FOR IMMEDIATE RELEASE: 2007-10-09

The economics of standardization - an investment with real returns

Standards have a significant, positive impact on the Canadian economy, according to a recent report produced by the Conference Board of Canada for the Standards Council of Canada (SCC).  The report, entitled Economic Value of Standardization, quantifies the value of standards, and establishes standardization as a key driver of competition, innovation and economic growth.

"The report confirms what we’ve been saying all along: standards increase productivity, reduce costs and improve access to global markets." says Peter Clark, Executive Director of SCC. "People tend to take the benefit of standards for granted, but now we have the numbers that prove standardization has a real positive economic impact on this country."

The SCC-commissioned document reveals that between 1981 and 2004, standardization accounted for 17 per cent of the growth rate in labour productivity, which translates into approximately 9 per cent of the growth rate in output (real GDP). The report also concludes that in 2004 real GDP would have been $62 billion lower had there been no growth in standards between 1981 and 2004.

Interviews conducted with senior executives from both the private and public sectors further support the case for standards. The study’s qualitative findings cite the importance of standardization as the basis for continuous improvement, innovation and new product development. Those interviewed also indicated that standardization helps to establish a level playing field for business and that the implementation of standards bolsters and validates credibility. Others commented on the important role that standards play in facilitating trade and new market development as well as contributing to improved public safety.

The study was based on methodology originally used in Germany and the United Kingdom, which demonstrated that standards make an important contribution to the growth in productivity in those countries. The methodology was adapted to the Canadian situation and involved four components: a review of the standards oriented economic literature; an empirical analysis of the impact of the Canadian collection of standards on Canadian labour productivity; interviews with senior executives from private and public sectors in the country; and an in-depth examination of the benefits of specific aspects of standardization in two Canadian companies.

The Standards Council of Canada is a Crown corporation with the mandate to promote efficient and effective standardization in Canada. It facilitates the development and use of national and international standards and offers accreditation services with the goal of enhancing Canada’s economic competitiveness and social well-being.  For more information, or to obtain a copy of the full report visit www.scc.ca or email the Standards Council at [email protected].

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