The Role of Standards as Knowledge Information (From the Perspective of Economic Security)

1. Introduction

As we welcome the New Year, many people remain concerned about how the ongoing global conflicts that have continued in recent years will develop. Even if these conflicts are limited to specific regions, their impact on global economic activities can be significant, especially when important resources or materials are concentrated in the affected areas. These disruptions can affect supply chains and, as a result, have a large economic impact, even on countries not directly involved in the conflict. This literature explores how standardization can help mitigate such effects. Standardization generally falls into two categories: de jure standards and de facto standards, and each has a different impact on the economy. De jure standards are formal agreements made by multiple stakeholders, such as specifications for the design of products. In contrast, de facto standards arise naturally through market competition and represent the most widely accepted specification at a given time. These distinctions are especially important when considering their impact on economic security, especially in relation to supply chain security and managing the leakage of technological information.

A survey on the state of standardization activities in Japan from 2019 to 2021, covering key indicators over these five years demonstrates that there was progress in standardization activities during this period [1]. This period, particularly marked by the COVID-19 pandemic, accelerated digitalization and impacted social systems.

Digitalization involves converting analog information, like images and sounds, into binary data (0s and 1s) encoding the data based on established rules, and decoding it back. This process necessitates standardized encoding and decoding methods, so digitalization today is effectively synonymous with standardization in terms of how it is implemented in society. This article will examine the significance of such advancements in standardization from the perspective of economic security.

2. Standards and Standardization Processes

(1) Logistics Sector
Standardization plays a key role in making logistics more efficient. For example, in the railway sector, different track gauges between countries mean that trains cannot travel across borders: the vehicles themselves must change. To allow trains to run smoothly across borders, it is necessary not only to standardize track gauges but also to harmonize signaling systems and vehicle safety assessments. Additionally, the standardization of container sizes and shapes helps make the transfer of goods more efficient, enabling efficient container transportation by rail. Since container sizes are communized, they can also be easily loaded onto ships, allowing for an integrated land and sea transportation system. Such technical specification is crucial for promoting efficient economic activity. The rules for container shapes, for example, represent a de jure standard [2].

In terms of economic security, the disruption of transportation systems due to international conflicts or the restriction of exports of materials produced in specific regions is a significant concern. In such cases, technological standards help harmonize transportation systems, making it easier to find alternative transportation routes, which contributes to stronger economic security.

(2) Product Sector
The standardization of product technologies and production methods can improve economic security by allowing for the use of substitutes and alternative production methods, reducing the risk of dependence on specific regions. When the design of a product is standardized, multiple suppliers can enter the market by producing goods that meet the same specifications. This process leads to a more diversified supply source.

However, if a product is monopolized by a single company, excessive standardization can pose risks to economic security. This issue is relevant not only in relations between companies but also in international relations. When a market is monopolized, and it becomes difficult to find alternatives from other suppliers, it becomes harder to diversify supply chains, which corresponds to the situation of de facto standards.

(3) Knowledge Information
Technical standards also carry value as knowledge. In the process of establishing de jure standards, information is exchanged among stakeholders, and knowledge is shared. While this process can offer learning opportunities, it also carries the risk of knowledge leakage [3]. This is especially important in the information and communications technology (ICT) sector, where the establishment of de jure standards is essential for the public implementation of new technologies. Therefore, careful attention must be paid to potential knowledge leakage during the standard-setting process [4]. Once knowledge leaves the owner, it cannot be controlled, making it essential to prevent leaks during negotiations from the standpoint of economic security.

3. Conclusion

This article provides an overview of the role of standards as sources of knowledge from the perspective of economic security, considering changes in the international environment. From the viewpoint of ensuring supply chains, the establishment of de jure standards helps ensure a diversity of suppliers and strengthens economic security. On the other hand, excessive monopolization leading to de facto standards may undermine supply chain flexibility. Furthermore, it is important to manage information exchange during the standardization process, especially in meetings related to de jure standards, where careful attention should be paid to managing relevant technical information.