"10. EU member states and community institutions should seek to make data freely accessible in open machine-readable formats, for the benefit of entrepreneurship, research and transparency."

"12. Open platforms for innovation and the development of services for public and commercial use should be fostered. This should include commercially neutral promotion of open solutions in public procurement to ensure that interoperability rests on a non-proprietary basis. In this context, standardised interfaces between process steps are one key element."

In essence, standards are good because they create the level playing field on which all can compete. [...] We are also currently revising the guidelines for horizontal agreements in which we plan to improve the existing chapter on standardisation to provide more guidance on standard setting. [...] If standardisation processes are open and transparent, then standards can bring significant benefits to consumers by ensuring compatibility between products, which will generate competition on price and innovation. I see an important pro-competitive rationale to having standards bodies require the disclosure of patents and, where relevant, patent applications, in the early stages of standard-setting. Ex ante disclosure helps those involved make a properly informed decision, and competition law should not stand in the way. [...] This will almost always entail ex ante disclosure of the existence of essential patents. But it could also entail unilateral ex ante disclosure of maximum royalty rates and the most restrictive licensing terms that would apply should a company's technology be made the standard. If the ex post royalty is significantly and unjustifiably higher than the ex ante price, then we may have an excessive pricing case. [...] Standards may facilitate economies of scale, but it is with interoperability that they really add value to the economy. Standards are the foundation of interoperability - they create the level playing field needed for interoperability, where all can compete. When good standard-setting allows everyone to interoperate, it is also more likely that consumers will get the sort of high-quality and innovative products that work in a wide range of situations. [...] If I may summarise my thinking: Standards can greatly affect the fortunes of both individual companies and the wider economy. As such standardisation must occur through open and transparent processes. Ex ante price disclosure schemes will generally not raise competition issues. Standards should be as open as possible. This is not a black and white choice but a question of degree, and it is in society's best interest that standards should be as open as possible. In many industries de facto standards are just as beneficial and valuable as de jure ones. And that requires that the creation and availability of de facto standards are held to a similarly high level of scrutiny by market participants and competition authorities. And of course, any standards body should see the Commission as a partner. We have an open door to discuss these issues. It is in the interests of all parties that we work together toward openness, and towards high standards.

While I understand the need to consult, the answer is that you could take the lead by investing in open standards policies, adoption, and best practice. Oh, and it would help if you motivate innovators to kick-start new ventures, and being good-hearted--pick up the tab for failed entrepreneurs so they still qualify for unemployment benefits if so happens. Creating a European software industry based on open standards is a good start. What if all things in life were that simple?

Standardization is a major driver of competitiveness. ICT represents one of the key industrial sectors of the 21st century, and standardization reform will significantly impact EU growth. Importantly, the Commission underlines the importance of global open standards as well as important Intellectual Property Rights (IPR) concerns like transparency through mandatory ex ante declaration of licensing terms and royalty free licensing where needed to enhance software interoperability. The fact that the issues contained within is White Paper already have been discussed among key European stakeholders (governments, industry, SMEs, consumer organizations, etc.), means there is solid backing behind its main conclusions, as well as in the implied way forward. The Commission is now set to launch major legislative reform of European ICT Standardisation in the beginning of 2010, revising the outdated Council Decision 87/95.

Highlights in the White Paper include:

A strong emphasis on openness and transparency:

While industry can use any standards, public authorities have a strong preference for, or even an obligation to use standards resulting from open, transparent and inclusive processes.

Openness: The standardisation development process occurs within a non-profit making organisation on the basis of open decision making accessible to all interested parties. The open standardisation process is driven by the relevant stakeholder categories and reflects user requirements.

Declaration ex-ante of the most restrictive licensing terms, possibly including the (maximum) royalty rates before adoption of a standard, may be a means of improving the effectiveness of (F)RAND licensing since this can allow for competition on both technology and price.

Standards based procurement is encouraged:

The Commission suggests clarifying that when they are defined within the context of ICT strategies, architectures and interoperability frameworks, the implementation of standardised interfaces can be made a requirement in public procurement procedures, provided the principles of openness, fairness, objectivity and non-discrimination and the public procurement directives are applied.

