Assessing competition

Why standards make it easier for companies to compete

By Gabriela Ehrlich

IEC Global Visions recently interviewed Dr Tamotsu Nomakuchi, former CEO of Mitsubishi Electric and currently President of the most important industrial research centre in Japan, the National Institute of Advanced Industrial Science and Technology (AIST) as well as Chair of the Technology Council of JISC (Japanese Industrial Standards Committee). In the interview we tried to find out what had changed Nomakuchi’s outlook on standards over the course of his career, and why he thinks today that they are very important for companies to compete globally

Quality – built into the DNA

When asked why Japanese companies have such an affinity with standardization, Nomakuchi explained that Japanese companies are traditionally very comfortable to manufacture high quality products. Historically speaking, the internal quality control system allowed them to manufacture products that could easily be sold anywhere in the world. The delivery of “higher than expected” quality allowed Japanese firms to achieve good customer satisfaction and build a competitive advantage.

Speed is now very important

In the interview Nomakuchi underlined that if he had been asked thirty years ago about the usefulness of standards, he would have replied that standardization is not necessary and that it hinders technological advancement. However, today competition has become fiercer and is accelerating globally. Speed is very important and technology progresses very fast and many different technologies are merging. As a result companies need to move very fast.

A tool to measure competition

Today, to stay internationally competitive Japanese enterprises need to compete under the same conditions as their competitors. International Standards are one of the tools that allow them to measure competition. Additionally, by participating in the standard setting process in all areas that are of interest to them, Japanese companies are able to broadly position their technologies. In short, International Standards help Japanese companies to compete more efficiently and to promote their innovations. In this context assessment and certification are also crucial and Nomakuchi believes that this aspect of standardization needs to be even more promoted.

Promoting broad cooperation

But competition is only one side of the coin. Increasingly companies need to work together to address some of the major global challenges including energy, resources and the environment. Individual companies may have many different views and ways to do things. However, when dealing with these major issues, individual company, industry or government efforts will not be enough. Humanity needs to develop major technological innovations and this requires extensive cooperation and research. International Standardization bodies such as the IEC will play an important role. Since the IEC is represented in both developing and developed nations, it is able to promote standardization globally to address these challenges.

See interviews with other CEOs and CTOs of global companies See interviews with other CEOs and CTOs of global companies