NTIS, Free Downloads, and The Productivity Paradox

Commerce Secretary William M. Daley intends to close the National Technical Information Service.1 NTIS is the federal government's central agency for the sale of scientific, technical, engineering, and business-related information produced for or by the United States government. Its collection includes about three million publications representing billions of dollars of information paid for by taxpayers. It distributes more than 170,000 subscription issues annually, maintains online databases, distributes electronic and printed products, provides custom information services, and manages Web sites for other agencies. About a third of NTIS's orders for technical reports are for material five years old or older. Its records indicate some 60,000 U.S. customers. Although it is one of the largest publishers in the world, you won't find its titles in Books in Print or in other typical trade distribution channels. It gets no appropriated funds to carry out its mission and so must charge prices to cover its costs. It appears that the present administration has run the business of NTIS into the ground. The Commerce Department claims NTIS's core business has been in the red since 1993 and that NTIS is in danger of going bankrupt. In March 1999, the commerce inspector general asserted that "even with significant efforts to improve its profitability, NTIS can no longer generate sufficient revenue to remain self-supporting." Another argument, made by Secretary Daley, for closing NTIS and transferring its operations to the Library of Congress is that a free download [presumably from the agency that originated the report] is preferable to paying $27 for a printed and bound report. This provides an example of how the "productivity paradox" has puzzled management analysts for many years. The paradox here is that if one takes into account the total costs and relative production qualities, the "free" download is clearly more expensive and an inferior product. Indeed, cheap microfiche copies have been available but not popular for decades. Scattering the sources for reports would frustrate customers' searches and raise their costs. The productivity paradox springs from assumptions, like the $27 print vs. free download, that automating information will produce gains in productivity by saving labor or other costs. It was well established that automation had done this for industrial tasks since the invention of the cam. This theory did not pan out for information, according to a panel organized by the National Research Council.2 By one analysis, a 12 percent annual increase in data processing spending yielded gains of less than 2 percent. Downsizings also did not yield commensurate productivity gains. That panel reminded me of another National Academy Press publication that attempted, also unaided by economists, to describe the economic value of scientific journals to society. Issued in 1970 by the NAS Committee on Scientific and Technical Communication, it was roundly criticized by Princeton University/New York University economist Fritz Machlup.3 In the recent report by the A.W. Mellon Foundation, economists R. Ekman and R.E. Quandt puzzle over applications of information technology that produce no significant financial savings in scholarly communication.4 They appear to recognize now that information technology will not enable libraries to pay their way--an item of "dogma" among many university managers. Information technology brings its own costs and shifts others, providing richer and faster--but not less expensive--communication. Blind enthusiasm for information technology has misled some into bypassing the linchpin of science, peer review. That part of the original proposal called "E-Biomed," offered by National Institutes of Health director Harold E. Varmus, has now been scrapped. Had he been alive today, Machlup would probably have explained that the productivity paradox results from inappropriate assumptions. Productivity in knowledge-related activity comes from information that saves errors and duplications.5 There is at least one study that confirms this.6 One must also count all the costs to arrive at a useful conclusion. You cannot automate thinking to save money. For instance, IBM's Deep Blue may have beaten Gary Kasparov in a chess game, but when you count the costs of preparation, computer vs. human, you will see the machine outspent the human many times over. There is another basic problem with the NTIS closing. The Library of Congress (LC) does not sell the publications that it archives so well. More, LC's archive has come under fire. In May 1996, the General Accounting Office submitted an unsolicited recommendation to Congress that LC should farm out its collections and become an information broker.7 The congressional committee rejected the idea, but the sting of surprise at the gross misreading of LC's value remains. In short, before Congress does anything to harm the research and education communities that depend on NTIS, I believe it is obligated by the public interest to make a thorough study of the impact on customers, their clientele, and the sponsors of research. (For obvious reasons, I would not trust the General Accounting Office or the Department of Commerce inspector general with this.) There may be alternatives less painful than closing. It may be that NTIS could turn the business around with the help of a businessman. Following that, hearings would permit the public to participate in the decision process. Albert Henderson (70244.1532@compuserve.com) is editor of Publishing Research Quarterly, P.O. Box 2423, Noble Station, Bridgeport, CT 06608-0423. References 1. Web address: 204.193.246.62/public.nsf/docs/ EA7BD28117EEF74D852567CB006B7D20 2. D. Harris, ed. Organizational Linkages: Understanding the Productivity Paradox, Washington, D.C., National Academy Press, 1994. 3. F. Machlup, Uses, value, and benefits of knowledge. Knowledge: Creation, Diffusion, Utilization, Sept. 1979, Reprinted, 14:448-466, 1993. 4. R. Eckman, R.E. Quandt, eds., Technology And Scholarly Communication, Berkeley, Calif., University of California Press, 1999. 5. F. Machlup, The Production and Distribution of Knowledge in the United States, Princeton, Princeton University Press, 1962, pages 187-8. 6. D.W. King et al., Value of the Energy Data Base, Oak Ridge, Tenn., Technical Information Center, U.S. Dept. of Energy, 1982. DOE/OR/11212-1 (DE82014250) 81 p. A survey of 60,000 scientists and engineers indicates productivity in R&D is achieved through providing better information and increased use of information. 7. Library of Congress Information Bulletin, 55:178-9, 193-5, 1996. Also Testimony Before the Joint Committee on the Library of Congress, U.S. General Accounting Office, May 7, 1996. GAO/T-GGD/AIMD-96-115.

NTIS, Free Downloads, and The Productivity Paradox

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