EIB UNIVERSITY RESEARCH SPONSORSHIP PROGRAMME COST BENEFIT ANALYSIS IN THE RESEARCH, DEVELOPMENT AND INNOVATION SECTOR UNIVERSITY OF MILAN - DEPARTMENT OF ECONOMICS, MANAGEMENT AND QUANTITATIVE METHODS UNIVERSITY OF MILAN - DEPARTMENT OF PHYSICS CSIL - CENTRE FOR INDUSTRIAL STUDIES Luxembourg, 23 April

Developing a CBA theoretical model for evaluating research infrastructure (RI) Testing the CBA model on two case studies Enabling funding agencies to assess the potential future net social benefits generated by a RI GOALS OF THE STUDY 2 SSC (abandoned) ISS International Space Station LHC Large Hadron collider

The E(NPV) of research infrastructures over the time horizon is defined as the expected difference between benefits and costs valued at shadow prices and discounted at the social discount rate. It can be decomposed in two parts: the expected net present value of use-benefits and costs NPV and the expected (non-use) social value of discovery. We drop the expectation operator, but all variables are to be considered as stochastic. THE MODEL 2

BENEFITS 2 Knowledge output (S) Technological externalities (T) Cultural effects (C) Human capital formation (H) The present value of use-benefits and costs NPV is the sum of the economic value of: The non-use benefits captures two types of benefits related to the social value of discovery: Services provided by applied RI (A)

Pure research infrastructure Applied research infrastructure TWO PILOT CASE STUDIES CERN Large Hadron Collider (LHC), Geneve National Hadrotherapy Center for Cancer Treatment (CNAO) in Pavia, Italy 8

1020 interviews at students (Milan, Paris, Exeter, a Coruña) 280 interviews at PhD students and Post-docs at Cern More than 1oo interviews with scientists, managers, experts, firms More than 15 researchers involved in the project ACTIVITIES IN NUMBERS 4

4 published working papers 4 forthcoming working papers An operational manual XIII Milan European Economy Workshop «The cost-benefit analysis of research infrastructures», June 2014 Presentation of the model at Seventh Annual Conference and Meeting of the Society for Benefit-Cost Analysis, “Advancing the Policy Frontier” - March , Washington, D.C. Call for papers for a special issue on Technology Forecasting and Social Change Final event in Brussels hosted by DG Research OUTCOME AND DISSEMINATION 4

DISSEMINATION ACTIVITIES 5

5

RESEARCH RESULTS: FORTHCOMING 4

DISSEMINATION ACTIVITIES: FORTHCOMING 5 THE USE OF COST-BENEFIT ANALYSIS IN THE EVALUATION OF RESEARCH INFRASTRUCTURES AND MAJOR R&D PROGRAMMES Presenting the results of the research project Cost-Benefit Analysis in the Research, Development and Innovation Sector, sponsored by the EIB Institute (University Research Sponsorship Programme -EIBURS) FINAL EVENT November 13th 2015 DG Research, Brussels

THANK YOU! 12