CeBIT [email protected] 2012- Alan Smart, ACIL Tasman

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Transcript of CeBIT [email protected] 2012- Alan Smart, ACIL Tasman

  • 1. Valuing Spatial Information A review of methods and findingsAlan Smart - SydneyAndrew Coote - London22 November 2011

2. Topics Value added approach Economic welfare analysis General equilibrium analysis Valuing intangibles Slide 2 3. Why is it so hard to estimate An enabling AgriculturetechnologyGovernmentMining andresources Public good Banking Transportdimension Impacts occur RetailSpatialtechnologie sPlanning andConstructionacross a largeNatural resourcenumber of sectors management Utilities Dynamic nature ofNational security Emergencymanageme Property and serviceschange nt Slide 3 4. Value added approach Economic contribution of Ordnance Survey in GreatBritain Oxera 1999 Allens Consulting (2008) Value added is the value of output less the cost ofinputsSlide 4 5. Oxera findings Largest contribution to GVA came from users of OS services and products 79 billion to 135 billion Around 10% to 21% of GDP of Great Britain at the time Slide 5 6. Value added approach in Australia andNew Zealand Allen Consulting Group 2010 Value added in Australia - $12.5 billion Mainly in government administration, property services, business services, construction and miningAround 1.4 % of value added in these industries Value added in New Zealand - $ 1.6 billionAround 1.4 % of value addedSimilar industries apart from miningSlide 6 7. Welfare analysis One measure of benefitPis consumer andConsumer Surplusproducer surplusS Product specific Need to know what PEconsumers areprepared to payProducer And what producers SurplusDare prepared to receiveQE QSlide 7 8. Value of WA Land Information System (WALIS) ACIL Tasman (2004) Willingness to pay survey of 12 user groups and a producersurvey to estimate producer and consumer surplus Estimate value to WA economy was $14 15 million Plus $1 million from more efficient and effective productionof data Study tested the results against a counterfactual thatrecognised some provision of data could still occur withoutWALIS but less efficiently Slide 8 9. Cambridge study of OrdnanceSurvey Data Rufus Pollock et al (Cambridge University, 2008) Estimated demand curve to assess the value servicessupplied from government trading funds And the impact on consumer surplus of changes inpricing for data Price elasticity of demand = percentage change indemand/ percentage change in price Used multipliers to estimate broader economic anddynamic impacts on the economy Slide 9 10. Cambridge study $ Studied large scaletopographic mappingand transport network Demand curveproducts sales worthPm70 million Concluded that a moveAverage costfrom average tomarginal costing wouldincrease economicPavcwelfare by 156 million PsrmcShort run marginal cost QmQavc Qsrmc Quantity (Q) Slide 10 11. ANZLIC Study PWC study for ANZLIC in 2010 used a similar methodology to addresspricing policies Change in economic welfare (consumer surplus in this case) by movingfrom cost recovery to marginal cost pricing is shown in table below Report notes that this would come at a loss in revenue to the agenciesconcerned which has consequences for custodianship of data. Geoscience Australia Victorian topographic Landgate topographic Landgate arial photographytopographic $ million$ million $ million$ millionChange in economic welfare 3.3 1.4 1.0 4.7Slide 11 12. Welfare analysis - issues Suitable for single product analysis Elasticities of demand vary with quantity A partial analysis that does not take into account resource transfers in theeconomy Eg - Planning and construction sector expands while legal sector contracts Multiplier techniques subject to considerable scepticism when resourcetransfers occur Welfare analysis serves as an indication of the implications of differentpricing and access models but should not be regarded as conclusive.Slide 12 13. Productivity estimates and CGEmodelling Economy wide approach Estimate direct impacts and use general equilibriummodel to translate into economy wide impacts Takes into account resource transfers within theeconomy as a result of change Direct impacts changes in productivity of labour or capital or multifactor changes in resource availability changes in income or tradeSlide 13 14. Adoption curves over time accumulating productivityGeospatial adoption curves in UK local governmentSlide 14 15. General equilibrium modellingSlide 15 16. New Zealand Agriculture 2010 Example PrecisionAgriculture Controlled traffic farming, etc.10-20% productivity Adoption 10% = 1.25% sector-wideproductivity improvement Slide 16 17. Productivity impacts comparedNew Zealand 2009Australia 2007 Tasmania 2010Agriculture1.25% -1.9% 0.93% -1.5% NilForestry 5.25% - 5.71% 1.93% 1.93%Fishing3.40% 4%-5% 5.14% 0.25% -0.35%0.02% 0.02%Manufacturing 2.1%- 3.15%%1.4%-1.5% 1.04-1.6%TransportCommunications 0.82% 0.98%-1.32% Nil 0.70% 0.7-1.25% 1.0%Utilities 0.23%-0.46% 0.47% 0.2%Property and business