1. Costs of parts, systems
2. Availability of parts, systems
3. Your inventory levels
4. Maintenance – time taken for a task or job
5. Maintenance – quality of work
6. Aircraft reliability
7. Operational safety
8. Decisions on purchase of new aircraft
8a Other (please describe)
Questionnaire 1 Page 2 of 2
Have standards helped your company in relations with suppliers? – Please write comments Please rate the impact from
here: –5 to +5

Who shows interest in standardization and standards in your company, i.e. discusses standards Please rate from 0, no
issues, asks questions about them? interest, to 5, very strong
interest
Director of department
Senior engineers, section heads
Only those directly involved, or where necessary
PLEASE WRITE COMMENTS HERE ON ANY STRONG STANDARDS IMPACTS THAT YOU MARKED ABOVE,
WHETHER POSITIVE OR NEGATIVE, AND IF POSSIBLE PLEASE GIVE SOME FIGURES AND FACTS TO SUPPORT
YOUR COMMENTS:
Questionnaire 2
Aeronautics Larger Manufacturer ‘ LMF’
Name
Position
Company
E-Mail
Address
Tel.
Fax
Please identify your industry within aeronautics

ATC Communication Systems & Components Hardware Hydraulic /Pneumatic

Aircraft Operating & Control Systems Inflatables

Airframes & Components Interior Equipment & Furnishings
Avionics Systems, Instruments & Components Landing Gear/Wheels & Brakes
Chemicals Lighting Systems & Equipment
Coatings & Paints Metals & Metals Services
Composites Oxygen/Fire Suppression Systems
Computer Software/Services & Databases Test & Inspection Equipment
Electrical & Electronic Components & Tools & Machines
Hardware
Engines & Engine Components, Propellers Training Equipment & Services
Crew/Passenger Supplies & Services Other

Questionnaire 2 page 2 of 3

Why do you use standards?
A. Specified by your customer B. Market reasons Company internal reasons?
STANDARDS IMPACT
1. Your manufacturing costs
2. More suppliers to you, so better buying prices
3. Your inventory costs
4. More competition against you, if really a worry mark –5!
5. Opportunity to sell to more customers in Europe
6. Opportunity to sell to more customers outside Europe
7. Impact quality of your work
8. Make it easier to introduce new products/processes
How do think smaller companies (‘SME’s’) will react to greater competition? – will they - Please list what you think is
the most likely, from 1 to 5
4a Specialize more, develop better skills
4b Develop new products
4d Compete harder, plan to win
4e ‘Downsize’ – cut costs and reduce employment
4f Close or be taken over
9. Have standards helped your company in relations with customers? – Please write comments Please rate the impact from
here: –5 to +5
10. Have standards helped your company in relations with suppliers? – Please write comments Please rate the impact from
here: –5 to +5
11. Who shows interest in standardization and standards in your company, i.e. discusses Please rate from 0, no
standards issues, asks questions about them? interest, to 5, very strong
interest

11a Board of Directors
11b Chief Executive/Managing Director/President
11c Marketing Director, Sales Director
11d Lower-level staff of the above departments
11e Only those directly involved, or where necessary
YOUR COMMENTS:
Questionnaire 3
Aeronautics Maintenance Overhaul Spares ‘ MOS’
Name
Position
Company
E-Mail
Address
Tel.
Fax
Select your Industry aone or more

Airframes Engines

Avionics Interiors

Other (please specify)
STANDARDS IMPACT
1. Your competitiveness
2. Buying prices
3. Your inventory levels
4. Impact profitability - very bad, mark it –5! (very good +5)
5. Opportunity to get more customers in Europe
6. Opportunity to get more customers outside Europe
7. Impact quality of your work
8. Affect administration/engineering costs
here: –5 to +5
here: –5 to +5
interest
Questionnaire 3: page 3 of 3
YOUR COMMENTS:

Questionnaire 4
Aeronautics ‘SME’
Name
Position
Company
E-Mail
Address
Tel.
Fax
Please identify your industry within aeronautics

ATC Communication Systems & Components Hardware Hydraulic /Pneumatic
Aircraft Operating & Control Systems Inflatables
Airframes & Components Interior Equipment & Furnishings
Avionics Systems, Instruments & Components Landing Gear/Wheels & Brakes
Chemicals Lighting Systems & Equipment
Coatings & Paints Metals & Metals Services
Composites Oxygen/Fire Suppression Systems
Computer Software/Services & Databases Test & Inspection Equipment
Electrical & Electronic Components & Tools & Machines
Hardware
Engines & Engine Components, Propellers Training Equipment & Services
Crew/Passenger Supplies & Services Other
STANDARDS IMPACT
1. Your manufacturing costs
2. More suppliers to you, so better buying prices
3. Your inventory costs
4. More competition against you, if really a worry mark –5!
5. Opportunity to sell to more customers in Europe
6. Opportunity to sell to more customers outside Europe
7. Impact the quality of your work

8. Other (please describe)
How do think smaller companies (‘SME’s’) will react to greater competition? – will they Please list what you think is
the most likely, from 1 to 5
4a Change by specializing more, developing better skills
4b Change by developing new products
4c Change by developing new markets
4d Compete as hard as possible and plan to be a winner
4e ‘Downsize’ – cut costs and reduce employment
4f Close or be taken over
here: –5 to +5
here: –5 to +5
interest
YOUR COMMENTS:
Questionnaire 5
Impact of Standardization Study
Conducted by ISUG on behalf of the European Commission
Questionnaire Re EN ISO 14001 / EMAS to Individual Companies and Manufacturing Associations (for Members
who have Implemented ISO 14001 / EMAS)
1 Number of years since your organisation was certified to ISO 14001

Or since certified under EMAS regulations

2 Ratio of cost implementation and maintenance versus cost saving arising:
3 Other benefits (not measurable in cost terms)
4 Negative aspects for the organisation’s operations:
5 Other comments on the impact of EN ISO 14001 or EMAS:
Optional:
Name
Position
Organisation
e-mail
Address
Telephone
Fax
Thank you
Questionnaire 6
Questionnaire to Environmental Organisations

(Governmental and Non Governmental)
(Please to not include packaging standards EN in your answers)
1 Do European products and process (other than packaging standards) standards in general have a
negative or beneficial impact on the environment?
Rate from +5, highly beneficial impact, to –5 for serious negative impact on the environment.
2 Specifically rate the impact of European standards in the following sectors of the environment.
(Rate +5 to –5 with 0 for neutral or no impact)
Medical Devices
Aeronautics
Environmental Monitoring
Gas Utilisation
Pressure Vessels
Electrical Equipment
Mechanical Engineering
Electronic Commerce
Food Hygiene and Safety
3 List any specific standards which in your opinion have a significant impact on the environment –
Indicate whether beneficial (+) or not (-) and rate as above

Standard Impact
4 Do any European standards conflict with European or national environmental regulations?

Please list the standard and the regulation (not packaging standards)
Standard Regulation
Questionnaire 6 : page 2 of 2
5 Do any European Standards have lower environmental requirements than previously existing
national standards?
Please list examples
EN Standard National Standard
6 Any other comments on the impact of European standards on the environment:
7 Is your organisation: Governmental / Non Governmental (delete as appropriate)

Optional:
Name
Position
Organisation
e-mail
Address
Telephone
Fax
Thank you
Questionnaire 7
Gas utilisation accident statistics and benefits to the environment
1 Region or Country / State to which the statistics given apply

2 Approximatelyimate population

Approximatelyimate number of gas consumers
3 Total number of gas related incidents reported
Number
Year / Period →
Domestic total
Appliance related (if
known)
Non Domestic total
Appliance related (if
known)
Non Domestic
Catering Equipment
4 Do you think (know) that gas utilisation Consumers Workers
(product) standards have had an impact on
safety of (please delete as appropriate) Yes / No / no info Yes / No / no info
Comments:
Other sources of Data on Gas Utilisation accidents:
Have the gas appliance standards been effective in proving improvements to the environment in the
following aspects?
(Please indicate which standards are effective and which are not)
Materials
Miniaturisation (less materials required for manufacture):
Yes / No (delete as appropriate)
Comment:
Less environmentally damaging materials utilised:

Comment:
More sustainable / recyclable materials utilised:

Comment:
Has the standards improved the performance of the appliance to:

Rational use of energy :
Comment:
Carbon Monoxide emissions:

Comment:
Oxides of Nitrogen emissions:

Comment:
Disposal

Do gas appliance standard call for design and construction methods which lead to more satisfactory
disposal:
Comment:
Other Comments on gas appliance standards and environment including references to relevant studies and
reports
Optional:
Respondents name
Position
Organisation
e-mail
Address
Telephone Fax:
Thank you!
Questionnaire 8
Questionnaire Regarding the Impact of the EN 45000 Series of Standards

1 Please indicate the number of organisations accredited by your organisation to the requirements of
the following :
Please indicate the % of the established market so accredited
No. Accredited % of the Estimated Market
EN 45001/ EN ISO 17025
EN 45011
EN 45012
EN 45013
2 Are there other organisations (Non members of EA) offering accreditation or certification under
these standards in your state/ area of activity?
YES / NO (Delete as appropriate)
3 How have the standards had an impact on each of the following (your opinion):
(Rate +5 for high beneficial impact to 0 for no impact to –5 for negative impact)
EN 45001 / EN EN 45011 EN 45012 EN 45013
ISO 17025
Trade
Innovation
Free Movement of Goods
Competitiveness of Enterprises
Health and Safety of Workers
Consumer Protection
Environment
4 Please rate the awareness of these standards in different sectors

( 0 – no awareness to 5 – high awareness)
EN 45001 / EN EN 45011 EN 45012 EN 45013
ISO 17025
General Public
Manufacturing Industry
Services Industry
(other than training
organisations)

Procurement Agencies
Management Consultants
Training Organisations
5 Any comments on the assertion made at the ISUG Workshop on the Impact of Standardization in
Brussels April 8-10th 2001 that:
“ there was poor implementation of EN 45000 series of standards”
b) “This leads to competition between consultancies, certification bodies and accreditation bodies”
6 Any other comments on the impact of these standards:
Optional:
Name
Position
Organisation
e-mail
Address
Telephone
Fax
Thank you
Questionnaire 9

Questionnaire to European Biomass Association and Other Biofuel / Biomass Organisations

1 How important is standardization for biofuels?
2 Will the existence of standards have an impact on the Environment (that would not have existed for
other reasons or in any case) ?
3 How will the standards impact on the environment? (if they are expected to have and impact)
4 Will these standards also impact on:

Aspect Impact rate from +5 to –5
Trade
Innovation
Competitiveness of Enterprise
Free Movement of Goods
Health and Safety of Workers
Consumer Protection
5 Other comments on the impact of standardization of biofuels:
Optional:
Name
Position
Organisation
e-mail
Address
Telephone
Fax
Thank you
Questionnaire 10

See website www.standardsimpact.org
Questionnaire re Environmental Monitoring Standards (rev 2)
Note: If you do not have data that fits the structure below please give your opinion on the impact of the European
Environmental Monitoring standardization.
Do the laboratories associated or directed or used by your organisation use EN or ISO Standards (where they exist)
for routine sampling and testing and monitoring of
Air quality
Water quality
Soil contamination
Sludges
Wastes
Are these referred to in national / regional Regulations or in pollution control licences or permits?
Yes / No
If not: do they use any international standards? Yes / No

2a If yes (to 2), please specify which standards are used.
2b If no (to 2), what procedures do they use:

(i) Developed by themselves [ ]
(ii) As specified in National or Regional
regulations (other than when these
call up EN or ISO standards) [ ]
Are the standards / procedures in 2. above used along with the EN/ISO standards.
Please estimate the approximatelyimate number of samples tested by these laboratories each year.
Less than 100 100 – 5000 Over 5000

Air
Water
Soil
Sludge
Waste

Please comment on the usefulness or otherwise of EN or ISO standards for environmental monitoring.
Are the existence of standard methods (EN or ISO) useful to these laboratories.
Name(s) of the Laboratory(ies) and address and name and email of contact:
Thank you: Please send to loha@iol.ie or fax to +353 1 492 4392
Questionnaire 11
Questionnaire
Note: If you do not have data that fits the structure below please provide information on the pattern of
applications.
1 Scope of Notified Body / Certification Body/ Test House (please tick)
MDD (93/42/EEC) Class(es) / Annex(es)
AIMD (90/385/EEC) Class(es) / Annex(es)
IVMD (98/79/EC) Class(es) / Annex(es)
2. Applications for Evaluation

Total number of new applications under the above Directives each year
1996: 1997: 1998: 1999: 2000:
Comment
3. Quality Standards
The number of applications based on a claim of conformity of the manufacturer’s Quality
System to EN 46001; EN 46002; EN ISO 13085; EN ISO 13088 for the purposes of certification
of products
1996: 1997: 1998: 1999: 2000:

Comment:
4. Innovative Products
The number of innovative products (including novel variations of existing devices) submitted for
approval
1996: 1997: 1998: 1999: 2000:
Comment:
5. Application of Standards
The proportion of certified products which used PRODUCT STANDARDS to support the
approval
1996: 1997: 1998: 1999: 2000:
The proportion of certified products which used HORIZONTAL STANDARDS to support

approval
1996: 1997: 1998: 1999: 2000:
The proportion of certified products which DID NOT use standards to demonstrate conformity
with the Essential Requirements of the relevant Directive
1996: 1997: 1998: 1999: 2000:
6 Comments on the use of standards to demonstrate conformance with the Directives.
7. Other comments on the impact of standardization and references to relevant studies etc.
(Usual Request for contact information)
Questionnaire 12
Questionnaire on the use of
Standards in Purchase or Public Procurement of Medical Devices
Notes:
Standards for the purpose of this questionnaire refer to International, (ISO or IEC, etc.) or European (EN) or
National Standards.
It is accepted that all purchases should comply with the European Directives (93/42/EEC; 90/385/EEC; 98/79/EC)
for Medical Devices and will be CE marked.
The object of this questionnaire is to establish if standards have a benefit in their own right in purchasing and
procurement.
1 When purchasing or awarding contacts for the supply of Medical Devices is it important that the
supplier specifies the standards applicable to the items supplied:
Essential
Important
Not important
2 If it is essential or important, do the purchasing order or procurement documents (invitation to
tender)
2a Specify the standards, or
2b State that the supplied goods should comply to applicable standards, or
2c Do not mention standards at all.
3 If standards are specified are they:
3a International (ISO, IEC)
3b European (EN)
3c National
3d Other (please specify)
4 If standards are specified, are technical requirements beyond those specified in the standards
also specified:
Yes [ ] No [ ]
5 Other comments (on the importance or otherwise of standards in purchasing and procurement.
Optional:
Respondents name
Position
Organisation
e-mail
Address
Telephone
Fax
Thank you for completing this questionnaire
Questionnaire 13
IMPACT OF STANDARDIZATION QUESTIONNAIRE

Software engineering
Name
Position
Company
E-Mail
Address
Tel.
Fax
ORGANIZATION
Type of your organization
Industry – software development Other industry Commercial
Services Government Other

Size of your organization (number of employees)
0 – 100 100 – 250 250 – 1000 more than 1000
In which of the following markets is your organization active ?
Aerospace Automotive Bank Education
Energy Financial Information technology Manufacturing
Medical Research Services Telecommunications
Other
Which standards are used in your organization?
Please list international, European, national, company and any other type of standards
Specified by your customer Market reasons Company internal reasons
Do you use standards for all your products/projects?
STANDARDS IMPACT
Do you think that standards have an impact on any of the following and Standard title or Please rate the impact
can you identify particular standards? number from –5 to +5 (negatives
for negative impact and
positives for positive
impact).
Innovation
Trade
Workers Health & Safety
Opening all European markets to you
Enterprise competitiveness
Protection of consumers
Environment
Other (please describe)
How standards helped your organization in: Please rate the impact
from –5 to +5
Improving software quality
Increasing productivity
Decreasing the cycle time for software development
Have standards helped in relations with your customers? Please rate the impact
from –5 to +5

Have standards helped in relations with your suppliers? Please rate the impact
from –5 to +5
If possible, please give some improvement figures to quantify the standards impact.
Questionnaire 14
ISUG is a consortium of persons involved in standardization and others with specific marketing and economic
expertise.
ISUG has been contracted by DG Enterprise to carry out a study of the impacts of standardization.
The objective of the study is to identify the socio-economic impacts of standards and of the standardization process
in Europe.
Apart from addressing the issues in general, the impact of standardization in twelve sectors is being studied in detail.
It is intended to submit the data to DG Enterprise for their consideration within the context of their future
management and direction of European Standardization Programme.
For further information and indeed to participate in the project discussion, see the project’s web page: at
http://www.standardimpact.org
It is important that the widest degree of consultation and data gathering be achieved. For that reason I hope that you
will participate in the on-line discussion and, if appropriate, take the time to complete the attached questionnaire.
The completion of the questionnaire by organisations involved in standardization or affected by standardization will,
it is hoped, add to the basic data to enable this project to progress.
Information given in confidence by an organisation or company and not in the public domain will remain
confidential to the project and the identity of the sources will be protected.
Please feel free to forward this request and questionnaire to any other person or organisation who might be
interested.
Liam Ó hAlmhain is the member of the consortium with specific responsibility for the Gas and Pressure Equipment,
Medical Devices and Environmental Monitoring sectors.
Tel. No. +353 1 492 4391

Fax No. +353 1 492 4392
E-mail: loha@iol.ie
Thank you for your assistance.
Liam Ó hAlmhain, 16th February 2001.

