Hard times? Digital library economics and the future financing of libraries

David Baker (University of St Mark & St John, Plymouth, UK)

The Bottom Line

ISSN: 0888-045X

Article publication date: 6 July 2015

659

Citation

Baker, D. (2015), "Hard times? Digital library economics and the future financing of libraries", The Bottom Line, Vol. 28 No. 1/2. https://doi.org/10.1108/BL-01-2015-0003

Publisher

:

Emerald Group Publishing Limited


Hard times? Digital library economics and the future financing of libraries

Article Type: Editorial From: The Bottom Line: Managing library finances, Volume 28, Issue 1/2

It was a fundamental principle of the Gradgrind philosophy that everything was to be paid for. Nobody was ever on any account to give anybody anything, or render anybody help without purchase. Gratitude was to be abolished, and the virtues springing from it were not to be. Every inch of the existence of mankind, from birth to death, was to be a bargain across a counter. And if we didn’t get to Heaven that way, it was not a politico-economical place, and we had no business there.

Charles Dickens, Hard Times

I have long had an interest in library finances and financial management; it is impossible not to be interested when you have been a senior manager in academic institutions for three decades and more. The everything-has-to-be-paid-for philosophy described by Dickens in Hard Times is ever more pervasive. This is especially the case in those “public” services that for very many years have been not only free at point of use but also largely paid for out of central – institutional or governmental – funds. Recent recessions and depressions – national, regional and global – have resulted in searching questions that are being asked about value, benefit, return on investment and much more across a whole range of activities that have long being regarded as for the common good. Libraries – public, academic and special – are not immune from the seemingly inexorable march of monetarism. Dickens refers elsewhere in his works to the power of money, as for example in Dombey and Son; if “money makes the world go round” then it does so now more than ever in these hard times. Hence, the title of this special double issue of The Bottom Line.

I recently summarised my work over the past 25 years with regard to on-site holding of, and remote access to library materials and the economic underpinning of decision-making in this area when I acted as a guest editor for the journal Interlending and Document Supply (Baker, 2014). I have also written and edited a number of books in the broader field of library economics in general and digital library economics in particular (Baker and Evans, 2009, 2013).

It seemed natural and logical, then, to accept an invitation to act as a guest editor of The Bottom Line, a journal that focuses on library finances – indeed, “the only journal to address finance issues for librarians[1]”; not only that, but also to issue a call for papers “within the overall theme of digital library economics and financing”. Given the inexorable application of technology to library provision and services, I took as my starting point for the main topic areas, two books that I have edited and written jointly with Wendy Evans (Baker and Evans, 2009, 2013) that are concerned with the economics of digital library provision. In terms of major ongoing issues, these publications provided the following list of themes:

  • The Economics of Information and the Internet.

  • Funding Digital Libraries – Where will the money come from?

  • Asset Management and Valuation.

  • Intellectual Capital – Value and Economic Aspects.

  • Income Streams and Funding Models.

  • Business Plans.

  • Sustainability.

  • Return on Investment.

  • Costing and Budgeting.

  • Resource Allocation.

  • Developments in Financial Modelling.

  • Efficiency and Effectiveness in a Digital World; what and where are the new metrics?

An obvious starting point for this special issue, and a way of covering the key themes listed above, was to ask John Robinson to update his thinking on digital library economics since his work in 2008 (Baker and Evans, 2009), when he considered the various financial aspects of online developments in library and information service provision. A good deal has changed in the past seven years, both technologically and economically. Robinson considers the significant challenges now facing librarians as they develop their digital library capabilities and looks at how costs for the various functions and activities should best be calculated. While doing everything “in house” may no longer be feasible for many libraries, planning and costing on that basis provides an effective benchmark against which other options – notably managed services, outsourcing and cloud services – can be tested. Whatever the eventual decision, it is clear from Robinson’s article that cooperation and collaboration will be an essential ingredient in the successful future development of library services. As the author comments: “new working methods and new costs are unavoidable”. Building new teams and/or re-training existing staff will therefore be essential.

