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Rudi Bekkers

This chapter examines the history and context of standardization and patenting. It begins by looking at how the discussion arose as to the relationship between patents and standards, and how this topic became more prominent on the agenda of companies, standard setting organizations, and regulators. It then looks at the empirical facts about patents in standards, focusing on standard-essential patents to describe how this phenomenon developed over time, but also how it is distributed among technology areas, standard setting organizations and specific standards. Concerns and problems are identified that could arise when patented technology is included in standards, leading to a discussion of patent policies in standard setting organizations. Likely reasons are identified as to why companies encounter more frequent conflicts over patents in standards, and a range of policy measures are examined.

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John Hudson and Marta Orviska

This chapter reviews the literature on the use of standards by firms. It deals with the reasons why firms adopt standards and the benefits they bring to the firm, with a particular focus on innovations. In doing so the authors distinguish between the many different types of standards, including but not limited to: (1) international management quality standards; (2) regulatory standards such as health and safety; (3) de facto standards such as Windows; and (4) firm-specific standards. They review both the theoretical and empirical literatures, and differentiate between different types of firms, small and large, rural and urban, and also between different sectors, for example manufacturing and services.

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Tineke M. Egyedi and J. Roland Ortt

This chapter seeks to define a functional classification that distinguishes between different kinds of standards in order to understand in more detail the different effects of standards on processes of innovation and diffusion. Analysis of relevant standards classifications already in the literature shows rough consensus among a variety of authors as to what these basic functions are, but contains many inconsistencies and omissions. The authors draw up a new classification of primary and secondary functions and test its applicability for innovation research. The effects of innovation as identified in academic and standards practitioner literature are sorted according to these functions, and explore the implications for possible new avenues of innovation research.

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Richard Hawkins

This chapter examines standards within the historical development of the systems of innovation concept, which has become a core paradigm for the development of science, technology and innovation policy. The historical roots of this concept are traced alongside the evolution of thinking about the role of standards in the economy. The increasingly networked nature of both technology and market is identified as a key conceptual bridge between the subjects of innovation and standards that has cross-fertilized both fields to this day. However, the focus on disruption and change in innovation policy has overshadowed the complementary need for stability, consolidation and industry building, which is where the functional role of standards becomes most visible. A framework is proposed that situates standards and standardization as specific functions in the systems of innovation model.

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Timothy Simcoe and Cesare Righi

Standards are both inputs and outputs in the cumulative innovation process. Significant technologies are standardized to promote modularity, interoperability and widespread reuse. The resulting standards provide a starting point for extending, improving and applying the underlying technology. This chapter reviews the empirical literature on the role of standards in cumulative innovation, with a particular emphasis on studies that exploit data collected from standard setting organization (SSO) intellectual property disclosures. The authors begin by discussing the relationship between standards and intellectual property, and then turn to a series of topics that have been studied using data on disclosed patents. These topics include the role of SSOs in promoting technology diffusion; factors that influence the performance of SSOs; and the relationship between standards, modularity and innovation. The chapter concludes by discussing several promising areas for future research.

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Simon Delaere and Pieter Ballon

This chapter discusses standards and innovation in the context of business models: how firms and industries create new ways of capturing value from products and services. Business model development encompasses all manner of direct and neighboring opportunities for creating new markets and creating streams of revenue for new products. Business modelling itself conforms quite well to any definition of innovation. Using the example of digital radio broadcasting, the authors show how the development of standards was also part of the process of working out various business models to expand the commercial possibilities of this technology, thus integrating the standardization and innovation processes in a particularly direct way.

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Eric J. Iversen

This chapter focuses on the role of standards to promote the (re)entry of technological systems in markets already dominated by a well-established incumbent technological systems. It starts from the recognition that the innovation process does not necessarily proceed neatly along a single (S-shaped) path of technological substitution. It is usually assumed that new technologies may emerge, grow and subsequently establish dominance after a period of rivalry. If they do not, the implication is that the emergence of a standard (or a dominant design) in a market does not necessarily lead to the complete substitution of an original rival but instead contributes to the dynamics of a longer-term process. The premise of this chapter is that by examining these ‘substitution dynamics’, important aspects may be revealed about the role and function of standards in the innovation process during successive generations of technology. Green technologies, specifically battery electric vehicles, are examined to explore the role of standards in technological substitution. The chapter also considers the dynamics of lock-in, the role of public policy, as well as the position of intellectual property rights disputes in such a context.

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G.M.P. Swann and Ray Lambert

This chapter offers a brief survey of the literature as to the effects of standards on innovation, specifically how markets move from standards to innovation. The main observations are that the direct effects of standards on innovation are mixed: sometimes supportive but sometimes constraining, even at the same time. These direct effects are perhaps why businesses are often skeptical about the role of standards in innovation. However, the indirect effects of standards are generally supportive, and it is here perhaps that the biggest pay-off from standardization is to be found. Standards lead to benign changes in the economic environment, and these changes can foster innovation. These effects are, perhaps, less obvious to the business observer, but greater in overall importance.

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Gregory Tassey

Standards are a ubiquitous technical infrastructure in high-tech industries. They affect the efficiency of all three stages of technology-based economic activity: research and development, production, and market development. Such activity produces complex knowledge-intensive products and services, which require: (1) accurate characterization of advanced materials that make up today’s state-of-the-art technologies in order to enable efficient product technology development; (2) process control to assure high quality and yield during the production stage; and (3) sophisticated measurement and testing standards to assure buyers of both component and system performance. To achieve these ends, standards must be a critical part of the technology infrastructure supporting high-tech industries. This chapter describes the economic roles of the different types of standards and their collective effect on a technology’s expansion path.

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Carl F. Cargill

Standardization and innovation are often thought of in a strict technical confine. However, because standards and standardization processes are also policy, legal and marketing tools, it is necessary to look at the idea of innovation through a much larger lens. The utility of standardization derives from its application in the market, not from an accumulation of specifications. This chapter examines standardization and standards as they are used and managed by businesses, countries, lawyers, policy makers and even technologists, both as a force to stabilize and to cause innovation. It is this use of standardization _ in a vital and chaotic environment _ that makes the study of standardization both frustrating and intriguing, and justifies it as a true cross-disciplinary subject.