I thank the committee for the opportunity to address it in respect of its consideration of the White Paper on ICT standardisation. I will first provide a brief outline of the importance of the ICT sector to the economy. Following on from this, I intend to give members some background information on the standardisation process as it operates in the EU, and the key aspects and goals of the White Paper.
Globally, the software and information industries are recognised as key drivers of the new knowledge economy and are among the fastest growing and most innovative industries in the world. Total global spending on ICT increased from $2.1 trillion in 2001 to $3.4 trillion in 2007. It is estimated that the growth of the industry will reach $4.4 trillion by 2011 at a compound annual growth rate of 7.7%.
The ICT sector is of vital strategic importance to the Irish economy. The current economic crisis has not altered this position. There are 110 foreign owned ICT companies in Ireland, including global leaders such as Microsoft, Intel, Dell, Google, IBM and others. There are also 660 indigenous software companies operating in a wide range of areas of activity. Figures from Forfás indicate that in 2008, total exports for agency-assisted companies in ICT services and manufacturing were €65 billion. Employment in these companies was 81,000.
Voluntary standards development has been one of the key building blocks of the Internal Market, with consensus standards underpinning the essential requirements of the European directives. The new approach introduced in the 1980s speeded up the EU legislative process by confining the legislative requirements to the bare minimum, with the technical details filled in by voluntary consensus standards. Many European standards are developed according to mandates from the European Commission so that European public policy guides the standards' work.
The flexible instrument of standards development is administered at European level by European standardisation organisations, known as ESOs, and facilitated at national level by national standards bodies, such as the National Standards Authority of Ireland, NSAI. The global level is administered by organisations such as the International Organisation for Standardisation, ISO, of which the NSAI is a member.
In developed countries such as Ireland, where technological improvement constitutes the main source of growth, standardisation contributes directly to pushing back technological frontiers, thereby benefiting the greatest number of people. Just like patents, voluntary standards are a way of codifying knowledge. Standards work in tandem with innovation and, because they enable companies to share innovation while developing good market practice, are also a means of disseminating it.
The development of European standards, called European norms or ENs, is open to delegates from all member states and the processes are open, transparent and inclusive. For example, there is provision for the representation of consumers, environmental interests and SMEs. In Ireland, the NSAI operates a number of consultative committees to provide input into European standards. Many Irish business people, including entrepreneurs from SMEs, and innovators take advantage of the fact that it is relatively easy in Ireland to gain direct access to European standards committees rather than, as might happen in the larger economies, working through a trade or industry association. European norms pass through different drafting stages with public consultation and national voting before final approval. These iterative processes help to ensure that the final standard is top quality and that products or services meeting the standard are fit for the purpose. I am accompanied by Mr. Enda McDonnell, director of standards at the NSAI, and he will be happy to answer any questions the committee may have on the standardisation process.
To turn to the White Paper, current ICT standards have been largely developed by industry fora and consortia outside Europe and without European public policy involvement. Consortia have been credited with producing fast, market-responsive documents, which have achieved widespread acceptance. However, these standards are not referenced EU standards. A referenced standard is a standard, the reference of which has been published in the official journal with an indication of the directive for which the presumption of conformity should apply. The European standardisation system has to adapt to the needs of fast-changing high-tech sectors. Examples given in the White Paper are e-health, accessibility, security, e-business, e-Government and transport.
Following a review of the current EU standardisation policy, the Commission brought forward the White Paper to determine the degree of consensus on “policy choices and specific measures that would help the European ICT standardisation policy to better respond to industry and societal needs”. I will comment briefly on the key aspects of the modernisation of ICT standards, as identified in the White Paper. The Commission suggests that four attributes should be applied to ICT standards. The first is openness. The White Paper suggests that the standard setting process be open to all interested parties and relevant stakeholders. This is important because if a standards body were able to preclude certain firms, it could be exposed to accusations of industry cartelisation. The second attribute is consensus. The standardisation process should be collaborative and consensus-based and should not favour any particular stakeholder.
The third attribute is balance. The standardisation process should be accessible at any stage of development and decision-making process to the relevant stakeholders. The participation of all interested categories of stakeholders should be sought with a view to achieving balance. The fourth attribute is transparency. The standardisation process should be accessible to all interested parties and all information concerning technical discussions and decision-making should be archived and identified. Information on new standardisation activities should be widely announced through suitable and accessible means.
These four attributes of openness, consensus, balance and transparency are the guiding principles for standardisation and are enshrined in the WTO criteria for international standardisation. In addition, the Commission recommends that the following attributes are reflected in the standards,namely, those of maintenance, availability, intellectual property rights, relevance, neutrality and stability, and quality. These attributes are supported by a large number of stakeholders, and we agree with their integration into future ICT standardisation policy in Europe.
