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SHORING UP STANDARDS AND CERTIFICATIONS IN THE SERVICES SECTOR

July 28th 2017 - Friday

 

Moving towards industry standards is increasingly becoming inevitable. For instance, in the world of information and communications technology, the standards have to ensure that computer products interact seamlessly. An example would be the easy access of information from mobile phones. Without a doubt, every industry - which include the health and telecommunications industries - are required to maintain a certain degree of standards. These industry standards are monitored and evaluated by structured organisations, typically global in nature, that are managed by pool of professionals and experts on that subject matter from the relevant industries.

 

Evolution Of Standards

Setting standards and branding, as well as accredited certifications for products, have long been in the market. One of the oldest standards body is the International Organization for Standardization (ISO), which originated in 1946. Delegates from 25 countries met at the Institute of Civil Engineers in London and decided to create a new international organisation ‘to facilitate the international coordination and unification of industrial standards’.

On Feb 23, 1947, the new organisation - ISO - officially began operations. Since then, they have published over 21641 International Standards covering almost all aspects of technology and manufacturing. Today, ISO has members from 163 countries and 781 technical bodies in charge of standards development.

After ISO’s initiatives, many standards have emerged over the years, both at national and global levels, commencing with the manufacturing sector. One such popular standards initiative in the manufacturing sector was introduced by the Institute of Electrical and Electronics Engineers’ Standards Association (IEEE-SA).

IEEE-SA is one of the world’s leading standards developing organisations (SDOs) and they closely scrutinise industry standards pertaining to electrical and electronics products, subsequently changing their name to the IEEE Industry Applications Society in 1971.

This body is involved in the advancement of the theory and practice of electrical and electronic engineering in the development, design, manufacturing,and application of electrical systems, apparatus, devices, and controls to the processes and equipment of industry and commerce, as well as the promotion of safe, reliable, and economic installations.

Within its broad range of standards, the IEEE 802.11, often referred to as “Wi-Fi®”, is a perfect example of a well-known, market-driven standard in action. It was originally conceived to interconnect wireless cash registers, but has evolved over the years, benefitting society. In other words, standards are evolutionarily, working in tandem with technology upheavals and the changing preferences of consumers.  

 

Emergence Of Standards In Service Sectors        

In a similar vein, standards and certifications also have begun to emerge in the provision of services or intangible items. One of earliest documents towards this is the ISO 9001:2000. This is a workbook for service organisations designed to make it easier for service providers to achieve the benefits, such as increased efficiency and effectiveness of services industry.

The cross-border trade in services includes business process outsourcing and offshoring, which offers opportunities for developing countries in particular to increase their market share by encouraging competitiveness through the implementation of a quality management system based on ISO 9001:2000.

However, the services industry is quite diverse, ranging from areas such as utilities, IT, finance, tourism, healthcare, education, and retail. Even the manufacturing sector has a significant services component – comprising of training, transit, logistics, and customer satisfaction.

Each of these areas has different priorities, and it can be a challenge to identify those needs, where they overlap, and where they diverge. In the case of the manufacturing sector, standards and certifications for the services sector have also emerged at the national level, namely American National Standards Institute (ANSI), DIN (German Institute for Standardisation), AFNOR (French National Organization for Standardisation) and SPRING Singapore.

 

Growing The Service Sector On Home Soil         

In Malaysia, such standards for the services sector has yet to be made explicit institutionally like SIRIM (formerly known as the Scientific and Industrial Research Institute of Malaysia) for the manufacturing sector. Indeed, establishment of such institutions warrant due attention at this juncture, though long overdue especially when the government has a long term vision of ushering in the services economy.

By the turn of the first quarter of the century, the government aspires for the services sector to achieve 70% of its Gross Domestic Product (GDP). Towards this aspiration as depicted in the New Economic Model, the government has identified a number of new areas of growth such as education and training, healthcare travel (health tourism), high value tourism activities such as eco-tourism, green technology which include renewable energy and energy conservation/ efficiency, financial services (integrated Islamic finance), creative industries, ICT such as telecommunication and mobile services, waste management (e.g. recycling), R&D and design activities, and regional operations such as Principal Hub (PH). As envisaged in the Eleventh Malaysia Plan (2016-2020), the services sector was poised to to be the primary driver of economic growth through enhancing the competitiveness and resilience of business services sector and promoting the migration towards high value and knowledge-intensive services activities, as well as being supported by strong household spending and stable labour market conditions.

Specific targets were set in the Services Sector Blueprint, launched in 2015. As outlined by the Malaysian Industries Development Authority (MIDA), the services sector is expected to grow at 6.8% per annum and contribute 56.5% to the GDP in 2020, and provide 9.3 million jobs; increasing value added per worker from RM55,574 in 2013 to RM74,101 in 2020; raising the contribution of knowledge driven subsectors to the GDP from 36% in 2014 to 40% in 2020; and increasing the share of services exports value added from 12% in 2010 to 19% in 2020.

In achieving these targets, the Blueprint aims to unlock the potential of the sector and transform it into becoming more knowledge-intensive and innovation-led industries which would include halal ecotourism and information and communication technology (ICT). Given the foregoing scenario on the prospects of services economy it is imperative for the government to formulate strategies in shoring up the standards, branding and accredited certifications for the Malaysian economy by leveraging the international standards that are currently available.

 

By: Ramachandran Ramasamy is the Executive Director, Blue Tree Associates Sdn Bhd.

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