A clear path for recognizing fora and consortia:

The Commission suggests promoting better cooperation between fora and consortia and ESOs on the basis of a process which would lead to standards issued by the ESOs.

public authorities should have the possibility, provided the right conditions are fulfilled, to depart from the general rule of referencing formal ESO standards. To that end the Commission could put in place a suitable procedure to enable the referencing of specific fora and consortia standards in legislation and policies.

The Commission suggests the establishment of a permanent, multistakeholder, ICT standardisation policy platform (with a wider membership than the Member State SOGITS Committee previously established by Council Decision 87/95/EEC) to advise the Commission on all matters related to the European ICT standardisation policy and its effective implementation

The Commission has opened a public consultation on the ICT Standardization Reform White Paper on the Your Europe portal, open until 15 September 2009. Despite the fact there is wide agreement in the European and global ICT industry about the importance of recognizing standards from fora/consortia, there are a few thorny issues that are likely to cause debate in the months to come. Expect some debate on the fine print surrounding IPR, the standardization needs of European software industry, and on the precise way to organize stakeholder input—and pressure from industry to finally get the legislative reform underway.

Summing up, mandatory ex ante disclosure, royalty free licensing for technologies included in standards that are essential for software interoperability, and full recognition of fora/consortia standards and specifications in EU policy and legislation is now a real possibility. Moreover, this approach is fully endorsed by the Commission.

While one would wish for EU standardization reform to go even further, calling for a more radical rewriting of the European system of regional and national standardization—taking into account global realities and the need for wide availability of open standards, what we have to look forward to in the near future is already a lot better than the current regime. Fear, uncertainty, and doubt about certain, smaller aspects of this reform should not overshadow the great accomplishment this White Paper represents. While there is still time to debate the fine print, the sign-off has been made.

With the White Paper as the foundation, an exciting legislative agenda is building up for 2010. Expect higher innovation in all sectors that deploy ICT standards in the time to come, and watch the efficiency of public sector ICT investments increase as open standards based openness takes a stronger hold on bureaucrats, programmers, consumers, and politicians alike. EU standardization reform is underway.

The global standards process is the only game in town. All standards either quickly evolve in a transparent, open, efficient manner and become ubiquitous, or the effort is stopped. All meetings can be attended online, there is online voting facilities, but presence is encouraged at kick-off, and during especially tough negotiations, and at the last meeting. All interested parties get free travel to those meetings. For the rest, things happen online and via videolink and online/offline integration.

European Standards Organization (ESOs) are super lean marketeers of global standards, educational facilities, and provide advanced online material and face-to-face instruction to governments, students, and society, they also maintain the legacy of European Standards which were developed until 2010, trying to turn them into global standards (or dissolving them).

National Standards Organizations (NSOs) do not develop standards any more, but are competence centers that occasionally provide assistance on problem areas within global efforts, feeding directly in, and also act as face-to-face meeting places during global innovation jams.

The European Commission is a watchdog and liaises closely with a lean standards steering committee for software. It implements and references in procurement standards from wherever, as long as they are open.

National governments implement only global standards and send their own civil servants to important standards efforts, such as accessibility, health interoperability efforts, and suchlike.

ISO is either revitalized or disbanded. It is certainly smaller, leaner, and not under the UN anymore. Industry has an equal seat, and there is ample funding for SMEs who want to participate.

As I said, this is the future, not today. As for today, software is already an enabler of innovation across the economy. While this is good, it is not enough. People need to catch on to the same logic of interconnection, change, and flexibility built on a common platform—technology, ideas, and negotiation. When many people agree about what technologies they want, how they want to use them, and the technologies themselves are cooperating, a lot can get done.

1. Influence governments to re-build the credibility and efficiency of the existing formal standards process.

2. Create new formal organizations with global reach. For example, one could create a new ISO with companies present, with a different business model, where standards are free, and the IPR policy is simple, and where online participation and voting is welcomed and effective. One would have two options, in fact, create a competitor to ISO, or simply shut it down and start over.

