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The Theory and Practice of Public-Sector R&D Economic Impact Analysis: The Case of the National Institute of Standards and Technology


  • Link, Albert N.

    () (University of North Carolina at Greensboro, Department of Economics)

  • Scott, John T.

    () (Dartmouth College)


This paper summarizes National Institute of Standards and Technology’s (NIST’s) previous economic impact analyses and provides guidelines for NIST’s management for planning, conducting, and interpreting NIST’s future economic impact analyses that (1) document the economic contribution of NIST’s investments in infrastructure technology (infratechnology) and (2) inform management about the effectiveness of past projects and guide strategic planning. Motivating this agency-specific case study is the general expectation and challenge for public institutions to be accountable for their use of public resources. Economic impact analysis is one way that public institutions can quantify the social contribution of their activity. Impact analysis can also provide important lessons to management about the effectiveness of previous resource allocation decisions, and it can provide guidelines for future strategic planning. This paper discusses each of the 17 NIST economic impact analyses in the context of the stages of economic activity—R&D, production, or commercialization—benefiting from the infrastructure technology research studied in each analysis. The analyses find that there are typically benefits for private-sector conduct of R&D because R&D is more difficult without state-of-the-art infratechnologies, such as measurement and test methods and critically evaluated scientific data. There are benefits for production because data, measurement methods, process control models, etc. contribute to better process control. Also, there are benefits for commercialization because products are of higher quality (yielding more value to consumers) and the infratechnologies lower transaction costs through product acceptance testing standards (lower overall acquisition costs for consumers and accelerate market penetration). In addition to discussing the findings in the 17 analyses about the benefits for the three stages of activity, the paper explains how the benefits of NIST’s infratechnology investments occur throughout the supply chains in industry, from the producers of materials through the producers of intermediate products to the final consumers of the product or service. The 17 analyses are also discussed in the context of where in the relevant supply chains the benefits were realized and the extent to which those benefits could be estimated quantitatively and incorporated into the evaluation metrics presented in each analysis.

Suggested Citation

  • Link, Albert N. & Scott, John T., 2011. "The Theory and Practice of Public-Sector R&D Economic Impact Analysis: The Case of the National Institute of Standards and Technology," UNCG Economics Working Papers 11-16, University of North Carolina at Greensboro, Department of Economics.
  • Handle: RePEc:ris:uncgec:2011_016

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    References listed on IDEAS

    1. Link, Albert N. & Scott, John T., 2001. "Public/private partnerships: stimulating competition in a dynamic market," International Journal of Industrial Organization, Elsevier, vol. 19(5), pages 763-794, April.
    2. Hall, Bronwyn H. & Mairesse, Jacques & Mohnen, Pierre, 2010. "Measuring the Returns to R&D," Handbook of the Economics of Innovation, Elsevier.
    3. Link, Albert N. & Scott, John T., 2011. "Public Goods, Public Gains: Calculating the Social Benefits of Public R&D," OUP Catalogue, Oxford University Press, number 9780199729685.
    4. Martin, Stephen & Scott, John T., 2000. "The nature of innovation market failure and the design of public support for private innovation," Research Policy, Elsevier, vol. 29(4-5), pages 437-447, April.
    5. Arvanitis, Spyros & Hollenstein, Heinz & Lenz, Stephan, 2002. "The Effectiveness of Government Promotion of Advanced Manufacturing Technologies (AMT): An Economic Analysis Based on Swiss Micro Data," Small Business Economics, Springer, vol. 19(4), pages 321-340, December.
    6. David Leech & John Scott, 2008. "Intelligent Machine Technology And Productivity Growth," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 17(7-8), pages 677-687.
    7. Doris Schartinger, 2001. "Benchmarking industry—science relations: the role of framework conditions," Science and Public Policy, Oxford University Press, vol. 28(4), pages 247-258, August.
    8. Albert Link & John Scott, 2002. "Explaining Observed Licensing Agreements: Toward a Broader Understanding of Technology Flows," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 11(3), pages 211-231.
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    More about this item


    economic impact analysis; NIST; social rate of return;

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • O22 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Project Analysis

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