Note : in replying to questions it is important to consider the impact of standards and standardization, and not to
confuse it with the impacts arising from regulations and other forces (market forces etc.)
In this sector (company, organization, as applicable):

1 Please provide a profile of the sector (company, organisation, as applicable) in tems
of
1.1 jobs.
1.2 turnover
1.3 trade
2 European Community Regulations

2.1 Do the standards support EC regulations
2.2 New Approach Directives
2.3 Global Approach Directives
2.4 Other Community Regulations and policies
3 The Economy
3.1 which aspects of the economy have been affected by standards in this sector (company,
organisation, as applicable)
3.2 and to what extent
4. Society
4.1 which aspects of society have been affected by standards
4.2 and to what extent
5 Standardization Process
5.1 How has the elaboration of standards affected their impact
6.. Future Developments

6.1 What are the opportunities and risks for future developments in European
standardization in order to improve the beneficial effects of standards and
standardization policies.
7. Types of Standards
7.1 What types of standards have been effective in this sector (company, organisation, as
applicable):
7.2 If industry or company standards are in significant use in any sub-sector is there an
explanation for this?
How have each type of standard affected the:

7.3 the competitiveness of enterprises, such as free movement of goods within the
Community,
7.4 external trade and innovation,
7.5 the protection of workers, (See also Q 13 below)
7.6 the protection of consumers, (See also Q 13 below)
7.7 the protection of the environment (see also Q 14 below)
8. Do the standards assist enterprises to obtain :
8.1 Market access

8.2 Economies of scale
8.3 Global markets
(please provide data)

9. Market Concentration
9.1 Have the standards affected the degree of market concentration in the sector ?
10. Geographical dimensions

10.1 Is there any geographical dimension (national, regional, global) dimensions to the
standards or to the standardising process ?
11. Technological change

11.1 Has the standardization process affected the speed of technological change and if so, in
what way ?
12. SMEs
12.1 Have the standards affected the degree of market access of SMEs ?
12.2 Are there any conflicts between standards and regulations in the context of market
access of SMEs ?
13. Public and Worker Safety

13.1 Do you have data on the impact of standards in this sector on public and worker
safety ?
14. Do you have data on the impact of standards in this sector on the Environment ?
14.1 resource use.

14.2 energy consumption;
14.3 waste,
14.4 noise,
14.5 impact on soil,
14.6 any other impact (specify).
15 Funding standards development

15.1 Estimate of % of cost of standards development funded by your sector (company,
organisation, as applicable)
15.2 Estimate of actual expenditure on standards development (attendance at meetings, time
of standardization officers, travel costs, etc.; contribution to national standards bodies
etc.
15.3 Cost / Benefit ratio (in your opinion)
Contact details for followup discussion :
Name :
Organisation :
Email address : Telephone no. :
Liam Ó hAlmhain 16/ February/01 loha@iol.ie

STANDARDIZATION
Volume 3

Informational ANNEXES
Including contributed articles etc.
To the
FINAL REPORT
April 2002
ETD/OO/503207

Contents Part 3
CONTENTS
ANNEX 9 Acknowledgements ...........................................................................................1
ANNEX 10: Attendance at Review Meetings and Workshop ........................................... 6
ANNEX 11:Articles and links posted on the ISUG website............................................... 9
ANNEX 12 Copies of Contributions made to the Project ................................................ 10
ANNEX 13:Abbreviations used........................................................................................ 39
ANNEX 14: Bibliography................................................................................................. 44

Acknowledgements
Buty, Gilbert, Alcatel, Standardization and Forums

ANNEX 9 Department
Byrnes, Mr H , CIES-Food Business Forum
Acknowledgements Brussels, Belgium
Calvert, Helen, Health & Safety Executive, UK

Clyde R. Camp, Director, IT Standards, InterDigital
Communications Corporation
Abrahams, Gemma, Espicom Business Intelligence, E. M. J. Ceelen, Philips Lighting
Chichester, UK Cena, Prof. Gianluca, Polito, Italy
Allen, Keith, Design Standards Dept., PE&T, Rolls Claude Chiaramonti, VendrEDI
Royce Phillip Clancy, Dublin Freight Forwarding
Altenhuber, Michael, M.Schneider GmbH, Austria Alan Clark, FAREGAZ
Aluminium Ranshofen Walzwerk Cloquet, Daniel, UNICE
Wayne Anderson, Food Safety Authority of Ireland Daniel Colbourne, Calor UK
Frank Aniba, PIE; Netherlands. Condra, Lloyd, Associate Technical Fellow, Boeing
Norbert Anselmann , DG Entreprise Commercial Airplane Group
Anthony, Peter, Pressereferent, DIN Deutsches Antonio Conte, DG Entreprise
Institut für Normung e.V. Cooper, John, Head of Product Definition, Product
Armstrong, Keith, CherryClough Engineering & Technology, Rolls Royce
Olivier Aubourg (EC DG Health and Consumer Carlos Corriera , EOTC
Protection), Simon Cox, Dept. of the Environment, Food, Rural
Affairs, UK
D. Bakker, FME-CWM (ORGALIME) Thierry Crignou (AFNOR)
Balto, David, White & Case, Washington, D.C. Carlos Correia (EOTC),
20005 Copejans, Gert, Sony Service Center (Europe) N.V.
Henri Barthel, EAN International Brussels
Bastide, J.C., Gavin Craik, ETSI
Alain Baud, Ora Conseils Enghein les Bains Cuc, Ing. Antonín, Czech Office for Standards,
Helmut Bayer, DG Entreprise Metrology and Testing
Roman Beck (University of Frankfurt), Brian Cunningham, NSAI
Cornelis Berkelmanns, DG Entreprise Dermot Cunningham, Cleaner Technology Centre,
Bernard Berry, Berry Environmental Ltd., UK Cork Inst. of Technology
(former NPL) Axel Czaya, Federal University of the Bundeswehr,
Selami Bezen, CEN Germany
Pierre Bianchini, Kone
T. Bienveignant, EUROGIP Willem Daelman, DG SANCO
Mona Björklund, DG Enterprise, Unit G1 Aurora de Bustos, Eurometaux
Madame Blandin, Eurogip Gunter De Clercq (CENELEC),
Jean -Yves Boeswillwald, EDF R&D Deckers, Mr A , DG Enterprise EC Brussels,
Peter Bonner, Mountgrace Associates Belgium
Jean-Marie Botte, TOTALFINAELF Guido de Jongh, CEN CMC
Didier Bouis, DG Entreprise Anna De Ruiter, DG Entreprise
Stefano Boy (TUTB), R. De Vre, EMC Consultant
Brooks, Pat, Technical Service Mgr., Hexel Henk de Vries (Erasmus University of Rotterdam),
Composites R. Dewilde, ESF( European Safety Federation),
Brown, Simon, Principal Specialist Inspector, Health Brussels
& Safety Executive De Wilde, N., General Manager, SD&A
Nigel Bryson, GMB UK Ake Danemar (VI/Orgalime, Sweden)
Mr. Bichi, FESI (The Federation of the European Delorie, Joe, Defense Standardization Program
Sporting Goods Industry) Brussels Office, US
Brockway, Mr R , UKAS London, UK Dittrich, Koen, Delft University of Technology
Dave Brown, Penn Nyla, UK Annette Dragsdahl (DI/Orgalime, Denmark),
Annette Bugiel, DIHT Per Dofnas, Ericsson
Daniel Bunch , DG Entreprise Seamus Dolan, Irish Furniture Test Centre
Neil Bunni, ICC Dublin Victor Dorman-Smith, Abbott Laboratories, Ireland,
Martin Burch, Marketing Manager, Energizer Battey Jim Dratwa, European Parliament-STOA; Ecole des
Co. Mines Paris
Hans-Peter Bursig, COCIR Francois Dupin , DIN/NAGas with DVGW
Suzan Burnstead ; (in a personal capacity); (Zimmer). Marc Durandeau, Gaz de France
Page 1 0f 53
Acknowledgements
Durant, Doug, Worldwide Engineering, John Deere Haatio, Toivo, Federation of Finnish Metal,
Tractor Works Engineering and Electrotechnical Industries,
Standards Department
Edmonds, Rob, Senior Industry Analyst, SRI Wolfgang Hahn, SANYO-Fisher Vertriebs GmbH,
Consulting Business Intelligence Product Compliance & Environment
Eichner Karsten, - Presseabteilung, Verband der Jim Hart (Consultant)
Automobilindustrie e.V. (VDA) Adrienne Harten , Chambers of Commerce Ireland
Elgurén, Frank, EGAR European Generic Article Ulrich Hartmann , Siemens AG
Register Harting, Dietmar, President/Partner, Harting KgaA,
Ellison, David, Secretary, Fork Truck Association 32339 Espelkamp, Germany Dulmage, G. Rae,
(UK) Manager, Standards Programs Division, Standards
Essler, Konstantin, Austrian Airlines Österreichische Council of Canada
Luftverkehrs AG Keith Hawken, AEA (Agricultural Engineers
/ Maintenance Organisation Association)
Evetts, D.R., Specialist – Materials Applications, Richard Hawkins (TNO Institute),
Rolls-Royce Christian Hay, EEB
Tineke Egyedi (Technical University of Delft), Heloire, Dr M-C , CEN Brussels, Belgium
Henter, Annelie, Bundesanstalt für Arbeitsschutz und
Dr Gottlobe Fabisch , Secretary General; ANEC Arbeitsmedizin (BAuA)
Marc Fähndrich , DG Entreprise W. Hesser (Federal Armed Forces University,
Marc Fähndrich , DG Entreprise Hamburg),
Bruce Farquhar (Consultant), Gerhard Hillenherms, AECMA-STAN
Peter Fatelnig, European Commission Laura Hitchcock, External Standards
Feen, Reidar, General Manager, Norclean a.s,, Management, The Boeing Company,
Sandefjord
Ian Flindell, CS UK
Seattle
Fisher, J.M., Senior Quality Systems Officer, TIMET Jacques Hoffenberg, Greater Copenhagen Waste
UK Ltd Society
Andrea Fluthwedel (DIN), Holler, Prof. Manfred J., University of Hamburg
Andrew Foster, Bombardier Hongler Georg, CEN
Patricia Fournier, French Ministry of Economic Lars Hoops (Federal Armed Forces University,
Affairs Hamburg),
Freedman, Avi, Hexagon Ltd., Tel Aviv Houston, Dr. Muiris, Medical Correspondent, Irish
Stefan Fridriksson, Icepro, Iceland Committee on Times
Trade Procedures Andrew Howard, AA, Centra Group, UK
Guenter P. Friers, Federal Ministry for Economic Ross Howie, Department of Trade and Industry
Affairs and Labour Austria Hubert David, EURIMA, Brussels
Fuerlinger, Josef, V.P. ROTAX Aircraft Engines,
Bombardier-Rotax GmbH Jean-Pierre Isnard (FIEEC/Orgalime),
Gaddes, Gordon, President of EOTC Frank Jaeger, EADS, Bremen, formerly Head of
Ashok Ganesh, CEN Standardization
Jose Alfonso Garre, AENOR Viji Jagannathan, Events & Publicity Coordinator
Garry Askew, Safety and Enforcement Statistics, US-Japan Technology Management Center, Stanford
Health and Safety Executive University
Gfrerrer, Günther H., Technical Assistant to the Jesper Jerlang (DS, Danish Standards Association),
Executive Board, FACC AG Jerónimo Maqueda, Jefe de Servicio de Estudios e
Veit Ghiladi, Head of Standardization, Daimler Investigación, INSHT
Chrysler Corp, Germany M. Jolivet , ICC Paris
Randy Gooden, Randall Gooden Attorneys
Peter J. Goss, Linda S. Svitak , FAEGRE & Nadia Kamel, Orgalime
BENSON LLP Minneapolis, Minnesota Kaiserman, Lynda, Research Services, Canadian
Tony Graziano, European Association for the Standards Association
Consumer Electronics Manufacturers Hori Kazuyuki, Sony International
Gretta Goldenman (Milieu Ltd.), Jocelyn Kellam, Partner, Clayton Utz, Sydney,
Ima Gomez Lopez, CEN CMC Australia
Loucas Gourtsoyannis (Normape), David Kennedy, consultant, former CEO of Aer
Groothedde, René, Secretary General, CECIMO Lingus, Dublin
Nick Kenny , EPA Ireland
H.W.Haantjes, CECED Kerry, Peter, Radio Advisor, UK Government
John Ketchell , CEN
Page 2 0f 53
Acknowledgements
Kimmo, Mikkola, Safety and Health Inspectorate of Hans Werner Muller, UEAPME Secretary General
Häme, Finland Munden, Mr S , Kodak London, UK
Kortschak, Josef, Sales & Technology, Böhler Bleche Mutru, Mika, R & D, Product designer, REKA
GmbH Cables Ltd., FIN-05801 HYVINKAA
Krechmer, Ken, ICSR Fellow, International Centre
for Standards Research, Boulder, Colorado Nagel, Hans, International Coordination
Küchler, Volker, T-Nova Deutsche Telekom Dept.: Harting KgaA
Innovationsgesellschaft mbH Nelissen, Reinhold J., Manager, Product Safety &
Michaela Kuehn, Bundesministerium fur Wirtschaft Compliance, John Deere Construction Equipment
und Arbeit, Company
Kushnier, Gary, ANSI Brendan Neville, (former) Chief Inspector, Health &
Safety Authority, Ireland
Lambert, Dr Ray J., DTI, UK Nikelman, Guy, Quality System and Survey
Laura Sanz Levia, Milieu Ltd. Manager, Techspace Aero
Lars-Göran Larsson, LM Ericsson Ana Margarida Neto, IPQ
Andre Lefrancois, SNECMA, France Nordby, Ben, President, OSO Hotwater Export AS,
Anne Lehouck, DG Entreprise Oslo
Lehto, Kari E., senior safety engineer, Safety Norhio, Markku, Helvar Oy Ab, Helsinki
Technology Authority (TUKES), Finland Nutt, Des, Wise Technics Limited
Leonardos, John, Market Research Manager, Nyssen, Claude, Technical Director, SONACA S.A
Hellenic Aerospace Industry S.A
Andy Limbrick, Oates, Tony, Agere Systems
Oliver Loebel, NORMAPME (UEAPME), Oke, Rob, Victorian Manager, NATA (Australia)
Secretary General Oksala, Stephen P., Vice President, Standards
Alain Loppinet , BNPe Society of Cable Telecommunications Engineers
Lutz, Dipl.-Ing. Peter, Managing Director, Interests Pia Olsen (Danish Society for the Conservation of
Group SERCOS interface e.V. Nature),
70190 Stuttgart, Germany Ørbeck, Beate Viktoria, Det Norske Veritas,
Corporate Communications
J. McCabe, Strategic Standardization Management, Dr. Denis O’Saughnessy, Guinness
ANSI Tamari Oyre, Chartered Institute of Arbitrators UK
Bill McConnell, Director Advent 3B2 Software Ltd.
Enda McDonnell, Director of Standards, NSAI, Page, Mark, Research Director, Drewry Co., UK
Dublin Pieter C. Parlevliet, CENELEC
Mick McManus, CEN Patrikeev, Evgueni, Secretary of IFAN
G. Machet, Centre Hospitalier Lagny-Marne-La- J. Pernollet, French Federation of Mechanical
Vallee Engineering
M. Stuart Madden, Distinguished Professor of Law, Dr Trudy Phelps, EUCOMED
Pace University Paul Pieters, CEN (retired)
Georg Malcrops, CEN Pinter, P., Sales Manager, Dipl. Ing Hitzinger
Carla Marcus (CEN Env. Helpdesk), Andre Pirlet (CEN),
Captain Joe Martin, U. S. Navy Commander, Center Hugues Plissart, CEN, Brussels
for Standards Defense Information Systems Agency Portalier, Philippe, Orgalime
Majerus, Nicolas, Quality Manager, Euro- Celile Prévôt, Euro Info Centres
Composites Pruysen, Aart, Approval Director Europe, Emerson
Paul Makin (Consultant), process Management, NL
Marsot, Jacques, INRS France John Purcell, Head of Inspection services, NSAI,
Carlos Saraiva Martins, DG Research Dublin
Virgilio Martins , DG Entreprise
Masaki, Oda, Sanwa Research Institute, Tokyo Rafferty, Peadar, Central Statistics Office, Ireland
Jozef Massonnet, Siemens Atea Howard Ramsden, EURELECTRIC
Alain Mayer (INRS), Reeve, Neil, Shell Standards Team, Shell Global
Luigi Meli (Ceced), Solutions International B.V.
Michaelis, Ralf, Berufsgenossenschaftliches Institut Luigi Ricossa (Bticino/Orgalime)
für Arbeitssicherheit Harald Riekeles (VDMA/Orgalime, Germany),
Miller, David, PE, Director, API Standards Program Rissanen, Anna-Liisa, Information officer, Ministry
Monteverdi, Alberto, UNI - Ente Nazionale Italiano of Social Affairs and Health Finland
di Unificazione Maarten Roelofs Heyrmans. Medtronic Europe ;
Richard Moore, EUCOMED Paul Romanus, AGORIA
Christian Muckle, CEN
Page 3 0f 53
Acknowledgements
Kenneth Ross , of Counsel, Bowman and Brooke Tosney, Eddy, External Research Manager,
LLP, US Consumers' Association Research & Testing Centre
Rydhström, Erica, European Commission, DG- Toth, Bob, President, R.B. Toth Associates
Environment Trommelen, Jan, SKIL Europe BV, Approval
Manager
Paolo Salieri, DG Research Olavi Tupamaki, Villa Real Ltd/SA
Mary Saunders, NIST
Stewart Sanson (CEN); Alejandro Ulzurrun, DG Entreprise
Laura Sanz (Milieu Ltd.),
M. Sapir, TUTB Tania Vandenberghe , ANEC
Saunders, Mary, NIST Romain Vandenputten, Marcogaz, Technical advisor
Rolf Schäfer, Unisys Deutschland GmbH Felix Van Eyken, AFECI, Secretary General
Raymond Schonfeld , Single Market Ventures Jean-Pierre van Gheluwe, DG Entreprise
Werner Schmidt, TBG/ CEN TC 151 E Van Der Laan, FMECWM
Schroeder, Georg, Quality Manager, VA TECH Van der Spurt, Herwig, Homologation &
HYDRO Ltd., Zurich Certification Manager, GE Power Controls
Sear, David, Valve World Erwin Vanhaeche, Group Director Q.A. Europe.
Eberhard Seifert, AG Neue Wohlstandsmodelle, Alcon Lab Inc
Wuppertall Institute for Climate Energy & Anja Van Impe, (formerly) DG Envrionment
Environment Alain Vanlanduyt (CECED),
J Seisler , ENGVA Philippe Vedonck. , Baxter;
Jacques Senave, FACOGAZ Aarre Viljanen, Federation of Finnish Metal, Eng. &
Suzanne R. Sene, U.S. Mission to the EU Elect.
Senneff, Mike, Worldwide Engineering, John Deere Emil Voelkert. , Roche Diagnostics;
Harvester Works Michael Volzow, CEOC
Claudia Seybold, ANEC Hippocrate Vounakis, DG Entreprise
Herman Shipper, NEN Vounnakis, Mr H , DG Sanco EC Brussels, Belgium
Lars Sjöberg, SIS Trevor Vyze, CEN
Ben Russell Smith, Liverpool University
Don Smith, Oil and Gas Production Standards James Walters, American Refrigeration Institute
Committee Natascha Waltke (UNICE),
Brieuc Spindler, AECMA-STAN Wannepain, Jean-Loup, Eurogip
Dr.Elisabeth Stampfl-Blaha, Austrian Standards Ward, Pat, Managing Director, Western Automation
Institute Ltd., Galway
Steinmetz, Tony, Standards Co-ordinator, Tyco Webb, Arthur L., St Bernard Composites Limited
Electronics, Webjörn, Jan, Verax, SE-65591 KARLSTAD,
Werner Sterk , KAN Secretariat Sweden
Stockton, Alan, Senior Test Engineer Safety Cabs, Weger, Dipl. Ing. Christian, Vice President, MCE
Silsoe Research Institute VOEST GmbH & Co
Strand, Bjarne, Vice President, Danfoss ESCO AS Christian Weinberger, DG Entreprise
Strauss, Jeffrey, Northwestern University Wehinger, Dr.-Ing. H., Physikalisch-Technische
Strickland, Sharon, Defense Standardization Program Bundesanstalt (PTB)
Office, US, Editor of the Defense Standardization Wenzelewski, Karl, DIN Aussenstelle Pforzheim
Journal, Washington D.C. Wermuth, Bernd, Deutscher Industrie- und
Swann, Prof P, University of Manchester, Handelskammertag (DIHK)
Manchester, UK Richard Wheatley, B S I
Matthew B. Williams, Director, Standardization,
Karola Taschner, EEB Aerospace Industries Association, Washington, DC
Christine Targent, EDMA George T. Willingmyre, GTW associates,
Tassey, Greg, NIST standardization consultant, US
Peter Tetteroo, Toro Europe NV/The Toro Company Willmets, David, Standards and Technical
Bernhard Thies , German Elektrotechnical Regulations Directorate, DTI, UK
Commission of DIN and VDE J S Wilson, Senior Economist, World Bank
Thompson, Dr. Ambler, NIST, Technical Standards Arthur Webb, Head of Standardization, Rolls-Royce
Activities Program Engines, UK
Johannes Thorsteinsson, EFTA Wurzel, Robert D., Director, ANSI, former Head
Tiainen, Hanna, Association of European Airlines Standardization of Becton Dickinson
John Tipping, UK EPA
Osmo Toikka, Datex-Ohmeda Lu Yannick, Airbus France, Toulouse
Page 4 0f 53
Acknowledgements
Zhu, Dr. Lei, York Refrigeration Ltd.

