International Standards: A Practical Review of Support Services and Access for Small and Medium Size Enterprises
GT CIBER Working Paper
Robert Sterneck
Research Fellow, GT CIBER
December 1, 1997


The following text summarizes the sources of information and problems a small firm wanting to expand internationally might encounter when gathering information on international standards. The research method attempted to simulate an operation with limited resources researching technical standards by concentrating on public sources of support. Through use of the internet, telephone conversations with various support organizations, and a conference on Japanese Technical Standards, the research yielded much insight into the services available and some of the problems a small enterprise might face in a similar situation.


The continual globalization of the marketplace has made excellence in international trade a significant competitive advantage in today’s economy. Participation in foreign markets provides many challenges for firms wishing to enter into direct competition with local companies. Some of these include cultural differences, complex tax structures abroad and in the US, trade restrictions, international patents, and industrial standards. While mastering all aspects of international commerce are essential for success, the first step to insure viability should be to insure that a product adheres to all relevant technical standards. This can be a daunting task for small and medium size enterprises (SME) due to the lack of capital resources, time constraints, a limited exposure to international issues and organizations, and the complex nature of technical standards. Firms that desire to expand into international markets have several avenues of support available through government and industry. Some of the services include dissemination of information, research, training, and localized support. In addition, several initiatives are underway to overhaul the US standards system to be more compatible with international standards and to create a universally accepted set of individual industry standards.

While international standards provide a base for companies to work from, all regional, national, local, industry, and individual company standards must also be met before a product can be traded in a particular market. Information on specific requirements must be obtained through the appropriate source and often verified by a separate entity. Simply following certain standards may not be enough if inspection by a regulatory body is required or if validated documentation of the product or process is necessary. In order for a firm to understand and implement all of the appropriate measures, it must seek aid from various sources and take advantage of the services that each individual organization provides.

Domestic firms are already subject to federal, state, and local requirements imposed by various regulatory and industry bodies. Unfortunately, many of these requirements are incompatible with requirements in international markets. "Due to a lack of agreed-upon infrastructure for standards and conformity assessment, the United States faces a series of problems in the global marketplace. US systems for standards and conformity assessment activities are decentralized, often competitive, with a mixture of public and private responsibilities and participants."1 This variability between US and international standards makes it difficult for US firms, and in particular, SMEs to compete in the global marketplace. The National Technology Transfer and Advancement (NTTA) Act of 1995 addresses this issue by leading both the public and private sectors in coordination of standards and conformity assessment activities to meet the needs of US industry in the global marketplace.2

Although not specifically aimed as SMEs, several initiatives resulting from the act and other support provided by the National Institute of Standards and Technology (NIST) can aid businesses in compiling information on international standards and implementation guidelines. Some specific areas influenced by the NTTA act include revision of the Office of Management and Budget (OMB) Circular A-119 and review of existing standards when new standards are proposed.3 Both of these initiatives will aid SMEs by streamlining the current US standards environment allowing firms to concentrate resources in other areas. NIST has also proposed a National Council for Laboratory Accreditation (NCLA) to provide a uniform approach by public and private entities to meet international standards. In the future this may allow for "one-stop-shopping in calibration and testing and laboratory accreditation leading to a "tested once and accepted everywhere" procedure.4

NIST has also established the Global Standards Program (GSP). This program specifically "provides technical information and support to Federal Agencies and industry to assist them in resolving trade issues related to standards and conformity assessment".5 The program encompasses a wide range of duties from monitoring to on-site support. The program consists of seven main directives6:

While the first six action items do not impact the day-to-day operations of a SME, the last item can be of great benefit to a firm that encounters barriers due to a lack of or inaccurate technical knowledge. Having direct access to a large knowledge base in a foreign country is an advantage that any business should leverage.

Another resource for US businesses through NIST is the National Center for Standards and Certification Information (NCSCI). The center focuses on compiling information regarding "US, foreign, and international voluntary standards; government regulations; and rules of conformity assessment for non-agricultural products"7. The NCSCI serves as a focal point for information to and from foreign countries. Some of the information available at the NCSCI includes military and Federal specifications, selected US industry and national standards, international and selected foreign standards, the US Code of Federal Regulations (CFR), Federal Register, and additional reference information. The center has staff to answer questions via letter, fax, email, telephone, and walk in inquiries. The organization is an excellent starting point for gathering information, but does not provide copies of the standards or other documents. Other services provided by the center include specific European Union (EU) member standard information and EU directives. One unique service performed (for a fee) by the NCSCI is the translation of foreign standards. This can be very helpful for businesses expanding into niche markets requiring adherence to obscure standards and/or regulations.

