CENDI Cost Study
The Changing R&D Information Economy in the Digital Age
Report Prepared by Robert Ubell
Making the Transition to a Digital Information Environment
- Key Judgements
- Agency Case Studies Vignettes
Department of Commerce (National Technical Information Service)
Department of Energy (Office of Scientific and Technical Information)
NASA (Office of Scientific and Technical Information)
National Library of Medicine
Department of Defense (Defense Technical Information Center and
National Air Intelligence Center)
Department of Interior (National Biological Resources Division)
THE CHANGING R&D INFORMATION ECONOMY IN THE DIGITAL AGE
A Report Prepared for CENDI
By Robert Ubell
President, Robert Ubell Associates
New York, NY
This paper offers the following key judgements:
1. Since the Electronic Revolution is in its infancy, experts in the
industry cannot predict the long-term effects. With little serious substantiated
economic experience or cost studies, there is no current consensus about
the consequences of introducing digital technologies. Many recognize that
for the immediate future, a dual system—conventional print coupled with
new electronic services—may be required. In this environment, costs in
the short term are likely to increase.
2. The real payoff from the Electronic Revolution may not be economic.
Rather, the investment may be returned in the creation of more effective
products designed to generate quality decisions more rapidly. As a corollary,
there is broad agreement that as the price per published unit of information
declines, costs of delivering more value-added, personalized products
to larger populations of end-users will cause costs to rise overall.
Ever since the introduction of digital technologies, conventional wisdom
imagined that the combined costs of acquiring, storing, retrieving and
disseminating R&D documents would decline when compared with costs associated
with delivering conventional print products. The theory held that since
a large part of the costs of creating and shipping print on paper—printing,
paper, binding, postage—would disappear, organizations would achieve great
savings soon after their files were converted.
While the digital age promised to deliver information to end-users in
better and faster ways, today managers have discovered that while costs
per end-user served appear to have declined1
and while access has also improved markedly, investments in developing,
installing, and maintaining technological infrastructure have escalated.
The "cheaper" goal of "better, cheaper, faster" may yet be realized, but
only after further investments in technology and human resources are made.
If measured in terms of increases in productivity, decision quality and
mission effectiveness, however, the return has already been—and will continue
The Economics of Print Publication
According to the premier guide to journals,2
there are now more than 165,000 periodicals published worldwide, with
approximately 2,000 added annually. Of these, more than 10,000 are peer-reviewed.
In the period 1960-1990, prices of science and technology journals increased
far in excess of inflation so that the depositories of technical information
in the last decades have been exposed to two parallel threats. As the
number of research periodicals grows, so have the subscription prices
for publications already housed in collections (Figures 1 and 2).3
With a river of data overflowing information depositories, several factors
accounted for sharp increases in the prices of scholarly material:
1. Balkanization of Science and Technology.4
In classical fields, such as chemistry and physics, the "twigging effect"—in
which research spawns ever-narrower sub-disciplines—stimulated the production
of parallel, quite specialized periodicals and other literature (textbooks,
monographs, reference works, review series, etc.).
2. Limited Markets. As the literature addresses narrower fields,
the marketplace for any one discipline shrinks, so that the support available
for any single journal falls to a handful of practitioners and their institutions.
While a few highly cited periodicals may boast subscriptions in the tens
of thousands, they remain exceptions. Most peer-reviewed journals report
subscription totals of between one and two thousand, with a considerable
number with less than 500.
3. Continual Generation of Research Reports. As fields grow, not
only does the number of periodicals published in that discipline tend
to increase—so that in certain dynamic areas, there may be as many as
two dozen or more scholarly journals competing for papers—but existing
publications also tend to expand to meet demand. A journal launched, say,
twenty years ago as a quarterly with 400 pages a year in a "hot" field
may have expanded over the years to a monthly publishing today more than
2,000 pages annually.5
4. Uniqueness of Papers in Science and Technology.6
Unlike the wide availability of competitive commodities in supermarkets
where consumers select one or two brands of breakfast cereal off the shelves,
articles published in the technical literature, for the most part, are
not interchangeable. Information managers cannot simply choose one journal
over another and hope to satisfy their research staff. The New England
Journal of Medicine, for example, cannot be substituted for the Journal
of the American Medical Association. Both are essential.