3. Endorse and financially support certain consortia not others. Contribute to a shake-out by picking winners and losers. The example of this might have been IBM's Standards for Standards initiative. IBM made a promise to pull out of places where they do not agree or are able to change the rules. A good principle, let's see about the results.

4. Someone simplified the template for what constitutes a standards organization and a standards process. There were easily accessible, clear, simple and consistent intellectual property policies for standards organizations, thereby enabling standards developers and implementers to make informed technical and business decisions.

5. Governments started shaking up the formal standardization system. For instance, BSI would not automatically receive its £6 million a year from the British government's DIUS. Moreover, fora/consortia like W3C and OASIS (and others outside the IT space) would be recognized as contributing to standards, since the policy would be that the government picks up any standard, from any origin, insofar as it is fully open and widely available and implemented.

6. Major players agreed to consolidate the number of fora/consortia from 500 to 50 in the interest of efficiency and wide implementation, pooling their resources together.

7. One put in place a tier-system for standards organizations, in order to avoid the binary approach (formal/informal) and provide a path towards gradual recognition (or not). The categories could be the following: (1) Formally recognized, (2) To watch and emerging, (3) Hopeless, unless major changes in governance structure are announced, (4) New initiatives that have yet to prove their worth, but could be innovative. The criteria could mirror those of the WTO criteria, supplied with the CAMSS criteria, and governed by an online voting system where governments, multinationals, SME associations, and user and consumer organizations had a voting quota each.

8. National Standards Organizations stopped issuing standards and instead became competence environments, funding agencies for standards participants in global organizations, and venues for local chapters that worked on specific problems within a global standard.

9. Standardization reform followed the path of ICT, so openness and self-regulation became the norm (realizing that this is not the best time to argue self-regulation across sectors).

10. Standards were sexy? Not sure what that might entail, but some aspects of sexiness include highly appealing or interesting; attractive. What I find enlightening is a piece advice from an old manual of sex tips for geeks: Even a single good feature can make you attractive enough to be a sexual success. That might be realistic, too.

11. All companies begin or end participation in standards bodies based on the quality and openness of their processes, membership rules, and intellectual property policies.

Will our children's children recognize today's Internet? Probably not. The reason is that much of it is ephemeral. It will go away, change faster than previous generations' impressions in books and popular culture. Governments, and Google as well, do try to archive historical pages, and they will be available to some extent for historians. However, Internet as we know it today, is likely to only last for a few more years.

Standardization is a tool to grapple with globalization. It yields more than £, $ or €—it yields freedom. Standards create and define networks. When these standards are used by many, network effects abound. Mostly, these network effects are benign, but in the case of quasi standards which sometimes are not standards at all, chaos erupts. In the beginning of this blog series, I said let's' consider network effects a given, and proceed. This was a wrong assumption. There is a world beyond network effects, but it is not pleasant. It is cumbersome, expensive, and risky. Moreover, not all network effects are created equal.

“Standards like HTML, XML, Style Sheets (CSS), to name a few — have fueled billion-dollar industries and connected people like never before”.

Standards are what links the Internet together. The future strength of applications like Facebook, LinkedIn or YouTube is in the hands of standards setting professionals – like you and me. By endorsing this or that widget or application, we contribute to picking winning standards. So, next time you opt not to register your name with Open ID, which would have enabled you to use one password across sites like Yahoo, Google, etc., you are making a standards choice. Most people do not think of it that way, but you are actually spinning the global wheel by doing or not doing certain things on the Web.

In fact, ideally, end users should always participate, even more directly. Local officials, small business owners, lawyers, software developers and consultants should go to standards meetings now and then, even if the meetings are in Hawaii (you could also surf in the water for a day, not just on the web). Wide participation gives a better standards because more ideas are on the table and more experience is brought to bear. Wide adoption is only possible if all impacted stakeholders know about the standard, believe in it, and promote it.

