International Standards: Catalyst or Barrier for Innovative Entrepreneurship in Singapore?

This research, under the CCCS inaugural Research Grant 2018, considers whether and how international standards, specifically those of the International Organization for Standardization (ISO), can function as a catalyst or barrier to innovative entrepreneurship in Singapore. It also interrogates how private (and quasi-public regulation) affect competition and whether such barriers are anti-competitive. In essence, while innovation and entrepreneurship are necessary, they may not be sufficient in ensuring that a product or service is competitive and able to access export markets.

The growing movement towards and the expectation of businesses engaging in responsible behaviour has led to more measures, public and private, to regulate businesses. These measures need not necessarily be legislative in nature but could include private means of regulation such as industry standards put in place by an industry association or standards such as those of the ISO. To this end, this research examines two ISO standards: ISO 26000:2010 (Guidance on Social Responsibility) and ISO 37001:2016 (Anti-Bribery Management Systems)

The questions examined in this study are:

1. Does private regulation, such as through ISO standards, affect the exportability in goods and services when they have to comply with such standards in order to access markets?

2. Is private regulation a potential barrier to innovative entrepreneurship in Singapore?

3. Specifically, how could ISO 26000:2010 (Guidance on Social Responsibility) and ISO 37001:2016 (Anti-Bribery Management Systems) affect Singapore-based companies?

The ISO standards can and does affect Singapore businesses in export markets should be closely studied for two reasons. First, Singapore businesses are very much reliant on export markets for their goods and services. Second, international standards are developing in areas that are not necessarily “technical” in the usual sense such as in social responsibility and anti-corruption. These standards focus on the hows of a good or a service rather than the what (viz what can the product do, and does it meet the mandated specifications and regulations for use). The former attribute is not often given adequate attention when compared with the development of a product’s specifications and the delivery of a service. It would appear that international standards and private regulation are shifting towards what can be described as “next generation” specifications that often go beyond how well a good or service can perform, to the impact of producing a product or delivering a service. The push for environmental, social and governance (ESG) concerns by stakeholders is growing and companies ignore them to their peril. In addition, the Covid-19 pandemic has added to the imperative and urgency of corporate reinvention that will focus more on the next generation of specifications.

This paper is authored by Eugene K B Tan, Associate Professor of Law & Lee Kong Chian Fellow (2019-2020) at the Singapore Management University's School of Law.

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