Major study finds standards important to drive the economy

25 September, 2006

A major study into the impact of standards on the Australian economy has found water and electrical standards generate economic benefits of around $1.9 billion a year while mineral sampling standards generate benefits of up to $100 million a year.

The study, which also looked at the economy-wide impact of standards, found that over the 40 years to 2002 a one percent increase in the number of Australian Standards is associated with a 0.17 percent increase in productivity across the economy.

John Tucker, Standards Australia CEO, said the report makes a clear case for the benefits of standards to the Australian economy.

"Standards are an important part of Australian industry and business," Tucker said.

"This report, for the first time, puts a dollar value on the impact of standards across some of our most important industries and also measures the economy wide benefits.

"And the result is clear: standards are helping generate profits and creating jobs in Australia."

The report: Standards and the Economy, undertaken by the Canberra based Centre of International Economicas, also found standards can:
- Distil and diffuse knowledge;
- Provide a common language for discussion;
- Underpin markets and help solve some externality problems;
- Underpin innovation and knowledge dissemination;
- Reduce costs of production and increase productivity;
- Help provide safety outcomes and assist with risk management.

The report, which used methodoly similar to work recently undertaken by the Productivity Commission, looked at changes in economic growth, population and the stock standards to determine economic changes.

The findings are consistent with similar studies undertaken in Britian in 2005 and in Germany in 2000. Like these studies, it is based on limited data.

There are currently around 6,800 standards in use across Australian industries, ranging from electrical and water industry technical standards to information technology, mechanical engineering, health and safety and management related standards.

The stock of Australian Standards is constantly changing with around 80 percent of current standards published or modified in the past 10 years.