Strategy for Europe 2020 Kristina Gogić magiur LLM RDI INFRASTRUCTURES Benefit Cos Analysis BCA of the research development and innovation RDI ID: 630537
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Slide1
BENEFIT COST ANALYSIS OF RESEARCH, DEVELOPMENT AND INNOVATION (RDI) INFRASTRUCTURESStrategy for Europe 2020
Kristina Gogić,
mag.iur
./LLMSlide2
RDI INFRASTRUCTURES
Benefit
Cos
Analysis
(
BCA
)
of
the
research
, development
and
innovation
(
RDI
)
infrastructures
is
a
new
field
;
1)
The
research
, development
and
innovation
(
RDI
)
infrastructure
is
the
generic
name
for
investment
projects
that
are
designed
and
operated
according
to
very
different
specifications
and
cannot
be
analyzed
with
the
same
degree
of
standardisation
of
methods
as,
- for
example
,
in
railways
or
water;
2
)Slide3
RDI INFRASTRUCTURES
While
the
target
groups
of
other
infrastructures
are
relatively
well
identified
:
-
e.g
.
passangers
for
high-speed
rail
or
residents
in
a urban
area
for
solid
waste
management,
the
multifaced
nature
of
RDI
is
such
that
many
types
of
direct
and
indirect
taget
groups
are
involved
:
-
from
business
to
the
general
public
;
Each
of
them
has
standing
in
the
BCA,
and
this
makes
the
evaluation
of
infrastructures
a
particulary
complex
task
.Slide4
RDI INFRASTRUCTURESIt is
expected
that
over
the
planning
period (
2014.-2020
.) a
portofolio
of
BCA
of
RDI
infrastructures
will
be
gradually
built
within
the
European Union (
EU
)
M
ember
States
(
MS
),
following
the
high
priority
given
to
research
and
innovation
for
the
EU
growth
strategy;
1)
Many
research
and
innovation
R
&
I
projects
face
difficulties
in
securing
finance
despite
being
fundamentally
good
projects
;
Slide5
INNOVFIN ADVISORYInnovFin Advisory (IFA)
was
set
up
as a
joint
European
Investment
Bank – European
Commission
initiative
under
Horizon
2020
IFA
assists
eligible
public
and
private
counterparts
to
improve
the
bankability
and
investment
readiness
of
large
, complex,
innovative
projects
that
need
substantial
long
term
investmentsSlide6
RDI IN THE EU POLICY AGENDARDI are at the core
of
the
policy
agenda
as
key
drivers
of
sustainable
long-term
economic
development
Strategy
for Europe 2020
puts
RDI at
the
top
of
the
EU
agenda
for
smart
,
sustainable
and
inclusive
growth
The
European
Commission
lauched
the
„
innovation
Union”
flagship
initiative
,
aimed
to
ensure
that
innovation
ideas
can
be
turned
into
products
and
services
that
create
economic
growth
and
jobs
.Slide7
Standard BCA of RDI InfrastructuresDefinition of RDI infrastructures
Research
and
development
infrastructures
are
science
related
physical
realisations
(
laboratories
,
facilities
,
etc
.)
developed
with
the
main
purpose
of
acquiring
new
knowledge
in
a
given
scientific
and
technological
field
;
1)
Innovation
infrastructures
are
infrastructures
aimed
at
combining
knowledge
and
technology
for
the
development
of
new
or
improved
products
,
services
and
business
processes
that
could
be
sold
on
the
marketplace
2), 3)Slide8
Standard BCA of RDI InfrastructuresDescription/Presentation of
the
context
Socio-economic
trend;
1)
Policy
and
legislative
framework
;
2)
Geographical
conditions
and
availability
of
resources
;
3)
Current
level
of
research
and
innovation
;
4)
Conditions
of
the
existing
research
facilities
and
infrastructural
needs
5)Slide9
Standard BCA of RDI InfrastructuresDefinition of objectives
RDI
projects
can
be
associated
with
a
multitude
of
long-term
objectives
;
i.e
.:
1)
-
strenghten
the
cooperation
between
research
,
innovation
,
education
and
business
to
create
more
jobs
and
increase
economic
competitiveness
;
-
enhance
the
attractiveness
of
a
cluster
or
science
park for
investors
and
companies
;
2)
-
promote
the
mobility
of
researchs
and
associated
exchange
of
ideas
Slide10
Standard BCA of RDI InfrastructuresProject identification
The
proposed
project
must
be
described
in
details
as a
self-sufficient
unit
of
analysis
;
-
when
RDI
investments
consist
of
single-site
facilities
,
the
project
identification
becomes
relatively
straightforward
1)
-
geographically
distributed
RDI
facilities
,
consisting
of
a network
of
infrastructures
and
equipment
located
in
different
places
(
or
countries
)
can
also
be
identified
as a
self-sufficient
project
if
there
is
a
strong
functional
relationship
among
all
of
its
parts
2)Slide11
Project identificationRDI investments
aimed
at
fostering
cooperation
between
a
number
of
research
facilities
and
knowledge
transfer/
innovation
facilities
; -
located
in
the
same
area
(
city
or
region
); -
are
not
incorporated
within
one single-site
infrastructure
;
-
could
still
be
considered
as a single
project
and
a
self-sufficient
unit
of
analysis
for
the
purpose
of
the
BCA as
long
as
they
create
strong
synergies
,
critical
mass
and
achieve
cost
savings
for
each
facility
involvedSlide12
Standard BCA of RDI InfrastructuresDemand analysis
The
demand
of
RDI
infrastructures
is
actually
driven
by
the
social
and
economic
needs
expressed
by
a
multiplicity
of
target
groups
;
i.e
.