The reality is, even though standard setting tends to take years and involves patiently sitting out day and week-long meetings to discuss small details, standards themselves can actually be quite simple. Agreeing on them is the difficult part. This is why common wisdom has it only experts should go: bureaucrats, engineers, low level technical policy makers and such like. Nothing could be further from what we need.

In the meantime, new standards, or “specifications” in Eurospeak (since the word standard is a reserved term for official stuff from recognized standards bodies) pop up all the time. The formal standards system is rapidly eroding, at least in the software space. And, with time, software becomes an enabler in all industries, and they will all get their own software standards. But will the software logic prevail?

In the last thirty years, the standards world has gone from US dominance to European assertion and Chinese boom. Europe today is a global standards player, or, rather, it tries to be. Clearly, European Standards Organizations (ESOs) are an important vehicle to enact the European regulations of the internal market—as a way to channel a concrete request to the international community. But the rationale for purely regional standards is extremely limited. Moreover, each of the 27 Member States also have quite assertive national standards bodies (as do most countries around the world). This complicates the vision one might have of one, global standards community, a thought so dear to the software industry. While national representatives meet at ISO, they have their own agendas and all try to adapt into niche players in their respective markets. The proper role of regional and national standards bodies is in educating people about standards, in arranging local mirror committees, and in working on specific aspects of global standards where there is regional, national or local expertise, little else.

According to an OECD report on Regulatory Reform and International Standardization (OECD 1999), standards directly affect at least 80 percent of world trade. But since few of those who should read OECD reports actually do, and most of those who do, end up being confused and overloaded (which might include readers and the writer of this blog), it might be worth considering why standards matter beyond the evidence from trade.

But I claimed that the situation is messy. Why is that? There are several factors:

First, the standards landscape itself is becoming too complicated with a myriad of global, regional and local players – official, semi-official, associations, clubs, etc.. The latest CEN overview of fora/consortia in ICT shows some 500 active players (the actual number is unclear, as the initial study was carried out years ago and the list keeps evolving without much concurrent analysis of the content).

Moreover, the regional assertion (Europe, China) is itself problematic. One would expect each world region of some prominence to start claiming their territory in terms of standards setting. The proliferation of fora/consortia makes the standards world complex to navigate, often expensive to staff and travel to support, even for relatively large companies.
As if this was not enough, new sets of actors are making themselves known (NGOs, user groups, SMEs) all the time. The system is ever evolving and continuously adds new actors. While this is not in itself a problem, it is once the system is overly complex. Even the large players loose oversight, and coordination problems ensue, which is quite ironic, since the entire purpose of standards is to address that problem.

What are the driving forces behind this messy globalization of the standards world? There are several factors:

The first is discontentment with status quo. Industry, on the one hand, whether as standards makers or standards takers (users) feels the formal process is slow. The scale of the international system is too small and too big at the same time. Too small to achieve wide availability and implementation fast enough. Too big and complex to gain overview. Many say its functionality is old-fashioned. Some say the formal system is in a breakdown. Well, let's look at some reasons why that is: lack of representation, competence, transparency, speed, dissemination, and excessive complexity, bureaucracy, and cost. Max Weber, the scholar of bureaucracy, should have waited to coin his expression “the iron cage”, an over-bureaucratized social order that feels like "the polar night of icy darkness", until he met a standards body.

Multinationals have largely moved on, or are actively looking for alternatives while still keeping a token presence in the old world. The reason is not spite, but speed. There is no time to waste. This is despite the fact that a well-functioning global system of formal standards setting would be the best for all parties.

