Measuring the Economic Impact of the British Library

15th October 2004, ippr/BBC seminar

Dr Caroline Pung, Head of Strategy & Planning, The British Library

Tabitha Elwes, Partner, Spectrum Strategy Consultants

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 Library’s unrivalled collections …’

Our reasons for wanting to measure our value like this were four-fold

Accountability

Validation

To inform strategy

A mandateFor 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

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

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

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 Library’s continued

existence?

How much would you be prepared to sell your reader’s 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…

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 Library’s 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

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

WTP WTA Invest-ment in access

Price elasticity

Altern-atives

Survey

Survey

Benchmarks

Survey

Spectrum/Indepen designed & tested the questionnaires; NOP carried out most of the survey work

200 users of the reading roomsWeighted by academic, business and personal 29 users of the Colindale site(1)

100 users of the remote document supply service50 commercial and 50 non-commercial users

2,030 members of the general publicRandomly selected across GB, based on the population distribution

Reading room users

Remote documentSupply & bibliographicservice users

Indirect value to widerUK 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

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)

Total Public funding(2)

Benefitcost ratio4.4:1

Total value relative to Grant-in-Aid

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 Library’s 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

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 Library’s role and contribution to stakeholdersTo 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 Library’s 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

Contact information

Greencoat HouseFrancis StreetLondon SW1P 1DH

T +44 (0)20 7630 1400F +44 (0)20 7630 7011

www.spectrumstrategy.com

tabitha.elwes@spectrumstrategy.comlaurie.patten@spectrumstrategy.com

Spectrum Strategy Consultants

Diespeker Wharf38 Graham StreetLondon N1 8JX

T +44 (0)20 7324 1800F +44 (0)20 7704 0872 www.indepen.co.uk

phillipamarks@indepen.co.uk

Indepen Consulting Ltd

Caroline Pung, British Librarycaroline.pung@bl.uk