The list of themes enumerated earlier and discussed in the main by Robinson’s opening paper was developed and refined during the early stages of a “Delphi” exercise that I was carrying out with the editorial board and the reviewer panel of New Library World (NLW) (a sister journal in the Emerald Library and Information Science portfolio) at the end of my first year as Editor-in-Chief as a way of determining the overall future direction of NLW and of identifying the key subject areas to be covered over the next three to five years. Time and again in the responses to the first-round Delphi survey, the emphasis was on economic and financial aspects of library provision and management, regardless of the type of library, not least because, as one board member commented, “global economic stagnation will in turn reduce investment in libraries”. The global economic depression has irrevocably altered the environment in which libraries and librarians will operate, as noted by another respondent in their comment that:

Cuts to public spending […] will continue to challenge the provision of library services, and the facilities which those that survive can provide.

So, for example, one Delphi participant forecasts that:

There will be a smaller number of public libraries for reasons of austerity and reduced relevance to users. All libraries will see further reductions in staffing and introduction of new technologies to support users and operate libraries – driven by cost reduction.

This is borne out by a whole range of statistics. Take, for example, the UK-based Chartered Institute of Public Finance and Accountancy (CIPFA) statistics for 2014[2] which speak of “continuing decline in buildings, books and borrowers as cuts continue to bite”. And nowhere has recession bitten harder than in Greece. Evgenia Vasilakaki discusses the challenges that the current prolonged and deep economic crisis has posed for Greek public and municipal libraries and the opportunities for innovative responses to “hard times”.

As one Delphi participant stressed, “value for money in public and academic libraries will be increasingly scrutinised”. This led many respondents to stress the need for greater proof of return on investment (ROI) and the (positive) impact of libraries, especially in the context of library services that are “seen as an overhead not integral to institutional mission”. This is Bruce Massis’ contention in his viewpoint paper, though, as he rightly points out, ROI in library and information services cannot, and should not, always be measured in purely financial terms. Libraries can and should demonstrate the many non-financial benefits of library provision to their investors – notably the taxpayers. Community benefits in particular can include, as Massis points out, job creation, increased business growth and “a proliferation of positive consumer habits”. These “cash equivalents” are important factors to be taken into account when ROI methodologies are being applied to library and information service provision. Such an approach “can be used by the library to help to sustain its support for funding, especially in hard times”. In this context, Johannsen provides a useful study of how to evaluate (public) library services, in this case a Web 2.0 training programme devised with a particular emphasis on upskilling computer illiterate segments of the Danish population. The paper includes discussion on the extent to which such activities – notably involving social media – are legitimate ones for professional and public library services.

Massis’ column and Johannsen’s study are complemented and reinforced by Skelly’s research. Her paper explores the potential relationships between various aspects of public library provision and usage and key aspects of economic growth and development. While these cause-and-effect relationships are never likely to be uniform in their outcomes, it is obvious that the library has benefits far beyond the purely financial. Skelly’s findings should be of value to library policymakers when planning the future development – or cessation – of particular services to users, especially in the public library sphere.

As Wendy Evans and I found when writing and editing A Handbook of Digital Library Economics (Baker and Evans, 2013), it is impossible to review library finances at the macros level without at some point focussing on the key question of sustainability. Digital approaches have the power to disturb established models of provision and service on the one hand, but the potential to create new modes of sustainability on the other. As many authors represented in this special issue comment (and as reinforced by participants in the NLW Delphi study), there is always likely to be a political dimension to the demonstration of worth and value in public service provision, and libraries are no exception, not least in the context of discontinuous and disruptive technology trends. Michnik provides an apposite and valuable case study of Swedish local politicians’ perceptions of the impact of public library services in the context of digital developments. As Skelly also notes, there is a complex and subtle set of relationships between elements of provision – and hence sustainability – such as physical space, library staff competences and budgetary demands and requirements. Achieving sustainability – in all its forms – will continue to be a hard task for librarians, with technology providing both a threat and an opportunity, being also a strength and a weakness of all forms of library provision.

It is clear from Michnik’s paper that new relationships between librarians and their key stakeholders are necessary. Derek Law, in reflecting on his own considerable experience over many years, argues that this is even the case and the necessity with university libraries, long regarded as relatively immune from the financial vicissitudes experienced by other types of library service. Unless academic libraries reflect and respond to the strategy and mission of their parent institutions, and can demonstrate how they are fully playing their part in achieving desired aims and objectives, they will become unsustainable for the simple reason that their dominant stakeholders will disinvest in them.

