BOX 2.3 The Development of Commercial Standards
Commercial standards are set in two primary ways. One method relies on the development of a consensus among private firms, technical experts, customers, and other interested parties. For example, the Internet Engineering Task Force helps to develop the consensus on many of the standards for the Internet. A number of consensus-based standards-setting bodies follow consensus standards development procedures promulgated by the American National Standards Institute. These procedures include open participation of volunteer technical experts in standards-writing committees; consensus agreement among committee members in support of any proposed standard; and elements of administrative due process, such as opportunities for comment and voting by affected parties.
A second approach to standards development in the private sector relies on marketplace competition. When one firm's product achieves a high degree of dominance in the marketplace, its specifications become a de facto (or industry) standard. A variant on the creation of industry standards is their promotion through industry consortia. Examples of such consortia include the Object Management Group and the World Wide Web Consortium. De facto standards largely characterize the world of information technology and communications networks. Indeed, networked computers and communication devices are of little value if they are based on a standard that few others use--there is no one to communicate with. Thus, increases in the number of devices conforming to a standard lead to greater pressure for other devices to conform to that standard.
Both approaches have in common the fact that they are—to varying degrees—supported by either the marketplace and/or a broad base of vendors and customers. This base of support helps to ensure that products incorporating commercial standards will continue to be built and purchased, thus reducing the chance that products will be "orphaned."
None of the above discussion should be taken to imply that commercial standards have no downside. Standards may freeze technology prematurely. User commitments to the use of a prematurely established standard and a hard-to-change infrastructure can then restrict the development and deployment of new and more useful technologies. Moreover, a standard that is popular in the marketplace may not necessarily be the most appropriate for all end-user applications. Nevertheless, it is safe to say that standards have on balance facilitated rather than retarded the growth of the information technology industry and the rapid pace of technological development.
SOURCES: Adapted from National Research Council. 1995. Standards, Conformity Assessment, and Trade