5. Escalating Publishing Costs. Despite the introduction of various
new technologies in the printing processes,7
so-called "first-copy" costs have escalated. Peer-reviewing8
alone is among the most labor-intensive operations, with dozens of pieces
of correspondence, telephone calls, faxes and e-mails transmitted merely
to accept (or reject) one article—much of it at the expense of the publisher
who must also support salaries, fringe benefits and overheads of editorial
teams at the publisher’s site and often at satellite offices at distant
research institutions. Once accepted for publication, a paper must be
shepherded through copyediting, typesetting, proofreading, indexing and
abstracting, among dozens of other major and minor operations before it
is actually printed. Add to these the mounting cost of postage, not only
to deliver the publication to subscribers, but also to market it to its
6. Publishers’ Economic Dilemma. Now consider the high cost of
printing slimmer print runs, owing to smaller markets for finer slices
of research, to photocopying, and to declines in funding. As prices climb,
acquisition budgets have historically not kept pace, forcing institutions
to cancel low impact journals. With slipping circulation, publishers announce
a spiral of price increases.9 (Certain European
publishers have exploited currency fluctuation to further boost prices
and profits.) Consequently, over the last several years, publishers report
that unit sales for periodicals have declined on average between three
to five percent a year.
The result is an information crisis.10
The investment needed to acquire and manage the fire-hose gushing from
the knowledge industry has overwhelmed the collection and management of
essential R&D information. Maintaining the paper status quo offers the
unappetizing prospect of failing to control costs.
The Digital Information Economy
Faced with a paper crisis, information managers welcomed the digital
revolution, expecting that computerization would help control price inflation
by eliminating some of the more expensive aspects of publishing and managing
published information. The result would contribute to a "digital dividend,"
after saving the cost of printing, paper, postage, storage, maintenance,
and other aspects of both the publishing and delivering economies. Miles
of shelves would be vacated; entire buildings would be emptied as solid,
bound volumes were transformed in electronic impulses. What’s more, computerization
would offer far more information to far greater numbers at greater speed
and with sharper precision.
But as a recent study on the economic impact of networked information
revealed,11 a number of obstacles undermined
the coming of the electronic utopia:
- Investments in "First-copy" Costs Increased.12
Commercially available digital subscription costs to scholarly materials
increase because much of the editorial activity required to generate
print continues in electronic publishing13
and, in many cases, these costs rise, owing to additional labor needed
to "markup" text for electronic dissemination, especially on the World
Wide Web. Many publishers report that "markup" costs have increased
editorial expenses between 15 and 25 percent.
- Highly Trained Technical Staff at Higher Salaries Increase Human
Resources Budgets. Conventional print publication and technical
information management has been traditionally shepherded through many
of its various stages—from initiation to end-user delivery—by a handful
key management staff, supported by a cadre of entry-level employees
without advanced training. The digital information economy, however,
depends critically on unprecedented numbers of highly qualified programmers,
software developers, Web masters and others armed with technical degrees,
commanding salaries far greater than the average wage for print support
- Rapid Obsolescence of Hardware and Software Results in a Treadmill
of Technology Costs. By now it is widely acknowledged that much
of the installed infrastructure and accompanying software being used
today by publishers, librarians, database producers, end-users and others
in the information chain will be obsolete 24 to 36 months after implementation.
Investment required to upgrade systems has introduced a new treadmill
of technology costs.
- Acquiring Digital Information Introduces New Roles. In the
print economy, subscription agencies and library book wholesalers occupy
an intermediary space between institutions and publishers—consolidating
orders, servicing claims, among other labor-intensive tasks—freeing
information managers to perform more satisfying intellectual services
for their clients. With the introduction of digital products, highly
trained and more costly specialists must now evaluate new technologies,
integrate systems and negotiate terms, either directly with providers
or with third-party integrators.14 The
information manger must now become a licensing agent, since much digital
information is now leased rather than purchased. Most information managers
must now often seek legal advice about contract terms—an entirely new
- Costly New Technical Support Services Are Now Required. As
new technologies are released—and as end-users are given direct access
to information over networks—institutions, software and hardware vendors,
telecommunications systems, information providers and database producers
must now provide experienced online or toll-free technical help and
customer support services to greater numbers of users, expanding the
scope, sophistication, and cost of end-user services.
