Standards are not only for the minority of businesses with thousands of employees. According to the World Bank, micro-, small- and medium-sized enterprises (MSMEs) make up over 90 % of all companies and account for up to 70 % of total employment. In developing countries, small businesses are key to economic growth and job creation. Inclusive GDP growth is particularly influenced by female-led companies.
MSMEs stand to benefit hugely from aligning with International Standards, which help cut costs, bolster credibility and confidence, and compete with larger businesses in the international market.
Businesses have much to gain. Not only does standardization reduce friction when collaborating with other companies, but it helps optimize practices, which can drive down costs and boost productivity – with a substantial impact on bottom lines. Each of ISO’s standards – though they may appear inscrutable at first glance – detail an optimal approach agreed upon by industry leaders around the world. For instance, working with ISO 50001 (energy management standard) can significantly cut operational costs, while working with ISO/IEC 27001 (information security management systems) helps protect a business against potentially ruinous security threats.
Veriscan Security, headquartered in Sweden, has been engaged with the ISO/IEC 27000 series for many years. Its CEO, Jan Branzell, also an editor for ISO/IEC 27003, commented: “As cybersecurity/information security is becoming a must for most organizations, the opportunity to work with an International Standard gives not only great internal structure but also serves as a basis for how to relate to other organizations. If these organizations also use the ISO/IEC 27000 series, it helps to create a better understanding as well as transparency on how they can build better security and trust together.”
Businesses have much to gain.
Aligning with International Standards ensures improved product and service quality, consistency and traceability. Because ISO standards are based on an iterative cycle of refinement, these standards continue to evolve to meet shifting needs, goals and expectations.
Standardization is, effectively, shorthand for trust. It allows consumers, investors and partners to put confidence in a business. This is particularly valuable when MSMEs are seeking to grow and compete – standards level the playing field, helping MSMEs compete with larger businesses in the international marketplace. Many international clients and organizations only work with businesses that use standards, including in areas such as environmental and workplace safety.
Businesses can also play an active role in shaping the future of their industry by participating in standardization processes – something too important to be left to only the largest companies which already wield considerable influence.
Or course, not all standards are relevant to MSMEs and smaller businesses must consider carefully which are most beneficial to engage with. Those focused on serving small, local customer bases may find few standards relevant to their work.
Working with standards can also demand a non-trivial allocation of time, expert personnel and money. According to a report by the German Standardization Panel, MSMEs tend to have financial constraints which prevent them from taking on a more active role in standards development. For the smallest businesses, managers are largely involved in day-to-day operations and it is unrealistic to expect them to commit to engaging with lengthy processes with intangible long-term benefits. This is a particular consideration in the Global South where businesses face additional burdens, such as relatively limited access to capital.
Engaging with International Standards is no minor decision for an MSME. Which standards – if any – are right for a company will vary on a case-by-case basis. However, using and taking part in standards development can, in the long run, put small businesses in a better position to compete in the global market. Guidance on MSME issues is contained in ISO/IEC Guide 17, which standards experts are encouraged to use.
ISO publishes a large and diverse set of standards, of which many are relevant to smaller organizations. For instance, ISO 45001 (occupational health and safety) and ISO 26000 (socially responsible businesses) are among the many ISO standards applicable to most MSMEs as well as large businesses.