Economic evaluation of R&D investment in natural resource management

An approach is presented for evaluating in economic terms the investment made by a publicly funded natural resource management research and development (R&D) funding organisation (Land & Water Australia) over its 16-year life. The approach combines qualitative methods to describe research investments and their outputs, outcomes and benefits with conventional cost-benefit analyses that produce measures of the worth of the investment. While the major driver of such an approach is the need for accountability to the Australian Government, co-funders and the public, a number of other objectives are being met also. Benefits to the organisation are accruing, including a better understanding of the factors that contribute to a successful investment and how to communicate the benefits of research to stakeholders.

One of the important strengths of the process is the consistency of application of a standardised approach to cost-benefit analyses and the transparency of the analyses that have now addressed 28 separate case studies. The approach is flexible, is conducive to updating information over time, and recognises many of the difficulties involved in applying investment analysis to R&D investment. The development of the process has adopted a continuous improvement philosophy.