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Growth through Standards

Profile picture of John BishopThis article was written by John Bishop, a Wellington-based business writer, www.johnbishop.co.nz. It first appeared in the National Business Review, 4 December 2009, and is reproduced here with their permission.

Standardisation can add at least 1 per cent to our GDP Standards New Zealand argues, and it points to international research to substantiate its claims. The Standards Council told the incoming government a year ago that New Zealand had fallen well behind other OECD countries in its investment in developing Standards.

'Standardisation, when properly implemented, is a low cost means of increasing productivity and driving economic growth,' it said in its briefing document to its minister.

This conclusion is backed by a study by the AFNOR Group for the French government. Published in June 2009 it concluded that 'from a macroeconomic standpoint, standardisation directly contributes to the growth in the French economy'.

'Standardisation contributes an average of 0.81% per year, or almost 25% of GDP growth. This is in line with figures for other technological leading countries, such as Germany and the United Kingdom.'

Standards New Zealand says that 'there is a real opportunity for New Zealand to leverage productivity off more coherent standardisation efforts'.

So what do Standards do and why do they matter?

According to the Standards Council, Standards are 'agreed specifications for products, processes, services or performances.'

They matter because they help companies and countries to trade and may confer a competitive advantage.

For instance, a German study found that conforming to the relevant international Standards helped expand German exports. Conversely products that met only German national Standards had a negative impact on exports sales.

Secondly, Standards are linked to innovation and productivity and therefore to economic growth. The two most commonly cited studies are from Germany and the UK.

A study by the Department of Trade and Industry in the UK that found 13 per cent of labour productivity growth between 1948 and 2002 came from the portfolio of Standards then in operation. Standards 'disseminate management practices, technology and other knowledge'.

The study by the German Institute for Standardisation found that Standards contributed about 1 per cent to GDP annually, a contribution second only to capital investment as a source of growth.

The UK DTI study says 'in line with theoretical expectations, the impact of Standards on labour productivity growth is long run in nature, with causation appearing to run from Standards to productivity growth rather than vice versa'.

In other words, more and better Standards improve productivity.

This is supported by a report by the Conference Board group of economists for the Standards Council of Canada in 2007.

It concluded that in Canada between 1981 and 2004, standardisation accounted for 17 per cent of the growth rate in labour productivity which translates to approximately 9 per cent of the growth rate in real GDP.

The study also interviewed Canadian business leaders who 'were very vocal about the benefits of participating in the standardisation process'.

They cited standardisation as the basis of continuous improvement, innovation, and new product development. Standardisation also helped establish a level playing field, and contributed to public safety.

This finding was confirmed in the French AFNOR study which surveyed 1790 French companies and found that over two-thirds agreed that standardisation contributed positively to profits, and had a real impact on the company's value.

The German government's high-tech strategy published in 2006 singled out the importance of a vigorous standardisation strategy, because it was a key element 'in securing the rapid translation of research into commercial products and services'.

In his review of the British government's science and innovation policies in 2005, Lord Sainsbury cited the work of the British Standards Institute in nanotechnologies which 'exploited standardisation…to ensure that a global market with a common understanding of terms and Standards would develop'.

Based on this leadership in Standards, the UK was then able to demonstrate its global leadership in the technologies themselves.

In New Zealand the Standards Council – unsurprisingly – supports the development of more and better Standards. It argues that Standards are a half-way house between government regulation and industry self-regulation, 'a light touch regulatory option that will minimise compliance costs'.

It sees Standards as a powerful economic driver for New Zealand. 'A coordinated economy wide programme of standardisation has the potential to add over 1 per cent to New Zealand's gross national product,' the council has told ministers.

Note: Closer to home, in 2006 and 2007, Standards Australia commissioned the Centre for International Economics to analyse Standards and the Australian economy. The final report Standards, innovation and the Australian economy was published in April 2007.

Standards New Zealand first phase of ISSP now underway

Standards New Zealand's programme of work to deliver the first phase of our Information Systems Strategic Plan (ISSP) from mid 2010 is well underway. Implementing the first stage of the software deployment and infrastructure upgrade will start with the roll out of the operating system upgrade and the email system replacement and this work will be completed by April 2010.

'Currently, we operate Windows 2000, which becomes unsupported later this year, therefore, we need to replace our operating system,' says Alison Holt, ISSP Programme Director at Standards New Zealand.

'While we are replacing our operating system, we are also going as far up the upgrade path as possible. We are maximising every dollar to ensure that we are in a strong and stable position, for the future.'

Microsoft-based applications

Standards New Zealand is moving to Microsoft-based applications across our network. This will enable centralised support and maintenance. For users, this should result in better system performance, reliability, and stability.

'To make it possible for us to upgrade to Windows 7, we'll be implementing Windows Server 2008, which will enable us to implement System Centre Configuration Manager (SSCM),' says Alison. 'Using SSCM means that we'll be able to rapidly deploy and manage our standard image and desktop applications.

'We are also moving our email system from Groupwise to Microsoft Outlook and Exchange 2010. This will enable us to set up a more efficient and Public Records Act compliant archiving system.'

Partnering for deployment of new systems

We have engaged Deploytech, a Microsoft Gold Certified Partner, to implement this first phase of work. 'We're pleased to be working with Deploytech, which specialises in software deployment and have experience of rolling out Windows 7,' says Alison.

Deploytech uses the best practices of Microsoft and combines them with customer requirements to achieve desired results.

Jaimie Robson, Managing Director at Deploytech, says, 'We're really excited to be working with Standards New Zealand to help them to deploy this end-to-end solution. This work will help them to achieve a robust, well-performing, and future-proof desktop operating and email environment.

'We've also made changes to the infrastructure to make it easier for Standards New Zealand to implement future updates.'

For more information email alison.holt@standards.co.nz.

Published in general.

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