A Nordic project team, lead by Menon Economics in cooperation with Oxford Research and the Social Science Research Institute of the University of Iceland, has conducted a cross-Nordic study on the economic influence of standards. The study was commissioned as a joint initiative by the Nordic standardization bodies and has benefitted from financial support from Nordic Innovation – an institution that works to promote cross-border trade and innovation between the Nordic countries.
The study combines two different methods
- Macroeconomic approach: Econometric estimation of a productivity model including stock of standards as an explanatory variable covering all five Nordic countries over a time span of nearly 40 years.
- Company level approach: A comprehensive business survey on the benefits of standardization covering 1 179 Nordic companies with prior experience from the use of standards. Case studies based on in-depth interviews with companies in different industries and countries throughout the Nordic region.
Macroeconomic approach. The study shows that standardization has contributed to increased labour productivity in all of the Nordic countries. The estimates suggest that standardization is associated with as much as 39 percent of the labour productivity growth and 28 percent of GDP growth in the Nordic countries during the period. The findings are impressive, but still need to be interpreted with caution. Standardization plays a symbiotic and complementary role with factors such as rules and regulations and technological development, which are only partly controlled for in the estimation model. While standards are central to this process, they form part of a broader architecture for coordinating and disseminating knowledge in the economy.
Company level approach. A large majority of the companies (87 percent) consider standardization an important part of their future business plans, supporting the hypothesis that standardization is an important business tool in the modern economy. There are many reasons for applying standards. When naming the most important reason for using standards, the companies’ responses are equally distributed between standards as a means to “improve market access”, “improve product/service quality” as well as to “reduce risk”. The companies’ most frequently reported benefits from applying standards are that they create trust and simplify communication with their customers, help them comply with regulations as well as improve the quality of their products and services.
Please contact Partner/PhD Gjermund Grimsby for any questions regarding the study. The report can be downloaded here.