This paper was refereed by the Journal of Electronic Publishing’s peer reviewers.
Standardization is a poorly understood discipline in practice. While there are excellent studies of standardization as an economic phenomenon, or as technical a phenomenon, or as a policy initiative, most of these are ex post facto and written from a dispassionate academic view. They are of little help to practitioners who actually are using and creating standards. The person actually creating the standards is working in an area of imperfect knowledge, high economic incentives, changing relationships, and often, short-range planning. The ostensible failure of a standard has to be examined not so much from the focus of whether the standard or specification was written or even implemented (the usual metric), but rather from the viewpoint of whether the participants achieved their goals from their participation in the standardization process. To achieve this, various examples are used to illustrate how expectations from a standardization process may vary, so that what is perceived as a market failure may very well be a signal success for some of the participants. The paper is experientially, not empirically based, and relies on my observations as an empowered, embedded, and occasionally neutral observer in the Information Technology standardization arena. Because of my background, the paper does have a focus on computing standards, rather than publishing standards. However, from what I have observed, the lessons learned apply equally to all standardization activities, from heavy machinery to quality to publishing. Standards names may vary; human nature doesn’t.
The arena in which standardization is played out is reasonably large. Nearly every industry is affected by standards, some more so than others. I believe that it is probably safe to say that the more an industry depends on interoperability for sales and growth, the more standards will be in evidence. Additionally, the more developed a society is, the more standards become necessary. It has been observed that “…(s)tandards are one of the hallmarks of an industrial society. As the society becomes increasingly complex and its industrial base begins to emerge, it becomes necessary for the products, processes, and procedures of the society to fit together and to interoperate. This interoperation provides the basis for greater integration of the elements of society, which in turn causes increased social interdependency and complexity.”[1]
Nearly two decades ago, The Economist published the following in its Survey of Information Technology.
The noisiest of those competitive battles (between suppliers) will be about standards. The eyes of most sane people tend to glaze over at the very mention of technical standards. But in the computer industry, new standards can be the source of enormous wealth, or the death of corporate empires. With so much at stake, standards arouse violent passions.[2]
This statement—echoed in one form or another in most literature on the subject of standardization—is even more applicable today in the IT industry. With the advent of the Internet and the World Wide Web (WWW), open standards and standardization are becoming more a part of the infratechnologies, a term used by NIST to describe a superset of technologies (the technological infrastructure), which "…provide the technical basis for industry standards."[3] As Martin Libicki notes, "(w)ith each passing month, the digital economy grows stronger and more attractive. Much, perhaps, most of this economy rests upon the Internet and its World Wide Web. They, in turn, rest upon information technology standards."[4]
In 1992, the Office of Technology Assessment noted that:
Other goods, like education and standards, are impure public goods. These combine aspects of both public and private goods. Although they serve a private function, there are also public benefits associated with them. Impure public goods may be produced and distributed in the market or collectively through government. How they are produced is a societal choice of significant consequence. [Emphasis mine][5]
With this being the case, one would expect that there would be substantial information on the practice of standardization; however, this is not so. Professional standardization organizations, such as ANSI or the ASTM, offer training courses on how to “do” ANSI or ASTM standards, focusing primarily on how to follow the rules of these organizations in creating conformant standards. Similarly, there is no overarching organization that regulates standards or standardization. Each nation has a National Standards Body (NSB) that serves that nation; the procedures and processes for these organizations are all different. The only common thread is that each NSB is a member of either the International Organization for Standardization (ISO), the International Electrotechnical Commission (IEC), the International Communications Union (ITU), or the Codex Alimentarius. These national bodies produce the bulk of the world’s standards, covering everything from animal traps to salt to tripe to chocolate to electrical safety. However, in the Information Technology arena, a majority of the specifications are now produced by consortia, a less formal standardization organizational structure.[6]
Consortia came into being for several trenchant reasons, and have continued to be created over the past 20 years at the rate of about 100+ a year.[7] The most inclusive list of consortia that I’ve found is a “subscription-only list” that also rates consortia on several axes of concern to participants.[8] There are other free lists as well—but all point to one thing—there are an awful lot of these things floating about, all creating specifications.[9]Arguing nomenclature, however, is pointless—all of these entities respond to market needs and requirements and create something that the market can and does use. Definitions usually include process descriptions, economic conditions, or policy statements. To forestall these, I’ll use the following definition for standardization and standards.
Standardization is the product of a personally held belief that the market has the ability to understand and chart a valid future direction through the use of collective wisdom, to understand the impact of change on itself, and to adjust to that change. The specific change agents utilized in this process are collective technical descriptions of how things ought to be and function, called standards.
…
A standard, of any form or type, represents a statement by its authors, who believe that their work will be understood, accepted, and implemented by the market. This belief is tempered by the understanding that the market will work in its own best interests, even if they do not coincide with the standard. A standard is also one of the agents used by the standardization process to bring about market change.[10]
This definition then does not draw distinctions about the creation mechanism of standards, and allows all sorts of standards—from strict NSB de jure to consortia specifications to proprietary de facto standards to be considered. Basically, I treat standardization and standards as an exercise in setting a market direction, and consider them a tool for change.
This then brings up the question, who creates standards? Basically, non-rational human beings create standards. I use this phrase advisedly, since most economic behavior (and hence, studies of standards) tends to assume a rational economic model. I have watched too many standardization efforts become a complex contest between corporate wills and a need to maintain a facade of control to believe that rational economic decisions are made. It should be remembered that a participant in a standardization effort wears many different hats simultaneously—hats that cover professional pride (doing what’s right), corporate or organizational goals (doing what’s right for your company), standardization organizational goals (doing what’s right for the organization and in scope or charter and following the rules), a national interest (doing what is right for your country’s industrial, social, or legal policies), and personal friendships (doing what’s right to make you feel good and for social and professional strokes). When you put two dozen people with conflicting emotions, goals, backgrounds, and personal motivation in a room, ask them to decide on a complex interface whose future characteristics may or may not impact the market, and then provide minimal guidance and no enforceable deadline, one is hard pressed to describe the outcome as a rational economic decision. When you toss in a rapidly changing external environment, competing organizations doing the same thing, and a generalized need to cooperate rather than compete, you have the basis of some interesting decisions that create standards.
With this as background, the question should correctly be, how do standards succeed? The simple answer is that no one really knows. Martin Weiss and Marvin Sirbu published a paper in 1990 that examined several of the technological success factors that influence standardization. Their findings were summarized thusly.
The results suggest that the size of the firms in the coalition supporting a technology and the extent to which they support their position through written contributions are significant determinants of technological choice in the standards decisions studied. The market share of the firms in the coalition was found to be significant only for the buyers of compatible products, i.e., the monopsony power was significant, not the monopoly power. In addition, the technologies whose sponsors weighted market factors more highly than technical factors were more likely to be adopted in the standards decision studied. The proponents of both the adopted and non-adopted technologies were found to have equal belief in the overall technical superiority of their technical alternative, even after the decision. The installed base of a technology and process skills were not found to be significant predictors of the committee outcome.[11]
The interesting thing to note here is that the primary success factors were (1) the willingness of firms to commit written technological contributions to the standards committee and (2) sponsors who understood how the market worked. Participants who advanced just ideas or merely attended, or those who didn’t understand the market, were usually much less successful at making their standards efforts succeed. With this as background, we can now begin to look at how standards begin and are created, because, very simply, if you don’t know how they come into being, understanding how and why they fail is difficult, and mostly relies on the term “bad luck” to explain away a host of complicated interactions that appeared to have gone badly for someone somewhere.