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Standards Have Broad Range of Potential Economic Effects, Study Says

New York, Aug 30, 2006

Standards Australia (SA), the national standards body of Australia, has released the report of a study examining the economic impact of standards.

The study was conducted by the Centre for International Economics (CIE), a private Australian economic consultancy. According to the report: “There are many diverse standards in use, forming part of the economy’s information infrastructure, with a broad range of potential economic effects.”

The report goes on to note that standards underpin markets, reduce costs of production, increase productivity and the scope for gains from trade, and can help to resolve economic externality issues.

Citing industry-specific examples, the report states that standards for the water and electrical industries increase the effectiveness of these networks for providers and users, generating economy-wide benefits of approximately $A1.9 billion per year.

In addition to their economic benefits, standards support innovation and the diffusion of knowledge, provide a common language for discussion, encourage safety, and are a key element in risk management, the report says.

The report was commissioned by SA for submission to the Productivity Commission—the Australian government's principal review and advisory body on microeconomic policy and regulation—which itself is conducting a study examining the government’s relationship with Standards Australia and the National Association of Testing Authorities. Due in November, the commission’s report will consider the appropriate role of the government in standard setting and laboratory accreditation; public funding of these activities; and the economic cost and benefits to business and the wider community of standards.

An inventory of studies on the economic and social benefits of standardization will be considered at the upcoming ISO General Assembly meeting in Ottawa, Canada, September 10-16, 2006.

Read the full CIE report.

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