Consumers, on the other hand, may feel utterly distanced from the process as a whole, most of them do not know their life is happening the way it does because standards are in place, and evolve. Those who do show some awareness are largely angry. The Naomi Klein's of the world provide a resounding, constant outcry for more sensible global institutions. Ones with real representation, legitimacy, and raison d'etre.
Governments tend to outsource the problem to a chosen, anointed set of standards bodies that seems to remain unchanged, no matter how slow, inefficient, or expensive they are. Standards bodies, in turn, tend to outsource the actual work of standards making, that is, the dirty job of traveling and spending days in endless meetings to try to reach consensus, to dubious experts without any real idea of government requirements. If they reconsidered that practice, they might discover that there are people within those same governments, to whom standards matter, and matter indeed. But since the process is viewed as so cumbersome and complex, most bureaucrats find it too bureaucratic. Match that! I am, of course, exaggerating to make my point, and there are plenty of smart movers and shakers in the standards world, but the system as a whole needs major revision. A global downturn may prove to be just the ingredient to make that possible. But I would not count on Obama this time, although yesterday's announcement of simplifying fuel efficiency standards was an example of putting complexities aside and doing what makes sense, at least in the US market. There are many more examples in the ICT field.

The second is innovation. New technologies feed new organizational processes, and the Internet is one such bundle of technologies, a bundle that is entirely foreign to the concept of national representation, for instance. The concept of transparency is also completely different on the web, which seems to go largely unnoticed among the formal standards players.

The third is monopolies. Some big players who, paradoxically, depend on their dominant position to survive, because they have an exclusive platform that either takes all or is irrelevant, attempt to subvert the formal standards process when threatened. Alternatively, they try to overtake it more subtly, by sitting on every possible committee, or by buying votes when their view does not prevail. The near history of such abuse does not make standards reform easy, and understandably makes for a certain scepticism on behalf of those SMEs or governments that feel they might lose even more control in a global picture.

Proliferation makes business sense only as long as there are no other, better alternatives. In terms of rescuing the ideal of global standards, what can be done? (more tomorrow).

New technologies, however, also bring with them new ways of doing business and this can occasionally make existing regulation obsolete. Some of the major trends that the industry, consumers and policy makers need to adapt to and embrace are: specialization, service oriented architecture, and increasing importance of user-generated content. A draft report report of an industry expert group on a European software strategy, initiated by the European Commission's DG Information Society and Media, but with independent conclusions, called Software 2.0: rebooting Europe's software industry from April 2009, Version 3.0, calls the Internet the global network of the 21st century, and has ample evidence of such trends.

A while back, the sociologist Anthony Giddens emphasized in his book Modernity and Self-Identity (Polity Press, 1991) that modernity is characterized by extreme confidence in abstract expert systems. His analysis is now updated with what he calls the Giddens Paradox of climate change: its consequences are not easily observable by those that are affected by it. The situation is much like the contrarian economist Robert J. Schiller sees the Irrational Exuberance (2005) of stock markets and real estate markets—we trust the experts to know better—even though the market is equally influenced by non-experts.

Hence, one could conclude that the situation has become worse. In 1991 we trusted the expert systems, which by that time was a mixed bag of things like government authorities, university professors, computer systems, and electricity providers. Few of these things were connected, so even though were were in a sorry state, most of us being totally ignorant about the workings of society, our ignorance did not have such an excessive price. If those systems failed, they could be fixed, or for the most part they could be abandoned.

In 2009, however, many systems are connected, it turns out the natural and human ecosystem is connected to everything. We still only trust the observable, and have no time for the analysis of systemic risk. That risk has increased drastically in two decades. Software has become the enabler of interconnection within vertical industries—and across. There is no Battlestar Gallactica, the fictional battleship in the eponymous Sci-Fi series that was without an Internet connection and hence narrowly avoided destruction in the alien Cylon attack on Earth. Or, if there is, it would be unable to come to rescue (after all, life is not television, right?). So, let's consider our predicament: we are bound to be connected—but we can choose whether we want strong bondage or weak ties, and we cannot abandon ship, unless we are interested in life without the Internet or indeed, without Earth itself. (more tomorrow)

However, 68 years after commercial Black & White Television began broadcasting in United States (1941), a contrarian view would be that much remains the same. The programs might have changed a bit, they might have changed us a bit, but we are still passively looking into a screen. Despite the possibility to store programming options until we come home and get stuff on demand, the message is a passive one. Push the button and we will push content upon you. We are asked to consider other people and situations, be aware of it, but not to touch, not to interact. And, no, voting in reality shows will not qualify, even if you end up using your remote control to do so. Clicking on widgets similar to on your iPhone comes closer, but is still just an extension of other media. In fact, the moment TV replaces real interaction, it is not a TV anymore, but something else. The Internet, perhaps?

