Houghton (Brussels 22 June 2009)

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Costs and benefits - Findings from the reports on the Economic Benefits of Open Access in
Denmark, The Netherlands and UK
Speaker: Professor John Houghton (Victoria University, Australia)

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Houghton (Brussels 22 June 2009)

  1. 1. Open Access: what are the benefits? A comparison of the UK, Netherlands & Denmark John Houghton Centre for Strategic Economic Studies Victoria University, Australia [email_address] edu .au
  2. 2. Implications of alternative publishing models (UK, Netherlands & Denmark) <ul><li>UK JISC-funded study of the “Economic Implications of Alternative Scholarly Publishing Models”. </li></ul><ul><li>Subsequently applied the same approach to explore the costs and benefits of alternative publishing models in the Netherlands and Denmark. </li></ul><ul><li>We focus on three publishing models: subscription publishing; OA publishing using author-pays; and OA self-archiving. </li></ul><ul><li>To ensure that comparisons can be made, we explore two self-archiving models: (i) ‘Green OA’ self-archiving in parallel with subscription publishing; and (ii) the ‘overlay journals’ model of self-archiving with overlay production and peer review services. </li></ul>Centre for Strategic Economic Studies
  3. 3. Phase I: Scholarly communication process http://www. cfses .com/ EI - ASPM / SCLCM -V7/ Centre for Strategic Economic Studies
  4. 4. Activities and data items (UK, Netherlands & Denmark) <ul><li>W e created a series of spreadsheets containing each of the activities identified in the process model , then sought to populate the model with data. </li></ul><ul><ul><li>The research funding activities worksheet has more than 350 items ; </li></ul></ul><ul><ul><li>The perform research work sheet has around 565 items ; </li></ul></ul><ul><ul><li>The publisher activities work sheet has around 670 items ; and </li></ul></ul><ul><ul><li>The dissemination activities worksheet, mainly research library activities , has around 730 items . </li></ul></ul><ul><li>So there are more than 2,300 activity and data items that are costed and another 550 basic data items ( e.g. the number of researcher s and publications , R&D spending, etc.) . </li></ul>Centre for Strategic Economic Studies
  5. 5. Phase II: Quantifying costs and benefits (UK, Netherlands & Denmark) <ul><li>We adopted a staged approach to Phase II that tackles it from the bottom-up (as case studies and scenarios) and the top-down (in a simple economic model). </li></ul><ul><ul><li>We explore the costs of the process activities and system costs, to see cost differences and direct savings. </li></ul></ul><ul><ul><li>We present cases and scenarios exploring the cost savings resulting from the alternative publishing models throughout the system, to see the indirect cost differences and savings. </li></ul></ul><ul><ul><li>Then w e model the impact of changes in accessibility and efficiency on returns to R&D . </li></ul></ul>Centre for Strategic Economic Studies
  6. 6. National scholarly publishing (Approximate annual costs in Euro, 2007) Centre for Strategic Economic Studies EI-ASPM Model: Author’s analysis Note: Approximate activity cost estimates as annual costs at 2007 prices and levels of activity.
  7. 7. Scholarly publishing models (Approximate annual costs in Euro, 2007) Centre for Strategic Economic Studies EI-ASPM Model: Author’s analysis Note: Approximate activity cost estimates as annual costs at 2007 prices and levels of activity.
  8. 8. Publisher costs by mode and model (Euro per article) Centre for Strategic Economic Studies
  9. 9. Estimated system costs per article (Euro per article) Centre for Strategic Economic Studies
  10. 10. OA publishing costs and savings (“Author-pays” in Euro millions, 2007) Centre for Strategic Economic Studies
  11. 11. OA self-archiving costs and savings (“Green OA” in Euro millions, 2007) Centre for Strategic Economic Studies
  12. 12. OA self-archiving costs and savings (“Overlay Journals” in Euro millions, 2007) Centre for Strategic Economic Studies
