Research Study on the Benefits of Standardization...innovation community, including government departments research agencies,and in their country by going beyond simply providing an

Research Study on the Benefits of Linking Innovation and Standardization

CEN/CENELEC

Final Report

December 2014

Ref: J2572/CEN

Prepared by

with the financial support of

and

Benefits of Linking Innovation and Standardization - Executive Summary

Executive Summary

This report details the results and conclusions of a Research Study on the Benefits of Linking Innovation and Standardization (the ‘BRIDGIT Research Study’), which was carried out between September 2013 and October 2014. The study was designed to support the wider BRIDGIT project, involving CEN, CENELEC and nine National Standardization Organizations, which is aimed at 'bridging the gap' between standardization, research and innovation.

The objective of the research study was “to show, based on concrete data and evidence, the benefits and role of standards in supporting and driving research and innovation”. It therefore addresses both standardization and standards as an output of research and innovation as well as a supporting infrastructure for research and innovation.

The study methodology was designed to address seven key research questions, using several research methods including a review of literature, stakeholder consultations, a broad based survey, case study development and stakeholder workshops. A significant body of evidence was therefore collated for analysis.

The key conclusions arising from the research and analysis were:

• Standards play a multiple, catalytic role in the innovation system o Standards play an important role in research projects. Based on survey responses

they are used by over 80% of researchers and they improve the process of research by providing common terminologies, harmonised methodologies and comparability between research activities.

o The functions of standards vary across the innovation life cycle.

• The catalytic role seems to be particularly important for market acceptance of technology-based innovation o Standards improve the marketability of research and innovation results

• Those researchers who are not active in standardization have a lower appreciation of the benefits of participation o Standardization activities have many benefits for participating organizations (but

these benefits are not recognised by all stakeholders) o There is relatively low participation of researchers in standardization

• There are barriers on both sides to improving the links between the innovation and standardization systems o There are some important barriers that inhibit participation in standardization,

such as a lack of comprehension of the standards world, a lack of the resources to participate and the perceived long timescales of standardization compared to a typical research project

o There is limited motivation for academic researchers and constraints for industrial researchers to participate in standardization although this does vary by their field of research.


o Some National Standardization Organizations have to share the costs of the standardization process with interested stakeholders to maintain the sustainability of the system and this is clearly a disincentive, especially for academic researchers who are unlikely to have access to budgets to cover these costs.

o Existing standards may not be suitable for new generation products or technologies without significant revision.

o The adoption of new technologies, especially disruptive technologies, can be affected by the scope and focus of established standards.

• Better connections and motivations are particularly needed to improve the flow of new knowledge into standardization o It is recognised that commercial interests are one of the drivers of

standardization; these interests can affect the adoption of standards related to new technologies

o Linkages between the research and standardization communities can be improved in Horizon 2020 particularly by identifying future standards needed to accelerate market acceptance of new technology based innovations.

o There is already a robust body of evidence that underlines the positive role that standards and standardization can have in Horizon 2020 but to realise the potential some positive steps could be taken to enhance linkages

• Contributions from standardization experts in research & innovation activities is an important linking mechanism for new knowledge o National Standardization Organizations have an important role to play in

enhancing these linkages, but they are not the only stakeholders that can perform this role.

o Standardization experts in other Organizations (e.g. industry associations and metrology institutes) can also play an important role.

o Participation in standardization activities offers a number of benefits to researchers

• IPR and standards co-exist in an acceptable manner in most industry sectors o The widespread importance of IPR to standards development is still limited o The systems in place to manage IPR in standards development are generally

suitable for practitioners

• Performance related standards may be innovation-enabling for outcome-based regulations

These conclusions underline the need for action by influential stakeholders to address the issues raised. The action themes can be summarised as follows:

Awareness

1. Increase awareness of standards, the standardization process and the benefits that they offer to the research and innovation community (including relevant government organizations and funding agencies)

2. Encourage research and innovation actors to consider the role of standards and standardization in research projects


Improved Linkages

3. Develop improved mechanisms to facilitate and encourage the research community to participate in standardization

4. Establish effective mechanisms to support standardization experts to contribute standards related knowledge to relevant research projects

Co-ordination

5. Improve linkages between Horizon 2020 and standardization activities

Management and Control

6. Identify and address instances where the innovation and standardization communities put up barriers to collaboration

7. Improve the governance of European standardization programmes so that they facilitate and support the exploitation of new research results

Policy options to address these themes have been proposed for each of the main stakeholder group. These are:

• CEN and CENELEC have a key role in increasing the awareness and understanding of standardization within the research community, extending the competence and activities of technical committees to address new technologies and developing bridging platforms with Horizon 2020

• The European Commission should engage with CEN and CENELEC to enhance the synergies and coordination between CEN and CENELEC Technical Committees, the priority areas of Horizon 2020 and the Innovation Union agenda.

• National Standardization Organizations need to reach out to the research & innovation community, including government departments and research agencies, in their country by going beyond simply providing an expert service to R&D projects. They need to ensure that the catalytic role of standards can be maximised to help overcome the market barriers to the adoption of new technology-based products and services.

• National Innovation Support Organizations should encourage and provide support for mutual participation of researchers and standardization experts in innovation and standardization activities, developing stronger links with National Standardization Organizations.

• Research & Innovation Actors need to consider how they can better help the standardization bodies to anticipate the need for, and support the development of, new and improved standards. They should consider the relevance of standards and/or standardization when formulating research and innovation projects and seek practical options to engage with the standardization community.

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Table of Contents

1. Introduction ................................................................................... 1 1.1 Context ..................................................................................................... 1 1.2 Objective ................................................................................................... 1 1.3 Research Questions ..................................................................................... 2 1.4 Sources of Evidence .................................................................................... 2 1.5 Report Structure and Context ....................................................................... 3

2. Web-based Survey .......................................................................... 5 2.1 Characteristics of the Sample ....................................................................... 5 2.2 The Significance of Different Types of Research Activity ................................... 8

3. Results and Discussion .................................................................... 9 3.1 RQ1 - Function and Impacts of Standards and Standardization in an

Innovation System ...................................................................................... 9 3.2 RQ2 - Motivation of Industrial and Academic Researchers to Participate in

Standardization ......................................................................................... 16 3.3 RQ3 - Perception of the Positive and Negative Impacts of the Research and

Innovation Community Engaging in Standards and Standardization ................. 21 3.4 RQ4 - Role of Standards and Standardization in Horizon 2020 ......................... 23 3.5 RQ5 - Coexistence of IPR and Standards in an Innovation System ................... 26 3.6 RQ6 – The Role of Standards in Achieving Regulatory Goals and

Stimulating Innovation ............................................................................... 28 3.7 RQ7 - Current and Potential Mechanisms for Engagement .............................. 29

4. Summarising Key Outputs from the Research Questions .................... 37

5. Proposed Policy Options ................................................................. 40 5.1 Options for CEN and CENELEC .................................................................... 40 5.2 Options for the European Commission ......................................................... 40 5.3 Options for National Standardization Organizations ....................................... 41 5.4 Options for National Innovation Support Organizations .................................. 41 5.5 Options for Research & Innovation Actors .................................................... 42

APPENDIX A: Literature Review Report B: Survey Questionnaires

Benefits of Linking Innovation and Standardization Page 1

1. Introduction

1.1 Context This report details the main results and conclusions of a Research Study on the Benefits of Linking Innovation and Standardization (the ‘BRIDGIT Research Study’), which was carried out between September 2013 and October 2014. The study was designed to support the wider BRIDGIT project1 involving CEN, CENELEC and nine National Standardization Organizations. BRIDGIT aims to 'bridge the gap' between standardization, research and innovation by:

• Demonstrating the best practices in Europe among the standardization organizations to reach out to the research community

• Transferring the idea of the Integrated Approach2 to all CEN and CENELEC members, to the research communities in Europe and to other actors involved in research

• Disseminating evidence of the correlation between standardization and innovation

BRIDGIT consists of a number of complementary work packages to achieve these aims, building on the practical experience of the standardization Organizations.

This Research Study (one of the work packages of the BRIDGIT project) focuses on providing better evidence on the relationship and impact of standards and standardization in the research and innovation lifecycle and making the case for improved links between standardization and research and innovation activities.

1.2 Objective The objective of the research study, as defined in the Invitation to Tender, is “to show, based on concrete data and evidence, the benefit and role of standards in supporting and driving research and innovation”. The study should therefore address both standardization and standards as an output of research and innovation as well as a supporting infrastructure for research and innovation.

This objective was defined in more detail by a number of specific research questions. These research questions were further developed and then used as a framework for the in depth research and analysis activities carried out, as discussed in the following section.

1 http://www.cencenelec.eu/research/BRIDGIT/Pages/default.aspx 2 The Integrated Approach is an initiative by CEN and CENELEC that aims to raise awareness of the benefits of

standardization in the research and innovation process, transfer research results and outcomes of innovation activities into standardization and fully exploit the functions of standards for research and innovation activities in order to increase the competitiveness of the EU Member States (Lisbon agenda). See STAIR an Integrated Approach for Standardization, Innovation and Research, CEN and CENELEC, June 2011

http://www.cencenelec.eu/research/BRIDGIT/Pages/default.aspx


1.3 Research Questions The original research questions for the study (as defined in the Invitation to Tender) were refined and edited during early project activities (e.g. the literature review, initial stakeholder consultations and feedback from the kick-off workshop)3. As a result seven research questions were investigated, namely:

1. What are the functions and impacts of standards and standardization in an innovation system?

2. What are the motivations for industrial and academic researchers to participate in standardization and do they vary in significant ways?

3. How do those operating in an innovation system perceive the potential positive and negative impacts of the research & innovation community engaging with standards & standardization and do these perceptions vary in significant ways?

4. What role can standards and standardization play in Horizon 2020?

5. How effectively do intellectual property rights and standards coexist within an innovation system?

6. Can standards play an enhanced role in achieving regulatory goals and stimulating innovation?

7. What are the current and potential mechanisms by which engagement between research & innovation and standards & standardization take place and what are the lessons learned from their practical application?

1.4 Sources of Evidence The evidence to address these research questions was gathered from a number of sources. The main ones were:

• A review of the literature, including analysis of the Technopolis study4 for CEN and CENELEC. The review report is included as Appendix A.

• Evidence collated from a survey of CEN and CENELEC members carried out within other work packages (WP1) of the BRIDGIT project

• A programme of qualitative interviews with key stakeholders from both the standardization and innovation communities. These provided a variety of subjective inputs on the research questions as well as examples of current and emerging initiatives.

• Three web-based surveys aimed at specific target groups of stakeholders: o Industrial participants in FP7 research projects

3 These activities are detailed in the Interim Project Report 4 Study on the contribution of standardization to innovation in European-funded research projects, Technopolis for

CEN and CENELEC, September 2013 (see http://www.cencenelec.eu/research/news/publications/Publications/ Study_Contribution_Standardization_Innovation_Final2013.pdf)

http://www.cencenelec.eu/research/news/publications/Publications/%20Study_Contribution_Standardization_Innovation_Final2013.pdf

http://www.cencenelec.eu/research/news/publications/Publications/%20Study_Contribution_Standardization_Innovation_Final2013.pdf


o Non-industrial participants in FP7 research projects and metrology researchers o Members of CEN and CENELEC Technical Committees. In total 618 responses were obtained, as detailed in Section 2, below The three interview questionnaires that were used for the survey are included in Appendix B.

• Case study interviews with over 30 individuals that participated in the web-based survey. From this, 25 informal case studies were prepared and presented to the BRIDGIT team. The majority of the interviews were positive in nature, but a small number highlighted some negative aspects of the European standardization system. It was impractical to fully understand the extent or significance of these negative aspects within the scope of this study so these have been referred to CEN and CENELEC so that they can investigate further. Where appropriate, we have included some general remarks in the report from this qualitative feedback.

• A focus group workshop attended by over 20 key European stakeholders where interim survey results were presented and emerging issues and policy options discussed

They way in which these sources link to each individual research question can be summarised as follows:

Figure 1: The Main Evidence Sources to Address the Research Questions

1.5 Report Structure and Context This final study report is one of four detailed reports that were prepared during the study. Other reports were:

1. An Interim Report, summarising the first six months of the project, the literature review, evidence from the WP1 survey, the stakeholder consultation and the development and synthesis of the research questions.

Literature Review

BRIDGIT WP1 Survey

Stakeholder Interviews

Online Surveys

Case Study Development

Focus Group Workshop

1234567

Key:

Source of Evidence

Research Question

Main Contribution

Partial Contribution

Background Contribution


2. A report of the 2nd Stakeholder Workshop, held in June 2014, where emerging observations from the research were presented and discussed

3. A stand-alone executive summary that was distributed at the BRIDGIT European Conference (“Standards: Your Innovation Bridge”) held in Brussels on 30th October 2014.

This report is therefore designed to build on and complement these other reports. It focuses on the results of the web based surveys, makes reference to significant evidence from the other research activities (where appropriate) and concludes on a number of policy options for key stakeholders. It has four main sections. Following this brief introductory section, the details of the survey samples are presented. The results of these activities are then discussed in Section 3 for each of the research questions, including analysis and interpretation of the evidence gathered. This is followed by Section 4, which summarises the key points from the research. Section 5 then details the policy issues and conclusions that can be derived from the study.


2. Web-based Survey

The three separate on-line surveys were carried out between April and July 2014, targeted at three different communities:

1. Industrial participants in FP7 research programmes

2. Non-industrial participants in FP7 research programmes and metrology researchers5

3. Members of CEN and CENELEC Technical Committees.

The surveys were based on a largely overlapping set of questions on the benefits of, and impediments to, a closer integration of standardization and research and innovation in Europe. For simplicity, the respondents from the first two surveys are identified as industrial and non-industrial researchers, or (collectively) as ‘the researchers’, while the participants in Technical Committees are referred to as ‘the standardizers’.

