Standardization tips markets toward the designated technical solution. The stakes are high not solely for firms vying for their technology to shape the standard. The “winner-takes-it-all” dynamic, inherent to positive feedback markets, significantly affects public policy, in particular, industrial policy design. Recently, standardization has taken center stage in the race for technological leadership and sovereignty. Major jurisdictions – the United States, China, and the  European Union –, are actively legislating to turbocharge standardization participation by industry actors.

In the traditional economics literature, the state’s role is confined to fixing market failures, arising from, amongst others, public goods, externalities, and information asymmetries. Contemporary literature, however, advocates for and sets forth instances where the state had a proactive role as an entrepreneurial agent. Drawing on evidence from flagship projects, such as the Apollo mission, it exposes the significance of the state in market creation, de-risking strategic industries, and providing ”patient capital”.

The state's role in stirring innovation and fostering technological solutions has attracted significant empirical scrutiny. This research has focused on the implications of demand-side instruments – public procurement, R&D grants, tax credits, patent box ­– on the rate of technical change. However, the impact of governments on standardization is still under-researched.

Standards are an “integrative” knowledge generation ecosystem. They discern the technical specifications that the standard-compliant product must embed. The knowledge essential to their implementation is codified in Standard Essential Patents, [self-declared by patent holders to the Standard Setting Organizations], scientific publications, and tacit knowledge generated through participation in standard-setting working groups/committees. As standards are ushered into existence through a lengthy negotiation process dominated by the private sector, state (or state-affiliated agencies) involvement is limited.

Yet, this approach appears to be coming to a head. Governments are recognizing the importance of standards as a marker of innovation. Additionally, standards are increasingly considered a vital tool for ensuring market integration, technological leadership, and sovereignty.

We aim to contribute to the evolving perspectives on state-market interactions by exploring the state-sponsored knowledge contribution to technical standardization, with emphasis on General Purpose Technologies and defense-related standardization.