In addition to US government initiatives to streamline the standards process, international bodies are also creating more universal and robust standards and governing bodies. Perhaps the most well known is the International Organization for Standardization (ISO). ISO is a federation of standards bodies representing roughly 100 countries. One of the main aims of international standards is to create universally accepted tracking and control processes as well as industry standards. ISO has a broad scope impacting virtually every industry and product made. Dissemination of this information is a daunting task that is being addresses through various methods. ISONET was created to assist local industries in gathering information regarding standards, technical regulations, and testing and certification activities throughout the world8. It consists of a network of national information centers located in individual countries staffed by experts in technical standards, international trade, and other related fields. In addition to ISONET, training and consulting services are provided worldwide. Included in these services are seminars addressing issues of quality assurance systems, technical assistance, consumer involvement in standardization, and recent developments in the field. ISO also maintains a large amount of literature available to the public regarding all aspects of the organization. While most of the information is targeted for large organizations, there is a limited amount of literature specifically focuses on the small business sector. In particular, the ISO 9000 for Small Businesses handbook is designed to assist in the interpretation and implementation of ISO 9000 in a small business environment.

Another international standards organization of note is the International Organization of Legal Metrology (OIML). The OIML focuses on the performance requirements of measuring instruments and how to carry out national inspections and controls of legal measuring instruments9. Information regarding the OIML is available through direct contact at the administrative offices in France or through NIST. Understanding of and compliance to OIML standards can be a large benefit to SMEs. Using OIML standards can help to create a single product or production process that can be used in many countries throughout the world. Conformance to these standards can also help to establish confidence in the company by foreign customers or partner firms.

The next step in the standards system is that of regional trading blocks. Groups such as the European Union (EU) and the Asia Pacific Economic Cooperation (APEC) each have individual regulations that must be followed. Conformance to standards may require inspections of processes or products, extensive documentation, or receiving official marking instruments to be placed on each piece of equipment. Support regarding these programs is also provided by NIST and ITA or through the regional trade organization offices. The advent of international standards organizations and conformity among markets is helping to make access to developing markets easier for US firms. One US effort, the Special American Business Internship Training Program (SABIT), is a cooperative effort involving NIST and ITA to aid Russia and the New Independent States develop standard programs. Training for representatives of these countries is done in the US covering standards development, conformity assessment, and quality management10. This training should provide a strong base for these countries to establish regulations and standards that are compatible with US and international standards.

Just as in the US, each individual country also has national standards and procedures that must be followed before establishing operations or selling a product locally. Some of the information regarding individual national standards can be obtained through US sources such as NIST, ITA, or industry groups, but often detailed information is only available through home country resources. Small firms can contact organizations such as the Japan External Trade Organization (JETRO) or individual foreign embassies and consulates to gather information regarding local standards. Most of these organizations are not set up to handle specific questions regarding individual technologies or industries but are intended to provide a starting point for information gathering. Although the World Trade Organization (WTO) established the Agreement on Technical Barriers to Trade to reduce impediments to markets through technical standards, entrance into a market may not be met with open arms. Foreign sources may have the most complete information about local requirements, however, they may not be willing to fully support attempts to gather such information by US firms. This may make it particularly difficult for SMEs to obtain information from these sources.

Some additional standards that should be considered are industry and individual company standards. Individual industry standards are often voluntary and are therefore not completely tracked by US standards organizations. The best source for this type of information is often individual industry groups. These groups provide networks of professionals working within the US and abroad giving access to a large pool of knowledge. This grass roots approach may provide unique practical insight for SMEs wishing to enter into certain markets. The lowest level standard or requirement is often dictated by the potential customer company and can only be obtained after initial contact with the firm. For example, firms wishing to sell to Toyota Motor Corporation in Japan must adhere to Toyota Technical Standards. These are only available to firms with an established working relationship with Toyota and requiring the information for product development.