Ziegenfuss, H. Glenn, Standards Engineering Society
Zima, Snjezana, Head of Standardization
Department, DZNM, CROATIA
Page 5 0f 53
Attendance at Review Meetings and Workshops
ANNEX 10: Attendance at Review Meetings and

Workshop
Participants at review meetings In January / February 2002
Carla Marcus (CEN Env. Helpdesk),

TRADE & FREE MOVEMENT Jesper Jerlang (DS, Danish Standards Association),
Pia Olsen (Danish Society for the Conservation of
Nature),
Dr. Loucas Gourtsoyannis (Normape), Dr. Andrea Fluthwedel (DIN), Harald Riekeles
Peter Bonner (Consultant), (VDMA/Orgalime, Germany),
Dr. Ing. Luigi Ricossa (Bticino/Orgalime) Gretta Goldenman (Milieu Ltd.),
Carlos Correia (EOTC), Jim Hart (Consultant)
Daniela Paparella (EC DG Enterprise), Daniela Paparella (EC DG Enterprise),
Gunter De Clercq (CENELEC),
Thierry Crignou (AFNOR)
INNOVATION
HEALTH & SAFETY AT WORK
Dip. Volksw. Roman Beck (University of Frankfurt),
Dr. Tineke Egyedi (Technical University of Delft),
Stefano Boy (TUTB), Dr. Richard Hawkins (TNO Institute),
Alain Mayer (INRS), Laura Sanz (Milieu Ltd.),
Werner Schmidt (TBG), Ake Danemar (VI/Orgalime, Sweden)
Natascha Waltke (UNICE), Andre Pirlet (CEN),
Paul Makin (Consultant),
Bruce Farquhar (Consultant),
COMPETITIVENESS AND QUALITY

CONSUMER PROTECTION
Prof W. Hesser (Federal Armed Forces University,
Bruce Farquhar (Consultant), Hamburg),
Prof. Henk de Vries (Erasmus University of Dr. Lars Hoops (Federal Armed Forces University,
Rotterdam), Hamburg),
Olivier Aubourg (EC DG Health and Consumer
Protection), LUIGI MELI (CECED), PETER BONNER,
Dr. Gottlobe Fabisch (ANEC), DR. LOUCAS GOURTSOYANNIS
Daniela Paparella (EC DG Enterprise), (NORMAPE),
Jean-Pierre Isnard (FIEEC/Orgalime),
Alain Vanlanduyt (CECED), Annette Dragsdahl (DI/Orgalime, Denmark),
Guido de Jongh (CEN) Stewart Sanson (CEN);
Daniela Paparella (EC DG Enterprise),
ENVIRONMENT
Page 6 0f 53
Attendance at the International Standardization Experts meeting in Galway July 2001.
DANIELA PAPARELLA, DG ENTERPRISE

Tineke M. Egyedi, PhD. Technical University of Delft
Veit Ghiladi, IFAN and DaimlerChrysler
George T. Willingmyre, WillingmyreAssociates, USA
Patrick Duffy, ISUG
Henry Ryan, ISUG
Craig Bullock, ISUG
Liam Ó hAlmhain, ISUG
Workshop on Impact of Standardization

9th-10th April, 2001 EFTA, Rue de Tréves 74, 1040 Brussels
Name Organisation Labour Austria

D. Bakker FME-CWM (ORGALIME) Jose Alfonso Garre AENOR
Henri Barthel EAN International Loucas Gourtsoyannis NORMAPME
T. Bienveignant EUROGIP Tony Graziano European Association for
the Consumer Electronics
Mona Björklund DG Enterprise, Unit G1
Manufacturers
Jean -Yves EDF R&D H.W.Haantjes CECED
Boeswillwald Ulrich Hartmann Siemens AG
Peter Bonner Mountgrace Associates
Keith Hawken AEA (Agricultural
Jean-Marie Botte TOTALFINAELF Engineers Association)
Stefano Boy TUTB Jacques Hoffenberg Greater Copenhagen Waste
Society
Annette Bugiel DIHT Hongler Georg CEN
Hans-Peter Bursig COCIR Mr Ross Howie Department of Trade and
ALCATEL Industry
Gilbert Buty
J.P. Isnard FIEEC
E. M. J. Ceelen Philips Lighting
Hori Kazuyuki Sony International
Claude Chiaramonti VendrEDI
John Ketchell CEN
Gavin Craik ETSI
Michaela Kuehn Bundesministerium fur
Brian Cunningham NSAI Wirtschaft und Arbeit,
Laura Sanz Levia Milieu Ltd.
Aurora de Bustos Eurometaux
Alain Loppinet BNPe
R. De Vre EMC Consultant
G. Machet Centre Hospitalier Lagny-
Per Dofnas Ericsson
Marne-La-Vallee
Seamus Dolan Irish Furniture Test Centre Georg Malcrops CEN
Jim Dratwa European Parliament- Jozef Massonnet Siemens Atea
STOA; Ecole des Mines
Christian Muckle CEN
Paris
Francois Dupin DIN/NAGas with DVGW Ana Margarida Neto IPQ
Peter Fatelnig European Commission Pieter C. Parlevliet CENELEC
Andrew Foster Adtranz Europe SA J. Pernollet French Federation of
Mechanical Engineering
Stefan Fridriksson Icepro, Iceland Committee
Dr Trudy Phelps EUCOMED
on Trade Procedures
Guenter P. Friers Federal Ministry for Celile Prévôt Euro Info Centres
Economic Affairs and
Page 7 0f 53
Howard Ramsden EURELECTRIC

Erica Rydhstrom European Commission, DG
Environment
Stewart Sanson CEN-European Committee
for Standardization
M. Sapir TUTB
Rolf Schäfer Unisys Deutschland GmbH
Herman Shipper NEN
Werner Schmidt TBG/ CEN TC 151
Raymond Schonfeld Single Market Ventures
Claudia Seybold ANEC
Brieuc Spindler AECMA-STAN
Dr.Elisabeth Stampfl- Austrian Standards Institute
Blaha
Werner Sterk KAN Secretariat
Suzanne R. Sene U.S. Mission to the EU
Dr Karola Taschner EEB
Peter Tetteroo Toro Europe NV/The Toro
Company
Bernhard Thies German Elektrotechnical
Commission of DIN and
VDE
Osmo Toikka Datex-Ohmeda
Olavi Tupamaki Villa Real Ltd/SA
Tania Vandenberghe ANEC
Alain Vanlanduyt CECED
Aarre Viljanen Federation of Finnish Metal,
Eng. & Elect.
Michael Volzow CEOC
James Walters ARI
Richard Wheatley BSI
Page 8 0f 53
Articles and links posted on the ISUG Website
ANNEX 11: Articles and links posted on the ISUG

website
"Socio-technical considerations of safety, using the example of Construction Machinery" by Dr.-

Ing. Joachim Speck. Outstanding thesis on construction machine safety
"Impacts of standardization in the Oil and Natural Gas sector" by Alain Loppinet. (copy in
Annex “Contributed Papers”)
"Impacts of standardization in Pressure Vessels" by Dr. Lei Zhu. (copy in Annex “Contributed
Papers”)
"Analysis of Standards and Innovation by UK Dept of Trade and Industry Economists" at
http://www.dti.gov.uk/tese/ecslist.htm.
Professor Peter Swann's report "The Economic benefits of standardisation" is available at
http://www.dti.gov.uk/strd/fundingo.htm in English, French and German, available in either
Word or Acrobat PDF format. The bibliography (references) has also been published for
those interested in following up the subject.
Impact of Refrigeration and Air-conditioning equipment safety standardisation on environmental
objectives. Daniel Colbourne, Calor Gas Ltd, UK. 23rd November 2001. (copy in Annex
“Contributed Papers”)
Page 9 0f 53
Copies of Contributions made to the Project
ANNEX 12 Copies of Contributions made to the

