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4th OpenAIRE Workshop - Legal and Sustainability Issues for Open Access Infrastructures ...

4th OpenAIRE Workshop - Legal and Sustainability Issues for Open Access Infrastructures
Nov. Vilnius
Preliminary Results of the OpenAIRE Sustainability Study - Phoebe Koundouri, Associate Professor - Athens University of Economic and Business

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    4th workshopopenaire 2_phoebekoundouri 4th workshopopenaire 2_phoebekoundouri Presentation Transcript

    • Sustainability Model and Business Plan for the Infrastructure and Organisation of OpenAIRE Prof. Dr. Phoebe Koundouri Director RESEES, AUEB. workshop: Legal and Sustainability issues for Open Access Infrastructures November 5, 2013, Vilnius, Lithuania RESEES: Research tEam on Socio-Economic & Environmental Sustainability
    • 2 AUEB-RESEES Team COORDINATOR: Phoebe Koundouri BA, MPhil, MSc, PhD (Cambrige) Associate Professor in Economic Theory and Policy Director RSEES, AUEB ECONOMISTS/ ECONOMETRICIANS: Anastasios Xepapadeas BA, MA, PhD (Manchester) Dean of School of Economics, Professor of Economic Theory and Policy, AUEB Nikolaos Kourogenis BSc, PhD (National Technical University of Athens) Research Associate, RESEES, AUEB Assistant Professor, Econometrics / Quantitative Finance. Department of Banking and Financial Management, University of Piraeus Osiel González Dávila BA, MRes, MSc, PhD (SOAS) Research Associate, RESEES, AUEB Subject Lecturer in Economics, SOAS, University of London Vassilis Skianins BA, MA, PhD (LSE) Research Associate, RESEES, AUEB ARCHIVE SPECIALIST: Oya Y. Rieger BSc, MPA, MSc, PhD (Cornell) Research Associate, RESEES, AUEB Digital Scholarship & Preservation Services arXiv Program Director, Cornell University Library. ACCOUNTANTS: Georgios A. Papanastasopoulos BA, MSc, PhD (Piraeus) Research Associate, RESEES, AUEB Lecturer in Accounting, Department of Business Administration , University of Piraeus John Sorros BA, PhD (Piraeus) Research Associate, RESEES, AUEB Associate Professor of Cost Accounting, Department of Business Administration, University of Piraeus. LAWYER/INSTITUTIONAL ANALYST: Lefteris Levantis BA, MSc, PhD candidate (University of Athens) Research Associate, RESEES, AUEB
    • 3 Concept and objectives • To provide OpenAIRE with an accurate estimation of the benefits and costs of its infrastructure. • To build a sustainable business model for the continuation of OpenAIRE beyond the life-time of its funding.
    • 4 Specific objectives 1. Stakeholder definition, stakeholders’ benefits: Identify, prioritise stakeholder groups and their needs; estimate monetary value of benefits they derive from OpenAIRE. 2. Cost accounting: how much does the current system setup and operation & maintenance cost? (technical & human cost of infrastructure components, operation/maintenance of the system, account keeping and financial analysis). 3. Cost benefit analysis: how do the system costs respond to the benefits of the identified stakeholders? 4. Business Model for OpenAIRE: identify revenue channels that can support the best and most viable way to spread the costs of OpenAIRE among beneficiaries of its services.
