Allowing product information for ever-shrinking information and communication technologies (ICT) to be displayed in electronic formats instead of small, hard to read physical labels would benefit consumers, manufactures, and regulators alike, according to a new report from the Information Technology and Innovation Foundation (ITIF). To support the adoption and use of e-labels, ITIF, a leading science and tech policy think tank, recommends a series of best practices for countries to follow in order to maximize the benefits of an e-labeling system.
“E-labeling makes it easier for manufactures to effectively display product information, for consumers understand it, and for regulators to ensure that the products comply with their requirements,” said Nigel Cory, trade policy analyst at ITIF and the report’s lead author. “As many manufacturers market their ICT products across multiple countries, a single product may require upwards of 20 different labels. These requirements ultimately affect product design and innovation, especially as products get smaller.”
However, the report notes that the benefits of e-labeling will be maximized if there are international standards in place. According to Cory, “There’s a risk that countries will make their regulations overly complicated, prescriptive, and substantially different from other countries, which would undermine the benefits of e-labeling. Aligning practices and working towards an international standard for e-labeling would support innovation and avoid potential technical barriers to trade.”
According to the report, e-labeling offers benefits such as improved access to information and utility for consumers, easier enforcement for regulators, reduced environmental impact, reduced impact on product innovation, an interactive platform, cost savings for manufacturers, and greater flexibility for smaller products.
However, to maximize these benefits, e-labeling will require countries to adhere to international best practices. The report presents a range of recommendations:
- Countries should allow e-labeling. Policymakers should view the development of e-labeling policy as an iterative process they can start by allowing it for products with an inbuilt screen, such as a smart phone, and then seek to expand the scope of products in subsequent revisions, such as to include products that don’t have a screen, but can connect to one. It can eventually extend to allowing e-labels, such as a QR (Quick Response) code, for ICT products that don’t have a screen. In this way, policymakers can move forward with basic e-labeling rules, even if they aren’t ready for advanced ones.
- Policymakers should engage industry stakeholders at each stage of the policy process. To ensure policies for e-labeling aren’t an unnecessary burden, private-sector experts should be involved in the design, drafting, implementation, and review process for e-labeling policies. Industry expertise can help ensure that the rules account for the technical details involved in presenting compliance information in an electronic format.
- Policymakers should aim for the “lightest touch” possible to ensure that requirements satisfy compliance requirements while minimizing or eliminating the impact on product cost and design.
- Policymakers should be flexible in how they initiate and pursue the changes needed to allow e-labeling.
“As ICT products such as smartphones and wearables become a ubiquitous part of daily life, regulatory compliance only becomes more important,” said Cory. “Overly prescriptive and divergent approaches to e-labeling will undermine the benefits – in terms of simplicity and efficiency - of e-labeling. Instead, countries should work to align their policies and move towards an international standard.”
Read summary. Read report.