Project
Contribution from Bruce Farquhar, Consultant, former Director General of ANEC
CONSUMER PROTECTION
The main background is the consumer rights contained in the UN guidelines on consumer protection and
subsequently adapted in the declarations of the European Union. These policy guidelines have also influenced more
specific declarations of consumer interest that have been published in respect of the consumer interest in
standardization by ANEC and at the national level.
IMPACT OF STANDARDIZATION ON CONSUMER PROTECTION
There are two main impacts standardization can have on consumer protection. One is the impact on existing
consumer protection policies and the second is the ability of standardization to aid in delivering new concepts, for
example, the single market trade stimulating freer trade between countries and the introduction of new technologies
such as wireless communications. Some of this second aspect is, of course, inter-mingled with providing similar
levels of consumer protection as has been previously provided in respect of more traditional industries and market
situations.
IMPACT ON EXISTING LEVELS OF CONSUMER PROTECTION
The main question in respect of existing consumer protection policies e.g. consumer safety, contract law and so on is
what role can and does standardization play in these spheres and what practical consequences has this for
consumers. To measure this we need to measure whether the greater use of standardization, for example, with
relation to product safety has led to any lessening of the existing national regulations or standards that were in place
beforehand. This might be done by analysing the situation pre and post European standardization. We also need to
acknowledge that the greater use of standardization has consequences for consumer involvement in the decision-
making process. The standardization process is very different from the legislative arena and there are differences in
the opportunities for consumer involvement in different forms of standardization (between different formal
standardization bodies and more obviously between formal standardization and industry consortia) and depending
on the level at which standardization takes place, for example, European versus international.
IMPACT ON NEW AND EMERGING TECHNOLOGIES, TRENDS AND FREE TRADE
The question of delivering new concepts centres around, on the one hand, delivering new technologies such as
wireless communications, DVD, etc. and on the other hand, concepts and trends such as freer trade, more
environmentally responsible consumption/sustainable consumption, greater consideration for certain sectors in
society which are perceived as more vulnerable, (children, the disabled, the elderly, poor and socially disadvantaged
consumers). Social exclusion is, for example, an important consideration in the implementation of the information
society.
Evidence of the impact of standardization
Page 10 0f 53
There is not a lot of information specifically aimed at assessing the impact of European standardization on policy
issues. However I would suggest that some supporting information could be found by way of studies that measure
the impact of various policies. In many cases these policies will be built around a use of standardization.
Furthermore there is information available on the evolution of consumer behaviour, for example, in growth of use of
mobile phones, cross-border shopping. In many cases these developments are the result of initiatives or policies that
have been underpinned by the use of standards. An examination of the role of standards in these sectors would then
help to demonstrate the contribution standards made to the impact that there has been and may have been otherwise
quantified. Use could be made of research available from the OECD with respect to the use of standards in product
safety and the impact of standards on trade.
OBVIOUS (NON QUANTIFIED) IMPACTS OF STANDARDIZATION ON CONSUMERS
The large extent to which standardization does play a role is in itself an impact when compared to the consumer
protection regimes in place twenty or even ten years ago. The ongoing discussions within DG Sanco and more
generally on governance within the European Commission reflect this evolution which is of itself a major impact
with far-reaching consequences for consumers and consumer organisations alike.
RECOMMENDATION:
Relate the use of standardization in consumer protection to the Commission's own consumer protection priorities as
outlined in the action programmes.
Page 11 0f 53
Carl Cargill, personal comments in discussion and correspondence with ISUG, relating
mainly to ITC sector and consortia standardization.
Standardization in general. Once you make to a standard, that’s it, your marketing now concentrates on
differentiation for competitive advantage. So standardization is the start of good marketing, the platform to establish
differentiation. Companies that understand standards and know how to use them are the exception, and will prosper.
The understanding should reach deep into the company. The globalization, based largely upon the Internet and the
World Wide Web, will have its greatest impact on SMEs, as the large multi-nationals have (or can easily) learn to
operate in a global networked environment.
People. In the traditional areas, technology is established, safety and environment issues may be involved, and speed
is not paramount. The standardizers tend to be experienced ‘safe pair of hands’, but not those who will set world
alight. In the innovative area, companies see their existence as related to rolling out, creating, developing networks
with all those players who can contribute and are willing to run with it. Their best people are involved; the
technology is developing and changing as they go.
Preferences Would favour working through SDO’s provided they could deliver. But they can’t. In terms of Time –
SDO’s can be as quick. But they tend to over-rely on consensus, whereas a Consortium, having listened ad nauseam
to an objector or indeed a perfectionist, will decide to proceed and ignore him, tell him they have considered the
point and decided it is not persuasive. SDO will tend to want to build in all implementations; the result may be
difficult to implement, too complex, on top of being too late. SDO will put his problems and difficulties out for
comment and allow a month etc. This will continue to happen. A consortium will listen but then say “look, we
discussed this before and we already decided” or whatever, and move on. Is not a fan of JTC1, and they would know
it –but that feeling does not apply to ISO, its OK in other parts. SDO’s try to put their stamp on things – when
HTML was brought to ISO for its blessing they started writing changes although there were 100’s of 1000’s of users
already out there. So now the relevant parties decided not to take XML to any SDO.
Consortia. A consortium is a group of like – minded people, they know exactly what they want to do and how.
They can be put together under the rules of any one of 6 or more bodies – the Open Group, IEEE etc. (they look at
the various models with their rules and pick what they think will work best for the situation). SDO’s are looking for
balance – consortium is interested only in the result, and balance may not be important – openness is desirable. Its
not important who is involved, what is important is the result. OSI and Edifact are examples of overcooked
standards. Consortia want speed to market, not perfection. It can take up to 6 months to put a consortium together –
first you approach e.g. IEEE and agree to launch it. You would probably be having technical chats with other
companies about it, anyway. Then you approach your possible targets and get them to sign up. You agree on core of
rules and concentrate on defining objectives, special requirements etc, based on known rules of existing such
groups. Recently Sun pulled in about 7 companies at say $ 45k each, another 7 as observers at a lesser amount each.
Many ‘consortia’ are really joint commercial ventures (read Updegrove about it), small number of participants, fixed
membership, not open, don’t have the legal protection of Consortia formed under accepted rules.
Some SDO’s are far closer to consortium performance than others. SDO’s can act as certifiers for consortia.
IPR has not been an issue until now with JTC1, but insistence that for IP “all future development rights belong to
ISO” is not acceptable. What would be acceptable is the ISO/ANSI agreement requiring IP to be made publicly
available on a “reasonable” rent basis. Nobody has defined ‘reasonable’. For a large company, their time to market
advantage coupled with incorporation in a standard may be enough to forget about other reward for their IP, for a
small company with little else, that is no use – so granting a time window for exploitation (a year, six months)
could be an alternative to nominating financial terms. In consortia you are often taking quite a risk that agreement
will be reached about IPR – could be dangerous because this may be near the end of the process. However,
companies know that if they misbehave they will get a reputation, so it is nearly always resolved.
Sun and such companies are not into market satisfaction, rather market creation. Regulation of standardization
should be very light, and. Consortia are now running perhaps 10 X 1 over SDO’s by number in the IT area.
Consortia success rate is probably 70-80%. Making an investment in a consortium activity shows a return – working
with SDO’s you can’t project a return, as you never know what way they’ll go. So looking for money to invest in an
SDO activity is not a runner.
Page 12 0f 53
Paying for standards. If you are a journeyman electrician in the US you may have to pay $ 75 for the wiring code,
maybe changed every few years. If you are a freelance code writer you will face paying $ 1000 for the necessary
standards documentation. Standards available over the web should be free or for very little. SDO’s should be funded
from their subs., not out of selling standards. NSB’s – people from Sun, IBM attend SDO’s both as IBM people and
representing the German position etc., causes confusion.
Acceptance of consortia standards. In the ICT area, the track record of the Open Group etc. is such that their
standards are probably more respected than SDO. Governments/official bodies try to withhold agreement from
consortium standards – but not very successfully, like others they must accept the fait accompli and then they issue
waivers so they can use consortium or even proprietary standards.
Marketing No – companies in consortia do not exchange market forecast or any other commercial information –
they stick to technical discussions only. They must do so to avoid anti-trust breaches. There isn’t any regulation at
present, if there was it would not need to interfere much, and it should be possibly through the IP route.
Comments
The ICT industry places a premium on consortia based standards; formal SDO standards are neither as rigorous nor
as useful as consortia standards in the ICT arena. One has only to look at the Internet (from the Internet Engineering
Task Force [IETF]) versus the Open Systems Interconnect (ISO/IEC JTC1 and CCITT of the ITU) for an initial
point of departure. OSI failed, despite massive governmental intervention, because it was poorly specified, poorly
executed, and poorly received by users. It was very complex, inherently self-contradictory, and had no legitimacy in
the eyes of many users. The Internet, on the other hand, practiced "just in time standardization", and succeeded in
creating a scalable, robust, and useable set of specifications. Similar examples can be found with the World Wide
Web (where HTML, XML, web services are being standardized in consortia), electronic commerce and e-business
(again, all consortia), much of the next generation. The notion that standards from consortia are quicker than those
from SDOs is not necessarily true; in many cases, there is better marketing of specifications from consortia and
quicker take-up of the specifications, since consortia have the advantage of telling the market that the specification
is coming. There is an additional problem for SDOs with respect to consortia. Consortia solutions are often better
because companies (the major source of ICT standardization) put their best people into consortia, because consortia
results are more industry focused and directed. SDOs tend to be much less focused on the market realities, and tend
to wander off looking for the "perfect specification". To cite an example, when HTML was being standardized in
the World Wide Web Consortium (W3C), ISO/IEC JTC1 (I believe it was SC 34) took it upon itself to standardize
HTML within ISO. I know no one from Netscape (the HTML expert company) attended this SDO based effort, as I
was the Director of Standards for Netscape. JTC1 was attempting to formalize HTML 3.2, while W3C was
standardizing HTML 4.0, which we needed for our product set. Additionally, JTC1 was proposing to make
gratuitous changes in its specifications, to differentiate JTC1 HTML from that that of W3C's HTML, which the
world was using and with which the world was satisfied.
More importantly, consortia are focused. When I have Sun's senior management sign a check for $50,000 annual
dues, I make sure that the consortium is focused, that Sun has deployed resources against the consortium's technical
or market activities, and that we monitor closely what is happening. The SDOs receive less management attention
for several reasons. Firstly, we've found out that the ability to manage an SDO to have it accomplish acceptable
technical results is much more difficult and time consuming than managing a consortium, without concomitant
benefits, especially relating to industry acceptance of consortia specifications.
And this last point, I believe, is the key to the success of consortia; the market (at least the large portion of
commercial customers) appears to accept consortia specifications in products, setting them equal or superior to SDO
specifications. (Note that this is an area that needs basic research, which is missing from standards knowledge.)
Based upon my experience with users in the ICT industry, users do not draw a distinction between consortia
specifications or those from an SDO.
The ITA and IWA's offer some relief, but again, there is not a demand for them from the market. They do not offer
any substantive improvements over consortia specifications - they are merely rubber stamps for an "accredited open
organization". It is not clear that the market attaches any value to the imprimatur of the IEC or of ISO. The PAS has
not been a success from its inception. It succeeded only in alienating the consortia from JTC1, since to participate in
a PAS process you had to admit that - in concept – the formal standard was superior to the standard produced by the
consortia. In many cases, this was patently false, since the consortia usually had more expertise and wider
acceptance than did the JTC1 Subcommittee charged with forwarding the specification.
Page 13 0f 53
Standards don't lend themselves to alpha and beta releases. In many cases now, standards are the codification of
existing practice. Very few standardization activities are concerned with writing "new technology" in standards
organizations; rather, they take specifications developed by a company or other organization and standardize what
the users are already using. It is more codification that creation. And the codification helps to remove some of the
ambiguities and much of the proprietary bias.
A consortium's failure is more visible; it represents a loss to the organizers of their investments. It is also apparent
rather quickly; if a consortium loses relevance, it loses members and usually its economic base, leading to collapse.
SDOs do not fall under similar pressure; the OSI committees in JTC1 were only finally suspended within the last
three years, while other committees have continued with few or declining membership for years. (Quite frankly, no
one cares about these "ghost committees"; they continue to meet on a regular basis and produce nothing - but then,
they aren't expected to produce anything.)
Keep in mind that consortia tend to be focused on single issues; W3C focuses on "web things", the IETF on
underlying internet wire protocols, the Object Management Group (OMG) on object technology and so on. They
MUST be good at what they do to retain membership and grow. SDOs are under no such strictures. They can
continue to muddle along, especially if no one expects great things from them.
If standardization is to help set policy, it must be examined much as a business is. If one looks at JTC1 over the past
five years - and then looks at the IT standardization arena (all standards activities, from SDOs to consortia to
alliances to open source software) - one cannot but help notice that JTC1 has lost absolute market share in an
expanding market. (As an example, in 1991, only about 15 consortia commanded Sun's attention, and much work
was done in the IEEE, ASC X3 [now NCITS], and JTC1.
In 2001, Sun belongs to over 60 consortia, and we have little technical participation in SDOs. ) In the business
world, if you do not increase in proportion to the market increase, you are on a downward spiral. To lose absolute
market share in an expanding market (that is, to be the boat that does not rise with the tide) is grounds for concern.
The ITC SDOs have not expanded or even held their own. They are losing to a different form of standardization that
the market finds more suitable.
_______
Nonetheless, Carl says he would prefer to see SDO’s prosper and he hopes some ways may be found of achieving
that. His reason, apart from sentiment, is that SDOs will give stability to standardization, and who knows what
consortia will continue how long into the future.
Page 14 0f 53
Impact of Refrigeration and Air-conditioning equipment safety standardisation on environmental objectives.

Daniel Colbourne, Calor Gas Ltd, UK. 23rd November 2001.
INTRODUCTION
Since the development of international regulations relating to Ozone Depleting Substances (ODSs), and more
recently, Greenhouse Gases (GHGs), the use of refrigerant fluids that fall under these categories have been
considered unacceptable by certain parties. In particular, these fluids include chlorofluorocarbons (CFCs),
hydrochlorofluorocarbons (HCFCs) and hydrofluorocarbons (HFCs). Initially, the use of CFCs was banned by the
Montreal Protocol, with a future ban on HCFCs. Now the Kyoto Protocol is imposing pressure on the use of HFCs,
although it is emissions that are restricted rather than actual use. Before the advent of Kyoto, fluorocarbon producers
invested considerably in HFC production, as these were seen by many as the default replacements to CFCs and
HCFCs. However, other alternative refrigerants have been adopted, primarily carbon dioxide, ammonia and
hydrocarbons (propane, iso-butane, etc.) Out of these, the hydrocarbons are the most directly applicable in terms of
use in current equipment designs, material compatibility and efficiency. However, unlike the conventional CFCs,
HCFCs and CFCs, they are flammable. This fact brings out the necessity for safety standards to enable their
widespread use. The refrigerant problem is not just restricted to Europe, but is a global issue, as all nations employ
the use of refrigeration and air conditioning.
The environmental impacts of various refrigerants are details in the table below.
Refrigerant Natural product (1) Atmospheric Global warming Ozone depletion

lifetime potential (GWP) potential (ODP) (4)
(3)
(Years)
Iso-butane Yes <1 <3 0
CFC-12 No 100 10600 0.82
HFC-134a No 13.6 1600 0
Propane Yes <1 <3 0
HCFC-22 No 11.8 1900 0.034
HFC-404A No <53.5 4540 0
HFC-407C No <32.6 1610 0
HFC-410A No <32.6 1890 0
(1)
Whether the substance exists in nature or not.
(3)
GWP based on 100 year integration time horizon, from WMO Scientific Assessment of Ozone Depletion, 1998.
CO2 = 1.
(4)
From WMO Scientific Assessment of Ozone Depletion, 1998. R11 = 1.
REFRIGERATION AND AIR CONDITIONING STANDARDISATION
The implications of refrigeration and air-conditioning safety Standardisation issues are best explained by examining
the structure of the standards infrastructure within this field. The diagram below identifies the various levels of
Standards committees and the refrigeration and air-conditioning safety standards for which they are responsible.
Within each level of standardisation, refrigeration and air-conditioning standards are divided between two
standardisation organisations: ISO/CEN and IEC/CENELEC. With respect to refrigeration and air conditioning,
ISO/CEN standards typically deal with mechanical and pressure issues associated with fixed installations and
IEC/CENELEC largely deals with electrical issues associated with appliances. However, in the interests of
harmonisation, common requirements are being developed in a central working group, an ISO/IEC Joint Working
Group on Flammable Refrigerants (JWG). The work from this JWG is being transferred into the relevant ISO/CEN
and IEC/CENELEC standards.
Page 15 0f 53
ISO (TC 86) IEC (TC 61)
ISO 5149 IEC 60335-2-24

INTERNATIONAL
ISO 817 IEC 60335-2-40
CEN (TC 182) CENELEC (TC 61)

EN 378 EN 60335-2-24
EUROPEAN
EN 60335-2-40
NATIONAL NATIONAL
COMMITTEE NATIONAL COMMITTEE
COMMITTEE REPRESENTATION
Whilst, in theory, this approach should progress the use of environmentally friendly refrigerants, the standardisation
system lets the intent down. This is largely due to the representation of “experts” on the aforesaid JWG. Standards
committee and Working group representation is virtually always from industry. This is due to the fact that most
“experts” already work within these specialist fields. Since there are considerably more “experts” that work for
fluorocarbon producers, rather than hydrocarbon suppliers because (a) more companies exist and (b) the existing
companies are much larger and well established, there are more JWG members with fluorocarbon interest in mind.
Although academic institutions tend to have more independent views, they tend not to send “experts” since they
have no financial resources for attending international meetings. In some case, academic experts do attend but this is
because they have been provided with funding, again by large fluorocarbon companies. Neither Governments nor
NGO’s are involved because they are not considered to be experts.
To be effective in a working group, it is necessary to attend all meetings, which can be very costly (e.g. two day
meetings which may occur three times a year, overseas, and for several years, plus associated sub-groups, parallel
working groups, etc.) In addition considerable time is required for reading material and authoring associated
documents. An organisation must be very interested and have ample funding for representatives to be involved.
Consequently, it is rare for any contribution to refrigeration and air-conditioning safety Standards working groups to
come from any source other than well-financed interested parties within industry. A monopolistic situation thus
develops.
DEVELOPMENT OF “SAFETY” REQUIREMENTS
Page 16 0f 53
The concept of “safety” is largely subjective; what one person considers to be an acceptable level of risk, can be
argued as unacceptable to another. The major part of the decision making within the JWG being made on the basis
of “consensus”, resulting in the majority view of those with interests in fluorocarbons being able to dictate what an
“acceptable level of risk” should be. Needless to say, this level is forced down until it errs on the ridiculous, making
the use of flammable refrigerants unfeasible. So, for example if a particular clause is drafted that permits reasonable
quantities of flammable refrigerant in a particular type of equipment, and the majority claim that it is “unsafe”, or
the perceived risk is too high, this becomes the consensus view and the clause removed. Despite there being large
amounts of supporting technical information, including:
historical statistical data on some 50 million domestic refrigerators using flammable refrigerants,
tens of thousands of air-conditioners using flammable refrigerants,
detailed studies on aspects that determine levels of safety,
comprehensive risk assessments demonstrating that the fire risk is significantly lower than other gas appliances
and electrical faults on conventional cooling equipment,
these clauses can easily be rejected or neglected.
The fact that each participant is considered as an independent expert by the convenor means that their personal
political or commercial driver is completely disregarded. The clause can then be replaced with another that only
permits minute quantities of refrigerant that would make the equipment unusable. However, since the majority
favours this, the new clause is agreed. Thus, a draft standard is developed in this way.
When the standard goes for enquiry and is considered by national committees, the same concept applies. A majority
view within the National Committee will agree on whether to accept or reject the standard. Again, since a large
proportion of a National Committee may be from companies with interests in Fluorocarbons, any vote will go their
way.
CONCLUSION
The end result is that European and International standards for refrigeration and air conditioning impose such
onerous requirements on equipment that use hydrocarbon refrigerants, that it becomes impractical or uneconomic to
produce. Thus, the market for HFCs will increase due to the lack of alternatives and hydrocarbons be rejected from
the market by overemphasising safety requirements.
Page 17 0f 53
Our view on standardisation of pressure equipment in Europe Dr. Lei Zhu
Safety of pressure equipment is very important to the people and property in the Community. Pressure equipment is
widely used around us. In order to make pressure equipment safe, they should be designed to certain standard.
However, due to the different requirements in the national standards in Europe, it is very difficult for a pressure
equipment manufacturer to satisfy all the requirements in a single design. In order to satisfy local code requirements
on pressure vessels and refrigeration system in Europe, we have to design our vessels and refrigeration system to
several national codes or standards. For instance, pressure vessel code to A. D. Merkblatt, CODAP, Swedish SPVC,
Italian VSR, Swiss SVDB and ASME Code. Refrigeration system code to Dutch CFC code, VBG20, Italian Norm,
Swedish refrigeration standard etc. It is impossible or very difficult to harmonise all the code requirements in a
single design. We have to split the design, which will double or triple the human resource to create separate
drawings, bill of material, production rout sheet, different inspection procedure, etc. The most difficult issues to
harmonise a design are material, weld joint design, inspection and safety device. Certain country will only accept the
materials listed in her national standard so that we have to specifically purchase some material for the units to that
country. Even sometimes the same material can be used all over the Europe, the application limit is still different in
different standard, especially for low temperature application. Then we still need to change the material for low
temperature application. Although we can provide experience and evidence to prove a weld joint design strong
enough for the application in our products, this weld joint design is still not allowed in certain countries due to the
requirement of regulation or standard. According to certain country’s regulation, some kind of inspection can only
be carried out by a qualified person in that country. Some safety device requirements are not reasonable or too big to
be fitted into a limited space of a small unit. All these create a technical barrier to prevent goods from moving freely
in EU and EEA Community. Also due to some special approval procedure in certain country, it is difficult to
guarantee the delivery date to our customers. It is very important to harmonise all the technical requirements in a
harmonised standard. Then we can have a single product design suitable to all the countries in EU and EEA.
However, according to the current situation in Europe, it is much more important to have a harmonised regulation on
pressure equipment than a harmonised standard. Although there are many difficult technical requirements in
different codes, it is actually the national law or regulation in different countries causes the technical barrier.
Standard is only a technical guide for a good practice. It is not compulsory. Design to a standard can only show
customers that the products are designed to a recognised standard for performance and quality. However, it is
mandatory to conform to the requirements of a law or regulation. At present, there is no harmonised standard
available for pressure vessels and piping, but it will not affect the import to or export from EU the pressure
equipment. Customers can still use current national or international standards to order pressure equipment. We think
that before harmonised standard become a well recognised one, before customers get used to it and before it shows
the financial benefit, customers will continue to order pressure equipment to current national codes or standards.
We received some information from American Air-conditioning & Refrigeration Institute about their concerns on
PED. Because some pressure equipment in refrigerating system are exempt from ASME Code in US, UL type
approval is used for the equipment. These types of pressure equipment are generally included under PED, such as
the shell of hermetic compressors, so that US manufacturers worry about the material certificate, design, and
inspection of the equipment to PED. There are definitely some differences in scope and technical requirements
between ASME or UL code and PED, otherwise there would not be so many different pressure equipment standards.
As long as PED does not explicitly exclude certain standard and does provide several ways to manufacturers for the
compliance to PED, we don’t think it will create a technical barrier for importing from outside of EEA. PED does
not exclude the possibility to use ant standard or even experimental method for compliance, as long as the evidence
or document can show that the equipment is safe. PED does have some quantitative requirements on materials,
which may cause some difficulty to ASME materials. There is a different view between Europe and ASME on
necessity of some PED requirements on materials, such as impact test requirement. For the equipment concerned,
they are generally not higher than category II, the manufacturers can use PMA to use those ASME or other materials
by suitable material certificate and test report. There may be some additional cost for UL or ASME design to
conform to PED. Although it is not mandatory harmonised standard is important. A well prepared harmonised
standard does provide many helps to manufacturers to achieve a common design suitable to all the countries
concerned, to reduce new product development cost, to reduce product cost from volume production of identical
products, to avoid potential error by using different designs and materials in production line, to provide presumption
of compliance, to compete at the same level, and so on. However, if the standard is not prepared properly people
will hesitated to use it unless it is mandatory. A bad standard can be too conservative which will increase the cost for
no good reason, slow down the technical change, can have some restriction to certain design which is not critical for
some pressure equipment. The big risk for a harmonised standard is that no company wants to use it if it has too
many restrictions, too complicated to use and too conservative, even it has taken a lot of money and years of many
expert’s time to develop it. According to New Approach Directive and Pressure Equipment Directive, harmonised
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standard is not mandatory, people can easily go to ASME code, BS standard or their national standard for PED
compliance if the harmonised standard has aforementioned drawbacks. Therefore, it is very important to publish the
standard on time and revise it regularly. It is very important to make the standard easy to use. For those areas
without general agreement standard committee can provide a brief guide initially rather than holding the publication
of the whole standard. The detailed requirements in those grey areas can be included gradually through revising.
Because the general harmonised Pressure Vessel standard prEN13445and Piping standard prEN13480 are a little bit
too conservative in some aspects, refrigeration industry in Europe is developing a separate harmonised standard
particularly for pressure vessels and piping in refrigeration system and heat pump to relax some technical
requirements in general standard. This example shows that industry standard is very useful to include some
particular areas and to relax some stringent requirements in the general standards for the application in these
particular areas. Standardisation will definitely affect many things and areas around us. Although standardisation of
pressure vessel and piping standards will not affect our life directly, it does affect the safety of personnel and
property indirectly. The main influence of the standardisation of pressure vessel and piping standards is on
productivity, cost and market accessibility.
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“Materials, equipment, offshore structures for the Petroleum and Natural Gas Industries"
Proposed by M. Alain LOPPINET chairman of CEN TC12
1) THE OIL AND NATURAL GAS SECTOR