    • 5 DELIVERABLES. Deadline. • METHODOLOGY. July 2013 • STAKEHOLDERS ANALYSIS. November 2013 • COST ANALYSIS. November2013. • STAKEHOLDERS BENEFITS MONETARY VALUATION: CHOICE EXPERIMENT. January 2013 • COSTS BENEFIT ANALYSIS. March 2014 • BUSINESS PLAN. July 2014
    • 6 COST BENEFIT ANALYSIS OF OPENAIRE COSTS OF INFRASTRUCTURE Investments & Operation & Maintenance Cost Questionnaire BENEFITS TO STAKEHOLDERS - Which Stakeholders? Stakeholders Database Stakeholders Mapping & Prioritization Sample Selection Method - Which Services do they Value? Stakeholders Questionnaire - How much & in which way are they WTP? Choice Experiment Method REVENUES EU Grants & Institutional Contributions Revenues from providing access to articles to individual users who seek the article. Revenues from subscriptions (e.g. universities and private entities). Revenues from contributions – donations, without equity rights or voting rights. Revenues from discovery services (e.g. library service providers) Revenues from Research Funders (e.g. welcome trust, national funders) Revenues from Brokering Services (e.g. copy editing) WTPsh, services = Price sh, services Revenues from Providing Statistics Revenues from other Services, etc. Financial Sustainability: ( R - C ) + ( R - C ) +… + ( R - C ) FNPV = ( R - C ) + (1+ i ) (1+ i ) (1+ i ) 1 0 0 1 2 2 N-1 2 Pricing/Financing Scheme and Business Model N-1 N-1
    • 7 Work Progress reported on: • Project wiki; [User: PhoebeKoundouri & Pass: openairetender] • Bibliography on the Economics of Open Access publishing. • Project Methodology. • Stakeholders’ Database: Stakeholders database • Stakeholders Mapping & Prioritization: Stakeholder description • Stakeholders’ Questionnaire and e-survey: part 1 and part 2 • Cost Questionnaire and e-survey: https://www.surveymonkey.com/s/R37SB28 • Sampling Method for the implementation of e-surveys. • Implementation of e-surveys starts this week!
    • Task 1 Estimating OpenAIRE benefits
    • 9 Stakeholder Mapping: 4 phases 1. Identifying: listing relevant groups, organizations, and people. Create stakeholder database. (completed: see Stakeholders database). 2. Analysing: understanding stakeholder perspectives & interests (see Stakeholder description and the stakeholder questionnaire part 1 and part 2). 3. Visual Mapping: visualizing relationships to objectives and other stakeholders. 4. Prioritizing: ranking stakeholder relevance and identifying issues. [Use these weights in Sample Selection for questionnaires implementation)
    • 10 Criteria in stakeholders’ mapping • Contribution: Does the stakeholder have information, counsel, or expertise on the issue that could be helpful to the project? • Legitimacy: How legitimate is the stakeholder’s claim for engagement? • Willingness to engage: How willing is the stakeholder to engage? • Influence: How much influence does the stakeholder have? • Necessity of involvement: Is this someone who could derail or delegitimize the process if they were not included in the engagement?
    • SH 15 Patent, Trademark, LibrariesOther and University Organizations Offices SH 14 PrimarySH andOpen Access& Researchers and Students SH 10 University AdministrationLearned Instructors Groups SH 8 Repository ResearchEducation&Societies SHand5Secondary Providers andDesks 7SH31Service4& Repositories SH SH 2 SH OpenTransfer, Labs 11 12Research Communities 9 Scholarly Publishers Standards SH Technology Organizations National Centres Organizations 6 13 and Library Scientists Access Commercialization PreservationFunders Researcher Services High SH 1 SH 3 SH 10 SH 6 Expertise Willingness to Contribution Legitimacy Willingness to Engage Willingness to Willingness to Contribution Legitimacy Contribution Legitimacy Willingness to Contribution Legitimacy Engage Some High: They fund High: Directly High: Proactive Willingness Engage Contribution use High: Directly Legitimacy EngageThere to High: They High: Research Proactive Medium: May Medium: Medium: is Contribution Legitimacy the scientific Not affected directly Engage thatisthis groupsThere is that produce the (may) Medium:by and evidence Some High:Notthe They High:NotNot Directly High: There may Engage facilitate provide directly High: Directly groups SH are has found 4 that OA research. Somehow communities Low: They Low: Medium: affected Medium: thatthis Medium: are High: They High: OA Some Medium: They High: the High: Proactive outputs stored by in High: Directly OpenAIRE's alreadyNEU in consult the thethe