How standards create freedom

What must we agree on?

Imagine arriving at a railway station where every train uses a different track width. Each operator has exquisite trains, impressive timetables and ambitious ideas about transport. Yet a journey across the country requires unloading passengers and goods whenever one operator’s tracks end and another’s begin. Everyone can innovate within their network, but the networks cannot cooperate without expensive translation.

Commerce has variations of that problem. Two organisations may each have capable software but find that information, documents, qualifications and processes cannot move between them without a bespoke connection. That connection can be valuable work. But when the same translation must be built thousands of times, it becomes an unnecessary toll on participation.

A shared standard settles some questions in advance. It does not dictate what every company must sell, how it must price its services or what its software interface must look like. Instead, it establishes terms on which independently designed systems can understand and work with one another.

Three precedents

The internet did not require every organisation to purchase the same computer. Shared networking protocols made different networks capable of exchanging information. The web did not require every publisher to use the same publishing company. Shared conventions allowed pages and browsers built by different organisations to work together. The shipping container did not eliminate competition among shipping lines or ports. Its shared dimensions and handling arrangements reduced the need to redesign every transfer.

Each example has complications and a history of imperfect openness. None means that standards eliminate business power or make services free. The common lesson is narrower and stronger: when a shared foundation is broadly usable, competition can move to the services built on top.

Standard, implementation, platform

A standard states common rules or vocabulary. An implementation is working software or a process that follows those rules. A platform is a service or environment that brings functions and participants together. A platform can implement an open standard and compete successfully. In fact, the manifesto explicitly welcomes thousands of platforms flourishing.

The problem starts when participating in the market depends on a proprietary interface or a gatekeeper’s permission, with no workable means to carry data, trust or relationships elsewhere. A genuinely open standard should make it feasible to develop a competing implementation without needing privileged commercial access. That requires good documentation and workable testing as well as an available specification.

A procurement example

Suppose a supplier holds a set of verified facts about its business. One buyer requests those facts in spreadsheet columns; another requires them in a portal; a third asks for a proprietary questionnaire. All three are trying to answer a legitimate question: Can we safely trade with this organisation? The friction is not due to that question being unimportant. It comes from having no commonly understood way to describe and exchange the answer.

A shared vocabulary could allow systems to ask for relevant information and interpret the response without rebuilding the entire relationship. Buyers could still set their own qualification rules and suppliers could still decide what they disclose. The standard would not force a buyer to accept a supplier, nor would it make confidential information public.

An important distinction: openness is practical

Publishing documentation is a start, not the finish. A standard’s practical openness depends on accessible licensing, clear change control, independent implementations, usable conformance evidence and safeguards against one participant acquiring special privileges. These are governance and engineering challenges, not just design challenges.

The Free Commerce proposition is therefore not ‘one system for everybody’. It is shared foundations, many independent systems.

Try it: find the common foundation

Pick an industry with several competing providers – logistics, banking, recruitment or procurement. Write down: (1) something they all need to communicate, (2) something each should remain free to do differently and (3) one unfair dependency that a shared standard might reduce. You are identifying the boundary between cooperation and competition.

Key terms

• Interoperability: Different systems can exchange and use information with an agreed meaning.
• Open standard: A publicly specified common foundation designed for fair implementation and participation.
• Implementation: A product or process putting the rules into operation.
• Lock-in: Friction or dependency that makes changing providers unnecessarily difficult.

Remember

Standards are not opponents of markets. Properly designed, they can make markets more competitive by allowing participants to cooperate on the foundations while competing on the value they create.