Setting Electronics Standards for Commercial Competition

IEC (International Electrotechnical Commission) President Dr. Klaus Wucherer discusses:

Founded in 1906, the International Electrotechnical Commission is the world’s oldest organization in standardization for all electric, electronic and related technologies. The organization is headquartered in Geneva. The IEC Council is the organization’s supreme body. Malaysia joined the organization in 1991.

- How it started 

- Reasons 

- Current relevance 

- Funding - staffing

 - Reach - ubiquity

 

WHY IT MATTERS

- Electrotechnical standards: why it matters? 

- Conformity matters - assessment tests - for commercial reasons  

- Extent of industry challenge without technical standards 

- Having worked with Siemens and Infineon - the private sector - impressions from the other side - value of IEC 

- Malaysia is a full member of the IEC -- impact to this country

 

TECH - PACE OF CHANGE - 

Conflicting technical standards are ubiquitous: CDs and DVDs, telephony systems, computer operating systems, electronic file formats. As the rate of technological innovation continues to accelerate, and as electronic systems become more complex and involve growing numbers of complementary components, technical standards take on increasing strategic importance and need to be managed accordingly.

- Current challenges - example - coping with rapid development in tablets - smartphones - digital cameras - other devices? 

- Which are other areas occupies IEC’s time? Biometrics? Defense? Details

 

CHALLENGES 

- Standards wars do create uncertainty though --not to mention being extremely expensive .. issues 

- In the war to ‘win’ the standards game, what is involved in winning your approval? 

- Is there a suitable compromise? The word ‘cooptition’ has been used before .. 

Given these considerations, often a better strategic approach is cooptition. That is, first cooperate across with stakeholders across the value net to develop optimal international standards that quickly gain legitimacy and de facto market dominance. This helps to create an attractive industry while reducing costs and uncertainty for individual firms

Then compete along other dimensions in this more attractive industry context. The benefits of this approach are the flipside of the drawbacks to standards wars: larger market, faster market growth, more and faster developed complementary products, less uncertainty and lower attendant hedging costs, and lower costs designing, testing, and building to multiple standards.

- This virtuous cycle was best exemplified with the compact disc. The two main developers, Philips and Sony, determined that agreeing on a technology and sharing it, would generate a market for the product way above anything that would have existed, had they worked separately on their own. How right they were! Is there a current example? 

- Do current industry players get actively involved in standards-setting? 
In summary, standard-creation raises important strategic implications for managers. While there are exceptions, in many cases, multiple standards weaken industry structure and reduce firm profitability. Betting on the wrong horse in a case of conflicting standards can be devastating; hedging bets by producing to multiple standards is costly.

Through active participation in standard-creation in the context of recognized international standards bodies, managers can help to ensure that their industry structure is better, that emerging standards align with the firm’s technical and strategic goals, that forthcoming standards are state-of-the-art, and that the firm is plugged into technical developments in their own and adjacent industries.

In politics they say, “Those who don’t do politics get done by politics.” The same logic applies in the context of standards. Standards are going to be imposed on your firm in the future: Do you want to actively participate in their creation or leave this to your competitors and others?

RENEWABLE ENERGY 

- In an Asian context, new developments in solar, biomass, hydro etc. Where are the standards being fought currently