Exploring the Unknown - NASA's History Office

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SPACE AS AN INVESTMENT IN ECONOMIC GROWTH
A Cost-Benefit Analysis of Selected
Technology Utilization Office Programs
November 7, 1977
[1] EXECUTIVE SUMMARY
Since its establishment in 1958, the National Aeronautics and Space Administration
(NASA) has played a major role in technology transfer through activities which encourage
the adoption, by other sectors of the economy, of technologies or techniques developed
for the space program. To provide a formal program to support and monitor
technology transfer, NASA, in 1962, established its Industrial Applications Office, the predecessor
of today’s Technology Utilization Office (TUO).
This summary briefly reports the results of a study applying standard methods of costbenefit
analysis to selected program activities managed by TUO. Our primary objective in
the study is to analyze the costs and benefits of selected TUO activities, based upon available
data.
In order to meet this objective, we have selected a subset of TUO’s projects or activities
for analysis. The main criterion for selection was the availability of data. To ease the
burden of data gathering, we have further limited the activities examined to those conducted
during the period 1970 to 1976. Nevertheless, the available data for the projects
we have selected are sometimes incomplete, or are subject to considerable uncertainty.
The individual activities that we have analyzed are grouped into two general categories:
information activities and applications projects. Information activities are directed
toward the production and dissemination of documents describing NASA technology as
well as computer programs and documentation. Application projects are designed to support
the transfer of a specific technology or technique by participating with others in the
[2] development of a new product or process.
We have estimated two different indicators of value for each activity/project we examine.
For both information activities and applications projects, we estimate the benefits
which are directly associated with TUO’s costs. For convenience we will call these “TUO
Benefits.” The “cost-benefit test” which we make in each of our analyses of TUO activities
consists of comparing TUO benefits with the TUO costs of the activity generating them.
If TUO benefits exceed TUO costs, the activity passes the cost-benefit test. This is an indication
that society gained more from TUO’s activities (in the form of new information,
new processes, or new products) than it lost in the taxes, user costs, and user charges
which were incurred in the provision of use of these activities.
While the primary results of this study estimate the costs and benefits of TUO’s technology
transfer activities, we also present two other special indicators of the economic
impact of these activities to provide some perspective. These indicators differ for information
activities and applications projects.
For information activities, we estimate the sum of TUO benefits, user charges, and
user costs. This number provides an indication of the value society places on the information
contained in the transfer media. For convenience, we refer to this measure as
“activity scale.” The measure of activity scale for information activities is intended to indicate
the resources others are willing to spend to extract the information contained in the
various media. As such, it provides one (albeit imperfect) estimate [3] of the value of the
technology contained in the information. For applications projects, we estimate the sum
of TUO benefits and those benefits that are attributable to other participants. We refer to
this measure as “applications benefits.” Applications benefits are intended to estimate the
value to society of the new project or process to which TUO is a contributor.