Directly affected societies engaging facilitateinvolved affected by the evidencemay may distribution of facilitiesacademic OpenAIRE's already engaging directly to by OpenAIRE's community isfund be interested this involved facilitate They Somehow affected publishers Some communities evidence that publish in affected by promote Open Medium:the Medium:that this promote the facilitate Openthe High: Directly groups that are OpenAIRE of scientificandof the by OpenAIRE's OA interested in outputs affected by activity by distribution of communityOA produce academic OpenAIRE's the consulting ismay production production/distribu OpenAIRE's distribution by OpenAIRE's willing to engage be outputsNeutral communityfrom scientific Medium: is disciplinesoutputs affected promote Nation OpenAIRE's communities SH 5 engaging Accessby outputs activity at already to engage distribution of OA stored by outputs activity scientific and willing tooutputs consultscientific activity production/distribu OpenAIRE's outputs tion of scientific consulting preserving willing stored stored the Publishersengage its membersOAby disciplines fund OA Level by outputs outputs activity OpenAIRE by activity stored by scientific tion of OpenAIRE outputs stored stored scientific outputs stored by OpenAIRE Low:its members collaboration from Resistant SH SH OpenAIRE by stored by outputs stored OpenAIRE OpenAIRE publishers 14 15 OpenAIRE SH 4 RES SH 7 SH 2 SH 9 SH 8 SH 4OA SH 11 SH Necessity of 13 Influence Necessity of Involvement Necessity of Necessity of Influence Influence Influence fund Necessity of High: They High: This Involvement Necessity of Involvement Influence Some Involvement High: This They High: They They Medium: Medium: Some Involvement Influence the scientific provide the community may Medium: the may community funding High:NotSome This High:NotSome This Involvement provide the communities communities Low: This Low: OA Medium: Some High: This High: This Medium: directly facilitate directly High: OA outputs stored by High: This and for interested may produce andthe produce andthe community community facilitiesmay in to productionSome be interested fund societies may in be producingfund involved community involved communities community publishers Some publishers societies in Medium: Medium:in community community OpenAIREOA consult theNeutral OA interested of the facilitates the facilitates the produce and may consult theNeutral consultation in consulting from consulting from production/distribu scientific outputs facilitates the production/distribu be outputs OA facilitates the Medium: Medium: OA outputs communities facilitates outputs communities may the OA scientificfund OA the scientific outputs its membersOAby distribution of by facilitatesoutputs consultscientific and may outputs outputs stored outputs stored tion OA distribution tion OA preserving distribution of Publishers of OA Publishers of OA its members of OA distribution of OA fundof the fundof scientific distribution distribution stored Resistant productsmembers stored Resistant scientific outputs OpenAIRE's by OpenAIRE OpenAIRE outputs stored by productsmembers products outputs stored products Low:its Low:its from by from by products products activity OpenAIRE OpenAIRE stored by OpenAIRE OpenAIRE publishers publishers OpenAIRE SH 12 Low Low Willingness to engage High 11
    • Task 2 Estimating OpenAIRE costs
    • 13 Project Costing & Cost Questionnaire: Main Cost Categories: • Repository Annual Costs • Coordination and National Open Access Desk (NOAD) Annual Costs • Cost of Infrastructure and Services Distinguish between: • Investment costs: establishing the infrastructure required for the operation of OpenAIRE and any extraordinary maintenance or expansion costs. • Operating costs: mainly labor and maintenance costs. • A questionnaire was developed by accountants, which will be sent to relevant stakeholders identified in Task 1. • The questionnaire is available at: https://www.surveymonkey.com/s/R37SB28
    • 14 Sampling methodology The selection of the stakeholders is based on a stratified sampling strategy, using the Stakeholder database spreadsheet. Two main stakeholder clusters are identified: 1. Individuals: The sample is separated into groups with respect to the academic/research orientation of each individual. 2. Organizations: - organizations financially affected by an OA in a direct way - all remaining organizations, which are also affected by an OA initiative, but mainly on operational issues.