stakeholders
who
/
which
will
ultimately
benefit
from
the
intervention
;
1
)
The
macro
categories
of
target
groups
,
which
drive
the
demand
for
the
RDI
project
at
regional
and
/
or
national
level
,
can
be
identified
:
-
business
;
2
)
-
researchers
,
young
professional
and
students
;
3
)
-
target
population
and
the
general
public
4
)
5
)Slide13
Demand analysis
Target
group
Examples
of
factors
driving
the
demand
Possible
methods
for data
gathering
and
estimation
Examples
of
output
from
the
demand
analysis
Business
Average
growth
of
the
industrial
base
in
the
RDI
project
field
in
the
last
years
Knowledge
intensity
of
businesses
in
sectors
related
to
the
RDI
project
Statistical
analysis
of
historical
data
Benchmarks
with
similar
RDI
projects
Relevant
literature
and
existing
studies
Interviews
,
surveys
,
consultations
Annual
number
of
spin-offs
/start-
ups
expected
to
be
generated
-
supported
by
the
project
Expected
number
of
business
using
the
infrastructure
to
develop
new
/
improved
products
and
processes
Researchers
,
young
professionals
and
students
Number
of
scientists
operating
in
the
RDI
project
field
and
in
the
geographical
area
targeted
by
the
infrastructure
Statistical
analysis
of
historical
data
Relevant
literature
and
existing
studies
Demographic
projections
Annual
number
of
researchers
who
will
directly
use
the
RDI
infrastructure
Revenues
from
student
fees
Target
population
and
general
public
Existance
of
knowledge
transfer
agreements
to
the
RDI
infrastructures
Provisions
of
outreach
activities
by
the
project
promoter
Statistical
analysis
of
historical
data
Benchmarks
with
similar
RDI
projects
Relevant
literature
and
existing
studies
Annual
number
of
people
potentially
targeted
by
the
project
Annual
number
of
patients
treated
by
innovative
medical
technologiesSlide14
Standard BCA of RDI InfrastructuresOption analysis
The
option
analysis
aims
at
identifying
the
most
promising
project
option
that
can
achieve
the
expected
objective
given
a
certain
demand
The
baseline
for
the
option
analysis
is
the
description
of
a
scenario
without-the-project
for
which
alternative
options
can
be
conjectured
RDI
project
options
:
strategic
,
technological
,
location
and
architectual
;
could
differ
one
from
another
from
multiple
perspective
1)Slide15
Standard BCA of RDI InfrastructuresFinancial analysisInvestment,
operation
and
maintenance
costs
Investment
costs
O
&
M
costs
-
Planing
and
design
costs
-
Land
acquisition
-
Construction
costs
,
possibly
disaggregated
by
civil
works
and
installations
,
materials
,
labour
etc
.
