Economic Evaluation Model for International Standardization of Correlated Technologies

Standardization is becoming increasingly important, and therefore firms need to begin planning for standardization as early as the R&D stage. While the costs of implementing early standardization are high and have a low probability of success, the potential benefits can greatly exceed the initial costs if the project is successfully managed. In cases of correlated technologies, the degree of uncertainty for implementing standardization is greatly increased; however, correlated technologies can result in a larger benefit and lower cost when they are jointly developed with standardization in mind from the beginning. In this study, we propose an economic evaluation model to analyze both the benefits and costs of correlated technology development and standardization, utilizing the concept of cost-of-ownership model. We also apply the proposed model to a realistic case and perform sensitivity analysis to examine the effects of various parameter settings. This study is expected to contribute to a more accurate evaluation of the economic value of standardization.