Exploring Cost Benefit Analysis of Research, Development and Innovation Infrastructures: An Evaluation Framework
Governments, funding agencies and policy makers have high expectations on research, development and innovation (RDI) infrastructures in the context of science and innovation policies aimed at sustaining economic growth in the long term. The stakes associated with their selection and evaluation are therefore high. Cost benefit analysis of RDI infrastructures is a new field. The intangible nature of some benefits and the uncertainty associated to the achievement of research results have often discouraged the use of a proper CBA for RDI infrastructures. Recently, some attempts to develop a CBA theoretical framework for RDI infrastructures have been made in the context of the use of Structural Funds by the Czech government and JASPERS. Moreover, the new Guide for the CBA of investment projects in the context of Cohesion Policy, recently adopted by the European Commission (2014) provides guidelines to appraise RDI projects, but also admits that due to lack of experience and best practices further steps are needed to improve the evaluation framework. This paper presents the results and the lessons learned on how to apply ex ante CBA for major RDI infrastructures by a team of economists and scientists at the University of Milan and CSIL during a three year research project supported by a EIBURS grant of the European Investment Bank Institute. Albeit the comprehensive conceptual framework presented in the paper builds on principles firmly rooted in CBA tradition, their application to the RDI sector is still in its infancy. So far, the model has been applied on two cases in physics involving particle accelerators (the Large Hadron Collider (LHC) at CERN and the National Centre for Oncological Treatment (CNAO) in Italy) In a nutshell, the model presented break down benefits into two broad classes: i) use benefits, held by different categories of infrastructure's users such as scientists, firms, students and general public visitors, and ii) non use benefits, denoting the social value for the discovery potential of the RDI infrastructure regardless of its actual or future use. We argue that the social value of discovery can be estimated with contingent valuation techniques. Another significant feature of our approach is the stochastic nature of the CBA model, intended to deal with the uncertainty and risk of optimism bias in the estimates