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Summary of NIST Impact Study Results

NIST Economic Impact Studies

Within the DOC, NIST has had a long history of assessing the economic impact of standards and related technologies transferred from its research and standards programs. These studies have focused on assessing the economic impacts of test methods, calibration services, reference materials, and other services developed by NIST.

Between 2000 and 2011, sixteen microeconomic studies were performed that assessed technologies transferred to nine different industries.  Each of these studies measured economic impact in terms of the net benefits society experienced as a result of NIST’s technology transfer activities.  Measures of net benefits include net present value (NPV), social rate of return (SRR), and benefits to cost ratio (BCR).  NPV is the inflation adjusted value of net benefits (benefits-costs) discounted over the course of the study period.  A positive NPV indicates that the mechanism being assessed yields greater benefits than the cost to provide it. SRR is the interest rate that reduces the NPV to zero.  The SRR is similar to the internal rate of return metric commonly used to judge the worthiness of investment projects. The modifier “social” indicates that the value of this performance metric accounts for the benefits and costs that accrue to all beneficiaries, not just the project investors.  The BCR is the ratio of the net present value of benefits to the net present value of costs. A positive BCR value indicates the number of dollars in benefits that have resulted from the technology transfer activity for each of the dollars invested, adjusted for inflation.

For example, as shown in the table below, in 2000 a study was made to assess the economic impact of NIST’s standard reference materials (SRMs) used in the production of fossil fuels (Economic Impact of Standard Reference Materials for Sulfur in Fossil Fuels).  SRMs are quality assurance materials that are used, among other things, to evaluate measurement accuracy and to provide compatibility of measurement data.  They play a key role in manufacturing by helping users verify the accuracy of measurement methods and calibrate measurement systems.  In this example, SRMs are used to provide more accurate sulfur content information for fossil fuels manufactures. Improving the accuracy of content information reduces the likelihood of disputes between sellers and purchasers of fossil fuels, such as coal companies and electric utilities. It also enhances production efficiency for the petroleum industry, resulting in reduced sulfur emissions into the environment.  This study quantified a portion of the economic benefits associated with sulfur SRMs. Included in the measures of economic benefits were improvements in product quality, production efficiency, and reductions in transaction costs and sulfur dioxide emissions to the environment. In addition, the study identified and qualitatively described the impact of NIST SRMs on other less tangible areas, such as research and development programs.

This study estimated that industry significantly benefited from the development and transfer of NIST’s sulfur SRMs.  According to the measures of benefits and costs analyzed, NIST’s sulfur SRMs yielded a NPV of $409 million in 1998 dollars, which equates to a SRR of 1056%.  The BCR of 113 indicates that for each dollar NIST spent on developing sulfur SRMs, $113 in net benefits accrued to those who used the SRMs in the manufacturing of fossil fuels.

 

NIST Economic Impact Studies (2000 to 2011)

Impact Study/ Transfer Mechanism Outcomes BCR(a) SRR(b) NPV(Year)(c)
Building Technology        

"Benefits and Costs of Research: A Case Study of Construction Systems Integration and Automation Technologies in Commercial Facilities" (2001)

  • Construction System Integration and Automation Technologies
Increase productivity & reduced costs 4 nc $120M (1997)

"Benefits and Costs Of Research: A Case Study of Fire Dynamics Simulation" (2002)

  • Fire Dynamics Simulator
Improved efficiencies & reduced R&D costs 75 27% $282M (2000)
Chemicals        

"Economic Impact of Standard Reference Materials for Sulfur in Fossil Fuels" (2000)

  • Sulfur in Fossil Fuels/SRM
Increased product quality & production efficiency, reduced transaction costs & pollution 113 1056% $409M (1998)

"The Economic Impact of the Gas-Mixture NIST-Traceable Reference Materials Program" (2002)

  • National Traceable Reference Materials, SRD; Calibration Services
Increase productivity, reduced 
costs
24 225% $56M (2001)
Electronics        

