Beyond Bugs and Drugs: the wider economic value of knowledge transfer and

cultural outreach of higher education institutions

The Reflective Conservatoire2 March 2009

Ursula Kelly

University of Strathclyde

•Motivation - why analyse economic value?

• Desire for economic value and impact measures for Knowledge Transfer from Higher Education Institutions (HEIs) is driven primarily by government:

-to assist in resource allocation

-to show evidence of return on investment

-to enable general evaluation of efficiency and effectiveness

-to give some indication of the economic and social

impact of Higher education

Beyond Bugs and Drugs

•Limitations of the ‘traditional’ focus of Knowledge Transfer: the readily available data encourages a focus on narrow aspects of HEI activity - e.g. patents and licensing, no. of ‘spin-off companies’ created

•leading to an over emphasis on commercial interactions or tangible products/inventions from Science & Engineering (the Bugs and Drugs agenda)

•Much wider impact of Universities ( social, cultural, environmental) but non-commercial work of universities ( eg public policy advice, community engagement, cultural outreach ) is overlooked ( Does under-priced mean undervalued?)

Towards the estimation of the economic value of the outputs of Scottish higher education institutions

•Initial pilot case study work 2004•Methodology development report – covering ALL HEI outputs•‘Next Steps’ pilot project (Kelly,McNicoll & Brooks 2008) applying the methodology to 3 areas of activity:

-cultural outreach-community outreach, -public policy advisory work

•Aimed to use real HEI data to illustrate how these areas of external engagement can be quantified and estimates of economic value made•Also developed conceptual framework further to identify potential PIs or ’metrics’ for some non-market areas of knowledge transfer

Terms, Definitions, Concepts

•Uses fundamental principles of applied economics and statistics•Uses core definitional sources (eg the European System of Accounts(ESA 95) , the SNA etc•Focussed on the Higher Education Institution ((HEI) not ‘Higher Education’ in general •We focus on the outputs of HEIs i.e what the HEIs actually produce

Key issues •The legal and economic status of UK higher education institutions and how this affects motivations and behaviour

•Complex relationship between UK HEIs and government and crucial importance of differentiating between higher education institutional outputs and government’s wider desired outcomes

•Current difficulty with the development of metrics for HEIs is a tendency to focus on how to measure outcomes •But only metrics based on outputs can give meaningful performance indicators for HEIs

•Understanding different types of ‘value’ ( financial, economic, market, social etc )

Outputs and Outcomes

Inputs:e.g. Staff time, technical support, wardrobe, space, heating, lighting etc

HEIActivitiesE.g. organisation of all resources to enable a performance of King Lear to be staged

HEIOutputse.g. series of five performances

Desired Outcomes: audience impacte.g. Audience enjoyment and entertainment; increased understanding of Shakespearean Tragedy

•Outputs are within the control of the HEI . Their outputs may contribute to outcomes …but outcomes also rely on other factors

Knowledge Transmission may be an output of an HEI

but Knowledge Transfer is an outcome , requiring the

active involvement of other parties and ability to absorb

the knowledge transmitted. Hence an HEI cannot be measured on its success in knowledge transfer as this is beyond its boundaries.

Other factors eg audience availability and

interest in attending

Other factors e.g. audience ability to understand material ;

audience taste and preferences

Estimating economic value of HEI outputs•Definition and Identification of outputs

– what an HEI actually produces ( e.g. outputs of Teaching, research, Consultancy/advisory work, Community engagement, cultural outreach)•Quantification of outputs

- Volume terms - how much of each output does the HEI produce - Value Terms - the market price of each output

Economic Value = Volume x unit price

•ALL HEI outputs are, in principle, quantifiable in natural volume units•But many outputs, such as cultural outreach, are non-market

Shadow-Pricing Non-market outputs•HEIs are not unique in producing non-market outputs•Recognised ways exist of imputing a value to non-market outputs ( and are used by the World Bank, UK Treasury Green book etc) •These include finding parallel markets ( ‘free market’ , equivalents), using ‘contingent valuation’- willingness to pay, willingness to accept - ‘hedonic pricing’, ‘Travel cost’ or ‘Time cost’.

Cultural Outreach SOME EXAMPLES

Outputs Measurable Possible Measures in natural Units

Possible ACCESSIBLE data Sources

Is this priced

?

Is this a free marke

t price?

Possible Free Market price comparison

Rate Known?

Gallery Exhibitions

Yes Number of Exhibs/Number

of attendees

Gallery Records no no Typical Cost of Entry to Formal Exhibition x

Number of Attendees

Variable £3 - £14

Workshops Yes Number of Workshops/Num

ber of Participants

Gallery Records sometimes

no Typical Cost of Entry to Formal Workshop X

Number of Attendees

£20 per day per person

Ramshorn Theatre

Performances

Yes No of perfs/number

attendees

Theatre Records yes don't know

Typical Cost of Entry to Formal Performance X Number of Attendees

Variable £7 - £20

Artistic Courses Provided

Yes number provided/duratio

n/ partcipants

Theatre Records yes no Commercial Equivalent Price x Number of

Participants

Will Vary by type of Course

Tours undertaken

Yes number /duration

Theatre Records yes don't know

Use Price as is or A Commercial Equivalent if

this exists

??