- Technology Generates Greater Demand at Greater Expense.15
With computer screens on every desktop, with instant access to vast
quantities of information, with alerting services that identify up-to-the-minute
information, users have come to expect the delivery of high-impact data
never before as easily accessed. As speeds improve, as databases become
more easily accessible and as more information is mounted on networks,
end-users are coming to demand more expensive hardware, software, and
- Electronic Publishing Adds to Costs by Adding New Products and
Services. Digital technologies make it possible to provide individuals
and their supporting agencies with products and services never before
possible with print. Today, penetrating search engines, graphical interfaces,
and other new technologies have revolutionized the way in which information
is searched and assimilated. Billion-dollar digital information companies—commercial
and nonprofit—such as Knight-Ridder, Lexis-Nexis, Chemical Abstracts,
ISI, and others have introduced online products that have become essential
information-gathering tools, adding to the total cost of acquiring information,
rather than offering less-expensive alternatives.16
What’s more, institutions—many in government—that produce databases
for scholars and the public have been forced by their mission not only
to acquire expensive commercial databases, but must continuously update
technologies to identify, gather, categorize and disseminate great volumes
of data to satisfy consumer demand.
- Intellectual Property Management Introduces New Investments.17
Because electronic data is easily accessible and widely available, the
proprietary rights of publishers and authors may be compromised. Consequently,
all of the players in the digital arena must now introduce safeguards
to prevent as nearly as possible the wholesale exploitation of information
by unauthorized users.
- Data Conversion and Digital Archiving Can Be Prohibitively Expensive.18
Converting legacy paper files to digital media is a mammoth and very
expensive task. While certain institutions and providers have committed
themselves to mounting historical documents on networks, it is not certain
whether this effort will be universal, given the great investment needed.
- Paper Documents Must Be Maintained in Parallel with Electronic
Files at Great Cost. Recognizing the extraordinary costs involved
in converting paper to digital media, most collections must continue
to maintain their historical documents, forcing institutions to continue
to support the storage and personnel infrastructure at—or near—previous
levels. What’s more, of the 10,000-plus peer-reviewed journals available,
less than 1,000 are currently online. While publishers are accelerating
the mounting of periodicals on networks, it is unlikely that more than
a couple of thousand will be accessible electronically by the turn of
the millennium.19 What’s more, many documents
are inappropriate for electronic dissemination (at least not at present).
One manager reports that an average document used by his staff is approximately
110 pages—far larger than is convenient to access on computer screens.20
- "Repurposing" Adds Large Unanticipated Costs. As technology
evolves, files mounted previously on more primitive digital networks
can become obsolete when new platforms, search engines, and interfaces
fail to accept earlier records. Unanticipated investments then become
necessary to convert existing files to conform to the new technology
or to acquire entirely new files that essentially replicate the old
but cannot be accessed by updated software. This dilemma faces all of
the players in the information industry—R&D laboratories, archives,
publishers, database producers, among others.
- Database Producers Must Accommodate Costly "Mixed Economy."
Today, vast quantities of bibliographic and other data generated by
commercial, government and nonprofit institutions consists largely of
conventional print documents. In order to acquire, catalog and disseminate
print information, database producers—in and out of government—must
continue to rely on traditional methods or expensive digitizing equipment.
As the digital economy emerges, computerized information must be added
to existing files, sometimes requiring parallel technologies, staff,
and other infrastructure in order to accommodate both print and online
documents. What’s more, because the digital economy is in its infancy,
few common standards have been accepted that a wide variety of non-compatible
electronic files must be integrated at great cost.
It is impossible to predict when annual expenditures to support the digital
environment will fall below what is required to maintain a paper economy.21
While the "digital dividend" has not yet made information budgets shrink,
it has certainly had large and lasting effects. Among these are:
- deeper accessibility to the world literature22
- broader availability to larger populations23
- increased R&D productivity24
- sophisticated manipulation of data25
- pin-pointed selection of critical information26
- simplification of research methods27
- easy navigation through complex databases28
In order to achieve these obvious benefits, continued investment in the
digital economy is required now.