1-1) The interested parties in our standardization work include:
The Oil Companies at national, regional and international level, whatever they are public or private.
The Services Companies performing work for the above companies i.e.: drilling contractors, engineering firms,
logging companies etc…
Oil and gas equipment and materials manufacturers.
Oil and Gas Institutes.
Government regulators.
All types and sizes of companies are involved, from large, integrated multinational oil companies, medium-size ones
Manufacturers and contractors are either major international units as well as small ones . Very often SME’s are
represented through professional Associations. The main branches or domains include upstream i.e. exploration and
production on one side and downstream i.e. refining , petrochemical and distribution.
1-2) The figures of our sector are hereunder given:
The consumption of hydrocarbons in Western Europe is 688 Millions of tons (320.2 produced in Europe and the
rest is imported).
The treatment capacity of the western European refineries is 729.2 Millions of tons hydrocarbons.
The number of refineries is 102 in European Union operated by 48 Companies (capacity of 650 Mt.).
The Supply and Services Industries (SSI) have a turnover of 30 billions of Euros and a workforce of 750 000
direct employees.
1-3) The trade of crude and refined products in Western Europe is: 481 Millions of tons for import and 99.3 for
export.
2) EUROPEAN COMMUNITY REGULATIONS

2-1) Legal factors:
Our standards have of course to comply with the legal framework of the European Community, but they do not
really support the EC regulation as it is generally understood.
2-2) Public procurement "Utilities" Directive nb.: 93/38 The Upstream activity of our sector, although it concerns
mainly private companies, has to deal and to comply with the terms of this Directive for excluded sectors. The
procurement of entities operating in energy sectors have to follow the Directive because we operate on the basis of
exclusive rights for exploitation of geographical areas for exploring and extracting oil and natural gas. If the value of
a procurement contract is above EUROS 400,000 for supply and services and above EUROS 5,000,000 for works,
we have to use (for transparency and fair competition):
1. European Standards (EN)
2. European National Standards (NNE, NF, BS etc..)
3. International Standards (ISO)
4. Other documents such as API, ASTM, Company Specs.
Note: CEN TC12 provides such necessary documents as EN standards.
2-3) New Approach Directives (within Article 100A for trade/supply or Article 118A for employment/workplace
safety)
The only obligation, we, as Industry, accepted is to have Standards which are not in conflict with the Essential
Safety Requirements of all the "New Approach" Directives in connection with the product which is standardised.
None of the ones we are writing are supposed to be harmonised (Presumption of Conformity) nor mandated.
3) THE ECONOMY
3-1) The following aspects of the Petroleum and Natural gas Industries have been affected by standards prepared by
the Technical Committee:
*Exploration activities and production centers (onshore as well as offshore) for oil and natural gas.
*Refineries and storage facilities.
*Transportation by pipelines with compression and storage centers for oil,
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natural gas, diphasic fluids etc...

*Petrochemical industries.
3-2) The different aspects of the Industry are concerned by the standardization process:
*Operators, refiners and transporters of products.
*Manufacturers of equipment, materials used by the operators.
*Service companies starting with engineering, construction ones and followed by in situ contractors (mud,
cementing, seismic, well logging, drilling, logistics, supply boats etc...).
4) SOCIETY
4-1) The society is affected mainly in its environment which may be jeopardised by the various possible impact of
the equipment used by the Industry (aspect, emission during life and disposal at the end of the activity). The
products which are produced from the earth should be handled in a carefully manner in order to avoid the pollution
within the ground but also on the surface.
4-2) The extent of the impact in the Society is very large because of the universal use of the finished product which
have a big weight in the consumers budget. In another hand the production itself is very sensible because of the
possibilities of external blow out. We have also to add the risk of the transportation of the products by pipelines as
well as by enormous tankers with a possible impact on the sea and on the coasts.
5) STANDARDIZATION PROCESS
As our activity is mainly international, which is particularly true for the Exploration and production area, we
decided to write our standard at the International level, mainly within ISO TC67 with the same title as CEN TC12.
We apply the Vienna Agreement for all the work items of ISO TC67 which are useful as EN standards according to
the European Regulations (specially for procurement matters). We took also care of the history of the petroleum
standardization which was initiated in USA by the American Petroleum Institute in the year 1923. API remains
active as delegated secretariat of ISO TC67 and as origin of about 60 % of our work items.
6) FUTURE DEVELOPMENTS
The principal risk is to see other interests willing to develop our standards in Europe. The risk is high, because as
already said, we have to use European standards if they exist. Anyway, through the Vienna Agreement we reduce
this risk by applying the stand still for the items of CEN TC12 program.
7) TYPES OF STANDARDS
7-1) All the types of standards are effective in our sector:

*The functional standards are preferred but for the time being it is a wish rather than a fact. Anyway it will be the
future. The standard shall give the desiderata of the users and leave the manufacturer free to propose a product able
to satisfy these desiderata.
*Technical Specifications are the most issued standards. They give the Industry the possibility to have well known
equipment, safe for operations and for the workers as well an interesting interchangeability.
*Recommanded practicies are also popular in our collection of standards mainly in upstream activities. None of our
standards are harmonized ones in the meaning of giving presumption of conformity to essential safety requirements
of the "New Approach" Directives. But, in any case, they are not in conflict with these ESRs.
7-2) Other standards
7-2-1) Industries standards are still in use in our Industry. They are mainly issued from API (American Petroleum
Institute), ASME and ASTM (all are American). . The main reason is that our Industry was mainly developed in the
United States of America which created those standards/ specifications which were used a long period of time in US
but also outside and which are still in use. They give us a good safety range, a fair interchangeability.
But due to the internationalisation of the activity and the extending difficulties met by us in more remote areas, we
decided to rewrite those API standards we need, in order to have more stringent documents in ISO (ISO TC67) and
then in CEN (CEN TC12) using exclusively the VIENNA Agreement with ISO TC67 leadership.
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7-2-2) Companies standards are still in use in many cases although we see a trend to diminish it by using ISO or
CEN ones instead of.
The main reasons of this use is due to the fact that the oil and gas, we are looking for, is in the nature. Its state is
different every where which push us to have different techniques. We have also a certain know how to defend in
order to be more competitive than the others.
7-3) All the standards which are issued authorise our operators to reduce their own specifications which increase the
range of the possible sale of products to the different Companies in the different countries of the Union. Each
manufacturer is able to try to produce the equipment according to the common standard.
8) THE STANDARDS ALLOW:
8-1) A large access to the market as mentioned above in 7-3 for example.
8-2) As we have only one standard used by many companies and identical to the international one (Vienna
Agreement) the possibilities of sale are wider which allow a better price by economy of scale.
9) THE MARKET CONCENTRATION:
It is very important in our sector gfor the oil Companies (EXXON MOBIL, BP, AMOCO, TOTAL FINA ELF, YPF
REPSOL etc..) as well as for the manufacturers. They was no interconnections between these concentrations and the
existence of common standards.
10) GEOGRAPHICAL DIMENSIONS:
This dimension is important because of the international status of our activity which cannot be only national or
regional. We already mentionned this aspect which means for us the preparation of our documents in ISO TC67
with a parallel vote in CEN TC12. But we impose the obligation that 5 European members participate actively to the
process in ISO and the nomination of an European Project Leader which task consist of making all the possible
efforts to make possible that in ISO all the European concerns are taken care of. We want ISO xx xxx standards
declined in Europe as EN ISO xx xxx standards as well as in our country as NF EN ISO xx xxx standards and if
possible in USA as API ANSI ISO xx xxx standards
OUR GOAL IS:
GLOBAL STANDARDS USED LOCALLY WORLDWIDE
11) TECHNOLOGICAL CHANGE:

Our standardization process has no effect on the speed of technological changes which are mainly driven by the
technical environment of our production areas which become harsher because the easy oil has already been
discovered and the present one has to be looked after in difficult zones: arctic, deep offshore etc..
12) SMES:
We may have some problems of access from the SMEs to our market if the standards become too much "functional"
leaving the supplier with the technical aspect of answering to the functional request of the operator. For the time
being it is not really the case because most of the issued standards are more technical specifications than functional
(as API documents in fact). We will have to deal with this aspect if we want to continue to have SMEs as suppliers
of our sector.
13) PUBLIC AND WORKER SAFETY:
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We do not have many of our European standards which have an impact on this safety. In one of our sub-sector we
write some standards for offshore platforms which treat the problem but we have not yet any figures on the impact
of such document which are still worked in work group and either not yet issued as standard or too recently issued to
be used.
14) ENVIRONMENT:
We just start one year ago to think about the various environmental aspects in the "product" standards. We studied
the possibility to participate to the pilot project of CEN (EHD) within an ad-hoc group which gave his proposal
during the last plenary meeting of CEN TC12. Then, the Oil and Natural Gas Industries decided to participate to the
pilot project. A document on pipeline transportation systems was chosen as pilot item. A special checklist will be
prepared to check all the possible environmental aspects of this product standard starting from the engineering,
fabrication, transportation and then through the in situ installation onshore or offshore, the life of the pipeline with
the possible accidents (leakage, explosion) and to finish with the disposal of the line at the end of the life of the
oil/gas field. We will also work on sectorial environmental guidelines to be applied to all the oil and gas sector.
These will be the basic document for the experts when they prepare the standard to be sure that they take care of the
environmental aspects of the standard.
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STANDARDISATION & RESEARCH (STAR)

(contributed by André Pirlet of CEN)
INTRODUCTION
European Standards prevent barriers to trade, provide technical support for legislation, and promote competitiveness
of European industry. They are the basis for agreement on the design, manufacture, performance and testing of
products, services, or operations and they are sometimes the basis for mandatory legislation. Whilst much of the
information required for new standards or the revision of existing standards is often the by-product of the normal
activities of industrial organisations, government departments and other bodies with an active interest in the
standard, the standardisation process is greatly dependent on a continuous input from a variety of R&D sources.
RESEARCH AND STANDARDISATION

Standardisation and R&D are interdependent. The technology necessary for the development of a new standard may
be created by a specific research project or may arise as a spin-off from research, innovation or development that
were not directly concerned with the elaboration of a standard. On the other hand, research leading to the
development of new products or processes generally benefits from early knowledge of relevant standards and the
subsequent value and marketability of the new product may be enhanced by ensuring that it conforms to the
appropriate standard.
The researchers should therefore become more acquainted with standardisation, for a mutual benefit. Within the
European enterprises themselves, the dialogue and co-operation should be enhanced between the researchers and the
experts active in standardisation, while standardisation should be a part of the medium/long term strategy of these
companies. Standardisation should be part of the 'job description' of some Executives.
CEN STAR
CEN/BT WG 70 (CEN STAR) was created in September 1992 to prepare guidelines to develop a more efficient link
between European Cooperative R&D and European standardisation, with the aim of improving the speed, quality
and completeness of the standardisation program, and promoting the guidelines e.g. by participating in the early
discussion of the European research programmes. Contributions are gathered by national delegations from major
European industrial research and institutional bodies. The Sectors within CEN produce strategic papers indicating
clustered research needs and priorities.
The resulting methodology is applied in contacts with CEN/TCs, with researchers seeking co-funding through the
EU R&D Programmes and Eureka, and with research sponsors. CEN/STAR has evolved into a Strategic Action and
Advisory Group, an active interface between the CEN TCs & Sector Fora and the EC.
CO-NORMATIVE VS. PRE-NORMATIVE RESEARCH

Co-normative research interacts directly with ongoing and/or planned standardisation activities; projects are
generally quite specific and usually relate to research needs proposed by TCs to progress items in their agreed work
program.
Pre-normative research relates to activities which are likely to generate new matters for standardisation,
corresponding to future needs for standards, even if not anticipated early on by the researchers themselves.
EXPERIENCE FROM THE EU FOURTH AND FIFTH FRAMEWORK PROGRAMS

Under the Standards, Measurement and Testing Subprogram (SMT), (fourth FP), part of the funding was targeted at
co-normative research projects designed to assist that part of the standards making process intended to support
European Community policy. Dedicated calls for proposals have been published twice a year by EC DG XII
throughout the life of the 4th Framework Program, based on lists of priority projects submitted by CEN, CENELEC,
ETSI and some EC DGs to DG XII and subsequently agreed by its Regulatory Committee. Since the level of
funding was perforce limited, the European Standards Organisations were charged with the identification and
prioritisation of their research needs, which formed part of the list of priority projects considered for support in this
program by the Regulatory Committee.
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Funding for co-normative and pre-normative research projects has been also available in the SM&T and other 4th
FPRD Programmes, but only under the specified themes identified in the published information package and with
fixed (usually annual) dates for the submission of proposals.
In the 5th FP, that procedure of Dedicated Calls in favour of standardisation was both 'enlarged' and 'restricted' : it
was enlarged since it accepted not only topics for co-normative research, but also topics for pre-normative research,
but is was also restricted to topics not dealing with food, living sciences, IT, water, energy and the environment ...
IDENTIFICATION AND PRIORITISATION OF RESEARCH NEEDS

CEN STAR has developed prioritisation schemes for both co-normative and pre-normative research needs. Under
that scheme, the CEN TCs and other interested parties are asked to identify needs for research projects that will
assist the standards making process or overcome problems that are preventing completion of the standardisation
work. For the dedicated calls, they are required to complete a prioritisation form for each need they identify and to
submit later on to the EC, in agreed formats, an Expression of Interest (EOI), as required for the preparation of the
announcement for Calls for Proposals by the EC for the themes that they finally select. Good examples of EOIs can
be downloaded directly from the Web : www.cordis.lu/fp5.
The prioritisation forms need to be filled in, possibly under the guidance of an RTD advisor or nucleus, to determine
the relative priorities of the research needs identified in the various sectors. A final prioritised list of priority needs is
then prepared by CEN STAR in time for consideration by the EC prior to each dedicated call. Themes published in
the dedicated calls for proposals are open to any potential proposer to bid for the work; the decision to accept any
particular proposal rests solely with the Commission.
This procedure takes a relatively long time, around 2 years from the expression of the idea to publication and call for
bids. Many of the ideas will tend to be relatively small projects, and it is recommended that contact is made with
other technical committees to ascertain whether the research idea has an application elsewhere. Projects with wide
support and application will be more likely to be successful especially if the project is of a significant size (>1M
Euros)
PRE-NORMATIVE RESEARCH
Although innovation and pre-normative research have an important part to play in achieving the European internal
market and strengthening the competitiveness of European industry, there exists poor awareness of this concept, in
some companies and/or sectors. A uniform approach which could be employed to identify specific needs for all
domains and sectors is not possible; the organisation of pre-normative research is quite sector dependent.
Nevertheless, industry, Government, and private laboratories undertake such research, taking into account the needs
of their customers and partners, their prospective activities, the results of market studies, national and international
policies, and regulation programmes. The dissemination of results is sometimes very focused and narrow, and there
is insufficient co-ordination or awareness on a broader basis.
A key issue relating to PNR is how results are converted into standards. This still occurs at present mostly on a
purely "ad-hoc" basis, and there is need for groups undertaking pre-normative research and industrial research to
interact positively and at an early stage with the standardisation process. The needs for pre-normative research
should also be considered by the Sector Fora, for their long term plans.
CO-ORDINATED ACTION WITH THE JRC

The Council Decision of 15 December 1994 on the JRC specific program for 1995-98 emphasised the need to
promote pre-normative research activities necessary under Community policies.
Under the industrial technologies objective, the contribution of JRC has also focused on pre-normative research,
undertaken principally within the framework of networks (like EPERC, the European Pressure Equipment Research
Council, whose Secretariat is held by JRC Petten) and in association with the standards organisations, particularly
CEN.
CEN has signed in October 98 a Cooperation Agreement with JRC. This has increased the possibilities to fill the
needs for research mentioned by the CEN TCs, but also to foster some new R&D related standardisation activities
(like in Risk Assessment for example).
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SUPPORT FROM OTHER EUROPEAN ORGANISATIONS

Representatives from EUREKA, EUROLAB and NORDTEST participate regularly in the deliberations of CEN
STAR and these organisations are supporting the aims and objectives of STAR.
SUPPORT FROM OTHER EC DGS