2.1 Characteristics of the Sample In all, there were 618 usable responses, 163 from industrial research participants in FP7 programmes and 201 from non-industrial participants. The remaining 254 responses came from CEN and CENELEC Technical Committee members.

The segmentation of respondents is shown in Figure 2 below. For standardization committee members, it should be noted that questions concerning the breakdown of organizations was related to the organizational type of the respondent, although of course it needs to be recognised that Technical Committee members are usually representatives of their respective National Standardization Organization, rather than their own organization.

Figure 2: Distribution of the Sample

5 Metrology researchers in National Metrology Institutes were accessed via EURAMET

Number % Number % Number % Number %618 100 163 100 201 100 254 100

Small or Medium Sized Enterprise 105 64Large Company 58 36Manufacturing 67 41Dedicated Research 56 34Services 23 14All Other Sectors 17 10Higher Eduation Institute 64 32Public Research Centre 58 29National Metrology Institute 39 19All Other Non-Industry Research 40 20Industry 126 50University 27 11Measurement Infrastructure 36 14Other 65 26

Total Research - Research - Technical Committee

Members Industry Non-Industry


In Figure 2:

1. All other sectors (Research – Industry) includes construction, utility, engineering and software companies

2. All other non-industry research (Research – Non Industry) includes corporate, independent and jointly owned research centres

3. Other (Technical Committee members) includes public sector organizations, consumer/social organization representatives, National Standardization Organizations and individuals

Respondents were asked whether their company or organization operated in one or more of 17 European standardization ‘domains’ (or none of them), as listed in Figure 3, below. Clearly many organizations’ activities spanned several domains. The average number of domains in the total sample was 2.4, with a similar number for the industry survey (2.4). Non-industry research organizations reported a higher average number of domains (2.7) and standardizers a somewhat lower figure (2.3). This latter group were much more likely to report operating in building or civil engineering (32%) and in electro-technology (19%) and less likely to operate in the ‘air or space’, ‘food and feed’ or ‘healthcare’ domains.

Figure 3: Domain of Responding Companies and Organizations

The relevance of respondent’s activities with respect to the Horizon 2020 priorities for “Leadership in Enabling and Industrial Technologies” (LEIT) and “Societal Challenges” was investigated, as summarized in the following two figures.

For the LEIT priority there is a reasonable representation in the surveys – ranging from 30% of the total indicating that their company/organization was performing research and standardization relevant to ‘advanced materials’ to 8% for ‘space’.

Number % Number % Number % Number %Air and Space 67 11 26 16 25 12 16 6Building and Civil Engineering 136 22 25 15 29 14 82 32Chemicals 88 14 31 19 32 16 25 10Consumer Products 80 13 24 15 22 11 34 13Defence and Security 54 9 20 12 21 10 13 5Electrotechnology 99 16 23 14 27 13 49 19Energy Production & Distribution 97 16 17 10 44 22 36 14Energy Management for Sustainability 108 17 30 18 37 18 41 16Food and Feed 76 12 24 15 32 16 20 8Health and Safety 126 20 23 14 50 25 53 21Healthcare 73 12 18 11 31 15 24 9ICT 92 15 30 18 39 19 23 9Machinery 87 14 20 12 28 14 39 15Materials 166 27 43 26 67 33 56 22Pressure Equipment 43 7 7 4 14 7 22 9Smart Living 40 6 10 6 15 7 15 6Surface Transport (Road, Rail, Water) 77 12 25 15 24 12 28 11None of the above 68 11 12 7 38 19 18 7

Total Industry Non-Industry Technical Committee


The distribution across the two researcher samples was very similar but a surprising 48% of the standardizers who responded indicated that none of the LEIT priority areas were relevant to their activities.

Figure 4: Relevance of Research or Standardization Activities to Horizon 2020 Industrial

Technology Challenges

For the societal challenges however, there are some differences between the researcher samples, with the industrial researchers being more likely to be in companies whose research was relevant to smart green and integrated challenges for transport, while the non-industrial participants were more likely to be in organizations performing research relating to food and inclusive societies. Unsurprisingly perhaps, the societal challenges were considerably less relevant to standardizers with a much higher percentage (28%) reporting that none of the challenges were relevant with lower percentages for all of the challenges.

Figure 5: Relevance of Research or Standardization Activities to Horizon 2020 Societal

Challenges

These analyses show that the survey respondents represent a broad cross-section of the research and standardization community with all major sectors and Horizon 2020 industrial technology and societal challenges represented.

Number % Number % Number % Number %

ICT 143 23 46 28 57 28 40 16

Nanotechnolgies 126 20 45 28 59 29 22 9

Advanced Materials 185 30 63 39 65 32 57 22

Biotechnology 99 16 34 21 43 21 22 9

Advanced Manufacturing and Processing 197 32 67 41 67 33 63 25

Space 47 8 16 10 19 9 12 5

None of the above 208 34 33 20 54 27 121 48


Number % Number % Number % Number %

Health, Demographic Change and WellBeing 157 25 31 19 64 32 62 24

Food Security, Sustainable Argiculture, Marine and Maritime Research and the Bioeconomy

112 18 31 19 55 27 26 10

Secure, Clean and Efficient Energy 220 36 68 42 80 40 72 28

Smart, Green and Integrated Transport 148 24 53 33 43 21 52 20

Climate Action, Resource Efficiency and Raw Materials

204 33 59 36 75 37 70 28

Inclusive and Reflective Societies (e.g Social Inclusion and Access to Culture/Heritage)

46 7 6 4 26 13 14 6

Secure Societies 81 13 23 14 26 13 32 13

None of the above 112 18 21 13 21 10 70 28



2.2 The Significance of Different Types of Research Activity The surveys of industrial and non-industrial researchers (but not the standardizers) assessed the significance of different types of research and innovation activities for the respondent’s organization ranging from basic science to incremental innovation. A scale of 1-5 was used to rate the significance of each type with 1 equating to ‘no or very low significance’; a score of 4 or 5 equating to high and very high significance respectively. The sample percentages scoring 4 or 5 (‘high’ or ‘very high’ significance) are reported in Figure 6, below in addition to the means.

Figure 6: Significance of Types of Research

This figure indicates that there are some important differences between the two researcher samples. Early stage research (the first two categories), where the research is developing the ‘underlying science base’ or is aimed at ‘developing new or emerging technologies’, is less relevant for the industrial researchers. This of course is broadly as expected. However the characteristics of the non-industry researchers are not a simple reverse of this pattern, as they show a fairly uniform distribution among the types of research.

Noticeably, the most ‘incremental’ category of research (that aimed at the improvement of existing products processes or services ) was rated as highly or very highly significant by a greater proportion of the non-industry sample than any other type of research. By contrast, and as expected, the development of new products or processes was more likely to be significant for the industry based researchers.

Therefore the researchers responding to the survey span the full range of research activities from ‘blue sky’ to ‘close to market’ research.

Mean % Mean % Mean % Mean %

Development of underlying science, not necessarily targeted at specific markets/applications

2.9 31.6 2.4 16.6 3.2 43.3 .. ..

Development of new and emerging technologies 3.5 56.7 3.5 54.1 3.5 58.7 .. ..

Development of new products, processes based on new and emerging technologies

3.7 64.7 4.1 79.6 3.4 52.7 .. ..

Development of new products, processes and services based on established technologies

3.6 62.2 4.1 77.6 3.2 49.8 .. ..

Improvement of existing products, processes and services 3.7 65.6 4 72.2 3.5 60.2 .. ..

(Scale 1-5; 1= Little or No Significance; 2 =Low, 3 = Moderate; 4 = High; 5 = Very High

% Indicates Percentage Rating That Type as of 'High' or 'Very High' Significance

Researcher Samples Only Industry Non-Industry Technical Committee

Total


3. Results and Discussion

The results from the web-based surveys are presented, analysed and discussed for each of the research questions. Where relevant the surveys that provided the data are also noted. In some cases additional observations are made based on other research findings. Firstly the key observations for each question are highlighted and then supporting evidence is discussed.

3.1 RQ1 - Function and Impacts of Standards and Standardization in an Innovation System

The overall conclusion on this research question is that standards play a multiple and catalytic role in innovation and growth systems. Although the degree of take up varies, standards are pervasive elements in the innovation system, as initially highlighted in the literature review. Specific conclusions are:

• Standards play an important role in research projects

• Standards improve the process and marketability of research

• The functions of standards vary across the innovation life cycle

• Commercial interests can create negative impacts in the application of standards

These points are each discussed below.

Standards Play an Important Role in Research Projects

The two surveys of researchers6 shows a high percentage (81%) using standards but with some variation according to the type of organization to which the researcher belongs, as shown in Figure 7. Apart from a small group of unclassified ‘others’ (e.g. non-governmental health service and other (non-research) public sector organizations) these percentages fall only a little when intensive use of standards is considered.

Figure 7: Use of Standards in Research

6 Surveys of (1) industrial participants in FP7 research programmes and (2) non-industrial participants in FP7

research programmes and metrology researchers (accessed via EURAMET)

0

10

20

30

40

50

60

70

80

90

100

% Using

The Use of Standards in Research

Use

Intensive Use


The responses from those researchers who can be regarded as part of the ‘measurement system’ (i.e. National Metrology Institutes (NMIs) and certification or testing bodies) showed that 100% are using standards in research. The academic sector, as expected, seems to be rather less prone to use standards but the majority of academic research respondents (over 60%) still claim to be intensive users of standards.

As far as the institutional source of such standards is concerned, the most frequently used seem to be those produced by international institutions such as ISO or the IEC. Around one third use either European and/or national standards in their research. A much lower proportion (<20%) indicated that they use standards from ‘other’ bodies such as ASTM or IEEE. This is shown in Figure 8, below:

Figure 8: Use of Standards in Research by Institutional Source of Standard7

These observations support evidence from the literature review, which indicated that, although the degree of take up varies, standards are pervasive elements in the innovation system and they provide a number of technical and economic functions that are important to research & innovation activities, for example:

o Standards for measurement and terminology o Specifications for processes (e.g. testing) and performance o Format standards developed for inter-operability between components or systems

It also shows that standardization can be considered as providing a catalyst for various linkages within ‘science, technology, innovation, and growth (STIG) systems’ (see the section entitled “Research and Standardization from a Systems Perspective” in Appendix A).

Standards Improve the Process and Marketability of Research

The benefits of using standards in research was investigated for both researcher and standardization stakeholders. The pattern of responses from each stakeholder group8 is generally similar as shown in Figure 9, below.

7 Based on the surveys of (1) industrial participants in FP7 research programmes and (2) non-industrial

participants in FP7 research programmes and metrology researchers 8 Based on the surveys of (1) industrial participants in FP7 research programmes, (2) non-industrial participants in

FP7 research programmes and metrology researchers and (3) members of CEN and CENELEC technical committees

All Industry Non-Industry Tech-Committee

1 International Standards (ISO, IEC, ITU-T) 50.6 50.9 50.2 ..

2 European Standards (CEN/CENELEC/ETSI) 32.9 35.4 30.8 ..

3National Standards (Published by a national standards body)

35.6 32.3 38.3 ..

4 Other (e.g. ASTM, IEEE, ANSI, etc.) 18 21.1 15.4 ..

% of Respondents who 'frequently' or 'always use' standard from stated sources

(Likert Scale: 1 = Never Use; 2 = Seldom Use; 3 = Often Use; 4 = Frequently Use; 5 = Always Use)


Figure 9: Benefits for Research of Using Standards

This shows a strong agreement between all groups that standards support research in a number of ways (over 50% in agreement with each of the statements). Common terminologies, harmonised methodologies and comparability (which can be described as “network effects”) are clearly seen as important and are most frequently cited. The nine statements in Figure 9 can generally be segmented into three themes:

• Research methods: o Provide common terminology/vocabulary o Provide a harmonised methodology for analysis o Define good practice in organization/management

• Research content: o Improve the efficiency and/or quality of research o Shape the specification of research activities

• The market9 acceptability of research outputs: o Ensure comparability with existing products/services o Improve the comparability of research results o Increase credibility of research outputs in the market o Increase credibility of research within the organization

These themes are discussed in more detail below (see section entitled “The Functions of Standards Vary across the Innovation Life Cycle”).

9 Including both internal (in-company) and external “customers” of research outputs


The literature review (see Appendix A) also highlighted that standards are an important mechanism for knowledge transfer. There is empirical economic evidence relating standards with productivity gains (including case studies of the benefits of standards for individual companies). It also identified a substantial body of evidence that the use of standards has positive impacts on product, service and process innovation, whether as a direct input (e.g. codified knowledge and best practice), as a complementary knowledge asset or as a contributor to the creation of market demand. The complementarities can include joint use of standards with scientific and technical literature, enabling research within businesses and academia and also facilitating collaboration between firms and with other organizations.

This is illustrated in more detail in Figure 10, which shows flows of both ‘codified’ and ‘tacit’ knowledge between the different parts of the system.

Figure 10: Knowledge Transfer Links

This figure highlights the significance of codified knowledge, not just in the form of standards, but also as scientific publications that form a major element in the motivation and incentive structure of the research community. It also illustrates the fact that knowledge flows take place not only through direct use of research publications or participation of researchers in standardization activity and vice versa, but also through the channel of the firm itself which, in its innovation activities is the primary vehicle for integrating knowledge emanating from both research and standardization. This includes of course decisions about patenting and other innovation activities.