Arms, William Y., "Scholarly Publishing on the National Networks," Scholarly
Publishing, Vol 23, April 1992
Cummings, Anthony M., et al., University Libraries and Scholarly Communication:
A Study Prepared for The Andrew W. Mellon Foundation, 1992, Association
of Research Libraries
Crawford, Susan Y., Julie M. Hurd and Ann C. Weller, From Print to Electronic:
The Transformation of Scientific Communication, 1996, ASIS
Drabenstott, K.M., Analytical Review of the Library of the Future,
1994, Council on Library Resources
King, D.W. and J. Griffiths, "Economic Issues Concerning Electronic Publishing
and Distribution of Scholarly Articles," Library Trends, Vol 43,
No 4, Spring 1995
Lynch, Clifford., "The Transformation of Scholarly Communication and
the Role of the Library in the Age of Networked Communication," Serials
Librarian, Vol 23, No 3, 1993
Malone, Thomas W., Joanne Yates and Robert I. Benjamin, "Electronic Markets
and Electronic Hierarchies," Communications of the ACM, Vol 30,
No 6, June 1987
Report on the Task Force on a National Strategy for Managing Scientific
and Technical Information, 1994, Association of American Universities
Scott, R.L., "Transitioning to a World of Electronic Scientific and Technical
Information Exchange," paper delivered at Inform ’97, Oak Ridge, TN, May
Siler, Sara, "Dictionary Dynasty Fights to Survive in Electronic World,"
The New York Times online "CyberTimes," June 30, 1997
Strassman, Paul, "People: The Untold Part of the Cost Story," ComputerWorld,
April 14, 1997
Ubell, Robert, Cost Centers and Measures in the Networked Information
Value Chain, April 1997, Coalition for Networked Information
Ubell, Robert, US and Canadian Survey of Electronic Products and Services
(1993-1995), 1995, Robert Ubell Associates
Ulrich’s International Periodical Directory, 34th Edition, 1996, R.R.
This report was based, in part, on telephone conversations with the following
experts whose participation is gratefully acknowledged:
Hal Espo, former Senior Director, Strategic Alliances, Knight-Ridder
Kenneth Fulton, Executive Director, National Academy of Sciences
Karen Hunter, Assistant to the Chairman, Elsevier Science Publishers
Robert J. Massie, Director, Chemical Abstracts Service
A.W. Kenneth Metzner, Vice President, Director of Electronic Publishing,
Kurt N. Molholm, Administrator, Defense Technical Information Center,
Department of Defense
Ann Okerson, Associate University Librarian, Yale University
Walter Warnick, Director, Office of Scientific and Technical Information,
Department of Energy
Robert Ubell is President of the scientific and technical publishing
consulting firm, Robert Ubell Associates. Over the past 15 years, the
company has generated a number of key studies on the development of electronic
publishing, including, most recently, Cost Centers and Measures in the
Networked Information Value Chain for the Coalition for Networked Information.
In the commercial sector, clients have included some of the more prominent
publishers, including Thomson, McGraw-Hill, and Harcourt. The firm has
participated equally in the nonprofit arena, with such notable clients
as the American Institute of Physics, the American Chemical Society, and
the American Cancer Society.
The author of more than 50 publications in such periodicals as Nature,
The New England Journal of Medicine, and New Scientist, Mr. Ubell has
also written or edited some 17 books for such distinguished publishers
as Oxford University Press, Cambridge University Press, and Henry Holt,
among others. Mr. Ubell lectures widely on scholarly publishing and has
taught at Columbia College of Physicians & Surgeons and MIT.
Prior to founding Robert Ubell Associates, Mr. Ubell was American Publisher
of the premier science weekly, Nature, and founder of the monthly, Nature
Biotechnology. Earlier, he was Editor of The New York Academy of Sciences
award-winning magazine, The Sciences. He began his career at Plenum Publishing
Corporation, where he became Vice President and Editor-in-Chief. Last
year, Mr. Ubell served as President of the Internet biological information
A member of numerous boards and committees, he has served in various
capacities for the National Academy of Sciences, the National Research
Council, the National Academy of Engineering, among many other scholarly
and government agencies and associations. He is on the Board of Directors
of Marcel Dekker, Inc., the scientific and technical publisher in New
York. On September 2, he joins Dekker as Executive Vice President for
- Fulton, Kenneth; Walter Warnick, personal communications.
