AuScope CEO Tim Rawling on evaluating the impact of public good investment in research infrastructure
In 2016, AuScope commissioned Lateral Economics to undertake an assessment of the impact of AuScope research infrastructure investments supported by the NCRIS program.
As part of this work some consideration was given to the value of public good investment, in particular with respect to information products benefiting research and scientific endeavour in Australia.
An excerpt of this analysis, in the context of AuScope’s activity in the Earth and Geospatial science sectors, is below. However, the argument for the impact of public good investment is relevant to all of the NCRIS capabilities.
Information and public goods
The standard economist’s take is that ‘free rider’ problems, or the challenges of asymmetric information, put a brake on certain types of information generation and distribution. Thus, the Productivity Commission has stated that the partial public good characteristics of pre-competitive geoscientific information mean that private provision alone may not be socially optimal.
Still this somehow doesn’t fully capture the fundamental nature of information in an economy, nor the opportunity it presents for new public goods. Today some of the most transformative new public goods are ‘platforms’ like Wikipedia, Google and Facebook.
Each of these platforms was privately built and each had the choice to overcome the free rider problem by operating behind a paywall. But each understood that doing this would degrade the amount of value they generated. So they chose instead to operate as a free public good and find indirect ways of funding their operations – Wikipedia through philanthropy and Google and Facebook through advertising.
There is a particular vacuum around that class of public goods that would add substantial value but which private endeavour struggles to bring into existence without help from collective institutions such as governments.
The Australian economist Nicholas Gruen (2015) has speculated about the possibility of public goods like Wikipedia, Google and Facebook that cannot be funded from indirect sources. He suggests by way of example a public private partnership in genomic data: a public health system like Medicare could fund genomic analyses and also the cost of the infrastructure for hosting the information for any patients who wished to opt into the system. It would then make that information available to patients as consumers, as well as curating the information as an asset for the health system more generally in diagnosis, pharmaco-vigilance and research.
Infrastructure and new public goods
AuScope, and other data oriented NCRIS capabilities, fit this model of informational public goods.
It is also worth expanding the definition of infrastructure to encompass information infrastructure. In this regard, Brett Frishmann’s recent book Infrastructure: The Social Value of Shared Resources is instructive, defining infrastructure according to the following criteria:
- The resource may be consumed nonrivalrously for some appreciable range of demand.
- Social demand for the resource is driven primarily by downstream productive activities that require the resource as an input.
- The resource may be used as an input into a wide range of goods and services, which may include private goods, public goods and social goods.
This describes both the public goods specified by Gruen but also projects such as AuScope as information infrastructure.
Potential roles for government in accelerating, facilitating and, where necessary, funding the emergence of such public goods include:
- Innovation partner: New products can help governments and other entities better achieve their missions. Where additional R&D is necessary to incubate the innovation, governments can undertake targeted partnering with the relevant enterprises.
- Benevolent wholesaler for life: Often governments fit themselves providing a ‘wholesale nudge’ or a default standard to champion optimal technology, helping to transmit innovations and cost savings from production through to consumers. Ideally the standard can emerge with usage or open collaboration on standards – as it does in many standards such as the internet – with government being a large and possibly unusually influential user, rather than the dictator of the standard for all others.
- Promoter of information platforms: Where new knowledge services or products are emerging – or even mature – the market often remains uninformed as to the respective merits of alternative offerings. Where helpful, governments can assist by seeking recommendations from an independent expert group reflecting the interests of users.
- Sponsor of standards formation: Standards are a public good. Governments can and do help set standards in all manner of situations, or help facilitate some needed but as yet missing standard to emerge, or otherwise help optimise emerging standards.
- Collective purchasers: There has always been a ‘textbook’ case for governments to help subsidise their own or even other service providers’ fixed costs from general revenue to make marginal cost pricing financially viable. Web 2.0 platforms provide an opportunity to trial these ideas, and in doing so develop additional public goods from rich data regarding usage.
While not necessarily using this language, AuScope and other NCRIS capabilities could be seen as taking a forward role in ‘orchestrating the emergence of public goods’ – both traditional and emergent – in research for the benefit of Australian society.
Download the full report from auscope.org.au/resources.