Referencing standards in public procurement is identified in the White Paper as an important aid to public authorities in specifying requirements. Public authorities normally reference standards as a guide but allow tenderers to offer an equivalent solution which achieves the same end. However, when acquiring ICT services and products, additional requirements may prevail. Council Decision 87/95/EC lays down current standardisation policy in the field of ICT, recognises the specificities of the ICT domain and provides guidance for the public procurement of ICT systems. It emphasises the importance of interoperability and encourages reference to functional standards to achieve that objective. However, the decision is outdated since it focuses on products and not on services and applications as used today. The Commission suggests updating the public procurement provisions of Council decision so that public authorities can more easily acquire ICT services, applications and products that fulfil their specific requirements. The Department would agree with the proposal to update the decision, although a final position would await consideration of the terms of the Commission's amended proposal.
Standards may be used to translate research results into practical applications and this is recognised in the White Paper. The Commission proposes initiatives to link ICT standardisation and ICT research and development early in the research life cycle. The issue of translating research results into commercialisation opportunities is one of the most important aspects of research policy. A range of approaches are used to facilitate and encourage this. In Ireland, our research funding agencies such as Science Foundation Ireland and Enterprise Ireland include measures in their programmes to support this. Standardisation is another means of facilitating this translation. For example, open platforms are essential for user-driven innovation, to foster innovation uptake on a large scale within the EU.
The Government has devoted considerable resources to ICT research and development and encourages all Government agencies involved in research and development and standardisation to pursue initiatives to bring the fruits of research into the standardisation arena for the overall benefit of Irish researchers and businesses introducing innovative products and services.
The Commission, in this White Paper, suggests regularly consulting standardisation and research stakeholders to ensure that relevant European research initiatives contribute most effectively to ICT standardisation activities. The Department agrees fully with the intent of this recommendation but reserves Ireland's position on the actual mechanism for this consultation. Such a mechanism should contribute to communication without introducing more bureaucracy for researchers and standardisers.
In regard to intellectual property rights, as the White Paper states: "IPR has an important role in standardisation in order to respect proprietary rights covering technology solutions needed for interoperability." In general, European standardisation policy allows proprietary technologies to be incorporated into standards. The Commission suggests that ICT standards developing organisations should, subject to competition law and respecting the owner's intellectual property rights, implement clear transparent and balanced IPR policies. It is also suggested that consideration be given to a declaration of the most restrictive licensing terms, possibly including the maximum royalty rates before adoption of a standard as a potential route to providing more predictability and transparency.
The IPR situation is more complex for ICT standardisation than in other fields and we recognise that this is a sensitive area. Both IPRs and standardisation encourage innovation and facilitate the dissemination of technology, but they do so by different means. There is a need to balance the interests of the users of the standards with the rights of owners of intellectual property.
The referencing of standards against EU directives and policies is currently confined to standards established by the European standards organisations. As the White Paper states:
Fora and consortia have produced many relevant ICT standards, primarily in domains where the technical expertise clearly lies with specific fora and consortia and not with the ESOs. This is the case with standards covering internet protocols established by IETF and web accessibility guidelines produced by W3C. The market acceptance of the mentioned standards is undisputed.
The difficulty is how to bring those fora and consortia standards into the public domain, so that they can be referenced by the Commission in legislation and policies. The White Paper suggests that a procedure be found to enable the referencing of specific fora and consortia standards in legislation and policies, subject to a positive evaluation. We agree that this would be desirable. However, we would reserve our position until we see the detailed legislative proposals that would be necessary to introduce this idea into EU law.
The Commission, in this White Paper, proposes a discussion platform representing all the stakeholders concerned, to advise on matters concerned with ICT standardisation policy and its implementation. We are of the opinion that such a policy platform should be established if it clearly delivers benefits, which cannot be supplied by the existing bodies or committees in the area. We will reserve our position until more detailed proposals are put forward.
To summarise, the Department of Enterprise, Trade and Employment broadly welcomes the ideas outlined in this White Paper, while reserving its position on suggestions until more detailed proposals are put forward by the Commission for national scrutiny. There are many issues which will require discussion and in-depth consideration. While being aware of some concerns about opening the standardisation system to fora or consortia standards, the Department is of the view that such an opening up would be beneficial, not only for public procurement in the Internal Market, but to all stakeholders.
The proposed evaluation mechanism, with ESO involvement, could bring about a situation where the advantages of the EU standardisation system — inclusiveness, openness, transparency etc. — are enhanced by taking on board specific, successful standards developed by fora or consortia.
An expert panel for the review of the European standardisation system, known as Express, has been created by the European Commission to provide strategic recommendations on European standardisation with a horizon of 2020. The proposals on an ICT standardisation policy will be taken into account in the work of that panel, which is due to report by the end of 2009. The Commission envisages presenting any necessary policy and legislative proposals in 2010.
