Standards are the rules, guidelines, and definitions that describe repeatable ways of doing things. Standards are a crucial element in the EU's industrial strategy as Europe seeks to remain a shaper of global standards rather than a follower.

The European Round Table of Industrialists worked with A.T. Kearney to study the issue of developing and implementing standards. We found six recommendations for establishing standards in European industry:

• Establish performance targets to foster innovation. Standards spread collective knowledge, bringing together industry players in a working environment of sharing and collaboration. The use of standardized parts and business processes can reduce early investment costs and risks, and provide a platform from which industries can innovate.
• Consult with experts. Involving technical and industrial experts, even when standards are initiated by governments, can help build standards on solid foundations.
• Coordinate industry players. European standardization bodies can play a larger role in facilitating standard-setting along the value chain and across industries.
• Balance speed and consensus. Standards must be put in place quickly in the face of accelerating technological change and market competition, and they must be built on a foundation of consensus to broadly address the requirements of all players.
• Encourage a global approach. European companies that adopt and participate in setting global standards increase their market access to other countries.
• Encourage SME participation. Despite their importance to the European economy, few small and medium-sized enterprises (SMEs) are actively involved in setting standards.

Corporate compliance—or, more accurately, the risk of noncompliance—has become a major concern over the past decade, especially for global manufacturers with operations in many different countries and jurisdictions. When a practice commonly accepted in one country could be a serious criminal or civil offense in another, companies had better know about it.

Many firms understand that compliance can lead to competitive advantage and are making their suppliers commit to compliance standards that go far beyond those required by law.

To understand how companies reduce the risks of noncompliance, A.T. Kearney surveyed execu¬tives at leading manufacturers, conducting in-depth interviews with compliance executives at nearly 40 top companies worldwide. While most studies approach compliance from a legal perspective, we focus our attention on compliance management.

Five major findings emerged from our examination of compliance management in these areas:

• Most companies expect to expand their compliance systems.
• Lower management has a much less favorable perception of compliance systems than top management, indicating a strong need for administrative efforts to generate acceptance at all levels.
• Most companies do not have an independent compliance department that reports directly to the executive board.
• External resources are especially useful for setting up a compliance system.
• The most effective compliance systems integrate compliance and process management.

Emerging countries—particularly China and India—are changing the face of global markets, as their economies grow by as much as 10 percent per year. In the wake of this growth, these countries are producing some of the world's fastest-growing, most competitive companies. In the steel market, American and European companies were the undisputed market leaders 20 years ago. Today, steel giant ArcelorMittal—formed after India's Mittal Steel acquired Europe's Arcelor—is the world leader. In chemicals, players from emerging economies, including Sabic and Sinopec, are now among the biggest. The quality and knowledge gap between these companies and those from developed countries is shrinking rapidly as their home markets mature. These companies are no longer low-cost alternatives—they are fierce competitors in the export markets.

While many developed-market companies have succeeded in this changing world, a recent A.T. Kearney survey of executives at German industrial companies indicates that there is more that companies from the developed world can do. Many companies have gone "glocal"—meaning they make global products with some local adjustments— but few have the full range of local value chains in these vital emerging markets, resulting in lower market share and growth that lags their local competitors.

To succeed in these booming emerging markets, companies from developed countries must meet client needs—as well as, or better than, local players.

Higher, more volatile prices for iron ore mean that steel producers must be vigilant in managing the price-volume equation.