J friedrich pest_outlook_2020

A Strategic Outlook for European Standardisation 2020:
Some Reflections and Outlook

Jochen Friedrich

Note: The positions expressed in this paper
are my own and don't necessarily reflect those of my employer

Introduction
The new decade which starts with this year 2010 and points to the year 2020 gives good
reason for organsiations and for different areas and sectors to reflect on their strategy for
the next 10 years. This includes, for sure, standardisation as an important contributor to
the market place, to economic growth, policy making and regulation in Europe.

The following considerations, reflections and outlook were developed in the context of a
discourse on the European standardisation strategy in which I was involved in 2009. For a
strategic discussion and for developing strategic recommendations for the European
Standardisation System with a horizon of 2020 it is important to base these
recommendations on a clear concept and assumptions of needs for 2020.

The PEST analysis below of Europe and the European ecosystem is meant to function as
background for the strategic discussion on standardisation. The PEST analysis covers the
following four factors: Political, Economic, Social, Technological. At the end of the
respective analyses some policy implications derived from the analyses are outlined.

This document is not meant to be complete, nor comprehensive yet. It is rather supposed
to be seen as a trigger for further discussion and further work.

POLITICAL OUTLOOK
Europe, the European Union, has a federal structure. It is clearly more a confederation
today than a federation. The member states have assigned certain powers to the union
while the prerogative still remains with them and the principle of subsidiarity governs the
overall structure of the European Union (EU).

This is not to say that the EU has a weak structure or is a weak system. Far from it. The
system of the EU has proved to be effective for providing a framework for integrating the
different European countries and cultures.

There is always a stress-ratio in the EU between strengthening the relations in some areas
and moving more towards a federation on the one hand and between reinforcing national
decision making and veto on the other hand. Given the heterogeneous and multi-national

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character of Europe with politically, economically and culturally strong member states
having their own historic predispositions and alliances and having their specific national
objectives this stress-ratio is unlikely to change. The political objective will continue to
focus on creating the right balance between central and national interests and needs,
including regional as well as local aspects.

The key objectives for political action on the EU will be to strongly align European
countries for being able to play a major role and compete in an increasingly globally
integrated world while preserving the principle that decisions are made as closely in the
smaller geographic areas and member states as possible. With such a structure Europe
will continue to try and develop the strength for acting effectively alongside global
superpowers and at the same time keeping the flexibility and proximity for heterogenous
peoples and nations to cooperate and integrate on an appropriate and acceptable level for
all.

To master this split is certainly the big challenge for Europe. At the same time, though,
Europe will continue to be a role model for other regions in the world which are seeking for
closer alliances and integration between their peoples and nations while building on the
existing traditions and national states.

In this context the further evolvement of the Union of the Mediterranean will also be of
great importance. Historically, the countries around the Mediterranean have always had
strong relations and, for some parts in history, even formed something like a geographical
unit; for other parts in history the relation was characterised by war or colonial structures.
Post-colonial times have seen some divergence both in economic and geo-political terms
between the countries in Northern Africa and Europe.

There is a high potential in establishing a structure of mutual cooperation and collaboration
between the EU, EFTA and the African and Asian countries around the Mediterranean.
Developing the proper political and economic structure will be a key issue for the next
decade. A similar, more informal cooperation has been started with the countries in the
Middle East. It is to be expected that this will further evolve in the next decade, as well.

Policy impacts for the European Standardisation System:
1. The political structure of Europe as a confederation needs to be reflected in the
European Standardisation System (ESS). This means that there is a role both for

© Jochen Friedrich, 2010. All rights reserved. 2

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national standardisation bodies and elements as well as regional ones – all closely
aligned and integrated within the global standardisation ecosystem. And not necessarily
with the same scope and tasks as the have been operating so far.

2. At the same time efficiency and effectiveness are of key importance to the ESS. The
future structure needs to ensure effective collaboration with all relevant global standards
bodies. Like in a confederation, a network of collaborating standards organisations
needs to be established for pragmatic and efficient cooperation. It is important to be
able to operate in a pragmatic way on the levels which are appropriate in a given task,
e.g. local, regional or global, depending on the respective needs of the market in the
respective sector.

3. The processes in standardisation need to be further improved to guarantee openness,
transparency and proper ways of consensus building. Quality must not be sacrificed for
speed. Recent cases in standardisation have exposed critical issues with the processes
as they are designed today, in particular regarding transparency and the possibilities for
all interested stakeholders to participate and be heard. It is essential for the credibility of
the global standardisation system that these processes are reviewed and improved so
that similar cases cannot occur anymore. This includes a clear commitment to
openness and a culture of democratic discourse in global standards development.

