They’re essential to global connectivity.

Harald Alvestrand, “The role of the standards process in shaping the Internet,” IEEE, 08-09-2004, https://ieeexplore.ieee.org/abstract/document/1323284/authors#authors

First of all, of course, global connectivity requires standards (or a global monopoly—but that is considered undesirable by most actors). And the existence of a global infrastructure such as the Internet creates by its existence a marketplace for the service of connecting to it—something that could not exist without the standards.

Standards also protect (to some degree) the people who try to make their offerings compatible with those of others—they can engineer from a relatively stable standard specification base and not worry about gratuitous changes imposed by a major competitor in order to change the playing field (such as occurred with IBM-compatible mainframe manufacturers in the 1970s).

Standards can also be used in the “added value” scenario above—one bases one's product on standards, so that others can migrate to it, and then uses the standard's allowed variations or potential for extensions to create functions that the competitors are unable to copy—this is often called “embrace and extend” and is considered by some to be anathema to the standards process and something one should guard against.

Also, standards can be used as a lockout mechanism for new entrants; this is especially true if the standards are costly enough to implement, or are badly enough specified, that small new entrants cannot afford to implement them, or cannot figure out how to implement them interoperably.