Sunday, 31 October 2010

Commission announces EU standardisation reform for early 2011 – Communication on industrial policy

Last Friday the European Commission published its next Communication for one of the flagships initiatives under the Europe 2020 strategy – the Communication on “An Integrated Industrial Policy for the Globalisation Era: Putting Competitiveness and Sustainability at Centre Stage” (COM(2010) 614). It was prepared under the leadership of DG Enterprise and is available at the DG ENTR website.

I gave it a first quick reading over the weekend – focussing on the passages and statements where standardisation and innovation are addressed. This means, for sure, in particular chapter 4.4 that is explicitly dedicated to standardisation.

This section on standardisation seems to have been drafted very carefully in order not to create any further uproar or protest with anybody – we all know the noise that was made against any reform over the last months. This has the downside that the text remains very high level and does not go much into detail. For “early 2011” the Commission commits to “present through a standardisation communication and legislative proposal a strategy to promote a stronger role for European standard setting in a rapidly changing world and society” (p. 12).

Regarding the ICT sector the Communication outlines that one aspect for change is the “rapid adoption of the best available global standards, where global standard making practices are well established such as in the ICT sector” (p. 12). This is surprisingly unspecific given the outstanding work DG ENTR has done on modernising the ICT standardisation policy in the EU since the start of the ICT Study which continued into the development of the recommendations that are laid down in the ICT White Paper of 2009 and that have broad support from industry across all sectors. The key messages on the needs of the ICT sector for reform of European standardisation were reconfirmed in the Digital Agenda – and quite frankly I would have expected them to be more clearly stated in the Communication on industrial policy, as well. After all, global, open ICT standards are of critical relevance for an effective industrial and innovation policy in Europe. For almost of all of the “big issues” that are listed and where standardisation can be of critical relevance global ICT standards from so called fora and consortia, above all the internet standards, are indispensable. There is simply no way to realise a smart grid without using TCP/IP, HTML, XML, and many such like.

The issue of fora or consortia standards is not addressed in this document. It addresses standardisation at European, international or national level. In addition, the document claims that “markets themselves often generate factual standards through technological leadership, market agreements, and/or market dominance” (p. 11). I believe the term “factual standards” – similar to “de facto” standards – is not clear enough here. It puts global open standards from well-established organisations (fora/consortia) on the same level like proprietary technologies with huge market dominance. Quite frankly, the latter should be totally out when talking about standards and standardisation.

The general direction which is given on standardisation is very good:
“For the manufacturing industries, the overall goal in the decade to come is to develop a standards system for Europe that will meet the expectations of both the market players and European public authorities. This needs to be achieved in a rapidly changing world and society, and should preferably also promote European influence beyond the single market in the globalised economy.” (p. 12)
What is not quite clear to me is why this statement is limited to the “manufacturing industries” – to me this is too much a limitation given the fact that economies are increasingly adopting post-industrial structures and are transforming into globally integrated economies where standardisation plays a key role on the level of process innovation and in the integration of technologies for developing smarter solutions for the things we do. It is exactly this role of standardisation that is of high importance on the context of sustainability. This is very clearly seen and addressed in the section on innovation:

“Improved use of ICT for industrial competitiveness, resource optimisation and innovation will be essential for future competitiveness too, as set out in the Europe 2020 flagship on the Digital Agenda. […] a more innovative use of ICT throughout industrial value chains needs to be encouraged to streamline business transactions for example by e-invoicing, and boost overall competitiveness through demonstration projects” (pp. 12-13).

Earlier in the document the Commission already addresses the topic of services and announces “set up a High Level Group on Business Services to examine market gaps, standards and innovation and international trade issues in industries such as such as [sic!] logistics, facility management, marketing and advertising (2012)” (p.9). This is very worth supporting. The services sector is clearly a growth sector for Europe with an enormous potential for further innovation and growth. This, by the way, again includes the ICT sector. Think, for instance, of all the SMEs across Europe that build their business on the internet – o providing services related to the world wide web. In this way, they very much benefit from using global open standards and from innovating on the level of the use and implementation of these standards.

Finally, I'd like to point at the passages dealing with Intellectual Property Rights (IPR). The Commission very clearly says: “Improvements in the European system of intellectual property rights are essential and long overdue, especially an effective EU Patent and patent litigation system.” (p. 9). No doubt, the EU Patent would be a major achievement. The Commission continues to outline that proper enforcement of IPRs is also necessary and touches on the negative effects of piracy and counterfeiting. What is not yet addressed in this Communication but what I think will have to be considered soon in this decade when talking about IPRs are aspects of open innovation, of flexible IPR systems that allow for different rules to be chosed in different contexts, of crowd sourcing and open source development, etc. Again, business models are changing and collaboration and co-creation are increasing – at least in certain areas. These are new challenges to the patent system. In the ICT sector they are vital already and have led to a very differentiated view on IPRs, e.g. by concluding that standards in the area of software interoperability should be available on a Royalty-free basis and under such terms and conditions that allow open source to use and implement them.

As I said in the beginning, this is a first snapshot on my side only after briefly reading through the Communication. The document is extremely rich and contains a lot of details – and thus provides a large amount of food for thought.

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