The Economic Impact of Multiple Standards in Information Communications & Technology

Standards impact the economy in various ways. Moreover, intense competition exists between a variety of standards in this era of globalization. This paper quantifies the economic effect of multiple standards in the Information Communications and Technology (ICT) sector. Thus, it identifies and specifies which standard applies when economic gains exist. A model is developed which quantifies the magnitude of the economic effect of multiple standards as compared with a single standard or no standard. The model allows for both the micro- and macroeconomic gains from standardization to be quantified. Preliminary estimates indicate that at the macro level the multiple standards multiplier is approximately three. That is for every dollar invested, the gain is on the order of three dollars. Although not as robust. preliminary results indicated a similar economic gain at the micro level Overall, multiple standards dominate a single standard. This paper applies the model to IMT-2000, an example of multiple standards, to demonstrate this approach to quantify the standards economic effect.