So, I have often asked: Show me the mobile money!

It exists. And you can find mobile money in some unlikely places

Like Africa

As early as 2005, I pointed out the potential of this trend when I said that there we see as many as 80,000 mobile transactions per day – in the democratic republic of Congo! Only Japan and Korea beat those numbers and there are not many technology related subjects where you can mention Japan and Democratic republic of Congo in the same context.

Why do we see this trend?

As they say, necessity is the mother of invention. And in Africa, the necessity of poor banking and telecoms infrastructure creates innovation in mobile banking.

I have a friend who describes ‘mobile airtime’ as the ‘euro’ for Africa.

By that, he means that people can ‘trade’ in airtime and use it as a de-facto currency like we use the Euro in Europe across borders. He even uses it to pay his bodyguard!

Which points to the paradox of emerging markets. So much of the innovation we see in Africa is chaotic but practical. It operates in environments which would be considered hostile by many. It is driven by grassroots entrepreneurs and also bigger companies
The best example of a bigger company is m-pesa launched by Safaricom in kenya capturing 6.5 million subscribers by May 2009 with 2 million daily transactions in Kenya alone (see also: www.talkstandards.com/case-study-m-pesa . The microlending site kiva also an example of an innovative web/mobile solution for commerce.

Examples of some more companies in mobile commerce in Africa below (courtesy dotopen).

Now, considering the above, and considering that there is still no significant uptake of mobile commerce in the west, here are some questions relating to standards and mobile money:

a) Existing standards such as banking standards are actually a hindrance to this model. Considering the perpetual question, do standards come first or does innovation?

b) Who sets standards? One would argue that standards would come out of Africa and would be used by the West? Since these companies have the best experience of the domain?

c) How should standards be created post innovation? Here, there is a role for LITE consortia led standards. For example – I could see that in future a standard would emerge from within the Mobile money companies in Africa but they would address practical problems which we see today

In any case, we see that the spirit of Jerry Maguire is alive and well for Mobile Money but only if innovation led the way first!

Join the Forum discussion here: www.talkstandards.com/questions-for-mobile-money-event

The key points in the discussion are:

• Standardisation is related to Geography: The full potential of the single market cannot be released without the support of a modern standardisation process.

• Standardisation is related to European policy: Standardisation plays a key role in supporting the increasing needs of European policy and legislation for standards capable of ensuring product safety, accessibility, innovation, interoperability and environmental protection.

• Enhancing the national delegation principle: Enable the weaker NSBs to assume a more active role in the
standardisation process. The principle of national delegation is a cornerstone of the European Standardisation System.

• Improving access to the standardisation process: The European organisations representing societal interests (ex environmental interests) must obtain a stronger role within the European Standardisation Organisations (ESOs).

• Facilitating access to standards to SMEs and micro companies.

• Standardisation in the areas of services to enable the harmonisation in the services sector, and the reduction of trade barriers and the protection of the consumer.

• Standardisation in support of innovation.

• Standardisation in a globalised world.

• Relationship to fora: ESOs and fora/consortia must find ways of cooperating in planning their activities by transferring standards to the most appropriate level, international or European, in order to ensure coherence and avoid fragmentation or duplication;

On reading this vision, there appear to be two over-arching goals:
- At a Global scale, ensuring European competitiveness through standards, and
- At a European scale, ensuring European integration through standards.

Could these two goals be mutually contradictory?

Here are some reasons why:

1) Rate of change: International standards operate at a relatively faster scale. If European companies are to be competitive now, they have to follow international standards rather than awaiting a harmonization of standards within the EU first (which could take longer).

2) Fora are domain specific and not geography driven: Globally, fora have evolved to address industries that span geography. They are better suited to work across geographies globally. For instance, telecoms standards are global and operate on a different industry cycle(for instance network upgrades). They do not rely on geography.

3) Uneven national involvement within Europe: There is uneven involvement of standardization at national level. For example, Germany is much more mature in many domains and trying to harmonise internally may actually slow down the German companies (which participate actively in international fora)

European integration is a worthy goal but are we mixing two goals? That of European integration and European competitiveness?

Would these initiatives actually slow down companies and countries who are actively participating effectively and bring them to the lowest common denominator?

Join the Forum discussion here: www.talkstandards.com/questions-for-event-reforming-eu-standardization/

• Currently, the British government is pushing hard for listeners to switch to Digital radio and specifically the DAB standard. While DAB is heralded as the ‘technology of the future’, few know that it is really ‘the technology of the past’ since it is about 30 years old. While the first development began in 1981, the first receivers were available only in 1999 and it is only ten years after that (2010) that there is some real commercial interest in DAB.

