Economic Value of Geospatial Information: The Albania Case Study March 16, 2016 Annual World Bank Land & Poverty Conference AANCHAL ANAND, LAND ADMINISTRATION SPECIALIST KATHRINE KELM, SENIOR LAND ADMINISTRATION SPECIALIST

Spot the difference between this…

…and this.

So what’s the difference? “Location is power!”

Broader Strategic Dialogue at the World Bank  Recognizing geospatial information will be key for delivering on SDGs  Developing a corporate strategy, SDI diagnostic, and business lines to respond to client needs Albania  New 5-year CPF of USD 1 billion investment with heavy focus on infrastructure  Integrated Land Management Project (ILMP) under preparation  Albania has recently set up a national spatial data agency – ASIG  Project component investing in the development of NSDI – need for a business case  First World Bank client country where such a business case is being developed Background

Part I: Framework

First things first… National Spatial Data Infrastructure (NSDI) has come to be seen as the technology, policies, criteria, standards and people necessary to promote geospatial data sharing throughout all levels of government, the private and non-profit sectors, and academia. It provides a base or structure of practices and relationships among data producers and users that facilitates data sharing and use. It is a set of actions and new ways of accessing, sharing and using geographic data that enables far more comprehensive analysis of data to help decision-makers choose the best course(s) of action. Much has been accomplished in recent years to further the implementation of the NSDI, but there is still much to be done to achieve the vision of current and accurate geographic data being readily available across the country. Defines Scope for Geospatial Information Analysis

National Spatial Data Infrastructure

Determining Value… Four major stakeholder groups:  Government: inter-agency data sharing, open data as a “public good”  Private Sector: geo-information related products and services  Non-Profit Sector: disaster risk management, project management  Research and Academia: value of geospatial information, technological improvements, best practices

Three Methods Multiple-Based Valuation Computable General Equilibrium (CGE) Specific Sectors Approach

Multiple-Based Valuation (1/2) Several studies help us benchmark value as percentage of GDP  UK (supply-side only without human capital): 0.02%  Australia: 0.15%  Denmark: 0.25%  New Zealand: 0.65%  Canada: 1.10% INSPIRE benefits estimated at 8.3x the investment Impact on specific sectors, overall economy, number of FTEs and firms etc Literature review findings

Multiple-Based Valuation (2/2) Based on these numbers, the value of geospatial information in Albania is expected to be between 0.54% of GDP Using the 2015 GDP estimate of USD 14.5 billion, the value of geospatial info in Albania is estimated at USD 78.4 million Taking into account purchasing power parity, this is as high as USD million Based on INSPIRE benefits, an investment of USD 1 million is likely to result in benefits of over USD 8 million

Computable General Equilibrium (1/2) “CGE models are economic models that use actual economic data to estimate how an economy might react to changes in policy, technology or other external factors” Provide a holistic view of the economy Comparative-static vs. dynamic models “Bulky” models that are challenging to build and operate for a solution

Computable General Equilibrium (2/2)

Part II: Interviews and Anecdotal Evidence

Specific Sectors Approach CGE models are resource-intensive and time-consuming Specific sectors approach  Tied in with Albanian Government priorities Good way to assess initial impact and find more synergies Can use sector specific information  E.g. in Canada change in industry output for mining 4.5% vs. agriculture 1.2% Cost-benefit vs. cost-effectiveness  Cash flow vs. productivity

Geospatial Information in Albania National level vs. municipal level Asset inventories Specific applications: water, property taxes Archaeological site: “cost of inaction”

Conclusions

No standard definitions or methodologies Stakeholder input is key – create a customized framework for the analysis Different approaches available depending on time and resources

So What is the Answer? Spoiler Alert: we don’t have one yet! Literature review points to a crude estimate (USD 78 m/USD 174 m) Economies of scale? Discount factors? Refining analysis and getting more input Methodology is more important than a specific number Important to triangulate findings

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