People like me have been banging on for years about the importance of standards to the performance of technology firms. Now, the Department of Trade & Industry (DTI) has published the results of academic work investigating, among other things, whether there is a link between standards and economic growth.

The results, available via the URL below, are very interesting.

The researchers analysed the effects of UK standards on GDP and labour productivity. They concluded that about 13 percent of the improvements in productivity and about 10 percent of GDP growth since World War II could be attributed to the beneficial effects of standards.

These benefits are pretty impressive, especially when one realises that the analysis only takes account of the effect of standards in the catalogue of the British Standards Institute (BSI). Many standards are not included in the catalogue, including those written by the Third Generation Partnership Project (3GPP), which handles standards for GSM and 3G; and the International Telecommunication Union (ITU).

Such a large chunk of our economy depends for its very existence on telecoms standards that I expect the numbers would be even more impressive if statistics for these additional specifications were included in the analysis.

The report also includes a study that concludes, in general, that standards both stifle innovation and improve the dissemination of knowledge.

I agree standards help to spread knowledge but the argument that they stifle innovation merits further consideration.

It is clear that if a successful standard exists in a particular industry, especially for IT or telecoms, then it is ludicrous to omit such a standard from mainstream products. In this way, innovation is sacrificed by vendors so they can reach a larger market.

On the other hand, innovation may be encouraged by the desire to make your own products more attractive than those of competitors. Vendors find they can often attract more custom by adding extra modes of operation - at the expense of compatibility with products that completely comply with the standards.

The products that extend the 802.11g wireless LAN (WLAN) specification in non-standard ways show how innovation can be built onto common standards.

But the effect of standards on innovation also depends on timing. If the participants in the standards-making process know that the technology is available but still in the laboratory, then innovation roars away in the rush to have one's own intellectual property included in the final spec.

There are many examples of this but the one that sticks in my mind was the development of the V.34 modem. The intention was to improve on the existing 14.4kbit/s maximum speed. After the flurry of research that resulted, the speed was more than doubled to 33.6kbit/s.

I welcome the latest report from the DTI and hope that it will convince companies that spending money on standards work is beneficial to them in both the short and long term.