"Economic Impact Assessment of the NIST's Josephson Volt Standard Program" (2001)

  • Josephson Voltage Standard/SRM
Increased product quality & production efficiency,
reduced development costs
5 877% $45M (2000)
Information Technology        

"The Economic Impacts of NIST's Data Encryption Standard (DES) Program" (2001)

  • Data Encryption Standards/Standard Conformance Test Methods
Increase productivity, reduced 
technical risks
102 270% $768M (2000)

"The Economic Impact of Role-Based Access Control" (2001)

  • Role-Based Access Control/Reference Models (RBAC)
Increase productivity, reduced 
R&D costs
109 62% $292M (2000)

"Economic Impact Assessment of NIST's Text Retrieval Conference (TREC) Program" (2010)

  • Search Engines (TREC)
Increase productivity, reduced 
R&D costs
4 189% $51M (2009)
Manufacturing        

"Economic Impact Assessment of the International Standard for the Exchange of Product Model Data (STEP) in Transportation Equipment Industries" (2002)

  • STEP/STDS; Conformance Test Methods and Services
Improved system efficiencies,
& reduced costs
8 32% $180M (2001)

"Economic Analysis of Role-Based Access Control" (2010)

  • ŸComputer Security (RBAC)
Improved system efficiencies,
& reduced downtime
249 nc $835M (2000)

"The Economic Impacts of Documentary Standards: A Case Study of the Flat Panel Display Measurement Standard(FPDM)" (2011)

  • ŸDocumentary Standards
Improved system efficiencies,
reduced costs
4 48% $56M (2010)
Materials        

"Retrospective Economic Impact Assessment of the NIST Combinatorial Methods Center" (2009)

  • ŸConsortium-Based Combinatorial Methods Development and Transfer
Increased R&D, production & 
technology adoption efficiency
9 161% $118M (1998)
Pharmaceuticals        

"The Economic Impacts of NIST's Cholesterol Standards Program" (2000)

  • ŸCholesterol Measurement/SRM
Reduced production costs, 
improved quality & accuracy
5 154% $4M (1999)
Photonics        

"Economic Impact Assessment: NIST-EEEL: Laser and Fiberoptic Power and Energy Calibration Services" (2000)

  • ŸLaser and Fiber Optic Power and Energy Calibration/Calibrations
Increase productivity, reduced 
costs
9 136% $20M (1999)
Semiconductors        

"Economic Analysis of NIST's Investments in Superfilling Research" (2008)

  • ŸSuperfilling Research Techniques
Reduced R&D costs 5 71% $8M (2008)

"Economic Analysis of NIST's Low-K Materials Characterization Research" (2008)

  • ŸLow-K Materials Characterization
Redcued R&D, adoption,
& production costs
8 nc $17M (2008)
         
nc = not calculated        
(a) BCR = Benefit to Cost Ratio        
(b) SRR = Social Rate of Return        
(c) NPV (Year) = Net Present Value and base year for dollars        

Thirteen of the studies presented in the table estimated SRR. The SRR values for these studies ranged from a low of 27% to a high of 1056%.  The mean value is 254%, but given the standard deviation for this sample (327%), the median value of 154% is more representative of the typical study. Sixteen studies calculated BCR. The BCR values ranged from a low of 4 to a high of 249.  The mean value is 46 but again, given the standard deviation for the sample (69) the median value of 9 is more representative of the typical study.  The median value of 9 indicates that for a typical study on this list each dollar NIST spent, $9 in benefits were created.  Note that given the data presented here, the NPV measures from different studies cannot be aggregated into one value because different base years are used to calculate benefits and costs.

 

Summary of NIST’s Economic Impact Studies (2000 to 2011)

  SRR BCR
Numbers of Studies Reporting 13 16
Min 27% 4
Max 1056% 249
Mean 254% 46
Std Dev 327% 69
Median 154% 9

Created June 27, 2018