Measuring the Economic Impact of the British Library

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Measuring the Economic Impact of the British
Library
8th November 2004 SCONUL autumn conference Dr
Caroline Pung, Head of Strategy Planning,
British Library
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The British Library holds unsurpassed collections
and offers a wide range of services based on them
One of the five largest research libraries in the
world
15.75m annual acquisitions budget
250 years of collecting across time, space,
disciplines, languages, cultures, formats
materials
Accommodation for over 1200 readers at St
Pancras
150 million items (books, serials, newspapers,
microforms, philatelic, sound, manuscripts,
graphic electronic materials)
The largest document supply service in the world
Helping people advance knowledge to enrich lives
Serves researchers, business, libraries,
education and the general public
Legal deposit worth 10m per year and now
e-legal deposit
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What do we know about the value of the British
Library?

• We have an incredible range of information
  resources and we know that they are valuable
• And we have considerable staff expertise and we
  know that this is valuable
• But just how much value does the British Library
  add?
• How do we go about demonstrating our value, and
  communicating that value in a meaningful way?

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We wanted to move from outputs and anecdotes to
impact
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Our reasons for wanting to measure our value like
this were four-fold

• Confirm our own belief in the value the Library
  brings

Validation

• To government and to the taxpayer

Accountability

• For continued investment

A mandate

• To help us understand our impact more clearly
• To inform our thinking about our products and
  services

To inform strategy
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So we undertook a quantitative assessment of the
value generated by the Library to the UK economy

• We commissioned work to provide an independent
  assessment of the value of the British Library to
  the UK economy
• The study was undertaken by Spectrum Strategy
  Consultants, and Indepen Consulting
• The core of the work took place over the three
  month period, August to October 2003

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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

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We primarily adopted a leading stated preference
technique Contingent Valuation

• 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

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We derived estimates of the value of the Library
through five main types of question
Example questions under each of the five main
types
Investment in access
Willingness to pay
Price elasticity
How much would your usage change if the price
went up by 50?
Willingness to accept
Cost of alternatives
How much would you have to pay to use
alternatives to the Library, if such alternatives
could be found?
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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

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

Reading room users

• 100 users of the remote document supply service
• 50 commercial and 50 non-commercial users

Remote document Supply bibliographic service
users

• 2,030 members of the general public
• Randomly selected across GB, based on the
  population distribution

Indirect value to wider UK society

• 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
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The study showed that the British Library
generates value around 4.4 times the level of its
public funding
Total value relative to Grant-in-Aid

• 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

363m(1)
Benefit cost ratio 4.41
83m
Total
Public funding(2)
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
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A significant part of the value is indirect value
to the wider UK society

• 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

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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 motivate our staff regarding the importance of
  what they do
• 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

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Contact information
Caroline Pung, British Library caroline.pung_at_bl.uk
Spectrum Strategy Consultants
Indepen Consulting Ltd

• Greencoat House
• Francis Street
• London SW1P 1DH
• T 44 (0)20 7630 1400
• F 44 (0)20 7630 7011
• www.spectrumstrategy.com

Diespeker Wharf38 Graham StreetLondon N1 8JX T
44 (0)20 7324 1800F 44 (0)20 7704 0872
www.indepen.co.uk
tabitha.elwes_at_spectrumstrategy.com laurie.patten_at_s
pectrumstrategy.com
phillipamarks_at_indepen.co.uk