So, much like with the previous episode, I have indeed written earlier about standardization, but as I said there in the context of innovation. Here we take a slightly different angle.

Once more, that older innovation-series article, TecC 19 demonstrates by way of fiction how the idea might have arisen. So taking that as our standard, let’s proceed!

We saw in the very first episode of this series, Episode 001, that money can be seen as a social contract, which essentially works only if people agree to give the same meaning, value, to a certain piece of paper or other artefact. Back there I also likened this aspect of money with language. With small differences, a standard is the same, isn’t it.

From the perspective of this series, standardization would have been the logical outgrowth of the foundational concepts we’ve previously touched upon, especially trade, Episode 010, and specialization, Episode 011. Let’s dig a bit deeper into what might be different or unique about this concept.

Intuition to Institution

In the earliest times of human interaction via practices such as trade, especially as the scale and scope of such exchange expanded beyond a small isolated community, the need to identify compatible agreed-upon ways of doing things across group divisions, or at least the benefit of doing so would have at some stage become apparent.

It would lower the barriers to the matters of exchange - in modern parlance, it would lower transaction costs - an economics term that I believe may be more widely used and understood beyond the field. (My intent in my writing is to use purely non-technical terms to describe these phenomena, but this one’s a glaring violation!)

But perhaps, the phenomenon of standardization deviates from the emergence of money, and especially language, somewhat sooner, in the involvement of a centralized body to oversee its use. This could be a standards body constituted of the different participants defining and policing the rules of engagement, comparable to the developments we traced in Episode 002 around the growth of the market, or it could be an even more overarching institution, the State, especially as the scale increases. Quite often, such bodies may be semi-autonomous arms of the state.

So one might say that even if at first emergent, practices at some stage undergo a certain formalization to become a standard.

The Standard-Bearers

In both this and the innovation (TecC) series, time and again there has arisen the question of the dichotomy between two systems of organizing anything: top-down vs bottom-up. Usually, as we’ve seen, the forces at play in each case have appeared somewhat in opposition to the forces in the other dynamic. However, standardization is one of those things that’s pertinent in not just top-down systems, where it’s easy to conceive of it, but also in bottom-up systems.

The classic telephone system was built as a top-down, central exchange-based standard. The Internet, a bottom-up system where any node can join the internetwork, is an expressly protocol-based design, where the protocol serves as the standard.

One may even argue that standards, by way of the just-mentioned protocols, are even more fundamental in bottom-up systems. And as I’ve said before, the best clues to this come from nature / biology. It can be argued that every aspect of planetary behavior, and every aspect of cellular behavior, operate on the basis of some kind of a ‘standard’, whether encoded in the laws of gravity or embedded in the codes of DNA.

But coming back to human affairs, standards are still pervasive. But we usually only realize this when something goes wrong: you’re at the nice cosy cafe and you try to stick your charger cable into the socket and it doesn’t fit!

So we may conclude that standardization is an unalloyed blessing in our lives. Or may we? Promulgating a standard, which means eliminating other ways of doing that particular thing, we may say, has its own opportunity cost (Episode 009).

In the design of complex systems, how do we know this approach to formulating a standard is in the long-run better than that? Only where there is some sort of competing standards can we have an opportunity to see which one’s working better? But then if we have multiple standards, are they even standards?

(And often there’s the spectre of the wrong standard prevailing, owing to custom or other factors - the QWERTY keyboard most of us use was expressly designed to slow down the typists banging away on those early typewriters that jammed easily!)

So yes, the fundamental question is - what is the right balance between standardization and variety / competition?

And then, the top-down/bottom-up dichotomy comes back. At what stage in the development of a new system do we formalize emergent practice as a standard? What is the right engagement of top-down versus bottom-up forces in this?

Article written by Ash Stuart

Images, video, voice narration and some footnotes generated by AI

Nothing in this presentation constitutes as advice - financial, investment or other

Further Reading & Reference

* TecC 19 - Footprints in the Dust - one of the greastest examples of standardization ever

* TecC 29 - Common Grounds: The Neat and Sound Worth of Grassroots Growth - the emergence of bottom-up standards

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