• So what went wrong? According to independent radio analyst Grant Goddard, as per the BBC article, “the fact it was developed by a multitude of European governments and state broadcasters, such as the BBC, via Eureka 147 rather than by the private sector was a crucial factor in delaying its launch”. And adds that “if Nokia develop something, they’ll be bringing out the handsets before you know it“.

• The issue was further complicated by a lack of interoperability and consistency in terms of available spectrum because each country had to then implement legislation for the spectrum to be used by DAB since there was no pan-European system.

• And to cap it all off, due to the long delay, DAB’s time may have passed before it even arrived, with other forms of digital technology – such as broadband – allowing listeners to access radio on their laptops and phones.

So, what can we learn from this?

• DAB may have succeeded if it had had some industry backing in the first place, i.e. industry would have tried to create devices not just standards.

• There was a role for government, but it lay in pan European spectrum harmonization. Industry backed standards could have developed on top of that framework thereby avoiding the situation of having a standard in isolation (without spectrum).

But most importantly, time and standards wait for no one.

Endless delay in co-ordination means that when the standard ultimately arose (after 30 years), better technologies have come along and superceded it.

We are assured that DAB is a part of the past. But will it be a part of the future? Time will tell.

• The programme of work, which includes information on any project as soon as a decision has been taken to develop a European Standard, is publicly available on the CEN and CENELEC websites and is updated every day. It is also available with the national members.

• The drafting and consensus building take place in technical bodies. Participation in these phases is essentially through national members, who generally set up mirror committees open to national stakeholders. Moreover, participation through relevant existing European professional federations or other organizations representing societal interests (for instance consumers) is also possible.

• At a certain stage in the development of a European Standard, a CEN/CENELEC Enquiry is carried out. In concrete terms, the draft is sent to all CEN/CENELEC Members in order for them to conduct a Public Enquiry in their country. Commenting on drafts during Public Enquires is becoming easier and more user-friendly in a number of countries through electronic tools (online consultation). There are a significant number of CEN and CENELEC members, who make the drafts freely accessible during the Public Enquiry, which allows anyone to comment.

• Finally, information on any finalised European Standard is publicly available on the CEN and CENELEC websites and is updated every day. This information is also available with the national members.

This shows the high degree of transparency of our system.

In addition to that, a number of initiatives are being undertaken to further improve transparency, to make it easier to trace standards, to offer guidance on how to look for a standard and to facilitate access to, and participation in, European standardization. A number of recommendations included in the CEN-CENELEC study on SME access to European Standardisation have already been implemented and the implementation of the rest is being worked on.

As immediate examples:

• The setting up of a helpdesk for SMEs at CCMC, with contact points in every National Standard Bodies;

• The decision to make available on the CEN and CENELEC websites, as well as on the websites of the National Standards Bodies, the scopes of the European Standards and projects under development;

• The publication of a Guide to help standards’ writers take SMEs needs into account

Although some of these measures refer explicitly to SMEs, all these initiatives lead or will lead to an improvement of transparency and an easier access for all stakeholders.

For more information regarding CENELEC’s work, please see the Home Page here.

Back to the Forum

EU competition policy supports the notion that industry standardization should be open, transparent and non-discriminatory. The Commission’s new draft guidelines on horizontal cooperation outlines requirements (including participation, transparent procedures and IPR-regimes with clear disclosure and licensing rules) under which cooperation on standards generally would not result in restrictions of competition (and thus would not run afoul of the antitrust rules). Such a “safe-harbor” approach is particularly appropriate for formal SSOs and other standards bodies with significant industry participation, since they affect the conditions for market access and competition both at the technology level and for the standardized products.

Similarly, where governments act as regulators or procurers, their involvement may increase the market ubiquity of a given standard. Relying on open and transparent standards in such situations can ensure a level playing field and full implementation of the standard, and avoid vendor lock-in.

However, too far-reaching regulatory requirements may stifle development. The success and increased importance of various fora and consortia show that different governance and organization models may be appropriate and efficient. Moreover, important “non-formal” SSOs (e.g. in the ICT-sector) display a high degree of openness and transparency, and an ability to protect themselves from vested interests, despite “non-conventional” structures.

IEEE P1547.8 expands on IEEE 1547 and also incorporates National Institute of Standards and Technology (NIST) recommendations for improved interconnection performance functionality

The standard aims to ‘future proof’ the existing framework of IEE 1547 by incorporating support for emerging storage technologies as well as other industry driven recommendations. It aims to establish a common technical platform to address functionality for the interconnection of distributed resources across the power grid.

