European SMEs and Standards
An Interview with Sebastiano Toffaletti, Secretary-General of SME Safety and the European Association of Digital SMEs
The benefits and challenges of standards and standards development for SMEs in Europe
What role do SMEs play in the European economy? How are standards helping SMEs remain competitive and what more needs to be done?
SMEs are the backbone of Europe's economy. Around 99 percent of all companies are SMEs, and they provide two-thirds of jobs in the private sector.
Standards are an essential tool for SMEs because of their different purposes: access to markets, safety of products, interoperability, technology transfer etc. However, we realize that in some cases standards can also be a barrier for SMEs. For example, standards can give preference to particular technologies and, thus, become a barrier to innovative solutions. Another example is certification costs: These can be excessively high and as a result prevent SMEs from complying with standards.
I believe that the key for standards to meet the needs of SMEs is to make sure that standardization processes are fully inclusive. It is not enough to say that the process is open to anyone who wants to participate because this approach does not guarantee that standardization will not be monopolized by certain parties. European regulation 1025/2012 [of the European Parliament and the Council on European Standardization] recognizes that there is a need for SMEs to be more and better represented in standardization. European standards organizations are requested to do more in this respect. We are working with ESOs to make sure that their processes are more inclusive of SMEs and other underrepresented stakeholders.
How are SMEs in Europe managing an increasingly global and digitized marketplace? How can or do standards make a difference here?
Since the creation of the European internal market with the merging of 28 restricted national markets, SMEs have enormously benefited from standards. In fact, standards give access not only to the national market where an SME is based but also to the markets of other countries that are EU members.
Nowadays, standards are increasingly set at the international level, not just at the European level. This gives SMEs even greater opportunities for exploring foreign markets in the EU countries and beyond. However, the situation sometimes poses problems to SMEs, which are now less capable of influencing standards development.
Experience has shown that standardization processes at the international level can be misused by global actors, like multinational companies, to impose technical solutions and requirements that are less in line with SMEs' needs. For instance, standards can impose very expensive testing requirements. SMEs are often unable to afford such costs because the size of their production is limited, whereas a larger company can spread these costs over a much larger number of products. Europe's health and safety legal requirements make standards de facto mandatory for placing products on the market. So, selecting the right standards sometimes becomes a fundamental matter if Europe wants its SMEs to remain competitive.
When SMEs in Europe look to market opportunities in North America, how do they view standards? What is the perception among European SMEs of U.S.-domiciled standards bodies that endeavor to create international standards?
Our main perception of the North American standardization system is that there are a large variety of standards bodies, so it is not easy for our SMEs to understand which standards enable market access and how their products can comply with those standards.
In spite of this, ASTM International standards are well-known by European companies especially because they are clearly associated with specific products and sectors and because they are distributed by the national standards bodies in Europe equally to other national or European Union standards.
What are the main challenges of being a small fish in the large pond of standardization at the local, European and international levels?
SMEs' standards development dimension is predominantly local. The more the level becomes global, the less SMEs are influential in standardization. There are indeed some good exceptions to this, but in general we can say that language and travel costs tend to be barriers for many SMEs.
Another problem that makes SMEs less effective in international standards setting processes is what it takes to be a standardization expert: For SMEs, it is typically the entrepreneur himself or the chief engineer who participates as the expert in standardization. Following an international process requires a great deal of time, and a more and more specific set of skills is needed to be influential. Technical expert knowledge needs to be coupled with soft skills such as language, negotiation and even consensus-building skills. Larger companies are increasingly making use of professional staff exclusively dedicated to standardization. These people obviously have specific skills and time that entrepreneurs often do not have
What is needed, in your view, to increase the ability of standards setting bodies to support European SMEs in meeting their technical needs in the global marketplace and grow their knowledge and participation in developing international standards?
Standardization bodies have to prevent their processes from being abused by multinational companies that have sufficient means to control the system. The result of such abuses is often standards that create undue barriers or excessive costs to SMEs.
I have been personally involved in different cases where standards were used to distort market competition, thus creating undue advantages for a few larger companies compared to a large number of SMEs. Despite our efforts, very few of these cases have been positively resolved, whereas the majority are still in place. Indeed, antitrust authorities are still too unprepared and do not have sufficient legal grounds to intervene. Standardization is a field where many antitrust practices take place, especially to the detriment of SMEs, but these abuses are often at the boundary of the law where it is hard to catch them.
Since 2012, Sebastiano Toffaletti has been secretary general of SME Safety, the European association of SMEs that manufacture safety products. Toffaletti is an expert in different EU groups and task forces that oversee standards on personal protective equipment, such as the European Committee for Standardization (CEN) PPE forum and the European Commission PPE working group. He is also founder and secretary general of the European Association of Digital SMEs. The association represents tens of thousands SMEs active in information and communications technology across Europe. Toffaletti has written several articles and position papers on topics such as intellectual property rights, standards, e-skills, net neutrality and cloud computing. He serves as expert in several EU groups and task forces, such as the EU Multi-Stakeholder Platform on ICT Standardization and the EU Working Group on Patents and Standards. Toffaletti also currently serves on the board of the European Telecommunications Standards Institute, which produces standards that enable global technologies.