servicesConstruction 0.75% -1.13%0.25%-0.5%0.25%Trade and retail 0.77%-1.15% 0.08NilRecreation 0.23%-0.46% ~ NilMining Low 0.15% - 0.36% 0.01%Government 0.77% -1.15%0.0.34%%0.37% Slide 17 18. Year OrganisationIssue Results2008 SRCSI and ASIBA (ACIL Value of spatial information in Australia$6 billion-$12 billion addition to GDP 0.61 % - 1.2% of GDP Tasman)Studies using CGE modelling 200750 % higher adoption if7% higher economic impact if barriers barriers removedremoved2009 NZ Ministry of EconomicValue of Spatial information in New Zealand $NZ1.2 billion0.6 per cent of GDP Development and LINZ (ACIL$NZ 1.6 million with barriers removed Tasman/SKM/Ecological Consultants)2010 Consultingwhere /ACILValue of geospatial information for local GDP 320 million higher in 2009 as a 0.02% of GDP Tasman for UK Localgovernment in England and Wales result of geospatial information in local Government Association governmentMain sectors with positive impacts BC ratio of 1.25construction, transport, business services560 million higher in 2015Additional 600 million with improvedpolicies2010 CRCSI (Allen Consulting)Value of enhanced positioning in selected1.1% to 1.2 % increase in sectors - mining, agriculture and constructionGDP by 20302011 Department of Premier andValue of improved SDI in Tasmania GSP $105 million higher in 20110.47% of GSP Cabinet (ACIL Tasman/ Lester$401 million by 2020 Fanks/ConsultingWhere)Additional $100 million by 202 0withSlide 18investment in spatial data 19. Issues with general equilibriummodelling approach Estimating sector wide productivity impactsrequires assumptions about levels of adoption Some users are not willing to share data onbenefitsSlide 19 20. Components of value TOTAL ECONOMIC VALUE USE VALUES NON-USE VALUESDIRECT USE ECOLOGICAL OPTION EXISTENCE BEQUESTVALUE FUNCTIONVALUEVALUEVALUEVALUEOutputs BenefitsBenefits BenefitsBenefits petroleum and flood control protection from satisfaction that altruisticminerals climate fires, floods andresource is there preserving transport sustainable water natural disasters preservation of national assets for communications resources improved environment the next property and sustainable management ofand conservationgenerationconstruction natural resourceclimate change values agriculturemanagement Insurance national security Fishing Biosecurity defence Long baseline for forestry biodiversity historical analysis tourism publicadministrationSlide 20 Based on work by Professor Mike Young- University of Adelaide 21. A wide range of applications -Tourism to sea bed mappingTourist informationBathymetricsystems in New mapping in AustraliaSlide 21Zealandand New Zealand 22. Natural resource management Water resourcemanagement Eg CSIRO/Murray DarlingBasin sustainable yieldsproject Value of water at the margin~ $100/ML - $500/ML A 1% reduction in nationalwater consumption savesaround $37 millionSlide 22 23. Summing up Understanding economic and social value of spatial information is important for both government and industry Welfare analysis useful where single product or service involved and impact on the rest of the economy is not significant in terms ofresource allocation in the rest of the economy General equilibrium analysis useful when multiple products are involved and multiple sectors are affected. Both approaches confirm that a move from average cost pricing to marginal cost pricing for foundation data increase economic welfare But only as long as governments are prepared to fund the cost ofcustodianship More work on social and environmental benefitsSlide 23 24. Thank youSlide 24 25. POPSIS Study European union sponsored study into pricing of public sectorinformation (2011) Assessed different models of supply and charging through 21 casestudies (including meteorological and geographical information) In case of zero-cost or cost-recovery number of re-users increasedby between 1,000% and 10,000%. PSI sales revenues can remain stable or even increase after drasticprice cuts due to the growing demand. Several case study public sector providers have reported thatintensified ties with re-users that may lead to improved data qualityand process efficiency Slide 25 26. Productivity and adoption sector wide impactsSlide 26 27. Translates into nationaleconomy Precise positioning Decreased price roadProductivity improvement Increased output per unit of value added used in roadtransport sector freightNational economic impacts GDPConsumptionLower productionInvestmentprice in sectors using Industry outputroad trasnsport (such Increased output and Employment as the retail sector).value added Increased access to factors .Decreasedcompetitiveness.Lower value added inDecreased value coastal shipping due toadded resource transfer to road freightSlide 27 28. UK Local government productivitygains Channel shift through deployment of transactional web mappingsystems. Improved transport efficiency by wide application of route optimisationand better street works management. Better decision making using geospatially-enable