    • 15 Task 3 Cost Benefit Analysis (CBA)
    • 16 CBA is crucial for the creation of a sustainable financing model: 1. Allows determination of the value of the services provided by OpenAire activities to a number of users: individual researchers, libraries, research institutions, etc. …but also more general values stemming from the positive knowledge externality which is generated by the accumulated information in the repositories and which can be accessed freely. 2. Allows determination of the cost required for establishing and operating OpenAire. 3. By combining A and B, allows determination of the financing schemes that will ensure the long term sustainability of the project in financial terms and thus the continuous provision of quality services to the stakeholders.
    • 17 Sustainability concepts • Economic Performance: Design financing schemes that will result in a positive financial net present value (FNPV) or an acceptable financial internal rate of return (FIRR) for the time horizon in which OpenAire activities will take place. Determining a financing scheme according to this objective will ensure that the performance of the project is acceptable in the sense that the discounted financial costs of the project (outflows) are less than the discounted financial revenues (inflows). • Financial Sustainability: Design financing schemes that ensure that the project will not run out of cash during its operating life (enough cash to cover the projects cost without running the risk of incurring cash shortages).
    • 18 CBA: Costs • To design these financing schemes we need information on the structure and the cash flows of future costs and benefits. COSTS: Let C0, C1,…CN-1 denote the cash flow of costs for a time horizon of N years (t=0,1,…N-1) during which the OpenAire activity will be operational. These costs will include the cost categories characterized in the cost questionnaire, that is: • • • • Repository Annual Costs Coordination and National Open Access Desk (NOAD) Annual Costs Cost of Infrastructure and Services So Ct ≥ 0 is the sum of all the above costs incurred in year t.
    • 19 Benefits – Revenues • Total benefits obtained by the stakeholders’ Choice Experiment will reflect willingness to pay for the OpenAIRE services. • The willingness to pay estimates can then be mapped, at least partially, to a pricing scheme that will provide revenues from different sources, as described in the revenue part of the cost questionnaire.
    • 20 Estimation of the total economic benefits for identified stakeholders. • One theoretical approach of capturing and describing the benefits derived from the different services provided by the OpenAIRE platform is the Total Economic Value (TEV) framework. • It provides a systematic tool for considering the full range of impacts a service has on human welfare. • The way to derive TEV is from preferences of individuals. Preferences can be studied by stated preference methods and revealed preference methods.
    • 21
    • 22 Choice Experiment Method (CEM) • CEM is a state of the art, survey based, hypothetical method, to estimate economic values for virtually any public good and service, and can be used to estimate non-use as well as use values. • CE is grounded in Lancaster’s characteristics theory of value (1966), which states that any good/service can be described in terms of its attributes and the levels these attributes take, and consumers purchase the attributes rather than the good/service itself. • In a CE survey the respondent is presented with two or more alternatives of the non-marketed service with different levels of its attributes at different prices and asked to choose their most preferred alternative in each set of alternatives. • As long as one of the attributes of the good is price, it is possible to derive the WTP for changes in the levels of the service's other attributes. • CEM can estimate the TEV of a good or service and the value of its attributes as well as the value of more complex changes in several attributes.
