Transcript Financing a Spatial Data Infrastructure: Towards

Funding Models for SDI
Implementation: from Local to
Global
Garfield Giff, Ph.D. Candidate
Department of Geodesy & Geomatics Engineering
University of New Brunswick
Presentation Format

SDI and the different levels of SDIs

Economic Issues associated with SDI Implementation

The Concept of Funding Models

Funding Models for the different levels of SDIs

Funding Models for Emerging Nations and Nations in
transition

Evaluation of the models

Next Phase of the research

Conclusion
G. A. Giff
Introduction 1

The recognition of the importance of Spatial Data
Infrastructure (SDI) to the information society is now
widely accepted.

List of SDI initiatives at
http://www.spatial.maine.edu/~onsrud/gsdi.htm.
G. A. Giff
Introduction 2

The different levels of SDIs (based on work
done by Dr. Rajabifard)
Global
 Regional
 National
 Provincial/State
 Local
 Are Spatial Databases below the level of a
Local SDI a SDI, or just a component of a SDI?

G. A. Giff
Economic Issues associated with SDI
Implementation

Associated with the implementation of a SDI are a
number of economic issues. Some of the more
significant ones are:




Benefit Cost Analysis
Funding
Pricing Policies and
Marketing
• This presentation will focus on the Funding Issues
G. A. Giff
The Concept of Funding Models
G. A. Giff

The first generation of SDIs were mainly financed
through an ad hoc manner

Structured funding mechanisms required for the
second generation of SDIs.

A guide for SDI program managers on how to
formalize and source financing for the
implementation and maintenance of a SDI

In an attempt to address the deficiencies in SDI
financing, the authors decided to perform research
in this area and publish the results.
Preliminary Results of the Research
G. A. Giff

The investigation revealed the following:
1.
Very little research on the economic issues of SDI.

The economic issues covered were mainly benefit-cost
analysis to justify implementation and pricing to a lesser
extent (Obermeyer and Pinto, 1994).

A lack of structured funding models

The need for alternative funding models to support the
second generation of SDIs and SDIs in emerging nations
Pyramid of SDI Research
Funding Models
Social and Political Issues
Institutional Issues
Economic Issues: Benefit-Cost Analysis
Technical Issues
G. A. Giff
Existing Funding Models

A Structured view of current SDI/Infrastructure
Financing
Government
Contribution
(Derived from Taxation)
Funding
Agencies
SDI Funding
Pool
G. A. Giff
Private/Public
Sector
Contribution
Funding Models for National Level SDI 1

Different methodologies available for designing
funding models for SDI implementation at the
national level

At the national level the main function of a SDI is to
satisfy national needs. That is, providing spatial
information to support for example:
 The
modernization of the public sector
 E-government and e-commerce
 Defense and emergency
 Land Management and
 Environmental and social activities
G. A. Giff
Funding Models for National Level SDI 2

SDI a provider of Public Goods

Problems associated with Infrastructures
providing Public Goods:

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The production of public goods normally results in
market failures and