New types of service – and especially those that are technology-based – require new kinds of business model, as noted by Robinson. The phenomenon of Massive Open Online Courses (MOOCs) may be a passing fancy; on the other hand, it could well be one element in the disruption through technology development and application of traditional models of provision referred to earlier in this editorial. Sarah Porter analyses the present interest in MOOCs and the associated business models – present and predicted – and formulates and discusses the associated key issues and challenges from the perspectives of platform, providers and consumers. While, to date, most MOOCs are based on a “freemium” model, it is clear that at least some add-on services (if not the core offering) are likely to be charged for in the future to ensure a degree of sustainability for the courses. While it is still very early days, Porter’s work will inform discussion and debate about the future development of appropriate and effective business models and decision-making processes for online courses.

In this context, it is interesting to note that all the respondents to the first-round Delphi survey stressed the importance of maintaining the basic principle of services that are free at point of use: “users [will continue to have] a default expectation that service should be free”; “no matter the changes happening, libraries will always provide free access to well selected, evaluated, organised information and offer added value services to users”. While this may be the case, everyone involved in the Delphi exercise to date also expects there to be greater and ever more sophisticated demand for a more diversified set of services, including “more accessible (self) services”. As a result, many of the participants ended up modifying their position with regard to free access to one where provision to the end-user is “at no or little cost”.

All well and good, then, to maintain the principle of free-at-point-of-use, but can it be afforded? It should be noted, however, that spiralling costs are nothing new. The early work developing just-in-time rather than just-in-case library provision in which I was involved in the 1990s was intended to be a response to the rampant inflation of hard-copy journals at the time (Baker, 1992). And adopting a technology-led solution would ensure – it was hoped and expected – that costs would be reduced at the same time as services were maintained if not enhanced.

Not much has changed. Every Delphi respondent sees “the inevitability” of technology developments as a key way of maintaining and developing library services and collections at a time of significant financial constraint. Just-in-time provision obviates the need to maintain costly book storage; certainly in my experience in the 1990s, adopting such an approach allowed me to reduce the pressure on space and avoid the need to fund an extension to the library building (Baker, 2013). There remains much potential for further economies here, at least according to one Delphi respondent:

Because MOST libraries will get rid of dead tree format for journal runs and by using the library as a teaching and learning hub other buildings can be closed and council taxes, electric and water bills can be reduced.

David Ball takes up the issue of “dead tree format” in his “thought-experiment”, investigating the economic and financial possibilities of moving from the classic just-in-case model of library provision to a centralised just-in-time one based on statistics from UK research libraries. It is evident from the author’s analysis that there is potentially a significant ROI to be made by establishing a centralised collection as a means of managing legacy collections of printed monographs, including through the freeing up of space on individual libraries’ shelves. Ball’s conclusions are reinforced and expanded in Mike McGrath’s review of the changes and trends in interlending and document supply (ILDS) over the past 12 years. As the Editor of the journal Interlending and Document Supply, and the writer of the Journal’s regular review of the literature on ILDS, McGrath is in a particularly good position to comment on the ways in which (remote) access to library materials has been transformed by a number of factors, including the economic and the technological.

These, then, are the key issues covered in this special double issue of The Bottom Line. As one Delphi respondent commented, “Libraries [will] need to become even more creative to address the challenges [the] economic crisis poses”. As another concluded, “[Libraries] should not merely move with the times but make the pace. [They] should lead rather than follow”. It is hoped that the papers reproduced here will help librarians to provide that necessary leadership.

David Baker

Notes

[1.] http://emeraldgrouppublishing.com/products/journals/journals.htm?id=bl

[2.] http://www.cipfa.org

References

Baker, D. (1992), “Access versus holdings policy with special reference to the University of East Anglia”, Interlending and Document Supply, Vol. 20 No. 4, pp. 131-137.

Baker, D. (2013), “Beyond space: access is all – or is it?”, in Watson, L. (Ed.), Better Library and Learning Space: Projects, Trends and Ideas, Facet, London, pp. 151-158.

Baker, D. (2014), “Guest editorial – resource discovery and delivery: back to the future”, Interlending & Document Supply, Vol. 42 No. 4.

Baker, D. and Evans, W. (2009), Digital Library Economics, Chandos, Oxford.

Baker, D. and Evans, W. (2013), Handbook of Digital Library Economics, Chandos, Oxford.

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