    • 23 Example: Valuing the Environment Choice Experiment 1.1 Which of the following three wetland management scenarios do you favour? Option A and option B would have a cost to your household. No payment would be required for option C, but the conditions at the wetland would continue to deteriorate. Option A Option B Option C Biodiversity Improve Maintain current level Decline OWSA Increase Increase Decline Maintain current level Increase Decline Number of locals re-trained 150 75 0 One-off payment € 40 € 40 €0 Option B  Option C Education and Research Extraction (Please tick as appropriate) I would choose: Option A 
    • 24 Next steps for CE benefit valuation. 1. Design the instrument for data collection (survey) The results from stakeholders’ and cost questionnaires will be inputs in the construction of the Choice Experiment Questionnaire (service-specific benefits, attributes and price vehicle). 2. Implement the survey using sample selection method. 3. Econometric Analysis of the data. 4. Estimation of WTP per OpenAIRE service, per stakeholder group.
    • 25 For the CE we will use Stakeholders’ Analysis Questionnaire on: • Exactly what is the service or services that OpenAIRE will provide to potential interviewees stakeholders (see next slide). • What benefits (marketed and non marketed) a user will obtain from OpenAIRE • Who should pay for the service? How can the user pay (methods of payment)? How much will the user pay? • Keep in mind that different users may require different instruments.
    • 26 OpenAIRE current & potential services • Hosts a catalogue of over 6 million publications from over 400 data sources, 40.000 of them linked to EC/FP7 projects. • Measures research output and monitor funders’ open access policies. • Hosts research results from other European funders. • Informs scientists about the funding agencies requirements and how they can conform; • Enables EC, funders, member states to monitor the impact of their policies easing reporting from coordinators to funders; • Provides statistics for funders to measure research impact and resources to help researchers publish in open access; • Offers services for project coordinators to generate lists of publications for reporting purposes.
    • 27 • Let’s denote the cash flow of annual expected potential revenues from sources 2 and 3. Main Financial Resources 1. EU Grant and Contributions EU grant Institutional Contributions 2. Revenues from posting articles. • Grants and contributions are expected to cover investment (infrastructure) costs. If they are designated to cover operating costs they should be included in categories 2 and 3. Revenues from providing access to articles to individual users who seek the article. Revenues from subscriptions (e.g. universities and private entities). Revenues from contributions – donations, without equity rights or voting rights. 3. Possible Additional Financial Resources Revenues from discovery services (e.g. library service providers) Revenues from Research Funders (e.g. welcome trust, national funders) Revenues from Brokering Services (e.g. copy editing) Revenues from Providing Statistics Revenues from other Services
    • 28 Financial Performance • The financial net present value for the project (FNPV) will be: ( R -C ) + ( R - C ) +… + ( R - C ) FNPV = ( R - C ) + (1+ i ) (1+ i ) (1+ i ) 1 0 0 1 2 2 2 … N-1 N-1 N-1 • In this formulation investment costs are expected to occur in the first year of the project’s life and i is the discount rate that reflects the opportunity cost of capital used to finance the project’s investment costs.
    • 29 The opportunity cost of capital is defined as • “the expected return forgone by bypassing other potential investment activities for a given capital” (European Commission (EC) Working document No 4: Guidance on the methodology for carrying out Cost-Benefit Analysis). • The reference rate to use for the discounting of the financial analysis can be estimated in a number of ways. • The EC considers helpful the use of a benchmark value. For the programming period 2007-2013, the European Commission recommends that a 5% real rate is considered as the reference parameter for the opportunity cost of capital in the long term. Values differing from the 5% benchmark may, however, be justified on the grounds of the Member State’s specific macroeconomic conditions, the nature of the investor and the sector concerned
    • 30 The financial internal rate of return (FIRR) is defined as • the discount rate r such that the FNPV=0, or ( R - C ) + ( R - C ) +… + ( R - C ) = 0 FIRR is the discount rate r : ( R - C ) + (1+ r ) (1+ r ) (1+ r ) 1 0 0 1 2 2 2 … N-1 N-1 N-1
    • 31 Financial profitability and financing schemes • The project will be considered financially profitable if: FNPV > 0 or r > i Therefore given: • The operating cost cash flow, and the grants and contributions that will finance investment cost: C0, C1,…CN-1. • A discount rate i = 5% OpenAIRE will be financially viable if a revenue policy and a policy for attracting other financial resources generate a revenue cash flow R0, R1,…RN-1 such that: FNPV > 0 or r > i
    • 32 Financial sustainability and financing schemes • Financial sustainability means there is enough cash to cover the annual project’s costs without running the risk of incurring cash shortages. Given: a) The cash flow of operating costs, the time profile of any interest payments, loan reimbursements, or taxes paid which are related to the project. b) The sources of financing investment costs (EU grants or contributions). • The project will be financially sustainable if a revenue policy and a policy for attracting other financial resources generates a revenue cash flow R0, R1,…RN-1 such that the cumulated cash flow of the project is greater or equal to zero during the projects life time.