The key message from the literature review is that standards have powerful effects in the innovation system through their role in the diffusion of knowledge of many types. It is also clear from the literature and from the stakeholder surveys that some sectors, notably services, the majority part of modern economies, make less use of standards in support of their innovation activities and that there is less standardization activity in services. CEN, CENELEC and National Standardization Organizations should consider developing activities to address this issue.


There is also relatively high agreement that standards enhance the credibility or marketability of the research to those outside the research group involved.

The vital role of standards in improving the marketability of innovative new solutions was clearly highlighted in a number of case examples provided by survey respondents from the research community. Many of these provided simple examples of cases where the relative benefits of the new technology or solution could be validated using an established standard.

In contrast, most of the negative examples were related to the lack of an appropriate standard that researchers could use to demonstrate the efficacy of new products or services to potential users. This is a big issue for innovative SMEs in particular as they do not have the power or resources to influence the standardization processes.

The respondents from Technical Committees were rather more likely to perceive the benefits of standards for improving the organization and efficiency of research.

The Functions of Standards Vary Across the Innovation Life Cycle

The survey questionnaires for the two target groups of researchers10 included a question on the type of research & innovation that they get involved in, based on five options related to the innovation life cycle (as already listed in Figure 6):

• Development of underlying science, not necessarily targeted at specific markets or applications (science)

• Development of new and emerging technologies (new technology)

• Development of new products and processes based on new and emerging technologies (innovation – new technology)

• Development of new products, processes and services based on established technologies (innovation – existing technology)

• Improvement of existing products, processes and services (product improvements )

This allows some detailed analysis of the correlation between research activities and perceptions of the relative benefits (or functions) of standards, as summarized in Figure 1111. This figure is based on categorizing the benefits as either “research methods”, “research content” or “market acceptability of research outputs”, as defined above (see discussion following Figure 9 (page 11, above)

10 The surveys of (1) industrial participants in FP7 research programmes and (2) non-industrial participants in FP7

research programmes and metrology researchers 11 Figure 11 uses a set of summary indicators based on the patterns of correlations between responses and

statistically rescaled to be measured on a scale of -1 to +1, hence showing relative not absolute relationships.


Figure 11 Relative Benefits of Standards at Different Stages of the Innovation Life Cycle

This indicates that the function of standards varies for different types of research activity. It also indicates that standards are relatively more important for innovation (especially through new technology and more incremental change) and less so for more fundamental research.

It also indicates that standards are important for the content and management of science oriented research. Standards can influence the way investment in the generation of new knowledge is organized and thus support potentially radical innovation. Standards are also considered especially important in specifying the content of research with more incremental innovation objectives.

This is an issue that some National Standardization Organizations have investigated. DIN makes use of mechanisms that correlate to the different stages of the ‘product life cycle’, supported by three different types of project, as shown in Figure 12.

Figure 12: DIN’s Tools for Linking R&D and Standardization12

BSI considers that functions of standards and standardization across the innovation life cycle can be regarded as different standardization readiness levels (SRL) as shown in Figure 13.

12 Innovation and standardisation, DIN, 2013


Copyright © BSI, 2014

Figure 13: BSI’s approach to linking R&D and standardisation13

The literature also highlights that different types of standards are relevant to the various stages of research, development and investment/commercialization, for example, as shown in Figure A1 (in Appendix A).

At early stages of the innovation life cycle, standards may facilitate the process of research in various ways that enable effective communication between researchers and allow for the systematic collection of results and data. However, as we get closer to commercial applications, standards provide important elements of marketability and may also assist companies to show that they are meeting regulatory requirements. In this case, standards are therefore part of the ‘demand pull’ side of the innovation system – which in turn creates flows of knowledge from products and markets back into research and innovation. Figure A1 also suggests that there may be an important economic distinction in the nature of the knowledge being generated over the cycle, with early stage research coming closer to what economists understand as a ‘public good’ while the knowledge created later in the cycle is more likely to be treated by firms as a ‘private good’ – an asset that can earn a return.

Commercial Interests Can Sometimes Create Negative Impacts

Two broad categories of economic model are important to understand how standardization works and standards are created in an innovation system. These are based on the distinction between private and public goods outlined above.

13 How Are Standards Made? Daniel Mansfield, BSI, at Standards: Your Innovation Bridge, Oct 30 2014


In the ‘public goods’ model, the creation of a standard for common use across the economy involves little by way of conflict amongst participants because they don’t generally have a preference over which option gets adopted. In this kind of situation, a sub-optimal number of standards may get created as firms are reluctant to commit resources and can ‘free ride’ on the efforts of others – a situation especially likely in sectors where small firms predominate. So a lack of commercial interest can affect commitment to the standardization process.

In the second type of model (private goods) differences in preferences between firms become important and the negotiating firms may therefore have an interest in promoting a particular standard specification on the basis of their own commercial interest. In some circumstances, intellectual property rights in a standard may sharpen these distributional impacts. This effect may be particularly important where some firms (or perhaps a university) are specialized in research activities. In the context of committee based consensus standards, such distributional conflicts may lead to delays in standardization or in the failure to adopt a standard at all. It may well be that problems of this latter type are more prevalent in the later stages of innovation cycles, since preferences will be more heavily influenced by individual firms sunk cost commitments incurred in the process of development creating a potential for opportunistic behaviour. However the standardization process, with benefits for the functioning of the innovation system as a whole, requires the active participation of firms and the management of their expectations and interests, bearing in mind that the latter include the growth and scale of markets as well as their market shares. Moreover, it is a major strength of formal standardization organizations that agreed rules can successfully ameliorate the potential problems.

Several case examples highlighted how a standardization committee that is based on a specific product or technology can inhibit the exploitation of innovative new solutions. These anecdotal case examples (which are being further investigated by CEN and CENELEC) illustrate the potential risk of negative impacts when a standardization committee is populated by commercial interests that favour the status quo. Ideally, such committees should be ‘technology neutral’ in order that they can be objective in their consideration of new solutions. This key issue is discussed again under Research Question 3.

3.2 RQ2 - Motivation of Industrial and Academic Researchers to Participate in Standardization

The overall observations for this research question are that participation in standardization activities is beneficial for researchers but there are significant barriers to address. Specific points are:

• Standardization activities have many benefits for participating organizations

• There is relatively low participation of researchers in standardization

• There are a number of barriers that inhibit participation in standardization



Standardization Activities have Many Benefits for Participating Organizations

“How does participation in the process of standardization support research activities” was a common question in all three surveys14. Figure 14 shows both the general pattern of responses and the differences in level of agreement between the three survey target groups, as defined in Section 2, above.

Figure 14: Perception of the Benefits for Researchers of Participation in Standardization

Whilst there are some differences between the three groups, the general pattern is similar. For example, all three groups

• Highlight that “builds confidence amongst potential customers and consumers” (78% agreement) is the most important benefit of participation

• Indicate that the four next most important motivations for participation in standardization are related to ‘networking’ benefits rather than simply commercial interests, i.e. that participation: o “Ensures awareness of future standardization trends” (76%) o “Provides an opportunity to influence future standardization activities” (76%) o “Provides a platform for information exchange” (73% in agreement) o “Enables networking with important stakeholders on future research needs”

(74%)

14 The surveys of (1) industrial participants in FP7 research programmes, (2) non-industrial participants in FP7

research programmes and metrology researchers and (3) members of CEN and CENELEC technical committees

0 10 20 30 40 50 60 70 80 90 100

Builds confidence amongst potential customers andconsumers

Provides an opportunity to influence futurestandardization activities

Ensures awareness of future standardization trends

Provides a platform for information exchange

Enables networking with important stakeholders onfuture research needs

Develops an image as leaders in the area

Provides an effective route to exploit research results

Increases visibility and support for research activitieswithin the organisation

Reduces time to market for research outputs

Provides a way to increase the income potential ofIntellectual Property by incorporating it into standards

Research Industry Research non-industry Technical Committee % Agreeing with Statement


Technical Committee members seem to have a more favourable attitude to most of the potential benefits. Their most important motivation, perhaps unsurprisingly, seems to be about ‘influencing future standardization activities’ whereas the overall top response across all three groups was ‘builds confidence amongst potential customers and consumers’.

There is Relatively Low Participation of Researchers in Standardization

Survey feedback15 indicates that there is a relatively low participation in standardization by EU-level researchers in general (46% participation) and also considerable variation in participation by organization type. Academic researchers in particular show comparatively low participation levels. Participation is highest, as expected, among organizations that form part of the ‘measurement system’, as shown in Figure 15.

This observation is also supported by a separate survey of the National Standardization Organizations across Europe carried out as part of the wider BRIDGIT project to gather both quantitative and qualitative information on links with the research and innovation community.

Figure 15: Participation in Standardization by Type of Research Organization (FP7 and NMI Samples)

One of the statistics from this survey is that (in most cases) less than 10% of standardization committee members are from the research community. How this form of participation effectively integrates research and standardization at the level of the organization and how it impacts upon perceptions is considered again in the discussion of other research questions.

The literature review found little evidence on the motivations for the participation of researchers in the standardization process, compared to the benefits and motivations of business. The public good nature of some standards and the potential of others to leverage the value of intellectual property, have been more extensively studied. However a survey of both business and academic researchers in nanotechnology in Germany16 suggested that only a minority of research institute respondents participate in standardization, largely due to the perceived lack of alignment with the reward and appraisal framework for their research. Those who did participate indicated that they are motivated by the prospect of future research

15 Based on the surveys of (1) industrial participants in FP7 research programmes and (2) non-industrial

participants in FP7 research programmes and metrology researchers 16 Blind, K., & Gauch, S. (2009). Research and standardization in nanotechnology: evidence from Germany. Journal

of Technology Transfer, 34(3), 320–342

0

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funding. The same survey found that technical standards were ranked rather low as information sources by business, but higher by academic researchers. It also highlighted the importance of tacit knowledge (for which participation is crucial) as well as codified knowledge in both research and innovation. This is discussed further in Appendix A.

There are Several Barriers that Inhibit Participation in Standardization

A number of potential barriers to participation were tested in all three surveys17. The three main stakeholder samples that participated in the surveys expressed different opinions on the barriers to improving links between the research and standardization communities. Figure 16 shows the pattern of responses from the three stakeholder groups.

Figure 16: Barriers to Links between Research and Standardization

Clearly there are some interesting differences in perception of the barriers. For example, issues such as ‘standardization timescales’ and ‘lack of a clear process for researchers to engage with standardization bodies’ are perceived to be much less important to Technical Committee members than to either industry or non-industry researchers

In contrast, members of Technical Committees consider that the standardization community in general lacks the resource to participate in research projects, although it should be noted that a number of National Standardization Organizations have been active in FP7 research projects. Only a minority believe that standards have little relevance to research, and vice versa, which

17 The surveys of (1) industrial participants in FP7 research programmes, (2) non-industrial participants in FP7

research programmes and metrology researchers and (3) members of CEN and CENELEC Technical Committees


suggests that the theory of the ‘virtuous circle of knowledge’ of standards supporting research and vice versa is logical.

The list of barriers in Figure 17 can be synthesised into four main indicators on the basis of correlation between responses18 from all three surveys19. These are:

• A lack of comprehension of the world of standards (i.e. the language of standardization is difficult and it is not clear which standards are relevant to research)

• Mutual irrelevance of standardization and research

• Operation of the standardization process (e.g. committee members can block new developments and the timescale are longer in standardization than in typical research projects)

• Resource constraints (e.g. the resource commitment required to participate in standardization activities is too high for researchers, standards bodies lack resources, it is not clear which research is relevant and the lack of recognition of researchers’ professional contribution)

Analysis of these indicators suggests a difference in the ranking of barriers between the industry respondents (from both the FP7 researcher and the standardization committee member samples) and other stakeholder groups. This is summarised in Figure 17.

Figure 17: Summary of Barrier Indicators by Type of Organization

There are two main differences between the industry respondents and the other survey respondents with respect to the four indicators in Figure 17. Firstly the industry sample is more likely to see “irrelevance of standards’ as a barrier. Also more of the non-industry sample seems to be concerned about operational and/or process barriers. Interestingly, the patterns for industrial and non-industrial researchers are directly opposite in terms of opinion on the relative importance of these summary barriers.

Additional analysis indicates that the most significant differences in perception are between those who are actively participating in standardization and those who are not. Non-participants are more concerned with barriers of comprehension, while those who are involved are more

18 Using the same multivariable analysis as for Figure 12 19 The surveys of (1) industrial participants in FP7 research programmes, (2) non-industrial participants in FP7



inclined to see operational issues as limiting participation (discussed further in Section 3.3, below).

3.3 RQ3 - Perception of the Positive and Negative Impacts of the Research and Innovation Community Engaging in Standards and Standardization

The surveys tried to gain a better understanding of the main benefits and barriers from the perspective of the different stakeholder groups. The categorisation of potential benefits was based on a number of sources including the CEN and CENELEC website, an APEC report on standards and conformance20; guidelines developed from the COPRAS project21 and stakeholder interviews. This research question is in effect a more narrowly focussed variant of research question 1 (the function of standards in an innovation system), so much of the analysis presented in Section 3.1 is also relevant here. In particular, the benefits of using standards in research have been covered in some detail. The key points for discussion for this research question (in addition to those discussed in Section 3.1) are

• Those who are not active in standardization have a lower perception of the benefits

• Some existing standards may not be suitable for new generation products or technologies

These are both discussed below.

Those who are not Active in Standardization have a Lower Perception of the Benefits

Evidence from all surveys22 was also segmented and analysed in terms of the

• Organisations that are active in standardization

• Individuals that are active in standardization

• Organisations that are not active in standardization

This data clearly shows that those respondents from organizations that are ‘active’ in standardization have more positive views of the benefits, as shown in Figure 18.