The Internet is different, most people would say today. It is tangible. It asks for a reply. It wants us to put ourselves out there. On Facebook. On LinkedIn. On Twitter. Our digital identities are on the line, and on line. We willingly risk exposure to all kinds of feedback, especially if we belong to the net generation. As a caveat, contrary to Don Tapscott in his book Grown Up Digital: How the Net Generation is Changing Your World (McGraw-Hill, 2008), I believe the net generation includes people of any age, not only youngsters. Many IT professionals, for instance, belong to this group. The net generation are those who have the attitudes that enable them to take the lead, but who don't care too much about positions and hierarchies. Or, at least, those of us who not care so much that they feel limited by not being formally in charge. The net generation includes those who have the knowledge and skills needed to maximize their influence in society. Those who embrace leadership from below will affect changes as they see fit, in the work place and in the the work life regardless where it occurs. In fact, the net generation has very little to do with age, although it is very present in Generation Y (1972-2000), those who are 9-37 years of age today. And, while they may not be in power yet, their parents are, or so they think, anyway.

The Internet, therefore, becomes an important vehicle. Not as a technology but as an enabler. The technology may come to be considered quite trivial. It is the things you can do that are fascinating. Because we want to be participating. We don't want to be alone. No man is an island, and no woman is an islet. We are all connected, or try to be. Many would even argue that the Internet is invincible. It is the new, new thing (although it is getting old already, which is an aspect to consider as well).

But in all technological change, some aspects remain the same. Those are hard to see until we have some historical perspective. While we will not concern ourselves with those aspects here, suffice to say there are things that the Net can't do, such as convincing people in the work place or elsewhere, providing an efficient venue for arguing with your spouse, or for handling any kind of great outpour of emotion.

Let's let the matter of what the Internet can and cannot do rest for the while. What we will do instead, is to take a look at one of the key invisible engines of globalization, that of the self-regulation provided through standardization. But in order to do that, we first need to have in mind a quick primer on the logic of the Internet. It goes as follows: The Internet requires interoperability. It runs on standard interfaces and protocols. Its network effects are key for standards. Let's' consider network effects a given, and proceed. (more tomorrow)

“The Internet is fundamentally based on the existence of open, non-proprietary standards” says Vint Cerf, often called the Father of the Internet, who visited Brussels last week.

“The internet’s generative characteristics primed it for extraordinary success—and now position it for failure”, writes the academic Jonathan Zittrain in his book on The Future of the Internet and How to Stop It, Penguin, 2008.

“Dominant players may try to use proprietary standards to lock consumers into their products or to extract very high royalties, ultimately stifling innovation and foreclosing market entry by new players”, Commissioner Viviane Reding of DG Information Society and Media from the European Commission said in her speech at Lisbon Council, 2 Feb 2009. The costs of non-openness are great. They may account for large parts of a government's IT budget. In fact, industry analysts like AMR, Forrester, Gartner, & IDC agree that roughly 1/3 of an average IT budget is spent on integration.

In contrast, standards drastically reduce integration costs. “Opting for open standards is a very wise business decision indeed”, Competition Commissioner Neelie Kroes from DG MARKT said during her speech at the OFE Breakfast, 10 June 2008. In fact, she deserves to be quoted in the full context, to understand exactly how she believes this is so:

“if we are to include proprietary technology in a standard, then ex ante disclosure may help those involved make a properly informed decision. Competition law should not stand in the way.... This will almost always entail ex ante disclosure of the existence of essential patents. And it may increasingly entail ex ante disclosure of maximum royalty rates. Both can increase the effectiveness of the standard setting process, lead to more competitive solutions and reduce the risk of later antitrust problems. Standards bodies could very often require disclosure without fear of competition law intervention. Choosing open standards is a very smart business decision indeed”.