- Ulrich’s International Periodicals Directory,
34th edition, 1996, R.R. Bowker.
- Cummings, Anthony M., et al., University
Libraries and Scholarly Communication: A Study Prepared for the Andrew
W. Mellon Foundation, 1992, Association of Research Libraries.
- Cummings, Anthony M., et al., page 94.
- Cummings, Anthony M., et al., page 95.
- Cummings, Anthony M., et al., page 95-96.
- Cummings, Anthony M., et al., page 128.
- Crawford, Susan Y., et al., page 101.
- Cummings, Anthony M., et al., page 97-98.
- Cummings, Anthony M., et al., page 11.
- Ubell, Robert, Cost Centers and Measures in
the Networked Information Value Chain, April 1997, Coalition for
- Cummings, Anthony M., et al., page 95.
- Crawford, Susan Y., et al., page 106.
- Malone, Thomas W., et al., page 488.
- Molholm, Kurt N., personal communication.
- Malone, Thomas W., et al., page 496.
- Scott, R.L., "Transitioning to a World of Electronic
Scientific and Technical Information Exchange," paper delivered at Inform
’97, May 7, 1997, pages 9-10.
- Arms, William Y., "Scholarly Publishing on the
National Networks," Scholarly Publishing, Vol 23, April 1992, pages
- Ubell, Robert N., Scholarly and Professional
Journal Publishing Industry, Robert Ubell Associates, 1994, pages
- Molholm, Kurt N., personal communication.
- Fulton, Kenneth, personal communication.
- Cummings, Anthony M., et al., page 104.
- Scott, R.L., page 6.
- Malone, Thomas W., et al, page 484, 488.
- Scott, R.L., page 13.
- Scott, R.L., page 6.
- Fulton, Kenneth, personal communication.
- Malone, Thomas W., et al. Page 494.
MAKING THE TRANSITION TO A DIGITAL INFORMATION ENVIRONMENT
- Fully Electronic Information Management is in its infancy and the
full life cycle cost is not yet understood
- The real payoff of the digital world may not be simply economic, but,
instead the ability to use better information for better decision making
- There is often a shift in where costs are incurred and savings are
gained. The information management function may increase costs but offsets
to users provide an overall life cycle return on investment for the
agency or nation.
Research is needed to make information fully electronic and this adds
to the development costs that allows future payoffs. For example, in the
visible human project (with goals in teaching and research about the human
body) methods need to be developed to link image data to symbolic text-based
data, which is comprised of name hierarchies, principles and theories.
Standards do not currently exist for such linkages. Information research
and development money is needed to accomplish this. The Visible Human
Project will allow:
- Non-invasive colon cancer screening
- Simplified plastic surgery
- Prostate cancer surgical rehearsal
- Surgical simulation
- Revolutionizing the study of anatomy in high school, college, and
- Radiation absorption modeling
- Crash testing simulations
Another medical example: In Medicine, effective mapping of the human
genome may help to find the causes for some disease and help in prevention,
treatment or cures. A key component of the human gene map project is the
management of information. Because of the volume and the dynamic nature
of the data and the need for broad access and dissemination of the data,
electronic versions are essential.
The Department of Defense DTIC is making DoD directives and instructions
(D&I) electronically available whereas previously they were only available
in print and microfiche form. In an analysis of economic benefits, DTIC
estimated that over the course of a 9 month period, about $200,000 could
have been saved by users if electronic D&I were available. Other non-quantifiable
user benefits(savings) include timeliness , avoidance of storage and on-site
file maintenance of material and currency of information. However, DTIC
had to invest in certain life cycle processes to make this possible. They
needed to scan, OCR, index, store, develop search and retrieval software,
and maintain transmission capability. Based on experience with the prototype
of full text with technical reports, it is known that DTIC must process
the electronic files prior to producing an acceptable output format. This
was the production step previously done by the publications= offices including
layout, editing, format conversion which costs are now at DTIC. Development
of more efficient processes for carrying out these functions is an investment
that must be made to realize the thousands of dollars of user benefits.
