International standardization and norms is the process of developing and implementing international standards to ensure consistency and compatibility in products, services, and systems across different countries. These standards are intended to ensure that all countries have access to quality products, services, and systems that are safe, reliable, and consistent. International standards also help to encourage competition, reduce costs, and create a level playing field for companies operating in different countries. And sometimes, they can serve as protectionist measures.
History of international standards
International standardization began in the early 19th century with the establishment of the first international organizations, such as the International Telegraph Union and the Universal Postal Union, which focused on the development of standards for telecommunications and postal services. This was followed in the late 19th century by the creation of the International Electrotechnical Commission, which aimed to standardize electrical systems.
In the early 20th century, the International Organization for Standardization (ISO) was established with the mission to develop standards for a wide range of products and services. ISO has since become the leading organization for international standardization, and its standards are used in over 160 countries. More recently, the World Trade Organization has become involved in international standardization. The WTO sets standards for global trade, including rules on intellectual property and product safety.
In the 21st century, international standardization has become increasingly important as the world becomes more interconnected. Companies around the world rely on international standards to ensure the quality.
One of the most significant examples is the international standardization of freight containers, considered a key enabling factor of globalization. Created in 1961, ISO technical committee has since standardized almost every aspect of containers from their overall dimensions to how they can be stacked, to the twist locks that securely fasten them to ships’ decks or truck trailers, to the terminology used to describe them. It led to a huge reduction in the cost of shipping and allowed many countries that were previously isolated from global trade to put their products on the world market.
The standards we use in our daily lives
Paper sizes : standards for paper sizes (notably A4) make it easier for manufacturers of printers, photocopiers and office supplies because they know that their products will be compatible with the available paper sizes.
Credit cards : credit cards can be used everywhere because they meet standards that specify the dimensions, technologies and communication protocols compatible with ATMs and payment systems.
Country and currency codes : the whole world is on the same wavelength with the standardized codes for country names and currencies. Avoiding confusion when referring to countries and currencies.
Date and time format : ISO 8601 setting out an internationally agreed way to represent dates: YYYY-MM-DD. To remove doubts that can result from the various day–date conventions, cultures and time zones that impact a global operation. It gives a way of presenting dates and times that is clearly defined and understandable to both people and machines.
What are the benefits?
International standardization can offer cost savings in several ways, from purchasing, production and sales to R&D, quality assurance, environmental protection and occupational health & safety. It reduces the need of your company to develop, maintain, and upgrade different technical standards for each country or region. This saves both time and money for your company. Moreover, international standards can provide greater efficiency, as they allow for the production of higher quality products at lower costs. When purchasing components for your products, standardization allows easier access to materials and components from multiple suppliers.
Access to new markets
Having standardized procedures and protocols makes it easier for your company to move their products and services into new markets. You can therefore start your internationalization in a simpler and more efficient way. It also saves a lot of time and money because you don’t need to create new product lines for each market. Standards are the silent foundation of the EU Single Market and global competitiveness. On the 2nd of February 2022, the Commission is presenting a new Standardisation Strategy outlining our approach to standards within the Single Market as well as globally. The Strategy is accompanied by a proposal for an amendment to the Regulation on standardization.
Enhanced customer satisfaction
Standards also improve quality, which is essential for good customer relations. And of course, standards ensure safety, which not only enhances customer trust but also reduces liability.
For example, the EN71 Toy Safety Standard is a European Union regulation, and one of the strictest toy safety standards in the world, that governs the safety of toys and children’s products sold in Europe. This safety standard was introduced to prevent harmful products from entering the EU market and protect children. This regulation increases customer satisfaction because parents who buy toys for their children are confident and aware of the quality of the product purchased.
ISO Standards benefit organizations that want to commercialize emerging technologies. These standards help businesses to establish the core characteristics of quality products or services. By this way you keep R&D faster and more focused. These mandatory standards are the basis to apply your creativity. They help you focus your internal efforts on those solutions that will work in the marketplace. Howether, by implementing ISO standards, you demonstrate your credentials to your customers, your employees, and other stakeholders.
Does standardization mean challenges?