Moreover, their perceptions are very similar to those respondents who are individually active (i.e. members of Technical Committees). This implies that research and standardization are well integrated in those organizations that are active in standardization. It is particularly noticeable that this is just as true for the perception of the ‘networking’ benefits of standards.

20 APEC Sub Committee on Standards and Conformance, Education Guideline 3 – Textbook for Higher Education,

Standardization: Fundamentals, Impact, and Business Strategy 21 COPRAS Standardization Guidelines for IST research projects interfacing with ICT standards (CEN, CENELEC,

ETSI, The Open Group, W3C), 2007 22 The surveys of (1) industrial participants in FP7 research programmes, (2) non-industrial participants in FP7



Figure 18: Participation in Standardization Supports Research Activities

However, the benefits of applying research results in standardization are less clearly defined in the available evidence (including the web-based survey results) although some of the case study evidence indicates how research can be useful to standardization.

Existing Standards may not be Suitable for New Generation Products or Technologies

Many of the positive case study examples indicate that standards are very supportive of incremental innovation as they provide the basis to demonstrate that new products are both fit for purpose and offer advantages over existing products or, in the important case of complementarities, are compatible with them. This is less so with more radical forms of innovation that might involve disruptive technologies that were unforeseen when the original standard was drafted.

It seems, therefore, that existing standards are more supportive of creating positive market impacts for incremental rather than radical innovation. However as shown in section 3.1, standards do have a positive role in supporting more fundamental research, although not as much as more incremental innovation. This may be an important issue for the Horizon 2020 aim of ‘Leadership in Enabling and Industrial Technologies’ (LEIT) and especially in the case of innovative SMEs.


3.4 RQ4 - Role of Standards and Standardization in Horizon 2020 The potential for standards and standardization to improve the socio-economic impacts of EU investment in research & innovation is one of the policy objectives of Horizon 2020. This is driven mainly from the ‘Innovation Union’ agenda and is being promoted (through, for example, internal guidance notes) to Commission project officers that are responsible for developing the text for the Horizon 2020 Call documents. This is already apparent in a number of the call specifications where call text often include phrases such as:

• “Contribution to standardisation in the …..”

• “Identification of gaps in standards, paving the way for future pre-normative activities in the field.”

• “… contribution to standardization should be an integral part of the projects”

• “The project is expected to promote standardisation at international level”

It is understood that the main policy objective for standards and standardization in Horizon 2020 is to help overcome the barriers to exploitation of new knowledge (e.g. new or improved standards facilitate new product adoption). This suggests that there will be a need for more active participation of standardization experts in research projects and/or more knowledge transfer activities.

The potential role of standardization to support the exploitation of EU research is not new. For example, FP7 projects were able to utilise support from ‘Exploitation Strategy and Innovation Consultants’ where one of the areas of support was ‘assistance for standardization’23 although apparently this support was infrequently requested24. It is understood that this consultancy support will also be offered to projects in Horizon 202025, although it’s not clear whether this service has been established yet.

The evidence collated in the present study indicates that standards and standardization already play a very important role in research and innovation activities, but also that this role can be enhanced. The main points are:

• Using standards and standardization to improve the exploitation of research outputs is an important objective of Horizon 2020

• Positive links between research and standardization can be encouraged through the design of Horizon 2020 Calls

• There is scope for better linkages between standardization technical committees and the Leadership in Enabling and Industrial Technology (LEIT) domains of Horizon 2020

23 http://ec.europa.eu/research/industrial_technologies/standardisation-assistance_en.html and http://ec.europa.

eu/research/industrial_technologies/pdf/esic-flyer_en.pdf 24 http://www.metaeconomicdevelopment.com/Strategies-Assistance/Pagine/Esic2.aspx 25 Draft Horizon 2020 Work Programme 2014 – 2015, Leadership In Enabling And Industrial Technologies,

Nanotechnologies, Advanced Materials, Biotechnology and Advanced Manufacturing And Processing, European Commission, 2013, page 123

http://ec.europa.eu/research/industrial_technologies/standardisation-assistance_en.html



Using Standards and Standardization to Improve the Exploitation of Research Outputs is an Important Objective of Horizon 2020

This has already been demonstrated in the discussion on previous research questions. In particular:

• Standards support the process of research by improving communication between researchers themselves and the conduct of research (RQ1)

• Standards play a vital role in improving the marketability of innovative solutions, especially those that are more incremental in nature (RQ1)

• Participation in standardization offers a number of networking benefits, such as building confidence with current and potential customers (RQ2)

• Participation in standardization offers several benefits to research projects (RQ3)

There is, therefore, an evidence base indicating that positive engagement of standards and standardization in Horizon 2020 will support exploitation of research outputs.

However, there is also evidence that highlight some concerns about the negative impacts of standards and standardization on research output exploitation in general, for example:

• Existing standards or standardization committees that are based on established products or technologies can inhibit the exploitation of innovative new solutions (RQ1)

• Some existing standards may not be suitable for new generation (disruptive) products or technologies (RQ3)

Positive Links can be Encouraged through the Design of Horizon 2020 Calls

Inclusion of references to, or requirements for, standards and standardization in Horizon 2020 calls will increase the existing high use of standards in research and innovation projects and (more importantly) serve to encourage participation in standardization activities. Figure 7 (based on the results of the survey of FP7 research project participants) shows that over 80% use standards to support their research but Figure 15 shows a much lower participation in the process of standardization.

The prior Technopolis study4 of FP6 and FP7 projects also provides some interesting statistics:

• An estimated 39% of all FP6 and FP7 projects used standards as an input, 12% had proposed new or revised standards as an output, and 8% had gone on to contribute to the development of new or revised standards

• The FP7 priority areas estimated to have the highest share of projects addressing standardization were Security (75%), Transport (including aeronautics) (66%), ICT (62%) and Energy (60%)

• One in eight FP7 calls made explicit reference to standardization, and projects funded under these calls were almost three times more likely to make use of standards than projects funded through calls that did not refer to standardization


This study also highlighted that the most common suggestion from R&D project coordinators to strengthen the links between research, innovation and standardization was to:

“strengthen mechanisms for funding research inputs into the standardization process.....”

Other suggestions included more and better information on existing standards, and on where standards are needed; a greater onus on FP projects to address standardization; improved coordination of research and standardization agendas and timetables; improved provision of information on the benefits of standards for research; simpler and lighter processes for developing new standards; and, dedicated channels or structures through which researchers can input to new standards development.

The evidence from this study generally supports the above conclusions.

It can therefore be expected that overt references to standards and standardization in Horizon 2020 Calls will further increase the use of appropriate standards and catalyse earlier engagement in situations where there is a need to influence standardization processes.

There is Scope for Better Linkages between Standardization Technical Committees and the LEIT Domains of Horizon 2020

The survey feedback provides some insights into the correlation between standardization and Horizon 2020 topics. For example:

• For FP7 respondents the most frequent users of standards in research were in the manufacturing & materials technology areas (nearly 90%). The least frequent were those in the ICT area.

• For societal challenges, the use of standards seemed to be considerably more frequent for researchers in the environment domain compared to the health domain.

• Almost 50% of CEN and CENELEC Technical Committee respondents indicated that none of the six Horizon 2020 ‘LEIT’ domains of Horizon 2020 were relevant to their activities.

These statistics suggest that there are major opportunities to increase the engagement between the standardization and Horizon 2020 research communities. However the final point above suggests that there are issues that need to be addressed regarding the fit between the Horizon 2020 priorities and the European standardization programmes.

There are, however, already some good examples to build on as several National Standardization Organizations are active players in European R&D projects in spite of the concerns regarding resource barriers within the standardization community that was highlighted by members to Technical Committees. Stakeholder consultations with National Standardization Organizations clearly highlight that:

• There has already been a relatively high participation by National Standardization Organizations in Horizon 2020 proposals


• It is possible, despite a widely held perception of long standardization lead times, to develop a Workshop Agreement (CWA), a technical specification or a technical report during the course of a typical research project

The issue here is that the National Standardization Organizations consulted have limited resources and it is understood that some were unable to respond in a positive manner to all participation requests. The discussion on previous research questions (e.g. RQ3) highlight that there are other sources of expertise and understanding of standards and the standardization process that can make a positive contribution to research and innovation projects (e.g. metrology researchers).

3.5 RQ5 - Coexistence of IPR and Standards in an Innovation System

The main conclusion from the survey is that IPR and standards generally seem to coexist in an acceptable manner within the innovation system. Specific points are:

• The majority of researchers do not perceive licensing of IPR for standards as an effective exploitation route

• The application of both IPR and standards is variable

• Standardization is normally about the voluntary pooling of intellectual property in a way that benefits all participants


The Majority of Researchers do not Perceive Licensing of IPR for Standards as an Effective Exploitation Route

The survey of researchers and standardization experts provides some evidence as to the importance that innovators attach to the competitive aspects of Intellectual Property (IP). In fact very few of the researchers (just 5% of the industry researchers and 2% of the non-industry researchers) gave a patent as a reason for involvement in standardization activities.

Figure 19 shows the pattern of responses from the three main stakeholder groups26 to questions about the co-existence of IPR and standards. There was a similar response to each of the statements. There were also some interesting differences between the feedback from standardization committee members and researchers.

26 Based on the surveys of (1) industrial participants in FP7 research programmes, (2) non-industrial participants in

FP7 research programmes and metrology researchers and (3) members of CEN and CENELEC Technical Committees


Figure 19: Standards and IPR Co-existence Issues

For example:

• Those involved in standardization committees were more concerned that the IPR licensing costs represent barriers to the use of the standard but only a small percentage believe that incorporation of such IPR is an effective way to exploit research results

• Few researchers considered that incorporation of IPR in standards is an effective way of supporting research results but they were also less concerned about the barriers to do so

IPR and Standards are applied to Variable Extents in Innovation Activities

The general view from key stakeholders is that IPR and standards essentially co-exist – although innovators are encouraged to protect IP prior to participation in standards activities.

The literature review (see Appendix A) provides some further evidence. It highlights that neither formal IPR nor standards operate evenly throughout the innovation system. Other means of protecting IP can be easily identified, such as secrecy, the creation of a lead time or by deployment of strong complementary assets, for example in manufacturing or marketing. Some sectors do use a lot of formal IPR, such as biotechnology or nanotechnology, where many firms specialize in research and are correspondingly more dependent on income from IP.

Similarly formal standards are not consistently found in great numbers wherever there is innovation. While they are found throughout established sectors, such as manufacturing and engineering in particular, it has already been noted that they are much less prevalent in the service sector.

Many of the cases that are examined in the literature where IP and standardization interact in negative ways are typically taken from the ICT sector, where inter-operability standards are

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Incorporation of intellectual property rights instandards is an effective way to exploit the results of

research activities

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compensation

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% Agreeing with Statement


vital for market acceptance and growth. On the other hand, in many ICT areas patenting is very widespread and intensive, as firms seek to maximise their financial return. Although examples like this clearly exist, the extent of their importance for standardization more generally is not known with certainty but the literature review suggests that the scale and impact is limited.

Standardization is normally about the Voluntary Pooling of Intellectual Property in a way that Benefits all Participants

Although strong cases can be made for both IP protection and cooperation in standardization, the literature suggests that they may interact in negative ways in an innovation system. Here we should note that standardization almost inevitably involves the ‘pooling’ of participants’ intellectual property. Two broad types of situation are described in the literature:

1. Participants are searching for a ‘common objective’. Typically in standardization, this may be about creating a larger market or defining a producer-user interface, where the creation of a standard leaves all the participants better off. In effect, the gains from a larger market exceed considerations of market share.

2. Competitive issues, where there are two main examples i. Competition for market share creates incentives to hold back from revealing IP ii. Participants are only prepared to share IP if they can be recompensed through

the licensing of a patent and/or its incorporation in a standard. Even in these circumstances, firms may still have incentives to delay in announcing IP essential for developing the standard.

The recent EC funded study27, which published its report during this research study, highlights a number of issues with “standards essential patents” (SEPs). These include:

• “Patent ambush” in a standards setting

• “Royalty stacking” making licensing costs excessive

• “Patent thickets” preventing standardization

Most standardization organizations have attempted to deal with the negative aspects of the intersection between standardization and patents by introducing an IP policy statement. The most common element regarding licensing is the inclusion of RAND or FRAND principles (licensing should be Fair, Reasonable and Non-Discriminatory).

3.6 RQ6 – The Role of Standards in Achieving Regulatory Goals and Stimulating Innovation

The literature offers evidence that a ‘performance standards’ framework for social and environmental ‘goods’ is more innovation-enabling than tightly specified solutions. A major example is the EU’s ‘New Approach’, which established a framework to apply performance

27 Patents and Standards: A modern framework for IPR-based standardization – Prepared by the ECSIP consortium

for the European Commission DG for Enterprise and Industry, March 2014


standards in regulations, avoiding lock-in to mandated single solutions and specific technologies but enabling a search for optimal ways of meeting the social or policy objective. This is, of course, dependent on the appropriate performance and measurement standards being available to enable innovative new solutions to be objectively compared with those that are already in the market.

Standards can therefore play a catalytic role in supporting policy measures to increase the demand for innovation. This is particularly important in risk-averse sectors such as public services. The same is true of outcome-based public procurement, which is seen as an important driver for innovation to address societal challenges and will become more common as the new EU Procurement Directive is implemented.

Stakeholder interviews also highlight the role of standards in new technology areas where no, or limited, regulation exists (e.g. biosecurity). The standards development process can provide a framework that supports procurement of new technologies (by providing a reference point where no regulations exist). Standards are not, however, regarded as a substitute for regulation.

3.7 RQ7 - Current and Potential Mechanisms for Engagement The discussion on this research question focuses specifically on the feedback obtained from the web-based surveys and other research activities. Proposed engagement mechanisms and policy options identified by the analysis of the research results in this study are included in Section 5, below.