The creation of natural monopolies
The above problems usually requires government
intervention to successfully correct them. Therefore,
government policies will play a key role in the
designing of the models
Funding Models for National Level SDI
Matching
Ratio
Tax-free bonds, Loans, Shares,
Special
Financial
Institutions
Central
Funding
Implementation
Environment 2
Government
SDI
Funding
Models
GovernmentPrivate Sector
Partnerships
BOOT
Financing
G. A. Giff
Tax Incentives
Combined
Methods
Implementation
line of credit,etc
Environment 1
State & private sector
Capital Market Instruments
Duty free imports, no tax on
capital goods & profit, etc
Appropriate
Model(s)
Appropriate
Model(s)
Funding Models for State/Provincial Level
SDI 1
•
G. A. Giff
SDIs at the level will produce information at a
larger scale & therefore open to more business
opportunities
•
More private sector participation is expected
•
Financing similar to a business venture
•
Less emphasis on the Public goods theory
Funding Models for State/Provincial
Level SDI 2
Tax Incentives
Waive property
taxes,state taxes & taxes
on profit, etc
Combined
Methods
Implementation
Appropriate
Environment 1 Model(s)
Project
Financing
(Business plan)
Central and
State
Government
SDI
Funding
Models
Funding
Implementation
GovernmentPrivate Sector
Partnerships
Private
Investment
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Appropriate
Environment 2 Model(s)
Matching
Ratios (Private
sector & national Gov.)
Funding Models for Local Level SDI
• The scale at this level is even greater, thus the
possibility of greater business opportunities
• More private sector participation is expected
• Financing similar to a business venture
• Greater participation from
environmental/community organizations
G. A. Giff
Funding Models for Local Level SDI
Local
Government
/Public Sector/
Community
groups
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Implementation Environment
SDI Funding
Pool
Implementation Environment
Selected
Model(s)
Federal/State/
Local
Government
Selected
Model(s)
Local
Government
capital
funding
Local
Government/
Private
Sector
Special
projects
funding
Private
Sector
funding
Project
Financing
Tax
Increment
Financing
Tax
Incentives
Funding Models for Global and
Regional Level SDI
•
•
A SDI at this level will be the coalition of a
number of national SDIs
Sources for funding a SDI at this Level will
mainly come from:
• National Governments
• Regional or Global SDI affiliated organizations
• The International Development Community
• National Development communities
G. A. Giff
Funding Models for Global and Regional Level
SDI
•
•
Funding Mechanisms for SDI implementation at this
level may be of the following formats:
Membership Fees
•
•
•
Regional and global organizations
UN member nations
International Development Agencies (e.g. USAID and
EEC)
•
International Funding Community (e.g. World Bank &
IDB)
•
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Partnerships with other organizations collecting spatial
data at Global & regional levels
Funding Models for Emerging Nations
Government
/ Private
Sector
Government
/Donor
Community/
Partnership
Selected
Model(s)
Government
capital
funding
Implementation Environment
SDI Funding
Pool
Implementation Environment
G. A. Giff
Selected
Model(s)
Government/
Private/ Donor
Community/
Partnership
Special
projects
funding
Private
Sector
funding
Project
Financing/
Special Banks
Tied Aid
Financing
Tax
Incentives
Evaluation of the Models 1
•
The Method of Modeling used here is often
referred to as the System Dynamic Methodology
(SDM)
•
SDM is applicable to this project since it
facilitate the modeling of both measured data
and data that are not easily quantifiable (e.g.
knowledge & political and environmental changes with time)
•
G. A. Giff
The nature of this type of modeling makes it
very difficult to evaluate
Evaluation of the Models 2
•
Need to evaluate:
•
•
•
•
The results
The changes in the model & the model output due to
changes in the input variables/implementation
environment
The relationships amongst the different variables
Number of software now on the market to assist in
the creation and evaluation (e.g. powersim, Matlab, Vensim
and Simulink)
•
G. A. Giff
To date preliminary evaluation of the models have
been carried out using powersim
Evaluation of the Models using Powersim Studio
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Evaluation of the Models using Powersim Studio
•
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Important features of Powersim

Allows for visualization of the models

Capable of presents both graphic and numerical
analysis of the models

Capable of analyzing changes to the model due to
changes in a particular variable(s)

It facilitates testing the completeness and coherence of
the modeled relationship
The Next Phase 1

A great deal of research still needs to be done on
the economic issues of SDIs:

Further assessment of the private sector roles in
SDI financing.
• Level of private sector monetary contribution
• Quantity, time frame, expected returns vs actual returns etc.
• Private sector non-monetary contribution
• Consultation, Working groups,Education/training,
Management, etc
G. A. Giff
The Next Phase 2
• Investigate the markets, infrastructures and
socio-political climate of emerging nations
to better formulate/customize models for
their conditions.
• Are these conditions different from that of the
developed nations?
• What effect will these differences (if any)have
on the models created for the developed
nations?
• What are some of the lessons learnt from
implementation in developed world that can be
applied to emerging nations?
G. A. Giff
The Next Phase 3
• Develop
framework(s) to identify how the
models change in response to a change in
the nature of the infrastructure.
• The effects of a change from fix-lines to
wireless access
• Further testing of the models developed
• How they react to changes in input variables
• How they react to changes in the
implementation environment in general
G. A. Giff
Thanks for your keen interest in
the presentation
Questions?
References
Crandall, Robert W. (1996). Funding the National Information
Infrastructure: Advertising, Subscription and Usage Charges. In
The Unpredictable Certainty: Information Infrastructure
Through 2000. White Paper of the NII, Chapter 18. National
Press, Washington.
http://bcb.nap.edu/html/whitepapers/ch-18.htm.
Obermeyer, N.J., and Pinto, J.K.( 1994). Managing Geographic
Information Systems. The Guilford Press, New York
Rhind, David (1999). “Funding a Spatial Data Infrastructure.”
Unpublished
G. A. Giff