Chamber Choir

Yes No of perfs/number

attendees

Director of Music

Sometimes

don't know

At minimum Equal to payment of Musicians as

per the ISM (1) . Use price of commercial

performance x Number attending if higher

Varies depending on

Size and Composition of

band. Commercial

Performances vary by venue

Examples of Shadow-Pricing Non-Market HEI Outputs

• Parallel markets for:- Public Policy Advisory Work - Sports Centre Community Memberships

• Time-cost Method for:- Public Lectures & events open to the public- Performing Arts Events- Galleries/Museums/Exhibitions- Wider Community Use of Library Services

SOME EXAMPLES OF USING TIME COST FOR NON MARKET OUTPUTS

Type Description Number/opening length

Av Visitor

no

Estimated length of

visits

Total time spent Economic value

Temporary exhibition

James Joyce Exhibition

6 weeks,6 day week

30/day 45 mns on average

6x6x30x45 =48,600

hours spent

Hours spent x DfT hourly rate for

leisure time hourly rate ( £4.46 2002

prices) = £216,756

Public Lecture

Annual Astronomy

Guest Lecture

1 hour 200 attendee

s

200 HOURSSPENT

Hours spent x DfT hourly rate for

leisure time hourly rate ( £4.46 2002

prices) =£892

External Library visitors

External Library

memberships

FTE Number (from SCONUL)

400

Est. annual no. of

visits per FTE user

(from SCONU)

64

EG. 1.5hours 400x64x1.5=2880

hours spent

Hours spent x DfT hourly rate for

leisure time hourly rate ( £4.46 2002 prices) =£51,200

Public Policy Advisory Activity SOME EXAMPLES

Type DescriptionType of staff

(Senior academic/ Professor, Lecturer,

Senior Manager ( etc)

How Manystaff

Approx time involved

Paid? ‘Parallel market’ or Free Market

price comparison

Parliament Adviser

Advisor to Rural Affairs Committee

Senior Academic

1 15 days per year

Expenses only

Commercial consultancy rate for

senior expert consultant

Member of Scottish

Government Expert

Advisory Group

SG Statistics Expert Users

Advisory Group

Senior Academic

2 4 mtgs/yr x 3 hr mtgs

None Commercial consultancy rate for

senior expert consultant

Member of public policy

network group

Local NHS Trust

pharmacy

network

Lecturer 3 Varied estimate 4 hours/month

input per member of staff

None Commercial consultancy rate for

expert consultant

Board Member

Government Agency

Regional Development

Agency

Senior Manager 1 6 mtgs/yr x 3 hour nmtgs

Nominal/honorarium

Commercial consultancy rate for

senior expert consultant

Board Member

Government Agency

Local NHS Trust

Senior Academic

1 6 mtgs/yr x 3 hr mtgs

Nominal/ honorarium

Commercial consultancy rate for

senior expert consultant

Some final remarks… • It is possible to estimate the economic value of what HEIs do – including their contribution to society that goes beyond ‘commercialisation’

• Vital for all aspects of HEI work to be included in this, and for the language of knowledge transfer to move to include interaction with wider communities and not only business and industry

• But this cannot be done by immediately jumping to ‘outcomes’ or ‘impacts’ – it is essential to identify & quantify HEI outputs in the first instance

•Without knowledge of HEI outputs no meaningful measures of efficiency (outputs/inputs) can be derived and •the future development of measures of effectiveness (outcomes/outputs) will remain unattainableReport can be found at:

http://www.sfc.ac.uk/publications/pubs_other.htm

Examples of some valid potential metrics

•Public Policy Advisory Outputs- Number of hours of public policy advisory work delivered per

member of staff per annum•Public Lectures and General Events open to the public

- Estimated annual attendance numbers and number of attendee hours spent•Wider Community use of Library Services

- Number of external (i.e non-academic) users of HEI Libraries•Wider use of Institutional information resources and knowledge base

- Annual number of full article downloads from institutional repositories•Wider community use of Sports services

- Number of external (community) user memberships of HEI sports facilities and centres

Performance Type Description How many average length

average attendance

Any charge

EXAMPLE COMPLETION          

Chamber Choir Lunchtime recitals usually one recital per

month 45 minutes 20 - 25 people none

Theatre Group Luncthime Plays 6 per year 1 hour 20 people £3 at door

  Evening perfs        

2005/6 academic year perfs

Much ado about nothing 5 nights 2 hours 80 - 100 £10/5 conc

  Anna Karenina 10 nights 2 hours 15

mins 80 - 100 £10/5 conc

  AN OTHER ETC 8 nights 1 hour 45 mins 60 - 70 £15/7 concDESCRIPTION

NUMBER/OPENING LENGTH

Av NO OF VISITORS

Estimated length of stay

Any charge?

How much

?

Permanent Exhibitions

Hunter: Man, Medic & Collector  

100/day over all 3

2 hour stay on av (Over all

exhibs) None  

  The World of Dinosaurs  100/day over

all 3

2 hour stay on av (Over all

exhibs) None  

  AN OTHER Exhibition  100/day over

all 3

2 hour stay on av (Over all

exhibs) None  

Temporary/Special Exhibitions

2005/06 academic year James Joyce Exhibition 6 weeks 30/day 45 mins None NA

  AN OTHER Exhibition 6 weeks 50/day 30 minsDonation

asked DK

  AN OTHER Exhibition 3 weeks 10/day 1 hour None NA

Other eg Degree Shows            

Architecture Hons year 1 open 5 days 15/day 20 mins None NA