The major flows of both codified and tacit knowledge between standardization and research activities, was developed in the literature review, as shown in Figure 10 (repeated opposite), drawing on the earlier Technopolis study of FP6 and FP7 projects4 to indicate the significance of some of the flows in such cases.

This figure shows mechanisms for the transfer of knowledge from research to standardization and vice versa. It also distinguishes flows of codified knowledge from tacit knowledge (e.g. flows that stem from participation and other ‘word of mouth’ contacts such as conferences).

The earlier sections of this report highlight the following about the main knowledge flows:

• Codified knowledge seems to flow quite well from standards to research but the reverse does not appear to be the case. The main flow of codified knowledge from research is likely to be through the traditional route of scientific publications. There may be options for encouraging some codified research outputs in standardization friendly forms, for example through the criteria used in policies for research assessment and the indicators used in bibliometrics.


• The flow of tacit knowledge between the research and standardization systems seems rather lower, except in the domain of metrology. It is not clear though whether this is at a sub-optimal level, given the opportunity and resource costs of researchers’ joining standardization committees.

• A major flow of tacit knowledge between the standardization community and researchers takes place within firms/organizations. We found no evidence in the surveys that the perceptions of the benefits of participation of those who individually participate (i.e. Technical Committee members) differed from those who belong to organizations which participate, suggesting that tacit knowledge flows appropriately within organizations.

So this shows that there are already mechanisms for the standardization and research communities to engage with each other. However they are not currently optimised and more needs to be done to facilitate and enhance engagement.

Options for consideration that were identified were:

• Reduce the standardization timescale and increase the use of available standardization tools

• Support National Standardization Organizations and other standardization experts to participate in research projects

• Develop mechanisms that reward researcher participation in standardization activities (e.g. through funding and assessment criteria for academic research)

• Establish clear channels for researchers to participate in standardization

• Consider intervention opportunities at a number of levels

• Review policies of charging researchers to participate in standardization for those National Standardization Organizations where this pertains.

These are discussed below.

Reduce the Standardization Timescale / Use Available Standardization Tools

The time taken for standardization processes are considered to be much longer than the duration of typical research projects. So the issue of ‘timescale mismatch’ is considered to be a key barrier to the research community engaging more in standardization and, as a result, the development of new or improved standards.

Some of this appears to be perception rather than reality as the typical timescales for standardization processes have reduced significantly in recent years and there are some tools (such as Workshop Agreements, Technical Specifications and Technical Reports) that can be implemented during the period of a typical research project. Some believe that the answer is improved awareness, education and training for researchers on standardization. Others consider that dedicated funding is needed to better translate research outputs into standards. There are clearly no easy answers but the evidence suggests that both communities need to take action to better reach out to the other.


Support National Standardization Organizations and Other Standardization Experts to Participate in Research Projects

Stakeholder consultation and case study evidence highlight the positive role of National Standardization Organizations and standardization experts (e.g. members of metrology institutes) in research and innovation projects, but the scope to do this is limited. Technical Committee members considered that “standardization organizations lack the resources to participate in research projects” as the main barrier to increasing the linkages between research and standardization (see Figure 16).

Mechanisms to address this lack of resource (such as direct funding of National Standardization Organizations or other standardization experts to participate in research and innovation projects) were identified by contributors to this research study. It is clear, from National Standardization Organization feedback, that selective participation in Horizon 2020 projects offers a new source of income to build capacity for better coordination at the national level.

Develop Mechanisms that Reward Researcher Participation in Standardization Activities

The issue of low researcher participation was clear from the survey, reinforcing evidence from consultations with National Standardization Organizations. The main barrier for academic researchers seems to be that they have neither the professional nor the financial incentive to participate and this is a barrier to the effective transfer of tacit knowledge. This is in contrast to researchers from the metrology community, which generally have both. For industrial researchers, especially those from the SME community, time is the key constraint. These individuals are unable to commit the time required to participate effectively in standardization activities due to competing work demands.

There is broad-based agreement that knowledge from the research community is relevant to the quality of standards and so either the incentives for participation need to increase or other ways to access the knowledge need to be found. Some believe that contributing to standardization should be a factor in the academic assessment criteria for researchers. Others consider that engagement with standardization should be a mandatory activity in public funded R&D contracts. What matters is that the interaction between the two communities is developed and that:

• New knowledge from research activities, where appropriate, is available to the standardization process

• Research and innovation actors are able to contribute in an effective manner to standardization activities

Establish Clear Mechanisms to Link Researchers and Standardization Experts

This is needed to address issues within both communities:

• Researchers claim that the standardization community is difficult to understand, penetrate and engage with


• European standardization experts believe that researchers need to take the initiative

Possible engagement mechanisms have been explored in the survey of CEN and CENELEC Technical Committee members (survey 3). These respondents were offered a range of options for encouraging cross participation between research and standardization and asked to rank their effectiveness. This is an important source of information from those in the ‘front line’ of standardization and is shown in Figure 20.

Figure 20: European Technical Committee Member Opinions on Engagement Mechanisms

Overall, the evidence suggests limited interest in better engagement.

There are various examples of initiatives to improve links and some of these are highlighted below (see “consider intervention opportunities at a number of levels”). Raising awareness and understanding of the standardization process amongst researchers is a key focus for current and new initiatives. In a number of cases this has been facilitated by the metrology community via specific programmes.

However, ways that standardization bodies could be more proactive in identifying relevant research activities were not easily identified. Feedback on the involvement of standardization experts in research highlighted “standardization experts advising on relevant standards” as the topic with majority support. There was less support for other ways that CEN and CENELEC Technical Committee members can participate in research. 30 -40% of standardizers agreed or strongly agreed with:

• Standards experts defining research priorities

• Standards experts monitoring public funded projects

• Standards experts participating in projects

0 10 20 30 40 50 60 70 80 90 100

Standardization experts monitoring publicly funded research projects

Researcher participation in the development of future standardization priorities

Standardization experts participation in defining future research priorities

Standardization experts participation in research projects

Researcher participation in European standardization Technical Committees

Researcher participation in National standardization Technical Committees

Standardization experts participation in research and innovation networks

Researcher participation in National standardization Working Groups

Researcher participation in European standardization Working Groups

Standardization experts advising research projects of relevant standards


As already indicated, there is evidence from stakeholder consultations that the National Standardization Organizations are becoming more active participants in collaborative research projects where there is a clear need for engagement with the standardization community.

Consider Intervention Opportunities at a Number of Levels

The evidence on current and potential mechanisms for engagement collated and analysed in this study indicates that the options for engagement mechanisms can be considered at three levels:

• Research/innovation project or standardization committee level (micro)

• Standardization organization or research/innovation funding organization level (meta)

• Standardization and research/innovation policy level (macro)

Examples of initiatives to improve linkages, at the different hierarchal levels, are summarised below.

Micro Level

There are two primary mechanisms to achieve practical engagement at the micro level:

• Standardization experts participate in research projects

• Researchers participate in standardization committees

The survey of National Standardization Organizations28, undertaken as part of the wider BRIDGET project, and consultations with the BRIDGIT consortium indicated a relatively broad level of participation in both European and national research projects. It seems that most of these have been reactive and initiated by the research consortium.

The benefits of standardization experts participating in research projects was also considered in the stakeholder surveys29. From this, it was clear that the majority of respondents agreed with the four main benefits of this mechanism, namely to:

• Identify and access relevant standards to support the research project

• Highlight opportunities to improve existing/emerging standards

• Provide direct access to the relevant standardization committee

• Increase awareness of the variety and suitability of standardization tools

The pattern of responses is shown in Figure 21.

28 BRIDGIT internal report, 2013-08-05 – survey of 34 CEN and CENELEC members on their involvement with the

research community 29 The surveys of (1) industrial participants in FP7 research programmes, (2) non-industrial participants in FP7



Figure 21: Benefits of Standardization Experts in Research Projects

Clearly, the standardizers (in particular) consider this bridging option to be a very effective mechanism in spite of the feedback (Figure 16) that 60% of them believe that “standardization organizations lack the resources to participate in research project”.

The benefits of standardization experts participating in research projects was also confirmed through consultations with the National Standardization Organizations and from some of the case study interviews, where the use of standards or involvement with a standardization body or a standardization expert significantly benefited a research project or exploitation of results.

An important standardization tool for engagement with research & innovation projects seems to be the CEN Workshop Agreement. Technical Specifications and Technical Reports are also useful deliverables from research and innovation projects. In general, the processes to enable the engagement with research & innovation projects have improved within National Standardization Organizations but there is a potential capacity bottleneck as only a few have dedicated staff to support this mechanism. In some cases the lack of knowledge of the standardization community within a research project can make it difficult to identify/interest a relevant Technical Committee.

The proactive approach taken by ETSI in identifying research projects relevant to its members is a useful model to note. ETSI scans research projects and approaches the consortium to offer support and engagement (e.g. through membership of project steering groups, reference committees, etc.). CCMC currently identifies research calls and circulates the information to members who then may pursue individually. A Horizon 2020 Coordination Action to establish a sustainable process between CEN and CENELEC and the projects funded by Horizon 2020 could significantly enhance current CCMC activity.

On the other hand, it seems to be much more difficult to attract researchers to participate in standardization committees as discussed in previous research questions. The academic community is considered (by the National Standardization Organizations) to be the least


tapped source of knowledge for standardization activities. There are obviously examples of where direct participation by researchers in a standardization committee has added greater value to the process than simply making research publications available to the committees. This is due to the codified research outputs not being written in a format designed to inform standardization committees of potential new work items.

Meta Level

This is currently quite a dynamic arena and there seems to be positive trends on both sides. It is most evident within the standardization community. For example, NEN is being proactive in engaging with the high level ‘Topsectoren’ initiative in the Netherlands, Standards Norway is developing a new strategy with nine focus areas including ‘cooperation with universities and research centres’ and AENOR is engaged with the national Technology Platforms in Spain. There is also evidence of internal communication activities and training within some National Standardization Organizations. Other supra-national developments include the RDI-COR network of RDI Correspondents set up in January 2012 by CEN and CENELEC to train National Standardization Organization staff and ensure there are named contacts for research and innovation within each National Standardization Organization.

The most common meta-level engagement mechanisms by National Standardization Organizations that have been highlighted during stakeholder consultations include dedicated websites and publications. Several National Standardization Organizations have dedicated staff that can respond to stakeholder needs for the development of new or improved standardization products. DIN enables this through a range of activities, BSI through its PAS team. More recently, the Danish Standards Foundation (DS) has established both a research network and an ‘advice to entrepreneurs’ programme to support engagement with academics and micro SMEs. Other meta-level mechanisms that have been highlighted include foresighting activities and stakeholder dialogue.

The main barrier is again the lack of dedicated capacity in the National Standardization Organizations and the extent to which National Standardization Organization policy is supportive as expert staff are needed to provide the input to research projects. Public sector budgets to support National Standardization Organization activities are under severe pressure and some have reduced in size or have diversified their sources of funding. Some have suggested that participation in collaborative R&D projects is a new income generation opportunity for National Standardization Organizations and needs to be resourced accordingly.

There is also more receptiveness and some initiatives from innovation community organizations; for example in Germany, the UK, Austria and the Nordic Countries.

In addition, the European Commission Joint Research Centre (JRC) has been developing an Industrial Landscape Vision 2025 as a basis to analyse the future needs of standardization in Europe and also a foresight study on the future of standards and standardization as a tool to facilitate innovation and competitiveness.


However, in general, the engagement with national research & innovation funding organizations (i.e. Innovation Agencies, Research Councils, and Academies of Science) seems rather embryonic and disparate. The BRIDGIT WP1 survey indicates a relatively high level of contact but limited level of ‘agreements’. The main interest in the BRIDGIT Research Study so far has come from the more industrial/applied side of the European innovation community (e.g. European Technology Platforms) and some of the reasons for this have been highlighted above. The broadening of the research sector survey, beyond the metrology institutes, provided some insights into the motivations and perceptions of researchers involved in different parts of the innovation system landscape.

Macro Level

Clearly, the most important development at the macro level is the overt references to the positive links between innovation and standardization in Horizon 2020 policy messages. Such policy messages are also apparent in the German High Tech 2020 strategy and the 2011 UK Innovation Strategy. In France AFNOR has been active in trying to influence policy, most notably through reports in 2008 and 2009 on the economic impact of standards and the relationship between standards and innovation. The National Standardization Organizations in Denmark and Norway have both been engaged in development of the new national innovation strategies.

Some of the National Standardization Organizations indicated that national Ministries and Agencies could be influenced either positively or negatively by the way the European Commission puts into practice the policy statements on standardization. For example, in Spain the 2020 Strategy for Innovation aligns with Horizon 2020 and, although standardization is not overtly mentioned, it has several related themes such as ‘fostering dissemination of knowledge from innovation’. This is apparently driving some researchers towards AENOR.

EURAMET’s European Metrology Programme for Innovation and Research (EMPIR)30, which will deliver leading-edge research, especially in the so-called Grand Challenges areas of energy, environment and health, will have dedicated budgets to support standardization activities. The innovation related activities of EMPIR will target industry’s needs and foresee a faster uptake of metrology research results while the pre- and co-normative research programme aims at metrology R&D needed for the implementation of European legislation.

These selected examples are not exhaustive but they do provide evidence of evolving trends and initiatives.

30 http://www.euramet.org/

http://www.euramet.org/


4. Summarising Key Outputs from the Research Questions

Analysis of the points arising from the research in this study, as summarised in the preceding section, leads to a number of conclusions on the linkages between research and standardization. These are:

• Standards play a multiple, catalytic role in the innovation system o Standards play an important role in research projects. Based on survey responses

they are used by over 80% of researchers and they improve the process of research by providing common terminologies, harmonised methodologies and comparability between research activities.

o The functions of standards vary across the innovation life cycle.

