Standardisation boosts productivity and trade

A new macroeconomic study reveals the substantial benefits of standards in fostering economic growth. Looking at the evidence from six Northern European countries, the study finds that 25 % of labour productivity growth in the past decades is associated with increased standardisation as well as 9 % of total exports growth.

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– This shows the pivotal role of standardisation in fuelling economic growth. The Nordics and the Netherlands are highly innovative and productive countries, with extensive use of European standards. Small, open economies benefit greatly from standardisation, as it helps reduce barriers to trade, says Elena Santiago Cid, Director General of CEN and CENELEC.

The value of standards

The study finds that standardisation is associated with approximately 9 % of the overall export growth witnessed in the Nordics and the Netherlands in the past 25 years, and a remarkable 25 % increase in labour productivity attributable to standardisation from 1970 to 2019. Today, each employee generates more than double the output compared to fifty years ago, with a quarter of this productivity growth directly attributed to standards.

– Standards play a crucial role in modern economies. They are vital for international trade, drive innovation, enable increased compatibility, enhance quality assurance and promote fair competition. By using standards, organisations can harness these benefits both for their own and society’s gain, states Øyvind Vennerød, senior analyst in Menon Economics.

The report estimates that if the pace of standardisation work remains consistent, it is projected to result in an annual GDP increase of EUR 2.6 billion in the Nordic countries and the Netherlands together, and to boost exports by EUR 2 billion every year. If the standardisation increases, we can anticipate even more substantial figures.

Standards benefit society at large

In conclusion, the study highlights the substantial positive externalities generated by standardisation, underscoring the importance of incentivising further standardisation efforts. Notably, the positive spill-over effects from standardisation extend beyond the firms themselves, with customers, industries, and society at large reaping significant advantages.

This insight holds valuable implications for policymakers, businesses, and society at large, highlighting the need for proactive support and incentivisation from governments. By embracing and promoting standardisation, the entire society stands to gain from the extensive range of benefits, fostering sustainable economic growth and overall progress.

About the study

The study was carried out by Menon Economics, a highly regarded and specialised economic consulting firm. Menon is known for its expertise in empirical analysis of economic policy, offering various services including industry analysis, economic impact assessments, and strategic advisory services.

The report was commissioned in 2023 as a joint initiative by the six standardisation bodies Swedish Institute for Standards (SIS), Danish Standards (DN), Standards Norway (SN), Finnish Standards Association (SFS), Icelandic Standards (IST), and the Netherlands Standardisation Institute (NEN).

Read more and download the study