Reflections on business model innovation in standardization
Why decades of "transformation" left standards bodies financially more fragile than ever, and what they can do about it.
Thumbnail photo by Slidebean on Unsplash.
Business model innovation and digital transformation are occupying a large part of the discussions in standards bodies, with various projects around these issues currently being deployed.
At international level, ISO and IEC are pursuing their SMART Standards programme, which aims to deliver machine‑readable, interoperable standards and to explore new business models for their distribution.
In the United States, SAE International has established the Digital Standards Alliance (DSA) under SAE ITC to “accelerate the integration and use of digital standards across the entire product development lifecycle” and to coordinate the standards industry’s digital transformation around common use cases and services.
In Europe, CEN and CENELEC, two of the three European Standards Organizations recognised under Regulation 1025/20121, recently announced a new value proposition to “move away from a traditional, document‑led model and towards a dynamic model centred around added‑value digital standardization services” (see my previous article European standardization and the illusion of invisible power).
Initiatives described as “digital transformation” in standards bodies are not new. In the 1980s, ISO launched a project to publish its standards in SGML, already with machine‑readable ambitions for its standards, before being abandoned a few years later. In the mid‑1990s, most standards bodies successfully converted their standards from print to PDF, mostly through scanning, enabling the sale of standards via online stores. At the same time, offset printing was progressively replaced by digital, print‑on‑demand workflows, resulting in substantial gains in efficiency. Then came the early twenty‑first century and, somewhat paradoxically, almost a full decade of inertia. It took indeed until 2011 for ISO to relaunch an XML project that was dormant, and to reopen the conversation on structured, reusable standards content. Since then, announcements about “digital transformation” have multiplied, especially around SMART Standards, a major initiative launched in 2021 following the recommendations of ISO’s Technical Management Board Strategic Advisory Group on Machine Readable Standards (ISO/TMB SAG MRS).
If the promise of transformation is everywhere in the communications, its effects on how standards bodies create, deliver and capture value are much harder to see. Despite all this activity and projects, no genuinely “disruptive”, high‑value products or services have emerged at scale, and the underlying business models of standards bodies remain variations of the sale and licensing of their documents.
This article explores why, despite multiple waves of digital initiatives and substantial investments, standards bodies are still struggling to achieve genuine business model innovation, seem to go round in circles, and what they can realistically do about it. To summarize, the high‑level view is that the main obstacles are not technical but conceptual, cultural, structural and political. The current fascination with “digital standards” often hides the real questions, particularly on the fundamental dynamics of why standards are developed and bought, and how they are used, two aspects that remain widely misunderstood.
The argument will develop over ten parts:
Part 1 - The unbearable pressure: The current pressure on standards bodies and their funding, including calls for free access to standards, legal challenges around standards referenced in legislation, reduction in public subsidies, and geopolitical tensions.
Part 2 - The struggles: How standards bodies have responded so far, mostly through digital publishing projects, and why many initiatives failed to deliver the expected impact or return on investment.
Part 3 - The business model confusion: How the lack of clarity around the concept of “business model” leads to poor strategic choices.
Part 4 - History of standards sales: How standards sales emerged and became central to funding of several standards bodies, and why this configuration is path‑dependent rather than the product of deliberate design.
Part 5 - Market (mis)understanding: The economic nature of standards as products, and how misreading the demand has led to chronic misalignment between standards bodies and their markets.
Part 6 - The obsession with digital transformation: How the pressure to “digitalize everything” has turned digital transformation into a mantra, often reduced to tooling and formats.
Part 7 - When inspiration comes from the wrong benchmark: Why analogies with the music industry and autonomous driving are poor templates for standardization and costly strategic diversions.
Part 8 - Other barriers to business model innovation: Internal blockers that make transformation so difficult.
Part 9 - Where we are now: A system that is technologically more sophisticated but financially fragile and strategically hesitant.
Part 10 - Recommendations: Directions for standards bodies that really want to move towards business models and strategies that are both sustainable and compatible with their public‑interest missions.
So, let’s dive in!
