4 - The economic factors

Summary

Information is more useful than money.

(Dyson, 1997)

Introduction

The effective utilization of resources is one of the most important management activities in developing digital content and establishing digital libraries. The history of library development has many examples of great libraries being created through the largess of benefactors or the tax-paying public without necessarily having much consideration to the costeffectiveness of the development: between 1881 and 1917 Andrew Carnegie contributed $56 million to build 2509 libraries (www.carnegie.org/). The new market economies faced by today's manager mean that, even in those few scenarios of generous funding, every last drop of value must be squeezed from the available resources to maintain that funding now and in the future. Senior managers are confronting ever more difficult decisions on resource allocation, with the significant issue of opportunity costs to contend with, as described in this chapter. There are several aspects to the effective utilization of resources in relation to digital information. There are the immediate start-up costs of either creating or purchasing digital content; the further implementation costs for establishing a digital library or even just basic access to bought resources; which are followed by the costs implicit in managing and maintaining a digital resource in the longer term. Hand in hand with resource expenditure go the value and benefit derived from the resource itself, how these are measured and offset against costs – cangoing digital ever become cost-effective? Whether there are intentions to recover costs in their use or to seek profit in the future is a key strategic question that every library manager will have to address in developing digital information resources or digital libraries.

Markets are based upon perceived value and this also has a distinct effect upon digital library development: we cannot afford that which we do not value. Value is a concept based upon individual perceptions, sometimes directed by marketing and other promotional activities, but in actuality it has always had an element of personal choice. The majority of markets are based around the differentials in perceived value rather than actual assets, and these market forces can be seen to be at play in digital library development.