    • 33 Financial Sustainability (Example millions of Euros) • In this example the project of case 1 is financially sustainable while the project of case 2 is not because it runs out of cash in year 3. 1 EU grant etc. Operating Revenues Total Inflows Investment costs Operating costs Interest Loans Taxes Total Outflows Total Cash Flow Cumulated Cash Flow CASE 1 (YEARS) 2 3 4 5 3 4 3 3 4 -5 0 4 5 3 5 1 CASE 2 (YEARS) 2 3 3 1 3 2 1 -2 -2 -2 -0.1 -1 - 5 2 -0.1 -1 - -5 -2 -2 -2 -0.1 -1 - 0 -0.1 -1 - -5 -2 -3.1 -3.1 -5 -2 -3.1 -3.1 0 1 -0.1 0.9 0 1 -1.1 -2.1 0 1 0.9 1.8 0 0 -0.1 -2.2
    • 34 Task 4 Identify a sustainable and socio-economically acceptable Business plan for OpenAIRE Back to tasks list
    • 35 The pricing policy • Will determine the pricing rules for providing the following services Revenues from providing access to articles to individual users who seek the article. Revenues from subscriptions (e.g. universities and private entities). Revenues from contributions – donations, without equity rights or voting rights. Revenues from discovery services (e.g. library service providers) Revenues from Research Funders (e.g. welcome trust, national funders) Revenues from Brokering Services (e.g. copy editing) Revenues from Providing Statistics Revenues from other Services • at levels which are: (i) consistent with the willingness to pay estimates and (ii) sufficient to ensure the financial performance and the financial sustainability of the project. • Even if the desirable pricing scheme is not implementable and gaps appear either in the financial performance or the financial sustainability, the cost benefit analysis will provide directions for the extra financial assistance required in order to close these gaps.
    • 36 If economic analysis reveals that • the project generates additional benefits that cannot be quantified or realized through the pricing scheme, and this results in poor financial performance, or problems in terms of financial sustainability, the CBA will also suggest the extra financial assistance required in order to make the project financially sustainable. • Sensitivity analysis and Monte Carlo simulation will be applied in order to account for the risk/uncertainty associated with the costs estimates and the expected revenues from the pricing schemes.
    • 37 Business Models for Repository Services Source: Friend, F. (2011). Open access business models for research funders and universities. Knowledge Exchange • Institutionally-supported: appropriate for digitization, repository provision, preservation at some levels and overlay journal production. • Publicly-funded (e.g. from top-sliced money allocated by the JISC): appropriate for all advisory services for interim ‘catch-all’ repositories, metadata creation and enhancement, resource discovery, technology transfer and bridging services. • Community-supported: appropriate for subject- and media-specific repository provision, usage, assessment, and meta-analysis services and publishing services. • Subscription-supported: appropriate for access and authentication, preservation and resource discovery services. • Fully-commercial models (including advertising-supported, merchant and utility models): appropriate for digitization, repository provision and hosting, technical advisory services, metadata creation and enhancement, technology transfer, and all output-level services
    • 38 Contact details Prof. Dr. Phoebe Koundouri Email: pkoundouri@aueb.gr Webpage: http://www.aueb.gr/users/koundouri/resees/