“A global recession is the time when the bold can help the innovations that will drive prosperity when the economic cycle turns, and where intelligent intervention from the Government can accelerate national competitive advantage”, said Lord Stephen Carter, UK Minister for Communications, Technology and Broadcasting in a media opinion piece published in The Times on November 7, 2008. So this resonates in the EU's Member States as well.

“The promotion by governments for the creation and adoption of open standards in public procurement policies is good for consumers”, said Anne-Catherine Lorrain, Intellectual Property Policy Expert at the TransAtlantic Consumer Dialogue (TACD) on Thursday 17 April 2008 at the European Parliament, Brussels.

“The Impact of interoperable ICT solutions on the internal market and the European economy are formidable and have not only brought us out of the recession but have spurred a new era of individual, regional and global growth”, said a Famous person from a Reputable institution, Somewhere in Europe, 2013. Wait. STOP. You realize this last one has not happened yet. Why? Because we have yet to unleash the potential of a completely open standards based IT environment in Europe. It would transform the world! Indeed!

The companies that are farthest along in their global initiatives tend to have a multiplicity of systems, few of which work seamlessly together, according to the briefing paper Leveraging the power of global innovation from February 2009, written by The Economist Intelligence Unit, and, full disclosure, sponsored by Oracle.

If we look at European governments in that regard the situation is dismal as well. While their policies might be good, no government has solved their interoperability challenges. The frameworks guiding them are seldom fully implemented, or seldom affect the huge portfolio of legacy systems that continue to be an obstacle to smooth operation. Interoperability of software is transformational if and only if it is not theoretical, but implemented, demonstrated, practiced. This is the next step, one which European countries, and particularly the European Institutions themselves now need to take.

The benefits of open standards are often spoken of in the abstract, that is, without quoting the $ impact and the € impact. Well, let's do that for a minute. But this time, with a structure. In fact, the benefits depend on who adopts them. Let me take an example, if the public sector adopts open standards, it makes public sector more effective, private sector more innovative, and citizens get more choice. A win-win for all, except the monopoly vendor.

How can open standards transform society? How long does it take? Where can I get that pill? You would think politicians were wondering. In fact, they should: standardization is a tool to grapple with globalization. No longer will global forces—flows of capital, technology, ideas, companies, products, and people seem uncontrollable. There is a self-organized and occasionally government sponsored self-governance going on. One in which agreements are reached without trading tomato quotas for languages (an anecdote I heard recently says the Portuguese agreed not to translate a key document into their language, saving time and money in exchange for larger tomato quotas. This supposedly happened sometime in the 90s). So, in that light, you could say that standardization sets you free, as SME, individual, government or vertical industry. How much for that? Can freedom even be monetized? Well, let me say that freedom for sure is worth more than € 1 Bn/year in Europe.

Even if we limit ourselves to more tangible effects, a recent British study estimates the annual contribution of standards to the economy of the United Kingdom at 3.6 thousand million Euro. In France, 13% of the growth in work productivity can be attributed to standards, according to figures quoted in the French Standardization Strategy 2006-2010. this was only figures for the value of formal standardization. In ICT, of course, fora/consortia are more important.

So, what is the fuzz about? Who in their right mind can possibly be against an increased focus on standards and against putting money and resources towards this honorable pursuit? Frankly, only monopolists with little to gain from competition, innovation, and consumer welfare. I would rest my case here. But I think the analysis deserves to be taken further. The situation in Europe is—and this is not easy to talk about—that there are established players in adjacent markets—such as telecommunications, electronics, hardware and embedded software—who are afraid that the convergence of technologies will mean they will have to play by software's rules. And they simply do not want to.

Furthermore, Europe has strong companies in vertical sectors who by 2009 for all practical purposes are software players as well. What oil or energy company does not have a software focus in their drive for efficiency and profits? All of them do. Some even have their own software units. But they seldom appear in the statistics, and their voice is never heard when talking about the software industry. They speak on behalf of what they see as their industry—a vertical.

