Exploring the Unknown - NASA's History Office

EXPLORING THE UNKNOWN 557
It is important to recognize that only the TUO benefits measure can be used to pass
on the merits of TUO’s activities. In addition, activity scale and applications benefits do
not measure comparable values. In our estimate of applications benefits, we measure the
value of the product or process which includes both the technology transferred through
TUO and the technology contributed by other participants. The estimate of activity scale
is an estimate of the value of technology contained in the transfer mechanism alone.
A summary of our findings is presented in Table 1. Employing standard methods of
cost-benefit analysis, we find that the TUO benefits of those activities we have examined
are greater than the TUO costs incurred.
In Table 1, estimates of both types of all measures are expressed in present values in
1976 of the stream of benefits over the relevant period, measured in 1976 constant dollars.
For each of the individual activities, TUO benefit results are presented in both dollar
terms and as ratios to the corresponding activity cost borne directly by TUO.
Each of the estimates reported in columns 2–4 of Table 1 has been adjusted by a
realization probability factor, which is reported in column 1. This realization factor
reflects our estimate of the likelihood that positive [4] [original placement of Table 1]
[5] benefits have or will derive from the activities we have examined. For the information
activities, the realization probabilities are 1.0, because expected benefits of the activities
may be inferred directly from actual market data on user demand for the activities. Our
estimates of realization probabilities for applications projects are generally less than one.
This is because most of the project technologies have yet to reach the marketplace, and
accordingly there is uncertainty about whether they will. The method by which these realization
probabilities were estimated for the applications projects is discussed in Chapter V.
The ratio shown in column 4 is the ratio of TUO benefits, i. e., benefits attributable to
TUO, to TUO activity costs. This ratio shows whether or not the TUO benefits of a given
TUO activity are greater than its cost. If this ratio is greater than one, then the costbenefit
test is passed.
Table 1
Summary of Estimated Benefits and Benefit-Cost Ratios
of Selected Activities Initiated 1970–1976 1
(All Benefits in Millions of 1976 Dollars Discounted to 1976)
a. Information Activities
1 2 3 4
Realization TUO Benefits TUO Benefits TUO Benefits-
Probability Plus User Costs TUO Cost Ratio
and Charges
Technical Support Packages 1.0 $ 83.0 $ 2.0 1.2
COSMIC 1.0 307.0 6.1 4.1
1. For Information Programs, the estimates are for the period 1970–1976. For the Applications
Projects, the estimates are for ten years after expected (or actual) commercialization.