• The catalytic role seems to be particularly important for market acceptance of technology-based innovation o Standards improve the marketability of research and innovation results

• Those researchers who are not active in standardization have a lower appreciation of the benefits of participation o Standardization activities have many benefits for participating organizations (but

these benefits are not recognised by all stakeholders) o There is relatively low participation of researchers in standardization

• There are barriers on both sides to improving the links between the innovation and standardization systems o There are some important barriers that inhibit participation in standardization,

such as a lack of comprehension of the standards world, a lack of the resources to participate and the perceived long timescales of standardization compared to research

o There is limited motivation for academic researchers and constraints for industrial researchers to participate in standardization although this does vary by their field of research.

o Some National Standardization Organizations have to share the costs of the standardization process with interested stakeholders to maintain the sustainability of the system and this is clearly a disincentive, especially for academic researchers who are unlikely to have access to budgets to cover these costs.

o Existing standards do not always reflect the needs of new generation products or technologies without significant revision.

o The adoption of new technologies, especially disruptive technologies, can be affected by the scope and focus of established standards

• Better connections and motivations are particularly needed to improve the flow of new knowledge into standardization o It is recognised that commercial interests are one of the drivers of

standardization; these interests can affect the adoption of standards related to new technologies


o Linkages between the research and standardization communities can be improved in Horizon 2020 particularly by identifying future standards needed to accelerate market acceptance of new technology based innovations.

o There is already a robust body of evidence that underlines the positive role that standards and standardization can have in Horizon 2020 but to realise the potential some positive steps could be taken to enhance linkages

• Contributions from standardization experts in research & innovation activities is an important linking mechanism for new knowledge o National Standardization Organizations have an important role to play in

enhancing these linkages, but they are not the only stakeholders that can support this role.

o Standardization experts in other organizations (e.g. industry associations and metrology institutes) can also play an important role.

o Participation in standardization activities offers a number of benefits to researchers

• IPR and standards co-exist in an acceptable manner in most industry sectors o The widespread importance of IPR to standards development is still limited o The systems in place to manage IPR in standards development are generally

suitable for practitioners

• Performance related standards may be innovation-enabling for outcome-based regulations (New Approach)

These key points underline the need for action by key stakeholders to address the issues raised. The key themes can be summarised as follows:

Awareness

1. Increase awareness of standards, the standardization process and the benefits they offer to the research and innovation community (including relevant government Organizations and funding agencies)

2. Encourage research and innovation actors to consider the role of standards and standardization in research projects

Improved Linkages

3. Develop improved mechanisms to facilitate and encourage the research community to participate in standardization

4. Establish effective mechanisms to support standardization experts to contribute standards related knowledge to relevant research projects

Co-ordination

5. Improve linkages between H2020 and standardization activities

Management and Control

6. Identify and address instances where the innovation and standardization communities put up barriers to collaboration


7. Improve the governance of European standardization programmes so that they facilitate and support the exploitation of new research results

Policy options for each key stakeholder group to address these needs are discussed in the following section.


5. Proposed Policy Options

The study has provided a rich source of evidence and insights into the mutual benefits of better integration between the innovation and standardization systems in Europe. It also indicates that the existing linkages are not sufficiently strong or embedded within established structures and processes although there are some interesting developments in some countries. This suggests that either there is a need for better coordinating frameworks and/or new structures and processes that will improve the transfer of information and knowledge between the two systems. Some suggestions for possible coordination actions by the main stakeholders are provided below.

5.1 Options for CEN and CENELEC CEN and CENELEC should consider how to better support the European innovation system with new or improved standards. The study indicates that the level of synergy between the priorities of CEN and CENELEC Technical Committees and the Horizon 2020 priorities is relatively low. Options to address these issues would include:

• Prepare new Guide(s) for researchers on both how they can use standards and also transfer new and accumulated knowledge into standardization

• Deliver dedicated workshops on innovation and standardization in partnership with the thematic units of DG Research and Innovation and European thematic platforms (e.g. ETPs) to promote the development of a more effective link between research and standardisation

• Explore the background to the case studies provided to identify areas for development

• Review of Technical Committees to assess their ‘innovation readiness level’ (i.e. are they open to new technologies and could they better monitor and engage with relevant Horizon 2020 projects)

• Develop bridging platforms (under the CEN-CENELEC Working Group (STAIR) on standardization, innovation and research) to improve synergies with the priorities of Horizon 2020 (e.g. the recent initiative of STAIR and EURAMET through the creation of the STAIR-EMPIR Platform)

• Explore with research intensive organizations and research funding bodies how greater recognition of researchers’ critical contribution to the development of major standards can be achieved to provide stronger motivation to researchers.

• Include a section in the Annual Report on important outcomes from standards and research links

5.2 Options for the European Commission The main issue for the European Commission from this study is the apparent lack of commonality between the CEN and CENELEC Technical Committees, the priorities areas of Horizon 2020 and the Innovation Union agenda. Options for bridging actions would include:


• Internal survey of the 2014/2015 Calls of Horizon 2020 to assess the extent to which standards and/or standardization has been included in research proposals and discuss their effectiveness with CEN and CENELEC.

• Publish a Call for a CSA (coordination and support action) to create a sustainable coordination platform between CEN and CENELEC and projects funded by Horizon 2020

5.3 Options for National Standardization Organizations The BRIDGIT project is developing tools to help all National Standardization Organizations (the members of CEN and CENELEC) to reach out to the research & innovation community in their country and some have already implemented bridging frameworks and/or processes. This needs to advance beyond simply providing an expert service to R&D projects and ensure that the catalytic role of standards can be maximised to help overcome the market barriers to the adoption of new technology-based products & services.

Additional options to improve linkages would therefore include:

• Build up and maintain a network of experts from within National Standardization Organizations, Technical Committees, other technical bodies, and the research community that is committed to raising awareness and is able to initiate the link between research and standardization in relevant projects

• Bridging structures and processes with national innovation agencies and platforms to initiate early stage standardization activities in the area of enabling and industrial technologies

• Explore options for the National Standardization Organizations to engage with national innovation support organizations to support the national innovation agenda.

5.4 Options for National Innovation Support Organizations Standardization is often mentioned in national innovation policy documents but the relationships between national innovation agencies and National Standardization Organizations seem to be limited. There are some good examples of funding programmes that support linkages between innovation & standardization (e.g. Germany, Nordic Innovation Centre) but these seem to be the exception. Options for national innovation support organizations would include:

• Encourage and provide support for mutual participation of researchers and standardization experts in innovation and standardization activities

• Involve the National Standardization Organizations in applied R&D programmes through complementary actions, such as stakeholder workshops, which will catalyse parallel and anticipatory standardization activities

• Explore the role of standardization in Joint Programming Initiatives (JPIs) and other European Research Area networks to co-fund strategic research & innovation

• Consider options to support the costs of standardization activities within research projects.


5.5 Options for Research & Innovation Actors Those who are active in research & innovation activities need to consider how they can better help the standardization bodies to anticipate the need for, and support the development of, new and improved standards.

Some research-intensive organizations (e.g. National Metrology Institutes, larger technology-based companies) are involved in both systems but others seem to only consider standardization when they encounter market barriers to the exploitation of new solutions. This, of course, is too late so options for improved linkages would include:

• Consider the relevance of standards and/or standardization when formulating research & innovation projects

• Propose options to address the barriers to mutual participation in standardization committees and collaborative research & innovation projects

• Explore ways that research & innovation actors could get more recognition for their contribution to standardization


APPENDIX A: Literature Review Summary Report

Introduction and Background In the world’s advanced economies there is now a clear consensus among policy-makers that a major share of economic growth is driven by the ability of economies to increase the productivity with which inputs of labour and capital are employed. Innovation and a progressive division of labour between nations and firms are seen as key drivers of this productivity growth. These processes require learning within the context of innovation systems in which both research and standardization activities are key components. There is a further consensus which sees the need for active government involvement in these systems, promoting research in priority areas. Horizon 2020 provides an example, aiming at promoting ‘smart, sustainable and inclusive growth’ covering employment, research, climate change, education and poverty/social exclusion. In relation to research, there is a perception of lagging innovation related expenditures, in which slow standard setting is identified as one of the underlying causes31. This has informed a target for 3% of the EU's GDP (public and private combined) to be invested in R&D/innovation by 2020, a considerable increase on the 2.0% of the EU’s GDP devoted to all forms of expenditure on R&D in 2010 (Eurostat 2013)32.

This paper reviews the available evidence relating to the systems of both standardization and research and how they interact to promote (or possibly hinder) innovation. The current BRIDGIT policy initiative may be thought of as aiming at leveraging these complementarities between research and standardization activity to achieve more and more productive commercial innovation. Better understanding of how standardization and research are linked is essential to this objective. This review approaches the topic from a policy standpoint, considering the standard issues of market failure, but also relating these to a systems perspective in which it is the interaction of research with standardization which is of central interest. We begin by considering the links in more detail, considering different types of standards as an input into the processes of research and innovation.

Linking Standards with Research and Innovation Classifications of Standards

Unlike research – where the idea – at least as rooted in policy and empirical analysis has been largely standardized via successive editions of the Frascati Manual (OECD 2002), precise definitions of standardization are somewhat elusive and little is known about the precise size of the relevant community and the extent of its overlap with that of research. For the purposes of this review it is convenient to define standards (following Allen and Spiram [2000]) as codified “agreements containing technical guidelines to ensure that materials, products, processes, representations, and services are fit

31 Identified causes include weaknesses in public education and innovation systems; poor availability of finance;

costly patenting; outdated regulations and procedures; slow standard-setting; failure to use public procurement strategically; fragmented efforts among member countries and regions - Innovation Union: A pocket guide on a Europe 2020 initiative.

32 http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/R_%26_D_expenditure (accessed 03/09/2013)

http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/R_%26_D_expenditure


for their purpose”. Under this rubric we can identify a variety of standards according to their immediate function. Here, again following Allen and Spiram, four main types can usefully be identified:

• Measurement/terminology standards

• Specifications for processes (e.g. testing)

• Format standards developed for inter-operability between components or systems

• Specifications for performance (which may be for minimum quality)

This typology corresponds reasonably closely to those used elsewhere. Many authors refer also to ‘variety reduction’ standards, although arguably there is always a tendency for a standard to limit variation in some dimension. Others refer to ‘information’ standards, but that is clearly an aspect of all the types identified above.

Standards are often developed in relation to very specific products or production technologies but it is clear that specifications for services can embrace organizational processes including provision of services. There is for example now a considerable literature on the ISO 9000 series which embraces quite different business activities.

The literature also makes a sharp distinction between standards on the basis of the process leading to their creation. Beginning in the 1980s, the early literature was based upon a consideration of how standards arose simply from a dominant market share, or so-called ‘de facto’ standards, largely in the context of interoperability standards in information and communications technologies (ICT). The major alternative source is the process of consensus building through participation in a committee with agreed rules; standards so created are sometimes called ‘de jure’ standards. Such committees – formed around trade associations, professional bodies, industry consortia, or through government sponsorship or coordination, provide varying governance structures and the extent to which they involve all relevant stake-holders may also vary considerably. In Europe the national standards body (National Standardization Organization) became established as an important form during the 1920s when a large number were established on the pattern of those established in Britain and Germany. The literature here has long drawn a distinction between the European system and that in the US which is far more pluralist and lacking any single peak coordinator. Moreover the European system has changed considerably in the last two decades, with the harmonization of standards playing an important role in the creation of the single European market. This project has clearly had important implications for national bodies, but has not prevented national strategies re-emerging, as in the case of Germany where a systematic integration of standards with research is being attempted, with coordination at a Federal Level. This includes a specific high tech strategy and a systematic approach by DIN to standardization at each stage of the innovation cycle, including the research phase.

Standards in the Innovation Cycle

The delineation of standards on the basis of immediate function can – at least approximately – be linked to phases in the research and innovation cycles as in Blind and Gauch (2009) or Goluchowicz and Blind (2011). A modified example of the diagram used is presented here as Figure A1.


Figure A1: Types of standard in the Innovation Diffusion Cycle (source: Blind and Gauch 2009)

First of all the figure suggests that there is no simple linear progression from pure research through to diffusion, the ultimate uptake of the results of via market selection. Feedback loops exist between all stages which may vary in importance in different contexts. It can be seen that semantic and terminological standards may be crucial in facilitating basic research and orienting it toward applications; measurement standards become crucial for applied research and in turn they pave the way for testing and experimental development. In its turn development work frequently requires interface standards which ensure feasibility of production on the basis of inter-operability of components. The phase of diffusion among ultimate users and the extent of market uptake may also be facilitated by standards which define quality and permit cost reducing innovations – which help to achieve market acceptance – and allow customers to benefit from network effects. In this way the impacts of different types of standard can be seen to have a cumulative quality. The other aspect emphasized in the figure is the likelihood that as we move closer toward commercialization the closer the knowledge is likely to be embedded in a proprietary technology and resemble a private good (as opposed to a public good) in nature. A similarly systematic approach to the role of standards in the research and innovation cycle has informed the standards-research integration policy in Germany.