Whilst DG Research is the principal EU channel for co-funding for co-normative and pre-normative research,
funding is available, on an exceptional basis, for "ad hoc" research in support of mandated standards through DG
Enterprise and in some specific programmes of other DGs (Environment, Transport and Energy..).
In its document COM (98) 31, the European Commission emphasized the need of greater consideration of the
prenormative dimension in Community research programmes, in order to foster the sustainable growth,
competitiveness and interoperability of products and services to emerge from research.
It is recognised in particular that standardisation is an effective key for the wide dissemination and exploitation of
results of research.
DEVELOPMENTS
Promotion of Pre-normative Research and Trend Analysis is achieved in a series of Workshops organised by CEN,
in some cases with the collaboration of the JRC.
The objective of these STAR Workshops is to provide an overview of the trends and needs for research and future
standardisation in selected areas, in light of recent research results, industry applications and standardisation. An
important part of the follow-up consists in ensuring that new CEN standardisation activities are set up, as visible
output of these Workshops.
The Terms of Reference of CEN/STAR have been updated in 1998 and formally adopted by the CEN Technical
Board. CEN/STAR has presented its formal Recommendations for the preparation of the 6th FP, and for the
standardisation related aspects of the ERA (the European Research Area). CEN/STAR is regularly updating its
strategy.
For more information: Secretariat CEN/STAR - andre.pirlet@cenorm.be
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Comments by Dietmar Harting
Dietmar Harting, Dipl.-Kfm., Harting KGaA, Espelkamp at IFAN Berlin 2001, and in
correspondence with ISUG.
“Innovations are the driving force of technological change, the guarantee of progress and increasing
affluence. During the research phase, however, there are some very useful coordination activities that may
come into play. "Development accompanying" standardization is the keyword here. Especially
international technology networks will benefit tremendously when a shared world of terminology has
been defined, when basic data on materials, techniques and processes are available. Just think of
environmental compatibility issues, and when tools, methods and interfaces for effective team work are in
place.
Naturally the basics for measuring and testing should also be defined when issues of qualification and
performance are to be discussed. Just think of information technology, for example. Without the
definition of interfaces there would be no networks and without protocol agreements there would be no
such thing as worldwide digital communication. The fact that the INTERNET exists can be attributed to
worldwide consensus on protocols. If this were not the case, the Internet would be a veritable digital
Babylon
“Due to the lack of detailed statistics in this area I am unable to supply detailed figures and data. But, I
shall give my evaluations and findings to my best knowledge and hope that it can contribute to complete
your study. HARTING has a focus mainly on connectors for application in the electrotechnical sector and
telecommunication area.
In the field of connectors standardization has generally a strong impact.
The request to facilitate international trade of electric and electronic equipment in a wider sense can be
fulfilled only by consistent and systematic standardization of the electrical interface, so far design,
manufacturing, sales activities and unhampered application is concerned. It is quite difficult to suggest
from the evolution and growth of the beforehand mentioned segments any quantitative influence of
standardized components. But, I would like to emphasize that the standardization of connectors certainly
has extremely contributed to its steady growth during the past 50 years and to its global market access.
As far as trade is concerned, from my point of view the removal of trade barriers had and might have in
the future a much higher impact as the standardization of components. But, it is fundamentally difficult to
assess the influence of one of these topics in figures or data, respectively to be of evidence whether there
is either a higher or minor influence. As you might know the omission of company approvals and audits
by standardization of components and the product and process certification created the widely
harmonization of those products. This effected positively a reduction of the type variety, again causing
higher volume per type, greater production lots manufactured in more economic processes, finally lower
product prices and higher product volume.
In the telecommunication area it is essential to differentiate between e.g. telephone base stations and
mobile phones. As for all basic equipment, standardization of its components will increase the quantity of
identical equipment by identical design, the volume for mobile phones will be increased by frequent
model modification and permanently improved features. Mobile phones are applying preferably
customized connectors, the influence of standardization on volume is minor.
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Economic considerations in standardization research

Prepared by Craig Bullock ISUG
“Standards balance conformity and diversity (Hawkins) or order and freedom (David)”.
Introduction
Paul David (1987) has described standards as belonging to a three level taxonomy which includes standards:
for reference and definition (sometimes
to define minimal admissible attributes (similarity standards or minimum quality);
for compatibility (or interopterabilitiy.
Others (e.g. Allen and Sriram, 2000) subdivide reference or definition standards into fundamental for measurement
purposes, or prescriptive for processes, or discuss quality of performance based standards, interoperability
standards, etc. The overall result, however, is, according to Maskus and Wilson (2000), to facilitate exchange,
guarantee quality and to achieve the provision of a public good.
This brief review serves to indicate the economic implications of standardization, for producers, consumers and for
society. It also indicates how firms’ competitive strategies can affect their attitude towards standards. The paper
contains sections which discuss issues of compatibility, product differentiation, competition, innovation, consumer
welfare, the environment, trade and health and safety. It also offers some initial suggestions for common questions
that could be put to companies in different sectors.
The paper observes that companies’ competitive strategies are varied and complex. The implications of this for
deciding whether standards are good or bad is further complicated by the different objectives of consumers and by
the distinction between consumers and the rest of society. Furthermore, there are many linkages and
interdependencies between each heading, particularly competition, innovation and consumer welfare.
1. PRODUCT COMPATIBILITY AND COSTS
The achievement of product compatibility is one of the principal rationales for standardization. A high degree of
compatibility can be expensive to achieve and the benefits of compatibility are rarely confined to one direction or to
just two players. Rather they occur through interaction among a range of companies. Nevertheless, in aggregate,
compatibility is a good thing. It encourages companies to compete on price which benefits consumers and increases
demand for the immediate product as well as that for associated products. It reduces the cost of maintenance as
replacement parts can be sourced from a number of competing suppliers. It further reduces transaction costs as
consumers do not have to investigate the characteristics of each product before purchase and are at less risk of
making mistakes. The reduced costs and lower risks increase sales, which in turn, allows successful companies to
exploit economies of scale.
The stock of investment and usage associated with a particular product is known as the installed base. The
investment could be of physical capital, or human capital, an instance of the latter being training, e.g. in a computer
language. Compatibility standards extend the benefits of the installed base to many companies or consumers.332
Each consumer who purchases a compatible product adds to this installed base and, in doing so, provides network
economies to other consumers who benefit from the expansion of the market. Consumers benefit from buying into a
large installed base, for example when they purchase a PC, use the internet of hire a video. Where products are
connected and used to communicate, the benefits are direct, as in the case of subscribing to cable TV where the
benefits depend on the number of other subscribers. Alternatively, where goods are complementary, the benefits are
indirect as, for example, with the purchase of a common make of car for which many spare parts available (Katz &
Shapiro, 1986).
332
Krechmer comments that, through the installed base, compatibility standards add “coordination effects” to the
“self-reinforcing effects” possessed by similarity standards.
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The scale of the benefits depends on the utility associated with the network and that associated with the original
product. They include the assurance of compatibility, less time spent gathering information, reduced need for
training, more choice, easier servicing and lower costs, but are not straightforward to quantify in relation to the
compatibility standard. Furthermore, both consumers and companies will also consider future network size before
embarking of a new purchase or investment. Standards therefore assure both companies and consumers of the future
(multi-vintage) compatibility of their investment.
The greater these benefits, the higher the prospect of standardization. This occurs because network economies are
shared. Positive externalities are passed onto other users and the total benefits therefore exceed the sum of
individual benefits. As private markets would underprovide for these total benefits, standards have the properties of
a public good. To private firms, the social value of compatibility standards therefore appears to be less than the
private value (Maskus & Wilson, 2000). As such, it would not be surprising if established companies fail to
appreciate the full aggregate benefits of standards. For example, a car parts supplier might lament the intense
competition it faces from companies producing a very similar product, but fail to realise that the total market size
may be greater due to car owners appreciation of the easy accessibility of parts when making their purchasing
decision.
In the above example, compatibility has increased the size of the market and made available economies of scale.
However, standards have also increased the elasticity of substitution between products. Rationalisation of the sector
could also follow. The failure to realise the aggregate benefits of standards means that compatibility standards are
expensive to negotiate and introduce. This is especially the case where a company has already built up an installed
base for its own product. Its customers would suffer too by incurring switching costs. However, Swann (2001)
describes such lock-ins as a “myth”. Moreover, adapters are often developed which allow users to avoid the cost of
converting installed bases. Such gateways permit the continued existence of variety which many consumers might
prefer. Although, David and Steinmueller (1990) argue that gateways can undermine comprehensive standards.
Ultimately, an industry may itself recognize the benefits of extending network economies and develop common
standards. Krechmer (2000) notes that there is a “self-reinforcing” incentive associated with compatibility standards
as companies come to appreciate the benefits of network economies. Self reinforcement, he says, “is based on the
understanding that greater use of a technical development promotes yet further use”.
Summary Points and other Considerations
Compatibility increases price competition and reduces costs [Competitive Structures].

By providing information, standards directly lower transaction costs [Consumer Welfare].
Maintenance becomes more routine and there is no shortage of spare parts.
The assurance provided by standards provides for reduced risk and liability. For example, corrosion rates are more
predictable [Consumer Welfare, Health & Safety].
Purchasers of inputs have less dependence on a single supplier, while the suppliers can supply to more than one
company. Costs are reduced (note the current trend to out-sourcing) and this reduction is especially important
to large companies using many components and requiring inventories.
Compatibility leads to network externalities which are similar to economies of scale [Competitive Structures]
[Consumer Welfare].
By opening up the installed base standards behave as a public good, but this means their benefits are not appreciated
fully.
2. PRODUCT DIFFERENTIATION AND COMPETITIVE STRUCTURES
The alternative to compatibility is differentiation. In classical economics, the scenario of perfect competition
involves manufacturers producing identical products and selling these only at an identical price. There are no
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restrictions on entry to the market by new companies who would be attracted by any abnormal profits that might
occur. Theoretically, if perfect competition is replaced by imperfect competition, there will be lower output, an
inefficient allocation of resources and involuntary unemployment. However, for a variety of reasons, not least the
incentive for innovation provided by the prospect of profit, the imperfect competition typically found in the real
world can be an efficient motivator of economic growth.
Naturally, this suits most companies who do not like perfect competition. Instead they seek to differentiate their
products and, to a large extent, this differentiation can benefit consumers who (invariably) have dissimilar tastes.
There can be:
horizontal differentiation in which each differentiated product has its adherents, and
vertical differentiation where consumers generally prefer the higher quality products but trade off quality against
price.
A further variation is provided by the general substitutes model in which consumers’ make complicated taste/price
trade-offs based on different mixes of goods. In this case, variations in product specifications only have a marginal
impact on the choices people make.
Standards are often described as reducing variety. This can be an important role in that it increasing the potential to
exploit economies of scale and reduces the risk faced by suppliers. Variety reduction also facilitates the more
orderly development of new technologies. Unfortunately, it is easier to discuss the efficiency losses which would
occur in the absence of compatibility standards than it is to demonstrate obvious benefits from existing standards.
Nevertheless, companies often recognize the benefits and develop consensus or de facto standards.
Except where products are by necessity homogeneous, standards do not preclude differentiation. Indeed, even
where standards ensure tightly defined similarity between products, companies often find that advertising can give
the customer the impression that more variety exists in the market. Consequently, competitive marketing strategies
can continue. In the absence of standards, higher quality producers could go out of business as companies compete
to reduce costs in a market where customers are vulnerable to the purchase of “lemons”. Companies do not relish
price competition.
Proprietary standards
Companies’ willingness to co-operate with standardization will be greater where the standards are considered to be
competitively neutral. Open standards will be less popular where technological development is rapid and there is
the potential to establish profitable patents. As innovation is costly and risky, companies often seek to establish
proprietary standards to provide a return on R&D., especially where they are confident that that can capture a large
market share. Proprietary standards preserve the differentiation of their products.
Through such means the company can choose either to restrict access (e.g. by licensing) or to allow open access,
depending on its market strategy. However, companies who adopt the proprietary standard do so at their own risk.
For example, the strategy might require them to produce a range of complementary products, but at the risk of a loss
of specialisation and inefficiency. There is also the risk that competitors who anticipate large future network
economies will attempt to challenge the standard by promoting and advancing their own products.
Widening the use of a standard through licensing to others also exposes the company’s product to the risk of
imitation. If the company lowers the cost of the license in order to increase its market share, it risks the possibility
that rent (profit) from the proprietary standard will diminish as the product comes to resemble a common standard.
Once in the public domain, the opportunity to use the product as a competitive tool is much reduced.
Competitive strategies
Competitive strategies involve an interpretation of consumer behaviour and competitors’ response as well as the
anticipation of future developments, both endogenous and exogenous. There are no clear rules. For instance, a
company could combine open and restricted standards by having an established market share based on an open
standard while simultaneously developing new variants of its product. It could be a monopolist at one end of its
product line and a proponent of competition at the other. If it is in a secure position of market leadership, the
company could even benefit from the innovation of its competitors or from any expansion of the market achieved by
its product having become the industry standard. This would especially be the case if its economies of scale and
cost structure make it better placed than its competitors to profit from the expansion.
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A recent development is the emergence of what Krechmer (2000) calls “etiquette standards” where by a
company’s possession of a discrete technology (or a differentiated product) is preserved through a licensed
character string, or “branded ID”, while the benefits of system compatibility are maintained. The advent of
new communications technology has permitted this development which permits companies to protect
proprietary interests while allowing full compatibility early in the life of the product. As such, etiquettes
are likely to become a new device for advancing competitive strategies.
Monopolies and Oligopolies
Where network economies are large, there might only be room for one network. Such a situation might sustain a
single company, a natural monopoly. More typically, the monopolist would be expected to have achieved its status
by winning through the competitive game, perhaps on the basis of a crucial innovation and clever use of proprietary
standards. The monopolist no longer faces an infinitely elastic demand curve at a single price found in perfect
competition, but can practice price discrimination to extract the maximum that different consumers are willing to
pay for its products. In the case of horizontal differentiation, a specific product, which is in high demand, could
transform its manufacturer into a monopoly that is and be able to raise prices, restrict supply and engage in
discriminatory pricing (e.g. Play Station 2).
However, monopolies are rare even where there is horizontal differentiation. Where there is vertical differentiation
competition is yet more typical. A far more common regime it that of oligopoly where the market is dominated by a
few major companies. In these cases, producers’ costs have as much to do with determining their competitive
strategy as does consumer behaviour. By way of illustration, the two main theoretical examples are:
The simplified static case of interdependence, or Nash duopoly, in which two companies maximise their product
differentiation and consequently their market share and profits. However, where costs rise with product quality
(as might be expected) the stability is undermined, competitive strategies emerge and no long-term equilibrium
is achieved.
A Cournot duopoly in which revenue increases with improvements in quality and both firms attempt to achieve the
best quality even though, together, they could earn higher profits with lower quality products. Fearful of a price
war, the companies seek to maximise the differentiation of their products.
For our purposes there is no need to commit these examples to memory, but they serve to illustrate how competition
and product differentiation can arise and this will influence companies’ willingness to accept standardization.
Product differentiation becomes a weapon of competition. With standards there is less market risk. Without, the
stakes are higher.
Standards can become a weapon of competition. Increasingly, economics is analyzing such competition through the
use of game theory in which a variety of complex different outcomes can occur. In only some of these cases is an
equilibrium (i.e. stability) achieved, more typically in the case of horizontal differentiation and then only
temporarily. In some other cases, such as in the simplified examples above, there is an incentive to collude. By
such means, companies can segment their market and practice price discrimination in a manner similar to the
monopolist. But collusion carries an incentive to cheat.
Stability could cause dominant companies to favour the introduction of standards. Equally, disequilibria could
cause disadvantaged companies or would-be entrants to seek standardization. By comparison, policy makers have
wider objectives and must consider consumer interests and the prospects for economic growth in the long-run.
SUMMARY POINTS AND OTHER CONSIDERATIONS
Product differentiation is the alternative to compatibility.

