An Investigation Into Standards and Innovation Part 3 of 6: A (head) case study of forced evolution

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Laurent Liscia, OASIS

Let’s look at the “ad hoc” standardization model that emerged in the 70s and 80s. We’ll use a beautiful study conducted by Fredrik Gessler, Professor at the Industrial Economics and Management School of the Swedish Royal Institute of Technology:http://www.iamot.org/conference/index.php/ocs/7/paper/viewFile/776/230

Gessler tells the story of the Digital Enhanced Cordless Telecommunications (DECT) standard, which begins in 1985. The setting is European regulatory framework, which is to say, bureaucratic purgatory.

In keeping with our description above, we have a de jure body called the Conférence Européenne des Administrations des Postes et des Télécommunications, CEPT which decides to study second-generation cordless phones. Two years prior, an industry consortium, the European Selective Paging Association, ESPA does the same, and comes up with its conclusions in 1986. If any of what I’ve said before makes sense to you, then you won’t be surprised when Gessler tells us that ESPA opted for a solution developed by Ericsson. We’re still in a monopolistic standards model. The British, however, were working on their own solution, and CEPT could not very well ignore it, even though the Swedish solution, based on TDMA, seemed more palatable—amusingly, the first way to address the issue was for the European Commission to issue a “standstill” on the British work, i.e., the British should not continue to develop their system until Europe had sorted the whole mess out. Not exactly an encouragement to innovation. In a mix of Solomon and the Marx Brothers, CEPT declared in 1989 that the Swedish standard was a good way to go, but that, as it happened, the British standard wasn’t too shabby either.

In 1988, however, Europe made an enlightened and agile move and created a standards body that involved not just the Post & Telecom administrations, but private companies in Europe and elsewhere. ETSI was born from the need for industry and government to see eye-to-eye on technology, and ETSI inherited the DECT standard(s). What happened next might serve as a textbook example for hardware standardization in the 90s (and to this day in many cases). Companies from several countries got involved and agreed to enhance the standard—but went on to devise proprietary extensions that would protect their interests. Everybody wins.

To summarize: two groups, Ericsson and a British conglomerate developed competing and proprietary systems for cordless telephony, and both wanted their technology to become a standard. This, after all, was the model for technology standards. With the advent of ETSI, those proprietary innovations morphed into a pool of shared and accessible technology. From that point onward, standards were understood as a good way to share the R and D burden when dealing with public infra-structure issues. But standards efforts were still clubby.

Click here to read Part 1 of Laurent’s six part series.
Click here to read Part 2 of Laurent’s six part series.

***Please look for the fourth article in Laurent’s six part series on the topic of Standards and Innovation in next months issue of Information Management News.***

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