To put this into perspective, in August 2009, NIST established an initial set of priority actions plans (PAPs) for developing standards necessary to build an interoperable Smart Grid. IEEE P1547.8 will support NIST PAP07 Energy Storage Interconnection Guidelines (pdf).

My view is: This point release of a standard is significant for two reasons. Firstly, it addresses important areas of future significance – ie, by incorporating certain aspects of plug-in electric vehicles (PEV). But it also demonstrates that the NIST framework is a ‘stack’ and designed to incorporate many technologies and applications which we don’t know much about today as long as they are within the broad PAP framework.

To be sure, nothing of this kind has been attempted by any government before and the NIST Smart Grid efforts on standardization bring together many diverse domains(technical and functional).

Hence, I am watching it’s evolution with interest. Right down to specific point releases of standards

The article highlights many of the shortcomings in the standardization process that we, here at talkstandards, have discussed.

Specifically, the acknowledgement of the relationship between setting standards and the creation of technology: i.e., that standards are not created in vacuum and are only useful to the extent that products and technologies based on the standards are deployed. The article then goes on to bravely propose a solution to the problem:

My proposal combines the necessary role of software developers with a standardization process run by the direct consumers of that software, not its creators. That means two phases of development:

• Invention – A very loosely-directed phase which opens with a call for proposals, possibly a meeting that generates a loose description of the work to be done. Developers can band together and form alliances to build work that answers to that description. Hopefully, multiple groups will take up the challenge, producing alternatives for exploration.

• Selection – A formal group of customers – customers who don’t work for the implementers and inventors – evaluates the results of the development phase to figure out what pieces work most easily. They may be able to standardize in a single round, or they may have to select some parts while leaving others open for further development and later standardization.

My view: I believe that the solution proposed – Invention and selection – may not be perfect (the article does acknowledges its limitations), but it would be a pragmatic step forward. More importantly, it would be more likely to provide real results by involving customers formally at an early stage

But in any case, the underlying implication of the article is that the standards process is broken (insane!) and many of us would agree in that view, and concludes that reform is needed for the standards process.

China is already investing heavily in research and development. In order to leverage the result of these activities into commercial applications, both the standardisation process and the resulting standards need to be used effectively as a channel for knowledge and technology transfer. Consequently, at the institutional level, the program level and the individual researcher’s level, closer links, particularly though use of incentives, need to be established.

This increase in research and development has resulted in a greater number of patents and other intellectual property rights (IPRs). In order to foster the broader diffusion of these IPRs, mechanisms have to be established which ensure an effective transfer, integration and general enforcement of IPRs. Furthermore, these mechanisms must take into account relevant IPRs in the rest of the world.

Aside from these supply-side orientated approaches, the effect of standards and standardization on the demand-side of the market and need to also be considered. In order to protect the interests of consumers, the government must use regulations to reduce risks and improve the quality of supplied products. Besides governmental regulations, standards can also help set regulatory framework conditions beneficial for the demand side while also reflecting the interests of suppliers. Europe’s “New Approach” is a good example of an effective trade-off between governmental regulation and self-regulation via standardisation. A new demand-oriented policy instrument which promotes innovation through the public procurement of innovative technologies, products and services is need as standards are an effective instrument to increase the efficiency of public procurement .

In order to integrate China into the international system of standardisation, the above mentioned approaches must be implemented in such a way as to strike an adequate balance between, on the one hand, promoting China’s economy and society, and, on the other, ensuring that these efforts do not negatively affect the other participants of international standardisation.

Firstly, China should be encouraged to transfer the relevant output of its R&D activities into international standards. However, this has to be realised in coordination with the R&D inputs of other international standardisation participants.

Secondly, the same principle has to be followed with regard to integrating the IPRs covering the R&D outputs, in order to avoid a bias in favour of the one or other country.

Thirdly, international standards should be integrated into China’s regulatory framework, which benefits both China itself, due to a more efficient regulatory framework, and the other participants in international standardisation, due to lowered technical barriers to trade.

Fourthly, international standards should be similarly integrated into China’s public procurement policy. International standards, which are an instrument for opening China’s public sector for suppliers from abroad vice versa, improve the efficiency of public procurement in China through increased transparency and, consequently, competitiveness of the public procurement process.

In summary, the effective integration into the international standardisation system will be a win-win situation so long as neither China nor the current dominant players try to exploit the options of the system at the costs of the other players.