Research and Standardization from a Market Failure Policy Perspective The Case for Intellectual Property Rights

The economics and indeed political economy of research now has a long history, with justification for policy interventions in the form of intellectual property (IP) protection and others (such as subsidies for research, direct provision or public procurement of research) being based on an understanding that there is market failure in the allocation of resources for research and innovation because the innovator is unable to recover the full return from their investments resulting in a tendency toward under-investment. This is partly because markets ensure that typically much of the benefit from innovation flows to consumers, but also because the knowledge embodied in the innovation ‘spills-over’ to rival firms who may imitate at far lower cost. Policy intervention in the form of IPRs is intended to counter these problems and promote invention and innovation by granting a temporary monopoly in the expatiation of new ideas that add to the sum of exploitable knowledge. In the case of patents, the holder reveals the content, providing a codified source of knowledge so that others can both avoid infringement and plan alternative lines of research or development trajectories for themselves. The economics of research therefore recognizes that there is a trade-off between the market distortion created by monopoly power and the stimulus to research and innovation and there is no reason to suppose that an optimal balance is achieved in this trade-off. Here policy can influence the nature of the trade-off by strengthening (or weakening) patent protection through the scope or the duration of a patent.

The economics of research also recognizes a further market failure in the form of ‘business stealing’ or ‘creative destruction’, in that firms do not take into account the negative impact of their innovations on the profits (or even the existence) of rival firms. In principle this could mean that over-investment in research is a possibility, but except perhaps in specific instances of a considerable prize from obtaining a patent, the presumption is that typically research creates net positive externalities, with the social rate of return exceeding the private rate of return from research by individual firms. Nevertheless, there is a significant literature suggesting that at the margin, the IPR system has become too strong.

Standards and the Coordination Problem

The early literature on standards in the 1980s was largely focused on the question of user adoption in the presence of network effects, i.e. when users benefit from the size of the user base, which depends upon the extent to which a common standard has been adopted (e.g. Farrell and Saloner (1985)). In such circumstances there is a coordination problem associated with the presence of network effects, where markets may generate either too much standardization (an inefficient ‘bandwagon effect’ resulting in an inferior standard) or too little (insufficient impetus for standardization resulting in a market failing to materialise). In such markets, expectations are crucial, so that often the firm with established market share and reputation is in a powerful position to build demand and win a ‘standards battle’. In other cases, the struggle for market share may depend upon the supply of complementary products. The evidence from case studies offers support for the relevance of these models and the market failures associated with them. Examples include David’s now famous paper on the lay-out of the QWERTY typewriter key-board (David 1985), the struggle between JVC and Sony for share in the market for video recording technology, and more recently the HD-DVD versus Blu-ray digital format war. But the


conclusions drawn from some these case studies have not gone uncontested (see for example Liebowitz and Margolis 1999).

The relative merits of committees versus markets as means of achieving standardization also received early attention in the literature, and here Farrell and Saloner (1988) showed that while the committee process is more likely to solve the coordination problem, it is also likely to be slower. They note however that slower may not always be worse if, with nascent technologies, more information makes for a better decision on the choice of standard. The issue of timeliness of standards has provided a recurrent theme in the literature.

Standards as Public Goods

In some circumstances standards involve little by way of distributional conflict, and they may come close to the economists’ concept of a public good, in that their use does not deplete the standard’s availability while an ‘open’ standard is available to all, although its use typically uses resources. A central problem in this type of situation is that the gains to any particular agent may be so small that the free-rider effect means that no standard is developed. If each firm then has to go it alone, there may be considerable duplication of research and development activities. More generally the lack of resources at this stage of the standardization process may result in delay in the development of the technology. Case study evidence supports the view that this effect can be important. For example, a recent study by NIST into the case of flat panel display technology (FPDL), suggests that the resultant standard not only led to considerable savings in these duplication costs, but also that NIST was able to speed up the process, acting as “an honest broker and a conduit for the highest international standards based on good measurement practice”33 (emphases ours). The potential for members of the academic community to act as honest brokers features occasionally in policy analysis.

It seems likely, as we move closer to commercialization and market acceptance that interested firms have invested more resources into possibly irreversible development commitments and that vested interests in the form of intellectual property in a particular standard are correspondingly more important, resulting in a second but rather different reason for delay examined further below. In such circumstances standards and associated technology come closer to the notion of a ‘private good’, albeit with possibly considerable spillover effects. A sharp distinction along these lines has been made by Tassey (2000 and 2005) who uses it

to present a model of a ‘technology based industry’ in which the problem of underinvestment in R&D varies significantly among the elements, suggesting that the composition of R&D as well as its size is an important element of an effective policy toward R&D. Figure A2 (recreated from Tassey 2000) indicates the preference of what Tassey calls and ‘infratechnology’ (a technical infrastructure facilitating both generic and proprietary technology development) and how different types of standards fit into the process of value creation.

33 http://www.nist.gov/director/planning/upload/eport12-1.pdf

http://www.nist.gov/director/planning/upload/eport12-1.pdf


Figure A2: Standards and Different Types of Technology (adapted from Tassey, 2000)

The Role of IPR in Standards Setting

IPRs and standardization complement or are in conflict with each other has important implications for the efficiency of the innovation system as a whole, for example by concentrating on standards which come closer to the pure public good type. This ideal form has been impossible to attain, most notably in the fields of innovation and communications technologies (ICTs) and with particular reference to mobile telecommunications, through the successive phases of development of 2G, 3G and 4G systems. In these technologies, patenting even of small details of the network and handsets and software is very extensive. The development of compatibility standards in the field enables users and suppliers to reap the benefits of network externalities, and also act as a unifying platform for future technological progress. The standards thus need to incorporate the leading technologies which will include those protected by patents. This need in turn provides an incentive for firms to patent more extensively or to otherwise make strategic use of their patents in the standardization process in order to extract the maximum share of the additional value created by the larger market enabled by standards. The strategic interaction generates potential problems for (or abuses of) standardization, which have been well documented in the literature. These are considered further below. But they indicate the need to consider innovation systems as a whole, an idea to which we now turn.

Research and Standardization from a Systems Perspective Other approaches to the analysis of innovation and growth have adopted a ‘systems’ perspective. This has emerged over two decades as a means of considering the comparative economic performance of capitalist economies. Under this heading it is possible to detect discussions of systems of production, corporate governance as well as innovation (Hall and Soskice 2001).


The idea of a system of knowledge generation and transmission which incorporates its translation into commercial innovation allows for a more nuanced view of how elements of the scientific and technology community interact with firms through identifiable institutions – organizations, policies as well as rules or regulations - which impact upon economic behaviour. Observation of considerable differences in these systems across countries has created a considerable literature founded on the idea of ‘national innovation systems’ (Nelson 1993) or ‘science, technology and innovation (STI) systems or even – to make the link to growth explicit - recently as ‘STIG systems’ (Aghion et al 2009). Differences between STI systems at the sectoral level can also be distinguished (Malerba 2005).

Some of the elements of a STIG system which incorporates standards are illustrated in Figure A3, which indicates a basic structure centred on role of the firm (including collaborative activities) - the key institution linking the activities of the science base (in pure and applied research) with the set of final demands (both household and government consumption) and exports (which provide the means to pay for imports) which drive welfare. The literature on innovation and growth has examined various features of the business environment which profoundly influence the R&D decision at the level of the firm and its ability to collaborate effectively in cross-firm innovation projects, an increasingly important feature of the industrial landscape. The diagram shows various aspects of the environment in which there is a policy interest, usually on the basis that there is some market failure. Bringing standardization into the picture can be done in a number of ways, but the diagram is used to emphasize the ‘catalytic’ effect of standards on innovation – a term used by both Blind in his inaugural lecture at Erasmus University (Blind 2009) and backed up by Swann in his reprise of the economics of standards (Swann 2010). This catalytic effect strengthens the complementarities between components of the system, although of course, the opposite may also hold, an example of ‘systems failure’.

Figure A3: Processes Linking Science and Technology with Innovation and Growth


Standards have impacts at various points in this system as indicated by the numbered linkages. Here we illustrate just four. We have already mentioned catalyst 1, and the impact that certain standards have on information and communication costs in scientific research. Some studies also suggest that standards may be able to stimulate innovation through government procurement policy – catalyst 2. For example, in his survey of standards and innovation, Blind (2012) discusses the role of public procurement in innovation, noting the potential for greater participation in standards development, not least in the sophistication of the requirements of the public sector. Catalyst 3 – the interaction between standards and intellectual property rights has become problematic and is discussed further in the next section. Here we see the potential for so-called ‘systems failure’. Catalyst 4 represents the real (or potential) for mandated standards to act as a promoter of innovation in regulation, clearly of relevance for the role of standards in EU directives, discussed further below.

The diagram is also helpful in informing us about lacunae in our knowledge. For example – given the possible importance of standards for reducing risk and encouraging sunk cost investments - we know next to nothing about the role of standards for investments in fixed capital, via for its example their ability to reduce imperfections in capital markets.

Research and Standards as a Sub-System

The potential for more integration of the results of scientific and other research into standardization and of the use of standards in research, has not as yet, received much attention in the literature, with some heroic exceptions. There are more instances in policy documents, of expressions of the desirability of such integration and in the case of COPRAS – (Cooperation Platform for Research and Standards34) some specific guidelines for IST (Information Society Technology) FP research programmes. As far as we can tell, there is little evidence regarding how the two activities are integrated within the firm itself and serve as joint inputs to effective decision making.

Some of the issues involved can be explored by making the linkages between the two processes explicit as in Figure A4, which is based on the contribution by Blind and Gauch (2009) whose important contribution examines the case of nanotechnology in Germany where, despite a strong research base, there had been little complementary standardization - in e.g. measurement and testing and health and safety - which is argued to be important for an efficient commercialization process. The figure shows the transfer of knowledge from research to standardization as well as the recursive transfer from standardization to research and distinguishes flows of codified knowledge from tacit knowledge flows which stems from participation and other word of mouth contacts, e.g. through conferences.

34 An FP6 ‘support action’ programme http://www.w3.org/2004/copras/

http://www.w3.org/2004/copras/


Figure A4: Knowledge Transfers in the Research-Standardization Sub-System (adapted from

Blind and Gauch 2009)

In their study of nano-technology, Blind and Gauch show how, in the research process, standards for terminology as well as test methods would facilitate communication, learning and collaboration – in other words lowering information costs (link 1 in the figure). A survey of business and academic researchers found that technical standards were ranked rather low as information sources by business, but higher by academic researchers. The paper also explores the importance of tacit knowledge in research and in standardization. The survey indicated that tacit sources were regarded as more important research inputs than standards with a similar ranking for tacit knowledge in standardization. It is not clear that this necessarily follows since the objective of standardization is codification and stability, but R&D seeks new knowledge and further ideas. Only a minority or research institute respondents participate in standards committees- largely due to the expected lack of alignment of the purposes with the reward and appraisal framework for their research. Those who participate report being motivated by the prospect of future research funding by business members. Businesses report that their motivations relate to reducing legal uncertainty around product markets and to keep abreast of other firms’ developments.

Just recently, a Technopolis report for CEN and CENELEC has built on the framework of technology transfer developed by Blind and Gauch, using a large scale survey of FP6 and FP7 project coordinators to monitor the use of research outputs in standards activity as well as the use of standards in research.

Some of the Technopolis results can be usefully illustrated with reference to figure 4. The grossing up of results from both target (projects with an explicit link to standardization) and a control group suggested that around 43% of the projects ‘addressed’ standardization in some way. The major link (1 in the figure) was the use of standards in research, with nearly one third of projects used standards as an input in their research, ensuring both efficient communication between research collaborators, between researchers and users, and to ensure that development was in line with market acceptability. A smaller but still significant reverse link (2 in the figure) found that up to one eighth of projects led to or involved proposals for new or revised standards, while a large proportion of these (one twelfth of all projects) contributed directly to the development of new or revised standards. In regard to the large number of projects which did not lead to codification in the form of standards (link 3), the main reason cited was the


inappropriateness of standards for project as a means of codifying or disseminating project output, although a significant number reported that non-use was ‘a lack of knowledge or awareness within the project team’, which may reflect inter alia a lack of participation which makes tacit knowledge available to the project. Other issues involved a lack of synchronisation in timescales, and uncertainties about the decision making process within SDOs.

Recommendations emanating from coordinators for strengthening the links between standardization and research included ongoing, specific or more flexible funding, as well as more dedicated structures. Other suggestions of interest include the use of the potential for mid-term reports to address the issue of future standardization, helping address the issue of the timeliness found throughout the literature. A lack of knowledge about existing standards was also indicated by ‘a significant number’ of respondents, with a call for more specific guidance from the Commission or standardization bodies. Similarly ‘several’ respondents suggested that FP projects should incorporate standardization experts.

The recommendations of Technopolis founded on the evidence provide various possible mechanisms for improving the integration of standardization and research, and these include:

• Improving the understanding of standards among FP researchers – e.g. through guidance and training and more information on the benefits of standards

• Making access of researchers to relevant standards easier through the development of standardization maps

• Easier access to standards bodies through ‘dedicated entry points’ , ‘interlocutors’ and extending the use of CEN and CENELEC workshop agreements (CWAs)

• More coordinated research innovation activities coupled to standardization programmes New processes for monitoring how research feeds into standardization processes

The knowledge flow diagram also indicates the distinction between standards and standardization for firm level innovative/entrepreneurial activities. Participation in standardization – regardless of the value of the codified information achieved through documentary standards (link 4) – generates value, as recently reiterated by Xia et al (2012) who term them process benefits, in the form of learning from other firms and the creation of social capital embedded in the network of participating firms. As a process, standards consortia typically offer tight governance which limits opportunistic behaviour, leading to greater process benefits. This of course includes “clear and rigorous” IPR policies. In their empirical analysis of seven ebusiness consortia, the authors did not however find that risks associated with opportunism were significant in shaping the process benefits, but that the perceived benefit of the standard, the firm’s level of technical capability, and governance were all positively related to the process benefits. Note that the study by Xia et al investigates process benefits at the firm level. As far as we are aware, little is known directly about the participation benefits that accrue at the level of the individual in terms of the development of expertise, career progression, prestige, etc.