The support services provided by these and other organizations have taken many traditional forms such as telephone, personal contact, and fax in the past. However, as the internet and other electronic means of disseminating information become more prevalent, extension and support services are attempting to capitalize on this far-reaching form of communication. The internet and the World Wide Web (WWW) are particularly good conduits for explicit information and documentation in text formats. The internet also lends itself well to disseminating large volumes of information, such as standards, that can be organized into databases that can easily be queried to provide specific information. One source in particular is attempting to leverage these benefits by providing extensive information over the WWW. The Nation Systems Standards Network (NSSN) is an internet based system maintained by the American National Standards Institute (ANSI) and designed to consolidate and disseminate information from US government agencies, private organizations, and international standards organizations11. This service provides two distinct levels of service: basic and enhanced. The basic service uses a database to identify relevant standards and their ordering information. While the basic service is free, the enhanced service requires an annual subscription rate beginning at $45012. The benefits to the enhanced services are inclusion of additional information such as scopes, references, and equivalencies as well as updates via email. The site also contains a large list of internet links to US and other standards agencies.

Through this investigation into the sources of information regarding international standards, several observations can be identified about the availability of information to SMEs. The complex web of organizations maintaining information on standards makes it difficult to locate the proper source of information. In addition, many of the organizations provide redundant services and operate in a somewhat competitive environment. For example, federal, state, or local organizations may be vying for funding and be somewhat unwilling to refer a "customer" to the "competition". Information regarding country specific standards is sometimes difficult to collect. Requesting information about national requirements may signal an impending encroachment into a certain market by a foreign firm. This request may be met with resistance presenting some difficulties in obtaining information. Language problems can also pose a significant barrier to gathering information. Contacting local sources in non-english speaking countries can be a difficult task for a US business with little or no international experience. Inherently SMEs normally operate with a limited supply of capital and human resources to devote to research into new markets. Research via the internet or other sources may require a significant amount of time and expertise that is not available to this type of firm.

These restrictions present a unique challenge for services trying to support smaller businesses. Several of the current services should be continued or expanded to include support of SMEs. The efforts to streamline US standards and make them more compatible with international standards and accepted practices should continue. Allowing firms to produce products and validate processes once will serve to be very beneficial to SMEs attempting to expand internationally. Individual efforts such as the ISO handbook for small businesses should also be expanded. Understandable, useful documentation can help a business avoid many pitfalls during the initial investigation and implementation stages of a program. Dissemination of information and training in the tools to gather this information is an area that could be refined. The support organizations, while plentiful, often duplicate similar information. A more unified network of support will aid SMEs by reducing the time and effort involved in researching relevant information. Much of the information contained in this paper was identified through the World Wide Web and the internet. This medium of communication can be an invaluable resource for small firms. Unfortunately, many of these companies do not have access to or expertise in navigating through the World Wide Web. Efforts to publicize the availability of information on the Web and to provide basic training for these companies may help these firms to support themselves. Unfortunately, some of these approaches may run into resistance because the current organizations may feel threatened by the concept of change. However, as the global economy becomes more intertwined, it will be essential for US SMEs to compete in this market. The support organizations must continue to change and adapt to the current market environment and provide the services required to keep the SME base strong.


Resources

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"Asia Pacific Economic Cooperation (APEC): Standards and Conformance Subcommittee." <http://ts.nist.gov/ts/htdocs/210/216/apec1.htm> (November 11, 1997).

"FACTS: The International Organization of Legal Metrology, April, 1997." <http://ts.nist.gov/ts/htdocs/210/215/oiml-fxs.htm> (November 8, 1997).

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McIntyre, John R. Japan’s Technical Standards: Implications for Global Trade and Competitiveness. Westport, CT: Quorum Books, 1997.

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"SABIT Standards Program." <http://ts.nist.gov/ts/htdocs/210/216/sabit.htm> (November 9, 1997).

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"Standards and Standardization Bodies." <http://www.iso.ch/VL/Standards.html> (November 18, 1997).

"WTO Agreement on Technical Barriers to Trade." <http://ts.nist.gov/ts/htdocs/210/217/tbtmotif.htm> (November 8, 1997).

Yano, Tomosaburo. Executive Briefing. "Japanese Technical Standards." Georgia Tech Center for International Business Education and Research. Atlanta, October 31, 1997.

"38 User Need for the NSSN Web Page" <http://www.nssn.org/user.html> (November 8, 1997).