- Energy,
waste
disposal
and
other
utilities
consumed
during
the
construction
period
-
Road
access
- RDI
equipment
,
including
information
technologies
(
particulary
for data
storage
or
elaboration
)
-
Intellectual
property
purchase
costs
-
Testing
- Start-
up
costs
- Materials
and
equipment
-
Consulting
services
-
Costs
of
scientific
personnel
-
Cost
of
administrative
and
technical
staff
-
Cost
of
obtaining
and
maintaining
patents
- Energy,
waste
disposal
and
other
utilities
-
Promotional
campaigns
and
other
outreach
expenditure
to
the
general
public
- Training
courses
connected
to
the
infrastructure’s
operation
and
management Slide16
Standard BCA of RDI InfrastructuresFinancial analysisRevenues
and
financing
sources
Examples
of
operating
revenues
Examples
of
financing
sources
-
Licenece
revenues
gained
from
patents
’
commercialisation
; - Sale
of
consultancy
services
-
Revenues
from
industrial
research
contracts
and
pre
-
commercial
procurements
contracts
-
Entry
fees
to
the
laboratory
and
for
the
use
of
research
equipment
charged
to
researchers
and
business
- Student/
master
/
PhD
fees
-
Spin-off
equity
realisations
- Research
grants
involving
a transfer
of
ownership
of
a
s
pecific
research
output
- Sale
or
rent
of
new
buildings
used
for
the
project’s
objective
-
Revenues
from
the
target
population
using
the
research
outputs
(
e.g
.
patients
receiving
an
innovative
treatment
)
- National/
regional
public
contributions
- National/
regional
private
contributions
- EU
contribution
-
Other
national
/
regional
funding
schemes
for RDI
activities
-
Public
grants
to
research
,
e.g
.
the
Horizon
2020
framework
-
Ordinary
public
transfersSlide17
Standard BCA of RDI InfrastructuresEconomic analysis
The
main
difficulty
is
the
estimation
of
the
social
benefits
from
a
range
of
diverse
projects
:
-
from
research
centres
on
climate
change
to
scientific
and
technological
parks
;
or
-
from
high-energy
physics
research
infrastructures
to bio-
molecular
research
facilities
Typical
benefits
(
who
is
going
to
be
targeted
?):
- for business;
1)
for
researchers
,
young
professionals
and
students;
2)
for
the
target
population
and
general
public
3)Slide18
Standard BCA of RDI InfrastructuresEconomic analysisValuation
of
benefits
To
business
:
the
general
rule
is
that
any
change
beneficial
to a
business
should
be
valued
by
incremental
shadow
profits
1)
To
researches
and
students
: one
of
the
main
benefit
is
the
opportunity
to
access
new
experimental
data, to
contribute
to
the
creation
of
new
knowledge
and
to
publish
scientific
papers
in
scolary
journals
2)
-
the
main
benefit
for junior
researchers
and
students
involved
in
the
project
is
a „
premium
” for
their
future
salary
,
resulting
from
the
aquisition
of
human
capital
3)Slide19
Standard BCA of RDI InfrastructuresEconomic analysis
Valuation
of
benefits
To
target
population
and
the
general
public
:
-
reduction
of
environmental
risks
;
the
most
encompassing
risk
for
the
human
kind
is
climate
shange
1)
-
reduction
of
the
health
risks
;
the
discovery
and
testing
of
new
drugs
,
new
advanced
forms
of
surgery
assisted
by
robotics
,
radiotherapy
with
non-conventional
beams
,
genetics
,
etc
.
2)
-
cultural
effects
for
visitors
;
3)Slide20
Standard BCA of InfrastructuresRisk assessment; Typical
risks
in
RDI
projects
Stage
Risk
Demand
analysis
-
Evolutions
in
the
labour
market
;
Insufficient
qualified
human
resources
for
research
activity
;
Interest
of
general
public
different
than
predicted
Design
-
Inadequate
site
selection
;
Inadequate
design
cost
estimates
;
Delays
in
completing
the
project
design;
Lack
of
well-established
technical
engineering
expertise
Administrative
and
procurement
-
Delays
in
obtaining
building
permits
;
Unresolved
property
ownership
rights
;
Procedural
delays
to
select
the
supplier
and
sign
the
procurement
contract
;
Supply
bottlenecks
Construction
- Project
cost
overruns
;
Delays
in
complementary
works
outside
the
project
promoter’s
control
;
Accidents
Operatio
n
-
Unexpected
complications
connected
with
the
installation
of
specialised
equipment
;
Insufficient
production
of
research
results
;
Lack
of
academic
staff
/
researchers
Financial
-
Inadequate
estimate
of
financial
revenues
and
system for
protection
and
exploatation
of
intellectual
property
;
Loss
of
existing
clients
/
users
due
to
competition
from
other
RDI
centresSlide21
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