Interoperability and standards work hand-in-hand to make today’s increasingly connected world possible. But without those two fundamental enablers, global trade would languish in chaos, disorganization and incompatibility. Without interoperability and standardization there would be many more obstacles to global trade.
Standards underpin the global communications network – they standardize the telephone numbering system, the technology to encode your voice, and the fibre optics to carry the data. Without internationally standardized communications networks, phoning a trading partner or a potential buyer in another country would be impossible.
Consider the Internet, that triumph of standardization. The astonishing rise of e-commerce would not have been possible without standardized electronic authentication over public networks.
World trade in a container
Containerization is another triumph of global interoperability, brought about by Standards. Although attempts at standardizing the dimensions of transportable containers date back to coal mining in the late 1700s, it was not until the global standardization of cargo containers in the 20th century that true interoperability of land, sea, and air transport became possible.
The breakthrough came when national container standards were adapted and adopted as International Standards, hundreds of incompatible container systems became obsolete, and containers that could be shipped and handled virtually anywhere became the norm. Today, it is estimated that over 20 million interoperable containers are used to move about 90% of non-bulk cargo worldwide.
Because of the standard container, loading,+ stacking, transporting and unloading of goods has become immeasurably more efficient. The system of containerization has also led to greatly reduced transport costs and a massive increase in international trade — thanks to Standards promoting interoperability.
Made here, shipped there – but will it fit?
More and more system components are built in different places, then shipped and finally installed elsewhere. Take a generator set that must fit into a power station built 50 years ago, or an assembly line that must integrate into an industrial communication system. If they are not standardized, chances are that sooner or later expensive trade-offs will have to be made.
Business, industry and government must be certain that the systems they purchase will work and communicate safely with other systems already in place, including information and in- and out-data feeds. They want assurance that standardized components will be available from different vendors for the projected life-time of the system. This provides bigger choice and better prices without the vendor lock-in that stifles competition.
Banking goes global through interoperability
With the dramatic growth in international financial traffic, bank customers expect their transactions to be fast, accurate and secure. This puts pressure on banks to improve interoperability. Electronic banking systems standardization has made it all possible. Several standards have clicked into place to connect banks worldwide and make life so much simpler for customers.
A key tool is the International Bank Account Number (IBAN) standard published in 1997, allowing cross-border identification and validity checks of bank accounts, and rapid and secure payments. Then, to reach optimal interoperability, banks created the Bank Identifier Code (BIC), specifying a unique worldwide identifier for each bank. Other system standards such as the Society for Worldwide Interbank Financial Telecommunications (SWIFT) and the Single Euro Payments Area (SEPA) have contributed to today’s high level of interoperability in financial transactions.