4. With such a set up, European standardisation will probably see something that could be
described as “reversed subsidiarity”. Standardisation is primarily a tool for market
access. This means ideally access to global markets based on one single standard.
Therefore, the trend in standardisation for developing global standards will continue –
most likely with increased enforcement in several sectors. And in sectors or on topics
where the global approach is unreasonable – not relevant and therefore not required –
will standardisation look at regional or even national approaches.

5. The strengthening of the European Union and the internal market will require an
increased focus on cross-border collaboration and the delivery of pan-European
eGovernment services. Interoperability – and thus the use of standards – is a key
requirement for the successful development and deployment of adequate
infrastructures and delivery of such services.


Jochen Friedrich

ECONOMIC OUTLOOK
For some time still the problems caused by the 2008/2009 economic crisis will be the
biggest challenge for Europe. This includes issues like
• Fighting or counter-acting unemployment
• Fighting or counter-acting recession and bankruptcy of companies, including most
notably the SMEs
• Keeping public finances and the monetary system in balance – struggling with high
deficits, inflation, etc.
• Restructuring the financial sector and the financial market in Europe: What happens
after the crisis with all the government shares held with banks etc.
• Revisiting several sectors across Europe and their dependencies on governments, e.g.
the automotive sector
• Redefining objectives for an effective industrial policy in Europe

For sure the economic crisis has been a big challenge to the Lisbon agenda and will at
least delay the successful accomplishment of the goals defined in the Commission's
Lisbon agenda. On the other hand, the crisis may have the effect that the need for working
towards the goals as defined in the Lisbon agenda is enforced and that the consensus
across Europe on this gets strengthened. In this context the Commission will probably
review its actions and means for achieving the goals of the Lisbon agenda and look for
different and better instruments in industrial policy supporting these efforts.

The crisis might also have the effect that countries in Europe are refocussing their
activities in industrial policy in ensuring – or even re-creating – a new (more healthy?)
balance between the producing sectors and the services sector.

Regardless of the possible or potential effects of the current economic and financial crisis
both the roles and the needs of the producing sector and the services sector need to be
understood better and a better level of differentiation is needed to accommodate these
needs with appropriate actions. The new academic discipline of services science which
was recently introduced in some countries and universities will be important to
complement available knowledge and add new aspects to the perspectives on national
economics.

Globalisation will, for sure, continue to be the dominating factor in the economy. The level
of global integration of enterprises will increase and the transformation into networked


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economies will proceed further. This means an increase of distributed work, distributed
development and marketing activities. It means also an increase in electronic machine-to-
machine communication and transaction handling in B2B processes.

In industry, in the short term the economic crisis is likely to trigger a period of consolidation
in several sectors as well as within enterprises. The demand for more efficient solutions
and for smarter ways to solve problems will increase. Moreover, globalisation will further
raise the need for smarter solutions for global problems and thus challenge the capacity
and innovative potential in developing such smart solutions. At the same time, however,
this is the opportunity for growth and innovation both large and small.

1. Global integration and networked economies and societies will have an increasing need
for standards and open ICT ecosystems with high level of interoperability ensured.

2. Global standards are needed – trend towards development of standards with fast global
market penetration and thus fast global market access.

3. Global integration of economies and societies and the need for global standards will
reinforce the need for close collaboration and some level of integration between
standards organisations, as well. The future ESS can take a leadership role in providing
an efficient and effective network structure for both formally recognised standards
organisations and fora and consortia in order to optimise collaboration.

4. Global integration of economies also necessitates a further and reinforced integration of
global players, e.g. from the emerging markets, into European and global
standardisation.

5. For the effective development of standards and specifications with global market
outreach and global impact a new system is necessary that enables close collaboration
between the different players in standardisation. This new system could be a structured
network of standards development organisations, both formally recognised and
fora/consortia. Structure could, for instance, be provided by the establishing of an
operational platform with the different organisations included so that close dialogue and
coordination of all work can be done and the key expertise of the respective
organisations can be used effectively and efficiently.


Jochen Friedrich

6. Public authorities will reinforce the use of standards.

SOCIAL OUTLOOK
Over the next decade – and most likely beyond – Europe will face major social challenges.
The following are just some examples to illustrate the dimension of the problems as well
as some trends:

1. Demographic challenges: Almost all European societies are facing a significant change
in the ratio between old and young. The demographic pyramid where there are ideally
less old and more young people is not (yet) turning upside down, but more changing
towards a pipe with equal numbers of people in their respective generations. Yet, with
the average expectation of life increasing there will be significantly more old people than
young ones.