The Returns to R&D and Standards Research into research itself provides a remarkable example of how standardization both ‘enables and constrains’. The successive editions of the Frascati Manual have contributed enormously to our understanding of the importance of R&D, alongside other more conventional inputs, for economic growth.


One constraint is that this understanding has rather been dominated by econometric evidence. Recent surveys of this literature (e.g. Hall et al 2009, Grandi et al 2009, Sveikauskas 2007) point to the following ‘stylised facts’ regarding the returns to R&D.

• That overall returns from R&D are high but variable (i.e. risky)

• That there are considerable spillovers of R&D from performers to other economic agents, so that there is a considerable divergence between private and social returns to R&D.

• That spillovers of knowledge from R&D are important across various boundaries, both within industries and domestic economies, but also internationally.

If spillovers from R&D have been found to be important, the nature of the mechanisms involved are still less well understood. We do have evidence relating to the role played by multi-nationals (e.g. Gorg and Greenaway 2004), geography in the form of agglomerations and networks, and some of the importance of labour mobility and other more ‘tacit’ forms of knowledge transfer. Clearly standards are also an important mechanism for knowledge transfer in their own right and there is some research linking standardization with productivity gains at the level of whole economies. An early assessment of the contribution of standards to German economic growth was conducted by Jungmittag et al (2009) which added a measure of the German number of DIN standards available, as well as patents and licensing payments for foreign technology, as measures of technological change, to the conventional inputs of labour and capital. This study found a considerable contribution coming from standards, worth 0.9% per annum for the period 1960-1996. A recent update (DIN 2010) found that this contribution had fallen but had stabilised since the reunification of Germany to about 0.7-0.8% of GDP pa. A number of studies - for the UK (Temple et al 2005), Australia (Standards Australia 2006), Canada (Standards Council of Canada 2007), and France (AFNOR 2009) - have all found significant impacts from standards with the impact on growth ranging from 0.2% per annum in the case of Canada to 0.8% in the case of Australia, which finds evidence of additionality to R&D expenditures. In a similar kind of econometric exercise, evidence regarding the influence of the growth in the standards stock – alongside the aggregate R&D largely performed by large firms - on productivity in the small firm sector of UK manufacturing is provided by El Shamy and Temple (2008). However as Swann (2010) has noted, the methodology of these studies represents a ‘black-box’ in terms of the mechanisms involved and while the consistency of the positive contribution is surely significant, any policy implications are less transparent.

At a micro-level, there is case study evidence of the benefits of standards for individual companies, some of it based around the ‘ISO methodology’ where there is a growing body of evidence at the company level with greater detail about the mechanisms involved. Since many of the studies are for less developed economies, this provides good news for processes of convergence in the European context. However the bottom line in these studies seems to be one of firm level profitability which as we have seen, ignores the business stealing effect as market shares change.

IPR and Standards As we have seen, it is important that IPR and standards coexist and protection of IP by firms is inevitable in standard setting as in other contexts. Nevertheless it is possible that the systems for standardization


and protection of IP interact in ways which are deleterious for ‘productive entrepreneurship’ based around innovation and instead encourage what economists call ‘rent seeking’.

A major form of abuse of patent rights in standardization is known as ‘hold – up’ or patent ambush. This can arise when the owner of a patent fails to make its existence known to intending users of a standard underdevelopment. They may then find themselves locked into use of the standard and facing unexpected demands for high royalty rates by the ambushing patent holder. Further problems are associated with so-called ‘royalty stacking’ where producers are faced with the need to acquire many licenses, so that even though each may be on a fair and reasonable basis, cumulatively the costs are excessive.

The patent intensity of ICT standards is indeed remarkable. As noted above, thousands of patents essential to some mobile telecoms standards, while very few, if any, are essential for the majority of technology fields. According to Baron and Pohlmann (2010) some 2% of patent classes are standard relevant. They also confirm that patenting behaviour in these fields is strategically responsive to the development and content of standards, with over 50% of essential standards declarations more than one year after release of the standard.

A number of studies have confirmed that there is not simply an overlap between the domains of standardization and patenting, through Standards Essential Patents (SEPs) but also feedback links – the patenting behaviour of firms is materially affected by the inclusion or potential inclusion of a patent in a standard. In general they seek more patents, whose quality may be diluted and tend to be more active in litigation. In part, this is one instance of the more general issue of strategic patenting - where the protection is sought not simply to enable the exploitation of the invention set out in the patent but to bolster the firm’s market position by raising rivals’ costs. Examples include so-called ‘blocking patents’, not intended for use in production of new products or processes but to constrain the ability of competitors to develop alternatives. Similarly, extensive patenting around a core invention creates ‘thickets’ that set up a sort of minefield of infringement risks for rival firms and may clearly have a deleterious effect on innovation. Other examples of strategic patenting include the following:

• Padding. Groups of ‘weaker’ patents are generated to enhance the position of the firm in licensing negotiations or in patent pools. (Dewatripont and Legros, 2008)

• Co-ordination. Firms that are members of industry consortia have a higher probability of citing each other’s patents in SEP declarations. (Controlling for patent and firm fixed effects) But the pattern is consistent with spillover effects - that is, the citations are genuine acknowledgement of prior art by fellow members of the consortium, who are all practitioners and developers of the underlying technologies (Delcamp and Leiponen, 2013)

Generally the interaction between the patent system and standardization results in inefficient rent seeking by firms possibly compounded by soft patent examination – and general patent inflation. But absent rectification of this latter problem, there is scope for SDOs to act to offset or limit rent seeking behaviour by firms. Most SDOs have attempted to deal with the negative aspects of the intersection between standardization and patents by introducing an IP policy statement. A selection of these has been reviewed (Bekkers and Updegrove, 2012). The most common element regarding licensing is the inclusion of RAND or FRAND principles, although the policy documents do not provide tight definitions of these terms and some high profile litigation has concerned the interpretation of FRAND, turning on accusations


that one of other element has been abused in a patent holder’s licensing behaviour in general in regard of individual licensees (i.e. the use of terms that are discriminatory).

Uncertainties around FRAND have led to some contributors to the literature arguing that it is not effective and proposing or cited amendments to FRAND or alternatives that could provide stronger safeguards for the integrity of standards that involve essential patents.

These include:

• Adapting the principle of patent pools in a form of ‘pseudo-pool’ which would include: good faith patent declarations during the standards making process and establishing aggregate royalties, to be shared between SEP holders. (Contreras, 2013)

• Cross licensing, pools, should be encouraged to reduce the impact of patent thickets (Shapiro, 2001)

• Binding arbitration setting of FRAND royalty rates (Lemley and Shapiro, 2013).

Regulation, Standards and Innovation The role of regulations in stimulating or impeding innovation - for example by prohibiting certain types of activity or setting targets for pollution reductions - is a contested field, with no real consensus on efficacy (Blind, 2012). Some have suggested that the scope for radical policy impacts, including through regulation, on the trajectory of technological development is inherently limited by, for example, economic and technological history (path dependence) and by the size and nature of markets. Not all regions, for example, can have an IT or Biotech cluster. The majority of innovations are incremental - building on previous practice, a tendency reinforced by the presence of public standards, and depend on the contexts such as the nature of demand and the institutional framework.

An instructive example of the interaction of regulation with standards and innovation is supplied by Beerepoot and Beerepoot (2007) in a study of building regulations in the Netherlands, where a prescriptive standard for implementing energy targets in new buildings was replaced by a performance standard. The main effect of the regulation has been to encourage incremental adaptation e.g. through improving the performance of heating and insulation products already on the market. They find little effect in stimulating investment in leading edge technologies (e.g. in solar energy or heat pumps) that might achieve a radical shift in energy efficiency. This has been importantly due to the complexity of the supply chain in the building industry but also due, in the Netherlands, to the dominance of the public sector as customer.

It is also sometimes argued that regulations are inherently anti-innovation, through their potential to cut off options and lines of development and through imposing costs of compliance. An early contribution (Maxwell, 1998) on the negative side, proposed that minimum quality standards can reduce innovation incentives through a dynamic feed-back effect. Firms may expect regulatory targets to be tightened if there is technological improvement, and so reduce their investment in the generation or adoption of such improvements.

In a recent study, Blind (2012) has attempted to provide an overview of how a range of types of regulation have affected innovation propensities across OECD countries. His results, using a business survey of perceptions of the effects of regulations, suggest that there is a trade-off between the


innovation dampening effects of compliance costs and the possibly stimulating effects as firms may need to innovate to meet challenging targets.

A policy initiative of the EU, known as the New Approach - established a framework to apply performance standards in regulations, avoiding lock-in to mandated singles solutions but instead enabling a search for optimal ways of meeting the social or policy objective. Implementation across member states was based on the following principles:

• Harmonisation is limited to essential requirements;

• Only products fulfilling the essential requirements may be placed on the market and put into service

• Harmonised standards, the reference numbers of which have been published in the Official Journal and which have been transposed into national standards, are presumed to conform to the corresponding essential requirements.

• Application of harmonised standards or other Technical Specifications remains voluntary, and manufacturers are free to choose any technical solution that provides compliance with the essential requirements.

• Manufacturers may choose between different conformity assessment procedures provided for in the applicable directive.

This framework recognises that voluntary standards can support innovation more effectively than a rigid system of prescriptive regulations.

In a similar vein, a very recent contribution (Mainelli and van Guten, 2013) argues that the use of voluntary standards markets can have a positive effect in rebuilding trust and supporting innovation in financial services, as a type of middle way between self -regulation and a costly system of official regulation.

Non-technological Standards and Innovation in Services Standards and Innovation in Services

This is an under-researched and arguably under exploited area of the role of standards35 - the share of services standards in total is around 4%. In one of the few systematic studies Wakke (2010) analyses the links between standards in a set of services and other economic variables, including innovation. The response of the degree of standardization to the innovation indicator (the share of science and technician staff in the sectors covered) is generally positive, suggesting the potential for extending the scope of standardization to support innovation in services.

Management Standards

Non technological forms are increasingly recognised as part of the emerging picture of broader innovation, encompassing changes in business strategy, Organization and new forms of innovation such as open and user innovation. Evidence is accumulating that management standards can be part of the enlarged innovation perspective. Introduction of management standards provide a guarantee of service

35 Although we note that CEN has several committees on services sectors and a significant programme of work in

these area.


quality for customers, but are also associated with the use of riskier - i.e. more innovative - technologies (Blind and Hipp, 2003). They also report that ISO 9000 supports management flexibility, so freeing creativity and resources for innovation.

A study of the innovation infrastructure in the UK examined the impact of quality management standards on the performance of firms (Frenz and Lambert, 2012). The results were based on data on issued Quality Management Standards (QMS) using ISO 9001. The ISO 9001 indicator was found to be significantly correlated with innovation via investment in the creation of intangible assets and with technology based innovation that involves the extensive use of IPRs, which implies that accredited management practices support the management of knowledge assets. A conference paper by Nguyen Thi and Martin (2010) uses Luxembourg data from CIS2006 and ISO9000 certificates data for the same firms. Broadly it finds that certification interacts with other innovation elements positively but with instances of a negative relationship. The impact of certification is stronger for smaller firms and reduces progressively as size increases. ISO9000 certification is also positively associated with technical innovation capabilities of manufacturing companies and nontechnical innovation capabilities of the services sector. Mangiarotti and Riillo (2010) use ISO9000 and CIS data for Luxembourg to investigate the determinants of ISO 9000 take up, distinguishing between manufacturing and services. Their main conclusions are that large international companies are most likely to have ISO 9000 certification, but start-ups are less likely to certify. R&D intensity is positively associated with ISO 9000 take up. The financial sector in particular shows low rates of ISO9000 take-up, confirming the results of Blind and Hipp (2003). The authors conjecture that this may be due to the highly regulated nature of the industry.

Emerging Themes: What We Do and Don’t Know • Standardization is a voluntary consensus process involving market stakeholders, including

users of goods and technologies. This is a major reason why we find positive economic impacts from the use of standards, e.g. as information and guidance for innovation.

• Standards in use contribute positively to goods, service and process innovation, both as direct inputs (e.g. codified knowledge and best practice) and as complementary knowledge assets for firms and markets. These impacts implicitly depend on an efficient process of standards making – proliferation may reduce the marginal impact.

• There may be scope for exploring the extensive margin – e.g. standards to support innovation in sectors such as financial services, where there is low penetration of voluntary standards.

• Standardization is still often regarded as slow and cumbersome, but flexibility in timeliness has been widely introduced e.g. technical statements and publication of ‘standards under development’. These enable early product research and design. But where Standards Essential Patents are involved, too early publication of a standard can be vulnerable to opportunistic patenting.

• Despite SEP issues, compatibility standards in ICTs have been highly successful in generating huge global networked markets and the consequent user benefits and opportunities for product innovation e.g. smart phones, internet applications.

• Discussion of the research/standards interface often assumes a simplistic linear model, where research leads to commercialisation/innovation and ultimately diffusion. But the research process is more often iterative and cumulative with extensively codified outputs and may be initiated by a market need and requisite problem solving.


• The Technopolis survey found a relatively small share of researchers seeing benefit from participating in standardization, mirroring results from the INTEREST project in 2006.

• The role of standardization and research integration in the German high-tech strategy is an important policy experiment, although evidence of success and the scope for generalization to other countries and sectors is not yet available.

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http://www.scc.ca/sites/default/files/migrated_files/DLFE-342.pdf


APPENDIX B: Survey Questionnaires


Industry Survey










Survey (Non-industrial participants)










Standardization Active Survey










Documents

Research Study on the Benefits of Standardization...innovation community, including government departments research agencies,and in their country by going beyond simply providing an