Lead companies can try to secure the market share for their differentiated products through the use of proprietary
standards [Compatibility].
Should an official standard be introduced, manufacturers can either add additional attributes to differentiate their
product, or compete on price or service.
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Oligopoly is a common form of market structure and involves interaction and complex competitive strategies.
Price competition is unpopular amongst oligopolists as it reduces joint profits. Instead, they prefer to engage in non-
price competition, e.g. branding/product differentiation, advertising, etc.
Game Theory is used to describe these competitive strategies and has also been applied to standardization. There
are circumstances in which product or proprietary standards can convey competitive advantage. On the other
hand, if standards lead to too much competition, they eliminate the profits needed for R&D [Innovation].
Standards generally make it easier for new entrants to a join a market (increasing the number of new firms).
Although, as entrants may need to differentiate their products to survive, too much standardization can be a bad
thing. In the long-term, the survival of these companies may depend on how the industry’s costs vary with
increased output (its cost curve). If these rise, some companies will drop out of the market while others expand
and ride along on the economies of scale.
To ensure competition, a limited number of companies should not be allowed to determine standard design
[innovation].
3 INNOVATION
Innovation is inseparable from market structure and, as such, is an element of competitive strategy, be this
aggressive, defensive, imitative or opportunistic. In particular, it introduces a dynamic inter-temporal element into
competition. This same dynamism encourages economic growth. Swann et al (1996) find a close correlation
between expenditure on R&D and the national number of standards. In his report to the DTI, Swann (2000)
describes standards as the “soft infrastructure” supporting innovation-led growth. In this way, standards provide
“credibility, focus and critical mass, in markets for new technologies”. He acknowledges that standards can
constrain some innovation, but that well-selected standards provide a larger counter benefit by setting the basis for
future innovation. Standardization is the pruning required in his “standards tree” for the orderly development of
new technologies. Should companies wish to develop a “new branch”, i.e. a radical new technology, the potential is
still there supported by the opportunity for price discrimination.
The standards formalise the baseline technology, but are also the basis for the diffusion of this technology. The
efficiencies and lower costs made possible by the innovation are made available to others who can follow a way-
marked learning curve. However, to avoid the accusation that standards allow for free-riding on the investments of
others, there must be a balance between the incentives for innovation involving private gain and the public benefit of
the diffusion of new technologies. Technological diffusion makes innovation more widely available, lowers the risk
of duplication of effort and maintains an opportunity for continued innovation from a any of a variety of sources.
However, diffusion could also be achieved by a combination of proprietary standards and licensing.
Research may be undertaken by many small companies in the early years of a technology’s life. However, as the
technology matures, research becomes dominated by a few larger, more successful companies in the expectation of
profit. As such, innovation is a beneficial characteristic of oligopoly.333 At present, this observation is especially
pertinent given the opportunities offered by new technology for changes in market structure.
In essence, product quality improves more rapidly where innovations are frequent and last year’s technology has
become the de facto standard. The technology becomes established through new technical standards which raise
minimal product quality over time.
Active competition leads to rapid innovation. The firm which innovates first earns a rent from its invention until its
rivals introduce a new superior innovations. In this way, firms may continually leap-frog one another with new
innovations. Companies may also choose to restrict access to new innovations through proprietary standards,
especially where there has been a large initial investment in R&D. A major innovation could permit the originator
to benefit from economies of scale and achieve a position of market dominance. Consequently, technical or design
standards are frequently proprietary, while quality or dimensional standards are not.
However, there is also an incentive to slow down the rate of innovation. Firstly, the risk that an R&D process will
fail slows down the rate of innovation even though the lower frequency increases the expected profit. The existence
of network economies also raises the risk facing any company that wishes to move to a higher standard made
possible by technological change.
333
after Schumpeter (1942).
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These same network externalities and the rapid rate of technological change mean that informal standards are
developed often as a collaborative process between companies. Farrell and Saloner (1985) find that where the
benefits are clear everybody joins the “bandwagon”.334 The rate of innovation may appear to be slowed down by
informal of formal standardization, but it rather becomes more orderly. Indeed, most innovations are still safe and
relatively inexpensive. There is still the potential for new radical innovation.
There is a link to the installed base discussed in the section of compatibility. A large installed base facilitates co-
ordination between companies (co-ordination effects). If the installed base is formalised through the introduction of
a standard then technological diffusion occurs through which the technology is adopted by a wider market. A
standard could benefit the competitive strategy of the innovator by allowing it to further expand market share.
Although, more generally, standardization is easier to achieve where it is competitively neutral, i.e. where it has an
equal or non-discriminatory impact on each firms’ installed or customer base. For similar reasons, standards may be
more common in industries comprised of companies which are not very vertically integrated, i.e. where a company’s
products are not dependent on its brand of inputs or own outlets.
The greater the installed base for a product, the more difficult it is for companies and consumers to consider a switch
to a new technology. Often competing installed bases evolve because technology changes too fast to permit a single
standard to become established. For example, the installed bases of both PCs and MACs are still expanding. If
enough people are using a particular technology, forcing its obsolescence through the introduction of a single
standard could worsen consumer welfare even if it is based on a superior technology. There are many examples
where old technologies survive or co-exist with new technologies simply because they already have a large installed
based (e.g. cassette tapes vs CDs). Often the relative supremacy of companies leapfrogs back and forth in response
to new developments in their respective technologies.
Consequently, the cost of introducing a standard will be least early in the life of a technology before the installed
base has grown. However, it should be noted that this is also the point at which the risk of selecting the wrong
standard is highest as a false move could advantage the innovator, but have disadvantages for consumer welfare,
competition and future innovation. There are differing opinions on whether the installed base, founded on existing
standards, delays innovation. Swann (2000) and Allen and Sriram (200)) think not, whereas The Economist
(27/2/93), using the example of high definition television argues that the uptake of new innovation can be so
delayed.
Nothing is clear cut. The selection of any standard, even a good standard, in a sector where there is innovation,
could retard the introduction of superior technology while permitting the orderly development of the market and
R&D. Nevertheless, the related installed base, and the profit associated with it, continue as persistent incentives to
competition. Indeed, standardization heightens the incentive to differentiate. Subsequent innovation may be
adaptive rather than fundamental, being restricted to improvements in products or processes, focusing on
components rather than the parent technology. Nevertheless, there remains an incentive for companies to break out
of the mould by introducing radical new technologies, at least where there is some confidence about future market
size. It would be more straightforward where a company invents a gateway. In this case, it is suddenly in a position
to challenge the supremacy of companies who are benefiting from a large installed base to which others had limited
access.
Consequently, the threat of competition is kept alive. However, Krechmer (2000) adds a cautionary note that the
emergence of private etiquette standards (whereby innovators can brand a product within a technology chain) are
allowing software companies to preserve their proprietary rights. Etiquette standards have benefits for
compatibility, variety and innovation (by providing an assurance of profits), but they do present a new problem for
policy makers trying to maintain competition in industries where there are rapid changes in technology.
Summary points and other Considerations
Economic growth is very dependent on the diffusion of new technology and technological progress
The transparency provided by standards opens up opportunities for technology transfer and for the diffusion of new
technology. Even for the innovative companies the benefits of sharing data may begin to exceed the perceived
334
At least under assumptions of good information, non-delayed adoption, and no great market concentration.
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risk of revealing one’s own results. The existence of standards also provides an assurance that other companies
will ultimately have to patent or reveal the results of their R&D [Competitive Structure].
The risk associated with R&D is reduced and there is no danger of re-inventing the wheel.
By reducing the prevalence of turn-key systems (where one company has a dominant technology), standardization
ensures that innovation can occur from companies at any point in the chain.
With or without standards, innovation is an element of competitive strategy.
For the same reason, companies are encouraged to collaborate. Strategic alliances can be formed which can pool
resources for innovation. Such collaboration is becoming more important for successful innovation, although
there is an obvious risk to competition given existing incentives to collude [Competitive Structure]
[Government Intervention].
The emergence of private etiquette standards is allowing innovative firms to hold on to their proprietary rights while
benefiting form the existence of network economies.
4 CONSUMER WELFARE
Where markets are vertically differentiated, consumers (including companies buying from suppliers) can select
either the cheapest product or that with the highest quality. However, this requires them to be well informed and
suppliers attempt to control this information through advertising.
Standards have important public good characteristics. The assurance provided by a standard reduces uncertainty and
the need to gather information about a product, so reducing transaction costs. This assurance also applies to product
quality and allows consumers to trade-off quality and price. Consequently, consumers make more informed choices
and this leads to greater consumer satisfaction regarding a product’s performance. Even the process of
standardization has an information benefit by raising awareness. Indeed, this is an explicit role of the US standards
agency.
Furthermore, by introducing compatibility, standards lower costs and provide an assurance of product reliability.
This includes an assurance of the product’s safety, for which consumers are generally be willing to pay a premium.
Consumers are better placed to adapt to new products and technological change. New technologies are easily and
quickly adopted, at lower prices, and without the need for customisation. By replacing product differentiation with
the likelihood of increased price competition, consumer welfare is increased through an income effect. The savings
are available to be spent on other products with a corresponding economic benefit.
However, consumers are not homogeneous. Swann (2000) identifies three essential types, the “calculating
optimizer”, those “without fixed preferences” (the don’t knows), and the “innovative consumer”, of which the last of
these possesses continually changing needs and preferences. Many consumers will value the network economies of
buying into a common standard and the ability to do so at a lower cost. However, there is a trade-off between
choice and price. Variety reduction reduces transaction costs, but there are consumers who will value variety above
similarity or compatibility. Standards have the effect of reducing variety and, if too comprehensive, could diminish
the utility of this latter type of (mix-and-match) consumer.
Therefore, the technology to which standards are applied is important. If applied to a parent technology, there is the
opportunity for continued differentiation and for companies to focus their innovation on components or product
levels in a market that is vertically differentiated. This would benefit consumer welfare at least where consumers
are not wanting a variety of parent systems.
Generally, standards will have a positive impact on consumer welfare unless they are poorly selected, suppress
innovation or are too comprehensive to permit some level of variety. However, the increasing prevalence of more
informal or private voluntary standards, or of greater participation of industry in standardization, has implications
for consumer welfare (Casella, 1995). This means that impacts on consumer welfare should receive an equivalent
amount of monitoring.
Summary Points and other Considerations
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Standards have an information effect which reduces uncertainty and transaction costs.
They provide an assurance of a product’s quality or performance . Maintenance becomes more routine [Product
Compatibility].
Where price differentiation is replaced by more price competition, the demand for all products is increased and there
is a corresponding income effect that increases consumer welfare and demand for other products.
Consumers are assured of a product’s safety [Product Compatibility].
Consumers find it easier to recover their money when disputes arise.
However, consumers are not homogeneous and so standards will benefit some more than others.
5 GOVERNMENT INTERVENTION
Governments have a unique role in creating new markets where the free market has failed. As noted earlier in the
section on compatibility, the market will undersupply standards as the sum of private benefits will not match the
total public benefit. This public benefit applies to consumers, but also the private enterprise for whom total market
demand is increased and input costs reduced. Standards are a positive intervention. Companies might together
agree to various compatibility or performance standards, but are far less likely to co-operate to produce technical
standards without government intervention.
Another characteristic of market failure is that individual companies will invest more than an optimal amount in
R&D by failing to take account of the research by others. Therefore, one reward for private sector’s acceptance of
standardization is government sponsored research particularly into the base technologies which are neglected by
business, a past example being the case of superconductors. Much of the research fostered by the EU involves
bringing together partnerships of companies, research establishments and users with the objective of advancing
Europe’s position in international trade. All gain from this co-operation, although undoubtedly some are better
placed to exploit the new discoveries than others. Economies are also achieved by concentrating certain avenues of
research in fewer European centres.
Another reward are economies of scale which lower costs for all companies. Economies of scale were a major
rationale for the Single Market. Helping European companies to exploit economies of scale by furthering EU
standards at international level are also a factor in trade policy.
Standardizers should also be conscious if the need to protect the prospects of small businesses. SMEs were
responsible for 3 million new jobs in the EU between 1988 and 1993. While rarely in a position to topple major
companies, but they can be highly innovative as they seek to develop new market niches. As a means of diffusing
new technology, standards allow competition policy to keep the threat of competition alive even where the market
structure is one of oligopoly.
The only problem is that the standardizers are not infallible. They must ensure that there is continued opportunity
for innovation and that the wrong technology is not selected prematurely. However, with so much technological
progress, this objective is not easily achieved. Moreover, they might lose sight of the essential public benefits given
that consumers are rarely represented in the standardization process, especially where this is long drawn out. The
standardizers are also vulnerable to institutional capture from larger companies or those at the centre of the
innovation process. Therefore, a limited number of companies should not be allowed to determine standard as this
could convey a undue competitive advantage.
6 The Environment and Standards
Policy markers have an inherent attachment to regulation (command & control). Engineers have an attachment to
regulations which impose technical solutions. Economists, of course, can be characterised by their opposing
admiration for the market. This predilection reveals itself in the argument that many environmental goals can be
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achieved through the market by making more widespread use of economic instruments, including taxes, subsidies
and (pollutant) emissions trading. Environmental policies are necessary because much manufacturing has an
external environmental cost which must be borne by society.
Regulation is often defined as a mandatory standard. Regulatory standards are often defined by a public agency to
ensure compliance with certain norms. The environment, and health and safety, are typical territory in which
regulatory standards are applied.
Their argument is that regulation sets too fixed a requirement for all companies irrespective of their size or cost
structure. Regulations also require expensive enforcement and monitoring. Economic instruments on the other
hand, allow companies greater flexibility in choosing how to reduce environmentally damaging activities so that an
optimum level is achieved that is fair to both business and society. A company must pay a tax on its pollution, but
can itself choose the means to reduce the pollution.. Taxes can also be easily readjusted in the light of new
information.. In the meantime, government receives revenue from the tax while the company has a continuing
incentive to reduce emissions even to a level below the threshold that might be set by regulation.
Taxes still depend on certain acceptability standards and these could be prescribed in legislation. However, where
products are concerned, standards do behave as a form of regulation and one that is directed at both the
environmental impact of products as well as the industrial processes behind them. They can be used to regulate the
type of materials used in manufacture, energy use, the environmental consequences of products’ transportation, re-
usability and waste. In many of these instances, regulation still has its place. This is especially so where certain
minimum environmental standards must be met, e.g. to minimise the health or ecological risk from toxic pollutants.
In this respect, economic instruments are less reliable as they do not provide for absolute control. The only proviso
is that policy makers do not always know where the critical thresholds lie.
In practice environmental standards have often been treated secondary to standards directed at achieving trade
within the Single Market. Implementation of environmental standards has also been confounded by continued
variations in national environmental policies, in particular the contrast between systems based on critical thresholds
and those based on ambient environmental standards. The latter are determined by the capacity of local
environments to assimilate (for example) pollution. Gradually, national environmental policy is being superseded
by EU Directives and their associated suite of standards.
As with H&S, can refer to the prod process or the product itself.
SUMMARY FACTORS AND OTHER CONSIDERATIONS
Environmental objectives may be met through regulation or economic instruments.

Economists generally prefer the latter given their flexibility.
However, regulation is better where absolute targets are concerned.
Product standards operate as a form of regulation, but in some cases economic instruments would be a more
acceptable alternative.
In many cases environmental standards have played second fiddle to other economic objectives and in some cases
these objectives are counteractive.
TRADE
In classical economics, trade is good as it permits counties to exploit their comparative advantage in producing
certain products. This allows countries to move off their productive frontier, i.e. to consume more than they would
otherwise be able to produce (given their factor endowment). It also allows them to meet economies of scale in
production than would not necessarily be possible if a company were simply meeting the needs of domestic
consumers.
However, this assessment is static. It suggests that a country’s comparative advantage is fixed and that factors of
production are immobile. That for example, Great Britain was forever to be a major manufacturer of cotton clothes.
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It also assumes that countries are already operating at full capacity when in fact it might be difficult to redeploy
workers from an industry whose market is threatened by cheaper imports from a country with a comparative
advantage in that product.
Today, economists are more likely to empress the virtues of trade as an essential means of the international diffusion
of new technologies, for increasing competitiveness (with its advantages of lower costs for consumers) and for
eliminating inefficiencies within domestic industries. Moreover, trade flows are often an outcome of product
differentiation rather than comparative advantage. As such, varying rates of technological progress between nations
come to dominate comparative advantage.
Consequently, the role of standards in trade is important given their relationship with product differentiation and
innovation. Given globalisation and the emergence of certain trading blocs, national policies often actively favour
large companies whose innovation is viewed as an economic benefit. Standards can be selected to support
continued innovation and to reduce the costs of domestic industries, but also to support the international expansion
of certain companies. In the last of these, there is the potential for conflicts with internal competition policy. As
tariffs are being gradually dismantled, attention has shifted to standards and regulations as instruments of trade
distortion (Casella, 1195).
Mutual Recognition Agreements
In addition, standards communicate information and this promotes trade together with consequent scale economies.
For example, intra-EU trade in electromagnetic products increased rapidly once common standards were adopted.
Standards also provide an assurance of a product quality and so contribute to increasing a country’s exports.
Similarly, standards make it easier for developing countries to sell products in an international market and for
industrialised countries to sell into developing markets.
Communication of information is especially useful for manufactured goods which are subject to variety in
characteristics. The cost-raising aspect may be more prevalent for homogeneous goods. Welfare gains in the EU
could be sizeable – 1% of GDP (Maskus & Wilson, 2000).
Swann et al (1996) add that an assessment of the economic impact of stands on trade has three dimensions, namely
the impact on non-price competitiveness and trade performance, the examination of non-tariff barriers, and as a
contributor to economic integration. Although there is no a-priori reason why standards should be the same in
different countries, simply that trade. itself brings about a convergence of tastes and incomes which can eventually
permit a convergence of international standards (Casella, 1995). However , this convergence is never total as
countries with varying rates of economic growth are continually looking to modify standards.
Swann (2000) found very elastic response between standards and imports/ exports. But results were contradictory
when other countries were taken into account. Feedback effect was unclear – do standards increase because of trade
volumes or does greater trade lead to more standards. As with relationship with patents and innovation, causality is
unclear. Moenius (1999) found positive relationship suggesting that a 1% rise in shared standards led to a 0.32
increase in trade.
As standards expand scale, but reduce variety, the impact on trade is uncertain. According to an OECD survey
(1999) most companies did not consider standards which impede trade to be serious matter.
An important consideration is that a rising proportion of trade is intra-industry, e.g. between component makers and
final manufacturers (52% in 1990). A further factor is that the rise of global corporations, much international trade
is also becoming intra-firm. Although firms may have their own internal standards, the search for competitive
components means that common standards can facilitate domestic companies’ involvement in international trade,
albeit in competition with third countries.
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New markets are opened up because new consumers can be convinced of an imported product’s quality.
Traditional definitions of comparative advantage are being replaced by newer interpretations in which successful
product differentiation and relative technical progress play an important part.
Standards facilitate domestic companies engagement in international trade and are especially beneficial given the
increasing proportion of intra-industry trade.
Policy makers often use standardization as a tool of trade policy.
As such, this can often be in conflict with domestic competition policy.
Health and Safety

Advances in technology mean that human capital (labour skills and knowledge) is becoming crucial to economic
success. Consequently, developed countries have adopted policies to raise and advance human capital. The EU’s
objective of convergence for instance seeks to raise labour standards throughout the community and in aspirant
member states. However, competitive forces can operate in the opposite direction by making it difficult for
companies to raise employment standards. Consequently, there have always been interest groups who complain of
the competition threat from low-wage economies. Nevertheless, the rising importance of human capital means that
economic prosperity is increased in the long term if policies support activities which compete through increased
efficiency rather than through lower wages or poor employment standards.
Workers’ health and safety is related to the incentive effect of wages in that more hazardous jobs commend higher
wages. Health and safety standards will contribute to reducing the basis of these wage differentials. Although, as
with wages that provide adequate remuneration, occupational health and safety standards support increased
efficiency in the long-term. H&S standards directly boost efficiency but through higher productivity (e.g. through
reduced sick leave) and by lowering the health care and other economic costs associated with suffering.
Lower rates of sick leave, lower insurance costs and injury awards benefit employers. Nevertheless, health and
safety regulations have been criticised as being too stringent or bureaucratic. Standards which are too stringent
could imply that costs exceed the benefits of higher safety (although compliance costs will fall with time).
Consequently there has been a move by the European Agency for Safety and Health to encourage members states to
conduct cost-benefit analysis of their H&S strategies. As with the environment, there has also been a movement to
more market based “incentives” in recent years. These include subsidies and penalties intended to ensure that
employers meet H&S standards. Social insurance schemes and private insurance schemes, where tailored to the
firm, also encourage employers to adopt satisfactory H&S practices.
The economic benefits of this package of health and safety regulations has not been accurately calculated in many
EU countries, but have been estimated to range between 1% and 3.8% of GNP allowing for large national
differences (EASHW, 1997). The reverse side of the equation is the cost of poor H&S. In Britain, losses to
employers have been estimated at between £4.5-£9 billion, mainly due to sick leave. The direct cost to accident
victims and their families has been estimated at between £6-£12 billion. An economic estimate of the cost of pain
and suffering (i.e. people’s willingness to avoid this) has been monetised at an additional £4 billion.
Only a few employers conduct a financial analysis of their H&S policies, e.g. Rover Cars. Although firms operating
in hazardous sectors do apply appraisal and risk assessment.