This is going to have tremendous impact on the welfare and social security systems.
Most notably the pension systems will face enormous pressure as will the health
systems. More old people will be in need of receiving pension and of receiving
healthcare (with increasing cost due to modern technologies) while there are less young
people who contribute to the financing of the social security systems.

There is a risk of a serious conflict between the generations. Mentality plays a major
role here, as well. With the generations sometimes described as the “boomers” (born
before 1960) and as “generation X” (born between 1960 and 1980), for the first time two
generations are coming of age which always enjoyed a high level of affluence and
expansion throughout their lives. Their lifestyle has always been based on steadily
growing possibilities of consumption of goods and services and they have seen the
growing markets and growing social relevance of leisure activities and travel and
tourism.

In order to keep their level of lifestyle after retirement these generations are dependent
on a high level of regular income. In many European societies there is already a trend
that the high level of guaranteed income (especially pensions) for the “boomers” is
secured while younger generations face cut-backs and an increasing pressure based
on increasing fees (for social security systems, for education, etc.), increasing labour


Jochen Friedrich

market requirements, increasing requirements for education and top results, lack of job
security, etc. At the same time, however, younger generations will have similar, if not
increasing, demands regarding their lifestyle. There is, therefore, a risk that all this
evolves into a conflict of the “affluent old” against the “beaten-out young”. Other factors
like uncontrolled environmental exploitation over the last decades leading to
consequences which become viral in the coming 10 to 20 years so that the burden is
put on the next generations might increase the tensions.

Yet, while the conflict is certainly existent, escalation and tensions are not a necessary
consequence. There are also recent trends for a growing awareness of the problems
and of the need to manage the situation more pro-actively than done so far.

2. Social consensus and social peace: Many European societies face increasing social
gaps. There will be different kinds of social fragmentation which pose a challenge to
societies, e.g. the integration of ethnic minorities and immigrants; a qualification gap
leading to a group of people with almost no professional qualifications; the issues
known as “underclass”.

Moreover, the recent – and still ongoing – financial and economic crisis has, to some
extent, shattered the belief in the financial and economic systems. For the last two to
three decades developments in society were closely linked to the needs in economy. Or
in other words: growth, economic success and wealth seemed to justify many societal
decisions. And the trend was for individualism after the more social approaches and
trends in the 1960s and 1970s.

Today, there seems to be a latent spreading of the belief that the rich are getting richer
and the poor are getting poorer. And there is even some pressure onto the (lower)
middle classes which face the risk of social decline.

3. Education: Industry and society will further transform into post-industrial economies.
One of the main characteristics will be the continued transformation of the industrial
worker into a knowledge worker. Education and qualification will become even more
important. This is true both for basic education in school and, actually, pre-school. But
moreover livelong efforts will be required more than ever by each individual for
increasing their level of knowledge and skills and thus their employability in industry and
in competition within an increasingly mobile and connected global workforce.


Jochen Friedrich

4. Information Society: The internet has boosted the information society by making access
to information available on a scale never known before. With the further evolvement of
the world wide web and the penetration of the ability to connect anywhere and anytime
the availability of information will increase. Regardless of the need to learn how to use
the available information effectively and how to differentiate between sources that can
be trusted and such that are dubious, this will lead to an increasing level of knowledge
in society. As a consequence, the learned discourse in all areas is likely to increase
which will put new requirements to the different actors in society.

Two examples: (i) Sales staff in a shopping centre will increasingly be confronted with
customers who acquired a solid knowledge about the product they wish to purchase.
Therefore, sales staff will have more need to provide qualified guidance at a high level.
(ii) Medical doctors and general practitioners will face patients with a high level of
information about their diseases and about possible implications of medical treatments.
As a consequence, the single authority of the medical doctors will not hold anymore and
they will need new methods and skills – soft skills and levels of education – for dealing
with their patients.

Moreover, information society stands for a connected and integrated society on a global
level. Social networking and a significant part of social interaction will take place
virtually via the internet. Interest groups will work via the internet and a significant part
of the democratic discourse will take place or at least be complemented by tools via the
internet. E-Democracy and e-Participation will, therefore, gain in importance. At the
same time there will be new challenges for web security and privacy.

5. Digital divide: This is almost the downside of the information society. Digital illiteracy will
become a serious issue for policy makers and will bring a new category of class
division.