  13. 13. An approach to overall impacts (A modified Solow-Swan model) <ul><li>There is a vast literature on returns to R&D, which while varied shows that social returns to publicly funded R&D are high – typically 20% to 60% a year. </li></ul><ul><li>The standard approach assumes that all R&D generates useful knowledge (efficiency) and all knowledge is equally accessible (accessibility), which is unrealistic. </li></ul><ul><li>W e introduce ‘accessibility’ and ‘ efficiency ’ into the standard model as negative or friction variables, and look at the impact of reducing the friction by increasing access and efficiency . </li></ul>Centre for Strategic Economic Studies
  14. 14. Estimating potential impacts (Publicly funded research) <ul><li>For public sector research, with a 20% return to R&D, a 5% increase in accessibility and efficiency would be worth EUR 78 million a year in the Netherlands, EUR 40 million a year in Denmark and EUR 250 million a year in the UK; and </li></ul><ul><li>For higher education R&D, a 5% increase in accessibility and efficiency would be worth EUR 53 million a year in the Netherlands, EUR 33 million a year in Denmark and EUR 180 million a year in the UK. </li></ul><ul><li>These are recurring annual gains from one year’s R&D expenditure. </li></ul>Centre for Strategic Economic Studies
  15. 15. Comparing cost and benefits (UK, Netherlands & Denmark) <ul><li>It is difficult to compare subscription and OA publishing at the national level: subscription publishing seeks to provide local subscriber s with access to worldwide research, whereas OA publishing seeks to provide worldwide access to local research . </li></ul><ul><li>W e approach it from both sides and try to explore the lower and upper bounds by looking at: </li></ul><ul><ul><li>Ceteris paribus scenarios – t he implications of simply adding OA publishing and self-archiving to current activities , all other things remaining the same; and </li></ul></ul><ul><ul><li>Net cost scenarios – t he implications of OA publishing and self-archiving as alternatives to current activities , by adding the estimated savings to estimated returns. </li></ul></ul>Centre for Strategic Economic Studies
  16. 16. Conceptual map of cost-benefit scenarios Centre for Strategic Economic Studies
  17. 17. Cost-Benefit comparisons (Benefit / Cost ratio) Centre for Strategic Economic Studies Note: Compares OA alternatives against subscription, with costs, savings and benefits expressed in Net Present Value over the first 20 years. Increased returns relate to higher education and public sector R&D spending. HE = Higher Education.
  18. 18. International comparisons (UK, Netherlands & Denmark) <ul><li>The cost-benefits of OA publishing are similar across the three countries: unilaterally author-pays publishing all articles produced in universities brings benefits around double the costs, but doing so in an OA world brings benefits of 3 time the costs. </li></ul><ul><li>Self-archiving models do not look as good in the Netherlands as they do in the UK, and nothing like as good as in Denmark (Reason: number of articles per repository). </li></ul><ul><li>OA alternatives are likely to be more cost effective in a range of countries, large and small. </li></ul>Centre for Strategic Economic Studies
  19. 19. Conclusions (UK, Netherlands & Denmark) <ul><li>Given the potential benefits , we suggest focusing on creating a level playing field by reducing the barriers to innovation and raising awareness of the opportunities. </li></ul><ul><li>There will be uncertainty in a transition, and it will be difficult to re-allocate and move funds around the system. </li></ul><ul><li>Some of the savings and benefits cannot be realised until some time after the costs have been met, so it will require budgetary allocations at the funder, institutional and, perhaps, national levels. </li></ul><ul><li>However, given the costs and potential savings noted these allocations need not be large. </li></ul>Centre for Strategic Economic Studies
  20. 20. EI-ASPM project website <ul><li>http://www. cfses .com/ EI - ASPM / </li></ul><ul><ul><li>The JISC report and summary documents. </li></ul></ul><ul><ul><li>The scholarly communication process model in html. </li></ul></ul><ul><ul><li>An on-line cost-benefit model with simplified versions of the models for journal and book publishing, OA publishing and self-archiving, research and library handling costs. These can be explored at the national, sectoral and institutional levels. </li></ul></ul><ul><ul><li>We will be adding links to the Netherlands and Denmark studies as they are released. </li></ul></ul>Centre for Strategic Economic Studies

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