Some regions or countries have specific certifications for certain products. Although a product may meet international standards, it may be subject to additional certification to access a market. The CE marking must be affixed to many products before they can be sold in the European union. It indicates that a product has been assessed by the manufacturer and found to comply with European Union safety, health and environmental protection requirements. CE marking is mandatory for products manufactured anywhere in the world that are to be marketed in the EU.
In the United States, many products must be registered with the Food and Drug Administration (FDA) such as food, drugs, medical equipment, laser products, etc. These products must be tested before they can be applied for registration and sold. Some countries do not have their own regulatory requirements and will rely on US or EU regulations to regulate exporters.
For example Apple has finally confirmed that it will follow the European Union’s new law requiring all smartphones with a physical port to use USB-C. This announcement is the result of the European Union deciding to impose new standards, with the use of USB-C on all smartphones sold in its member countries from autumn 2024.
Use of standards as protectionist tools
Standards can be used as an excuse for protectionism and thus can become obstacles to trade. A good example is the introduction of mandatory standards which are commonly used by a local industry, but not known or adopted in other countries. Therefore the same basic question arises again: how to ensure that standards are genuinely useful, and not arbitrary or an excuse for protectionism. The usual pattern is that a country introduces a new product standard for all sales of goods in its local market, which is justified as necessary for consumer or environmental protection. Often, importers into the local market, however, challenge the standard as a “disguised barrier to trade”.
Cost and time to get certified
Depending on your business and the type of product or service you offer, the cost and time to obtain certification will vary greatly.When comparing three different certifications, the time and cost differences are already significant.
The FDA approval process can take between one week and eight months, depending on whether you self-register, submit a 510(k) application or submit a Premarket Approval (PMA) application. In the case of medical devices, the FDA imports for fiscal year 2023, Annual Establishment Registration Fee: $6,493 and then other fees apply, for a 510 application, the standard amount is $19,870.
The cost ultimately depends on how much help you’ll need with the conformity process. If you intend to let someone manage the entire CE marking process for you then you’re looking at thousands or even tens of thousands of euros. If your product requires third-party lab testing, assuming you don’t have the necessary equipment and expertise in-house.
ISO certification is a multi-step process that generally takes a minimum of six months to a year from implementation to registration. The cost depends on the number of employees you have working in your organization, the complexity of your activities and the number of sites from which your organization operates. You can expect an average ISO Certification to cost around $3000-$5000 annually.
The cost of these certifications can be a hindrance in the development of your business abroad and should be taken into account in your strategic decision regarding the selection of international markets.
High number of standards to reach all customers
The large number of norms and standards imposed by countries makes it difficult for companies to reach all their potential customers abroad. To enter a region or a country your company has to submit new applications for certification. The cost, the need to adapt the product and the time required slow down the international development of your company.
If you wish to access the Brazilian market, you will need to obtain the Brazilian Conformity Assessment System (SBAC) delivered by Brazil’s Instituto Nacional de Metrologia, Normalização e Qualidade Industrial. While for Argentina you must contact Instituto Argentino de Normalización y Certificación to get IRAM certification.
In Australia it is the Regulatory Authorities who deliver The Regulatory Compliance Mark (RCM). For South Africa you should take an appointment with the South African Bureau of Standards to get an EMC approval certificate. In China it is the CNCA certification organization who delivers China Comprehensive Certificate.
Lack of creativity
Standardization may also stifle creativity, particularly in product design. Employees who work in a business that’s focused on standardizing as many procedures as possible might feel they are taking an unnecessary risk by volunteering new ideas or requesting changes to long-accepted policies.
Norms and standards are intended to ensure that all countries have access to quality products, services, and systems that are safe, reliable, and consistent. However with standard come challenges. Some standards are not the same from one country to another and can even be in some cases barriers to entry. The cost, the large number of certifications and the time to obtain them can slow down your international development strategy.
Kompass can accompany you in your international business project, with decades of experience and a far-reaching international physical network. Kompass’s Market Ranking Report (link) can help you evaluate the market potential of 5, 10 or 20 countries simultaneously, and identify new export markets with the highest potential. This comprehensive and personalized Market Ranking Report can minimize risk, saving time and money, as well as identify new business opportunities abroad.