1. Societies will have a high need for finding smart ways to solve their problems.
Standardisation will certainly not be able to provide a quick remedy for all the issues at
hand. However, on many levels standardisation will be able to support smart solutions
in an efficient and cost-effective way. Assistant technologies and the transfer and
sharing of information will be critical for developing effective and smart methods in
support tackling the challenges in societies. Standards will be required for realising such


Jochen Friedrich

technologies and solutions. This applies also to developing and deploying new ways of
learning (leveraging online education tools, virtual realities, etc.) as well as to privacy
and security technologies.

2. With the increasing transformation into a networked and integrated society,
interoperability is becoming a societal issue. Genuine interoperability, in turn, requires
standards. Public authorities will need to pay attention that interoperability is kept and
realised; they might even have to consider ways to enforce interoperability in case of
problems.

3. The ESS will have to be flexible to cope with the requirements and ensure that the best
and appropriate standards and specifications are available for use in Europe in the
public sector and for referencing in EU policies.

4. Public authorities will have to increase involvement in standardisation by bringing in
their requirements into the process at an early stage – not only with the formally
recognised national and European standards organisations but also with fora and
consortia who have relevant expertise in specific technical areas important for certain
tasks.

5. The further evolvement of e-democracy and e-participation will have its effect on
standardisation and standardisation processes. It has recently become obvious that the
consensus-building process and the process of public enquiry are highly problematic.
The OOXML case has revealed many of the unclear and problematical structures.
Similarly the European Commission Study on Access to Standardisation1 has identified
some shortcomings of the process of public enquiry and stated correctly that often only
those parties vote on a standard that took part in developing the specifications. The
processes ought to be reviewed and reworked in order to ensure more openness and
transparency, have adequate checks and balances, and in order to implement proper
ways for all interested stakeholders to submit their comments. Modern ICT technologies
can be used to enable similar structures as in e-democracy and e-participation.

1 The study is available at http://ec.europa.eu/enterprise/policies/european-
standards/files/standards_policy/access_to_standardisation/doc/access_to_standardisation_study_eim_e
n.pdf


Jochen Friedrich

TECHNOLOGICAL OUTLOOK
The last 15 to 20 years were characterised by what is sometimes called the “digital
revolution”. While the penetration of work and life by digital technologies already started, it
is to be expected that the full consequences and impacts are still to come. Keywords for
the debate are “the future internet”, “the internet of things”, “virtualisation”, “cloud”, “virtual
worlds and realities”, “human-machine-interfaces”, “machine-to-machine communication”,
etc. With the “digital revolution” technologies also massively entered the areas of leisure
and entertainment with a tendency for further growth and extension.

Much of the technological progress in the next decade will be about making technologies,
solutions and ways of interacting smarter, more efficient and effective. In other words: we
are likely to see the SmartHome, the SmartCar, SmartUtilities, the SmartDataCentre, the
SmartOfficeBuilding, the SmartTrafficSystem, SmartHospital, SmartHealthcareSystem etc.
ICT is at the core of this technological development. And technological innovation is very
much in the integration of technologies.

The next decade will also bring a further automisation of cross-organisational processes
and an increase in automatic transactions. This will increase overall efficiency and speed
of transaction handling and information exchange. It will also facilitate the opening-up of
new distribution channels and of online sales of services and goods.

The IT sector in particular will continue to move towards dynamic infrastructures realised,
for instance, with the methods and tools of cloud computing. Dynamic load-balancing and
smart ways for using available resources will contribute towards better and more efficient
solutions regarding global challenges and in the context of Green Responsibility.

In the Communications sector the progress towards mobile broadband will continue and
will challenge the traditional landline supply with connectivity. Mobile broadband will,
moreover, allow and further promote the spread of different hand-held and lightweight
devices with connectivity to the internet. The provision of services for storing information
and data on servers and only making use of them locally will rise and provide a growth
opportunity on the market while at the same time gradually replacing the current regime of
carrying all data and applications on a local machine. The concept of Software as a
Service (SaaS) and similar new business models will increase in significance and have the
potential to largely replace current ways of buying and installing and using software. This


Jochen Friedrich

will also have some impact on licensing models for software sales as used today.

1. Global market will make standards ever more important for market entry and
competitiveness.

2. Technology trends like internet of things will pose new requirements onto
standardisation for having the relevant standard available fast and effectively.

3. Innovation via the integration of technologies will require open standards to be available
and implemented. Standards are essential for the combination of technologies and for
modular enhancement and dynamic scaling of architectures and infrastructures.

4. The process of further automisation of cross-organisational processes and of automatic
transactions will strengthen the need and demand for interoperability and for the use of
open standards for being able to handle and read data formats and data structures
automatically.

5. Need for effective standards for realising mobile broadband and entering into the post
3G era.


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