Clearly, policy makers have so far been very sensitive to what their own industrial powerhouses have had to say. And so they should. The challenge is, that precisely following the path of protecting dinosaurs, even well performing dinosaurs, will not improve the software market. So, Europe has a choice. Take a chance on creating a new industry, knowing that it faces resistance among their own, or patch up the current situation, letting the existing logic prevail. Let me remind you, a logic where Europe is a software midget, a continent of lost opportunity, but still an enormous software market on the receiving end. To any market economist this is a quite striking phenomenon. The Americans would call it a no-brainer. The striking thing is that nobody has proven the telecoms right; there is no evidence to suggest they would go under if Europe played up its software hand. On the contrary, it might create a new markets for telecommunications players as well.

Actually, I will say one more thing: the fact that open standards makes business sense does not mean it is easy to create them. Standards take time, they mean intense negotiations, technical literacy, money to travel, and diplomatic skills and stamina. There should be a prize to people who develop standards, probably the most silent engine of growth of the information economy.

So what is the call to arms? It is easy. We need to adjust the current standardization and IPR regime in Europe to better facilitate innovation—and we need to do it before the opportunity is lost. The previous decade has shown that the software industry does not ask for permission to innovate. It does not wait for anyone. Innovation will happen wherever creative minds have the space to grow and where the markets are open for business. Europe could be that haven of openness. China will not be. The model in the US is open—as regards letting business concerns permeate standardization policy. But Europe could go further. A Europe transformed by software openness would potentially be the most competitive economy in the world. Maybe not by 2010, but more realistically by 2020. Rome was not built in one day. Building it took leadership, tough decisions, and sacrifice. Openness—by open standards and a sound standardization system entails very little sacrifice—and will make Europe more than a good place for a software technology museum.

Open standards are the best way to achieve interoperability. However, almost all software standardization happens outside the formal channels (ISO, CEN, BSI), and that this is a challenge that governments (and industry) must grapple with. While fora/consortia like W3C and OASIS are not (yet) formalized, they do have international reach and allow access and transparency.

How to create bridges between the formal and informal world? If governments signaled very clearly that they are open to good, open standards wherever they come from (as long as they fit your requirements as a customer...or as a custodian of the common good), that would give legitimacy to the right fora/consortia, and would de-legitimize other, less worthy ones. The net effect would be to simplify the system.

A draft report report of an industry expert group on a European software strategy, initiated by the European Commission's DG Information Society and Media, but with independent conclusions, called Software 2.0: rebooting Europe's software industry from April 2009, Version 3.0, calls the Internet the global network of the 21st century. If it is, that has profound consequences for the way we have to view the transformational potential of software. We are talking about a utility in the same vein as water, gas, electricity, and telephone access. The difference is—this particular utility determines life chances, and company and country balance sheets. And it is more difficult than putting the cables in the ground and switching it on. There is content, skills, and maintenance to think of from day one. Cloud computing, despite all of its possible merits, is currently forking the Internet into dozens of paths. This is not smart, certainly unless each path follows established open standards, and is a challenge that must be addressed in 2009, not later.

The transformational potential of software standards cannot remain invisible. The most silent engine of growth of the information economy must now make some noise. The only force that could enable a sustainable energy future of Europe by making other industries more efficient must now step out on its own. But it cannot, will not do it alone. Software is what it is—soft—until its effects are known. Hard facts. Policy drive. The power of such ideas must now be apparent. Whatever choice European policy makers make, 2009 will be remembered as a turning point, not only in the history of the Internet, the history of the financial markets, and the history of sustainability, but also in the history of Europe. There are two paths—towards the past and towards the future. Europe has always had elements of both, but 2009 may not afford her the choice anymore.

Some highlights include the value of publishing open government data using truly open standards, the benefit of good interoperability frameworks and management processes than ensure IT makes business sense, and making sense of the emerging paradigms of openness:

The desire for an open and transparent government is more than open interaction and participation, appropriate data as products of the government must be shared, discoverable, accessible, and able to be manipulated by those desiring the data. The data as well must be linked via subject, relevance, semantics, context, and more.