The existence and enforcement of H&S standards are a component of any assessment of working conditions;
Good H&S standards force firms to operate on a level playing field, encouraging competition based on efficiency
rather than the knee-jerk reaction of cutting labour costs;
Poor H&S imposes a direct cost on employers, workers and the economy;
However, H&S legislation should consider the cost and benefits of compliance, particularly for SMEs.
There is a role for incentives which are not directly linked to specific H&S standards.
Maskus & Wilson (2000) suggest that aggregate data studies are useful for braod trends, but that detailed
microeconomic, firm level studies of compliance costs, quality responses, investment in redesign or production
methods, and export / import impacts might be better.
Page 38 0f 53
Abbreviations Used
ANNEX 13: Abbreviations used

A listing of all the abbreviations used in the reports (Parts 1 and 2)
AAMI The Association for the Advancement of Medical Instrumentation

AAR Association of American Railroads
ABB Asea Brown Boveri
AECMA Association Europeenne des Constructeurs de Materiel Aerospatial, European Association of
Aerospace Manufacturers
AENOR Asociacion Espanola de Normalizacion y Certificacion
AFNOR Association Francaise de Normalisation
AIA Aerospace Industries Association of America
AIC Airbus Integrated Company
AIMDD Active Implantable Medical Devices
AMS Automatic Measurement systems
ANEC (Association de Normalisation Europeenne pour les Consommateurs, European Association for the
co-ordination of consumer representation in standardisation) the European Consumers’ voice in
Standardization
ANSI American National Standards Institute
AS 9000 Aerospace Basic Quality System, is the aerospace version of ISO 9000. AS9000 contains ISO
9001 in its entirety with the addition of 27 clarifications or qualifiers and 8 notes to the existing
twenty elements of ISO 9001. The document was developed by a consortium of aerospace prime
contractors operating as a subcommittee (AAQG) under the Aerospace and Defense Division of
the American Society for Quality Control
ASA American Standards Association
ASB Associated Body
ASME American Society of Mechanical Engineering
ASTM American Society for Testing and Materials
ATC Air Traffic Control
ATEX Explosives Atmospheres Directive
AWG Avionics Working Group
B Billion 109
B2B Business to Business
B2C Business to Customer
BA e British Aerospace
BEC British Electrotechnical Committee
BEUC Bureau Europeen des Unions des Consommateurs
BRC British Retail Consortium
BSI British Standards Institution
CAB Conformity Assessment Bodies
CAMs Continuous Ambient air-quality Monitoring systems
CDMA Code Division Multiple Access
CECED European Committee of Manufacturers of Electrical Domestic Equipment
CECIMO European Committee for Co-operation of the Machine Tool Industries
CEFIC European Chemical Industry Council
CEFIC European Chemical Industry Council
CEMs Continuous Emissions Monitoring systems
CEN Comite Europeen de Normalisation, European Committee for StandardisationCEN EHD CEN
Environmental Help Desk
CENELEC Comite Europeen de Normalisation Electrotechnique, European Committee for Electrotechnical
Standardisation
CENTREL A regional group of four power companies. CEPS of the Czech Republic, MVM Rt. Of Hungary,
PSE SA of Poland, SE A.S. of Slovakia
CEPT Conference Europeenne des Administrations des Postes et des Telecommunications, European
Conference of Postal and Telecommunications Administrations
CHP Combined Heat and Power
CIES Food Business Forum
CIS Cooperative Insurance Society U.K.
CNATM Caisse Nationale D'assurance Maladie
Page 39 0f 53
Abbreviations Used
CO2 Carbon Dioxide

COCIR European Coordination Committee of the Radiological and Electromedical Industries
CORBA Common Object Request Broker Architecture
COTS Commercial-off-the-shelf
CPD Construction Products Directive
CR CEN Report
CRAM Card Random Access Memory / Computational Random Access Memory
CSS Cascading Style Sheets
CTS Common Technical Specifications
CWA CEN Workshop Agreement
DECT Digital Electronic Cordless Telephone
DC Direct Current
DG Directorate General
DIN Deutsches Institut fur Normung e.V. German Institute for Standardization
DIS Draft International Standard
DOM Document Object Model
DOS Disk Operating System
EA European Co-operation for Accreditation
EAN European Article Numbering
EADS European Aeronautic Defense and Space company
ECISS European Committee for Iron and Steel Standardisation
ECMA (1)European Computer Manufacturers Association
(2) European Association for the Standardization of Internet and Communication Systems
EDI Electronic Data Interchange
EDMA European Diagnostic Manufacturers Association
EECA European Electronic Component Manufacturers Association
EEE Impact on the Environment of Electrical product and Electronic Equipment
EFA European Food Authority
EFA European Food Agency
EFQM European Foundation for Quality Management
EFTA European Free Trade Area
ELOT Hellenic Organisation for Standardisation
EMAS EcoManagement Audit Scheme Regulations
EMC Electromagnetic Compatibility
EMC Electromagnetic Compatibility
EMF Electromagnetic fields
EN European Standards
EN European Standard
EN s European Standards
ENV European Pre-standard
EOQ European Organisation for Quality
EOTC European Organisation for Conformity Assessment
ES ETSI Standard; ETSI Central Secretariat
ESO European Standards Organisation
ESS European Standardization System
ETCI Electro-Technical Council of Ireland
ETSI European Telecommunications Standards Institute, Institut Europeen des Normes de
Telecommunication
ETUC European Trade Union Confederation
EUCOMED European Confederation of Medical Devices Associations
EURAS European Academy for Standardization e.V.
EUROM IV European Federation of Precision Medical & Optical Industries, Medical Technology
FAA Federal Aviation Administration
FAO Food and Agriculture Organisation
FDIS Final Draft International Standard
FIEC European Construction Industry Federation
FM Factory Mutual Research Corporation
FTC U.S. Federal Trade Commission
GAD Gas Appliance Directive 90/396/EEC
GATT General Agreement on Tariffs & Trade
Page 40 0f 53
Abbreviations Used
GMOs Genetically Modified Organisms

GNP Gross National Product
GSM Global System for Mobile communications
HACCP Hazard Analysis Critical Control Point
HCFC any of various Chloro Fluoro Hydrocarbons (used as refrigerants and insulation blowing agents)
HD Harmonisation Document
HTML Higher Text Markup Language
HTTP Higher Text Transfer Protocol
IAE International Aero Engine
IATA International Air Transport Association
IBN/BNI Institut Belge de Normalisation / Belgisch Instituut voor Normalisatie
ICAO International Civil Aviation Organization
ICS International Classification for Standards
ICSCA Industry Cooperation for Standards and Conformity Assessment
ICT Information and Communication Technology
ICTSB Information Communications Technologies Standards Board (composed of CEN, CENELEC and
ETSI)
IEC International Electrotechnical Commission
IEEE Institute of Electrical and Electronics Engineers
IETF Internet Engineering Task Force
I-ETS Interim European Telecommunication Standard
IFAN International Federation of Standards Users
IFPUG International Function Point User Group
IFPUG International Function Point User Group
IMAP Interactive Mail Access Protocol
INCOTERMS International Commercial Terms
INES Internet Network for European Standardisation
INRS Institute National de Recherche Scientifique
IPP Integrated Product Policy
IPQ Instituto Portugues da Qualidade
IPR Intellectual Property Rights
ISO International Organisation for Standardisation
ISO The International Organisation for Standardization
ISP Internet Service Provider
ISSS Information Society Standardisation System
IT Information Technology
ITS Information Technology Standardisation (Sweden)
ITS Intelligent Transport System
ITU International Telecommunication Union
IVD In Vitro Medical Devices Directive
JAA Joint Aviation Authority
JASSM Joint air to surface standoff missiles
JPG Joint Presidents Group (CEN/CENELEC/ETSI)
JTC1 Joint Technical Committee of ISO and IEC
KAN Kommission Arbeitsschutz und Normung
kV kilo Volt
LAN Local Area Network
LFE Low Frequency Emissions
LP Liquefied Petroleum
LPG Liquefied Petroleum Gas
LVD Low Voltage Directive
M Million 106
MDD Medical Devices Directive
MIME Multipurpose Internet Mail Extensions
MITI Japanese 'Ministry of International Trade & Industry'
MRA Multilateral Recognition Agreement
MTU Motoren und Turbinen Union
MW Mega Watt
NATO North Atlantic Treaty Organisation
NCC National Consumer Council UK
Page 41 0f 53
Abbreviations Used
NCRA National Cooperative Research Act of 1984 US

NCRPA National Cooperative Research and Production Act
NEC National Electrical Code U.S.
NEMA National Electrical Manufacturers Association (US)
NFPA National Fire Protection Association
NFS Network File System (TCP/IP based protocol for disk sharing)
NGV Natural Gas Vehicles
NIST The National Institute of Standards and Technology (US)
NL Netherlands
NNI Nederlands Normalisatie Instituut
NORMAPME European Office of Crafts, Trades and Small and Medium-sized Enterprises for Standardisation
NOx Oxides of Nitrogen
NSAI National Standards Authority of Ireland
NSF Norges Standardiseringsforbund
NSF National Sanitation Foundation US
NTB Non Trade Barrier
NSO National Standards Organisation
OEM Original Equipment manufacturer
OH&S Occupational Health and Safety
OJ Official Journal of the European Communities
OMG Object Management Group
ON Osterreichisches Normungsinstitut
ON Austrian Standards Institute
OQS Operational Quality Standard
OSHA U.S. Occupational Safety and Health Administration
OSI Open Systems Interconnection
PAS Power Application Software
PC Personal Computer
PCB PolyChlorinated Biphenyls
PED Pressure Equipment Directive
PEP Packet Exchange Protocol
POP Post Office Protocol (network used to receive e-mail)
POSIX Portable Operating System Interface eXchange (for computer environments)
PPE Personal Protective Equipment
preENV Draft of a European Pre-standard
prEN Draft of a European Standard
PTO Power-takeoff
PVC Poly Vinyl Chloride
QA Quality Assurance
QC Quality Control
QFD Quality Function Deployment
QMS Quality Management System
QS Quality System
QS 9000 Special Quality System Requirements of the Automobile Industry for its component suppliers -
QS-9000 is a series of mandatory quality system standards written by a team from the 'big three',
other car makers, and the truck manufacturers. It applies to all suppliers of PRODUCTION parts
and materials to the auto industry. Each car maker has its own requirements as to when first-tier,
second-tier, etc. suppliers will be required to conform.
QS-9000 is a superset of ISO 9001. All ISO requirements are included, plus much, much more, so
they will represent a lot of work for companies that are not already well along the ISO road. QS is
prescriptive to a large degree. There are seven QS-9000 documents and all of them must be
referenced in order to gain a complete understanding of what is required." The QS-9000
documentation is copyrighted by AIAG and must be purchased from them. It is not available on-
line.
QuEST Forum for Quality in Telecommunications
R&D Research and Development
RoHS Reduction of Hazardous product Substances
RoRo Roll on Roll off (Ferries etc.)
R-R Rolls Royce
RRSP Risk and revenue sharing partners and specialized suppliers
Page 42 0f 53
Abbreviations Used
SABE Strategic Advisory Body on Environment

SAE Society of Automotive Engineers
SBAC Society of British Aerospace Companies
SCBA Self-contained breathing apparatus
SDO Standards Development Organisation
SEI Software Engineering Institute
SFS Suomen Standardisoimisliitto r.y.
sic thus, (Latin) used to show that the original text is being quoted
SIS Swedish Standards Institute
SLDRAM Synchronous-link dynamic random access memory
SMB Server Message Block
SMEs Small Medium Enterprises
SNV Schweizerisch Normen-Vereinigung
SNV The Swiss Association for Standardization
SPS Sanitary & Phytosanitary
STACO Standing Committee for the study of principles of Standardization (ISO)
TAPPI Technical Association of the Pulp and Paper Industry
TBT Technical Barriers to Trade
TC Technical Committee
TCP/IP Transmission Control Protocol / Internet Protocol
TDMA Time Division/ Demand Multiple Access
TL 9000 the quality system requirements for design, development, production, delivery, installation, and
maintenance of telecommunications products and services
TQM Total Quality Management
TSP Total Soluble Phosphate
TUTB European Trade Union Technical Bureau for Health and Safety
TV Television
TWh Tera Watt hour
UCPTE Union for the Coordination of Production and Transmission of Electricity
UL Underwriters Laboratories
UMTS Universal Mobile Telephone Service
UNECE United Nations, Economic Committee for Europe
UNI Ente Nazionale Italiano di Unificazione
UNICE Union of Industrial and Employer's Confederations of Europe
UNIX UNiversal IntereXchange
USCAR United States Council for Automotive Research
USD US$ United States Dollar
VDA Verband der Automobilindustrie
VHS Video Home System
VOC Volatile Organic Compounds
W3C World Wide Web Consortium
WEEE Waste from electrical and electronic equipment
WEEE Waste Electrical and existing Electronic
WHO World Health Organisation
WI Work Items
WS/EC Workshop / Electronic Commerce (CEN ISSS)
WTO World Trade Organisation
X TCP/IP-based network-oriented window system
XML EXtensible Markup Language
Page 43 0f 53
Abbreviations Used
ANNEX 14: Bibliography

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Page 46 0f 53
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Page 47 0f 53
Abbreviations Used
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Page 53 0f 53

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STUDY INTO THE IMPACT OF

FINAL REPORT to DG Enterprise

Impacts of Standards Users Group

Nicolo Bellina Maria Luisa Ferrero John Nolan

Totus Ltd. Tel. Int. 353+1+239 0019

2. IMPACT ON TRADE AND FREE MOVEMENT ......................................................17

3. IMPACT ON COMPETITIVENESS AND QUALITY ................................................32

4. IMPACT ON INNOVATION .....................................................................................54

5. IMPACT ON HEALTH AND SAFETY OF WORKERS.............................................72

6. IMPACT ON CONSUMERS ....................................................................................92

7. IMPACT ON THE ENVIRONMENT .......................................................................105

Table 3.1: Quality and productivity improvement example .........................................................50

D. OVERALL IMPACT OF STANDARDIZATION

Impact Hard Circumstantial Anecdotal Negative

E. TRADE AND FREE MOVEMENT

'Normalised' EU trade as % consumption

Other supporting evidence of the impact of standards on trade include:

• the existence of voluntary bodies such as IFAN to promote standards;

Potentially negative impacts of standards on trade can arise either if:

F. COMPETITIVENESS AND QUALITY

Some examples of cost reductions by standardization

Potentially negative impacts in this area are:

Us e o f s tan d ar d s ('ye s ') an d in n o vatio n activity

CIS Innovation survey, DTI, UK

H. HEALTH AND SAFETY AT WORK

Germany 1969 - 1998

Adapted from “Elektrounfälle in Deutschland” (ISUG graphic)

Electrical fatalities at home - Germany 1970 - 1999

Germany Former BRD

Adapted from “Elektrounfälle in Deutschland” (ISUG graphic)

• different types of standards,

• How standards have developed over time

1.2 STANDARDIZATION IN HISTORY

Standardization has played a key role in development of Europe over 30 years. A

I. The Initial Approach to Harmonization

II. The Low Voltage Directive

III. Information on Standards and Regulations

IV. The Single Market—The New Approach

V. CE Marking of Conformity—The Global Approach

Information Technology Equipment - relative

Figure 1.1: Information Technology Equipment

1.3 WHAT DO WE MEAN BY STANDARDS AND STANDARDIZATION?

Standardization is the process of formulating, drafting, publishing and reviewing appropriate

Type of standard (see below)

1.4 WHY ARE STANDARDS USED/NOT USED?

Aware of standard Not aware of standard

Benefit of compliance Cost of adopting Cost of not adopting

Market access Implementation costs Commercial sanctions Official sanctions

Customer Satisfaction Inspection costs Customer rejection

Wider market Regulatory/criminal

Wider choice of suppliers Supply chain difficulties Civil lawsuits

Variety reduction Higher insurance costs

Increased worker safety

Lower product liability claims

1.5 THE CHALLENGE OF MEASURING THE IMPACT OF STANDARDS

Public perception of standardization

• Bananas to be straight! (i.e. perceived Eurocratic nonsense)

Actual danger of bad standardization

• Disadvantages a better product

Standardization is to technical matters as law is to behaviour

1.6 PROJECT APPROACH AND METHOD

interviews with experts, discussions, correspondence, also encouragement to use website

Each of the key research modules is now described in turn.