Standardization has improved economic performance, facilitated improved user experiences, and contributed to safer and more environmentally friendly work environments.
This is the conclusion of a recent study on the role of standards for five Nordic countries (Sweden, Finland, Denmark, Norway and Iceland).
According to the study, standardization has provided an increase in labour productivity and GDP in the five countries studies. In the period from 1976 – 2014, standardization is associated with an annual increase in labour productivity of 0.7 percent per year out of a total average growth of 1,8 percent. This therefore suggests that standardization can be linked to 39 percent of labour productivity growth and 28 percent of GDP growth in these countries during the period studied.
However, the study notes that while standards are a proxy for the dissemination of knowledge within an economy, they are part of a larger system contributing to economic growth and prosperity.
Companies rely on standards
As part of the study, the authors conducted interviews with over one thousand Nordic companies. Based on the responses, the study found that the most important reasons for companies to use standards are:
- Improve access to foreign markets (34%)
- Improve quality of products and services (32%)
- Manage risks (26%)
These results were similar independently of which country the companies operated.
According to the study, standards generate production and supply chain efficiency. Fifty-nine percent of respondents noted that standards simplify purchasing and tendering processes thus increasing efficiency and reducing costs. As a result, standards are particularly important in sectors with complex tendering processes where the quality of the product or service can be difficult to access in advance such as in the healthcare and construction industries.
Standards can also help reduce production errors or limit the delivery of poor-quality products from sub-contractors. According to 65% of respondents, standards reduce the risk of manufacturing errors within a company and raise the quality of products from subcontractors.
The study was conducted in the five Nordic countries in 2017 by Menon Economics in cooperation with Oxford Research and the Social Science Research Institute of the University of Iceland. It includes the econometric estimations of a productivity model over a 40 year period and a comprehensive business survey with 1,179 companies in eight different industry sectors.
The full study can be found on Standards Norge.