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Measuring the Economic Impact of the British Library 15 th October 2004, ippr/BBC seminar Dr Caroline Pung, Head of Strategy & Planning, The British Library.

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Presentation on theme: "Measuring the Economic Impact of the British Library 15 th October 2004, ippr/BBC seminar Dr Caroline Pung, Head of Strategy & Planning, The British Library."— Presentation transcript:

1 Measuring the Economic Impact of the British Library 15 th October 2004, ippr/BBC seminar Dr Caroline Pung, Head of Strategy & Planning, The British Library Tabitha Elwes, Partner, Spectrum Strategy Consultants

2 We wanted to obtain a composite measure to reflect the total value of the British Library to the UK economy …TO IMPACT How much value, in monetary terms, does the Library add to the nation as a whole? What benefit does the Library bring relative to the funding it receives? What would be the economic impact if the Library ceased to exist? FROM OUTPUTS … 8,000,000 items supplied remotely & consulted in Reading Rooms 382,000 visits to our exhibitions FROM ANECDOTES … Contemporary publishing depends upon the research and scholarship of the past. Both publishers and authors relay on the British Librarys unrivalled collections …

3 Our reasons for wanting to measure our value like this were four-fold Accountability Validation To inform strategy A mandate For continued investment To government and to the taxpayer Confirm our own belief in the value the Library brings To help us understand our impact more clearly To inform our thinking about our products and services

4 There were two main valuation methods available – we used the consumer surplus approach Consumer surplus approach measures economic impact through the value individuals gain over and above the price they pay Macro-economic impact analysis measures economic impact through macro-economic variables such as expenditure, GDP contribution and employment The macro-economic approach is not well suited to un-priced goods such as the BL where value is not adequately reflected in macro-economic impacts Therefore, this study selected the consumer surplus approach

5 Involves the construction of a hypothetical market within a questionnaire Interviewees asked a range of questions and asked to provide a monetary estimate of the value of the Library to them directly measures consumer surplus captures use value, option value and existence value Cross checked against values derived from investment in access and cost of alternatives We primarily adopted a leading stated preference technique: Contingent Valuation

6 We derived estimates of the value of the Library through five main types of question How much would you be willing to pay for the Librarys continued existence? How much would you be prepared to sell your readers pass for, assuming you could not then replace it? How much do you invest, in terms of time and money, to make use of the Library? How much would you have to pay to use alternatives to the Library, if such alternatives could be found? How much would your usage change if the price went up by 50%? Willingness to pay Willingness to accept Investment in access Price elasticity Cost of alternatives Example questions under each of the five main types…

7 Prioritisation was important to focus efforts on some key areas No precedents for a holistic impact assessment of a National Library – partial values for New Zealand national library and some work on public libraries Not all the Librarys services could be included. We focused on Reading room access to collections Remote document supply and bibliographic services Public exhibitions and events Indirect value of existence and option to use the Library to wider society We did not include Emerging products and services Smaller established products and services Overseas users

8 The different questioning techniques were applied to derive values for these different areas Approach Reading Room users Remote Document Supply and bibliographic service users Public exhibition visitors Indirect value to wider UK society WTPWTAInvest- ment in access Price elasticity Altern -atives Survey Benchmarks Survey

9 Spectrum/Indepen designed & tested the questionnaires; NOP carried out most of the survey work 200 users of the reading rooms Weighted by academic, business and personal 29 users of the Colindale site (1) 100 users of the remote document supply service 50 commercial and 50 non-commercial users 2,030 members of the general public Randomly selected across GB, based on the population distribution Reading room users Remote document Supply & bibliographic service users Indirect value to wider UK society Note:(1) Conducted by Spectrum A less resource intensive method (benchmark study) was employed for exhibitions as it was anticipated that the value would not be as great as in the other 3 areas Public exhibition visitors

10 The study showed that the British Library generates value around 4.4 times the level of its public funding Note(1)Net of BL revenues. (2) In 02/03 Library received £7m of donations/investments and £27m from its commercial services in addition to GIA For every £1 of public funding the British Library receives each year, ~£4.40 is generated for the economy If public funding of the Library were to end, the UK would lose £280m per annum Excludes value generated for non- UK registered users which is considerable £83m £363m (1) TotalPublic funding (2) Benefit cost ratio 4.4:1 Total value relative to Grant-in-Aid

11 Of the £363m of value generated by the Library each year: £59m comes directly from users of the services we tested £304m comes from wider society In other words, a key part of the British Librarys value: Reflects existence and option to use value for wider UK society (all regions of the UK) Reflects a wide range of positive impacts that the Library generates for society and that society recognises A significant part of the value is indirect value to the wider UK society

12 The Library is using this study in several ways The study represents the first comprehensive evaluation of the benefits of the British Library to the UK economy. To the best of our knowledge, the study represents the first time that the Contingent Valuation methodology has been used to derive a figure for the overall value of any national or major research library We are using the results To communicate the Librarys role and contribution to stakeholders To motivate all Library staff regarding the importance of what the BL does To prompt ourselves to focus in our strategy on adding value (economic, cultural, social) We expect to conduct further studies of the Librarys impact in the future to build on this work, e.g. to enable us to develop an understanding of the value of emerging products and services

13 Contact information Greencoat House Francis Street London SW1P 1DH T +44 (0)20 7630 1400 F +44 (0)20 7630 7011 Spectrum Strategy Consultants Diespeker Wharf 38 Graham Street London N1 8JX T +44 (0)20 7324 1800 F +44 (0)20 7704 0872 Indepen Consulting Ltd Caroline Pung, British Library

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