Modern soccer stems from mid 19^th century efforts to standardize the rules of various codes of football played throughout English public schools during the era. The primary motivation was to overcome considerable interoperability which required teams to agree on a match by match basis upon the rules with which to be played as prior to this, each club had had its own unique set of rules which could vary considerably. For instance a number of schools played a variation of the game, which would eventually develop into Rugby, in which players were free to handle the ball with their hands, forbidden by many other clubs.

Soccer as single standard vies for widespread market adoption, measured as number of fans or international popularity, against competing standards in the form of other sporting codes. Soccer’s governing body, the 8 member International Football Association Board which meets biannually, plays a similar role as an informal industry driven Standards Setting Organization, adapting the game to changing user needs.

Soccer is incredibly successful as a standard, with over 240 million people from more than 200 countries regularly playing the sport – according to a survey conducted and published by FIFA in 2001. Similarly the last previous World Cup in 2006 had a television audience of 26.29 billion people across 214 countries and territories.

The success of a sporting standard, particularly team sports, relies to a large extent on significant network effects. The enjoyment of both fans and players increase at the margin with the addition of more fans and players – however, this is completely negated by the widespread use of the Vuvuzela this World Cup.

More young players allow more teams to play spreading which results in a wider catchment for professional teams to recruit from. More fans bring more money, either directly or indirectly through sponsorship. Herein lies an important similarity with technological standards.

The simple rules (just 17 broad laws) and limited equipment required have obviously affected the popularity of soccer. Compared to say ice hockey which requires substantial investments in both gear and playing facilities, soccer can be played with as little as a ball and an open space. However, other games with even simpler rules and less equipment have failed to reach an audience anywhere near the size of soccer’s let alone start a war in Central America (Football War).

So what lessons can be learned from the impressive success of the soccer standardization? First of all, the widespread adoption of the rules can be attributed to the simplicity of the standards system. Also, the valuable network effects cannot be stressed enough. Thus, when it comes to technology, interoperability is key in determining the impact and success of any certain standard. The common expression of “less is more” is perhaps easier to apply to soccer than to e.g. advanced mobile technology standards, but the notion can be the same for policy makers etc, especially when striving towards international coordination of standardization processes in today’s global economy.

Ajit Jaokar argued that any “standards for standards” effort risked the creation of a “class system between consortia” based on an arbitrary set of criteria and will only be more difficult to apply as new innovation becomes increasingly cross-domain (e-health, Mobile health, etc).

Helen Disney, arguing that the priority of an SSO should be promotion of both competition and innovation, identified the criticism that formal review creates more bureaucracy within the standard setting organisations and as such may slow change in dynamic markets such as the IT sector. However, she also presented the countervailing argument that rankings may provide valuable information that reduces search costs and facilitates the connecting of business with SSOs, and so long as SSOs continue to foster competition and innovation, rankings may be a valuable exercise.

Daminen Gerdin highlighted the significant challenges inherent in the ranking of SSOs, particularly the difficulty in determining first the requisite criteria and secondly the weight to place on each of these criteria in computing any final measure of rank. He further questioned whether such rankings would not do more harm than good. Geradin suggested that rankings may negatively affect diversity and competition between SSOs, by causing poorly ranked SSOs to disappear for the standards setting landscape.

Mattias Ganslandt discussed the 2008 IBM guidelines for SSO membership, which set out a set of criteria required for IBM to take part in an SSO. Ganslandt argued that policies such as this work towards a standardization of the standardization process and may have negative effects on innovation. Forcing SSOs, which differ from each other in many ways, to comply with a set of criteria would not benefit stakeholders, especially not the end-users.

Knut Blind argued that the crucial aspect with respect to ranking SSO is the selection and weighting of the criteria and that such a complex issue would require a broad range of criteria to be integrated. He stressed however that there exists inherent difficulty in defining unique and quantifiable parameters, e.g. for openness.

Steve Mutkoski warned of the dangers of placing “form over substance”, and forgetting the distinction between a successful standard and a successful/“highly rated” SSO. He argued that the main challenge associated with ranking SSOs was not the defining of ranking criteria, but that a single set of criteria and formula through which to pass these criteria will never be able to accurately assessment and compare all SSOs. Furthermore it will miss the intended mark due to its failure to guarantee that individual standards themselves be of high quality, relevant and obtain market acceptance.

Daniel Dardailler (who related his argument to his experience with W3C) suggested that a formalized review process could potentially foster efficient standardization, so long as the process of developing the review criteria and methodology were open and publicly available. Such ranking he claimed could aide stakeholders with their investment choices and allow new consortia gain immediate support provided they follow the criteria. Conversely, Jay Kesan argued that formalized rankings are more likely to hinder standardization than foster it as the criteria developed may be based on factors not common to all SSOs.