In the aviation and aeronautics sector, aviation products are the largest
positive industrial contributor to the U.S. balance of trade. This edge
is eroding, especially to the French. France is known for engaging in
highly effective, active information capture, with on tenth of our research
budget. They now have 40-50% of the aircraft and space launch business.
Japan, another key competitor has STI organizations track the career of
researchers in 60 countries and employs 5,000 experts specifically to
monitor 8500 selected journals from 50 nations. The U.S. has increased
its budget in science, technology, and education, but the STI budget in
NASA has declined over 50% in recent years. Competent mechanisms to disseminate
and access results to those intended to benefit are possible and critical
in an electronic environment if we are to have effective return on our
R&D investment dollar.
For the taxpayer, the National Technical Information Service (NTIS) has
made access to over 700 tax forms with instructions, publications and
other information available on the WWW 24 hours a day, 365 days per year.
The IRS needed on online solution that protected IRS internal systems
and that could be rapidly expanded during the peak tax season. During
the 1997 tax filing period, the web site received over 117 million hits
and over 6 million file downloads. The IRS has been able to significantly
reduce the overall expense and response time of delivering tax information
as well as enabling more constituents to reach the IRS.
The Davis-Bacon Act requires wage rates established by the U.S. Labor
Department to be paid on federally funded construction projects. Rates
are established by surveying wages for each occupation in four types of
construction for each county of the 50 states, District of Columbia, and
the territories. There are about 3000 documents.
Prior to online availability of this data, it was only available to the
public as a 7000-page document with weekly updates of as many as 1500
pages. Ten day currency is required in contract bidding. Print delivery
was not always timely. The customer of the print service paid $2000 per
year for the full country. With the current online availability through
NTIS’s FedWorld, the data are updated every Friday. The cost is $600 per
year for unlimited access.
The advantages of NTIS’s database system over paper are:
- Cost Savings
- Timely Delivery
- Powerful and effective search engine
- Rapid access to specific data
- No labor for paper maintenance
- Electronic documents can be incorporated into solicitations, proposals,
and contracts without rekeying. This also eliminates keying errors.
As the federal government continues to shift from paper to electronic
record keeping, the National Archives and Records Administration (NARA),
has major responsibilities to provide guidance on how agencies should
handle this electronic environment. In addition, the hardware and software
needed to access the growing electronic legacy collections must be provided
in order to continue to make these collections available to researchers
and the public.
Shifts in planning, training, and technology that must take place in
order to continue to perform NARA's mission in an electronic environment.
In the strategic plan of NARA it states, "We have to figure out how to
cope with a paper explosion that threatens to overwhelm us, how to get
on top of accelerating technological change, how to take advantage of
opportunities that technologies offer, and how, in a time when the federal
government is cutting back, to make the most of our resources." In addition
to paper NARA is trying to cope with growing quantities of computer-generated
records. In the Federal Government, these range from millions of e-mail
messages to vast scientific databases, all of which require new methods
for appraisal, preservation, and public access. Clearly, electronic records
problems are costly to overcome and require more staff with technical
expertise, a resource we can never have enough of. Moreover, the current
shrinking of government only makes the job larger because as agencies
streamline, programs end, and military bases close, more information is
cleaned out and accumulated records need to be dealt with.
NARA is implementing an Electronic Access Project (EAP) to manage electronic
collections and to provide better access, but basic descriptive work (i.e.,
cataloging to provide accessible content) must be performed first in order
to create the basis for centralized access. EAP had significant infrastructure
investments (http://www.nara.gov/nara/vision/ eap/eaprec.html.). Congress
has appropriated $4.5 million for this project. The operating budget for
NARA also acknowledges the need for continued improvements, beyond the
initial development of EAP, and the increased need for NARA to provide
guidance in the electronic environment. In times of shrinking Federal
resources, NARA's FY98 budget increased 4% over FY97 to accommodate the
transition to a digital information environment.
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