Mike’s note: The following are comments submitted by Hiranya K Nath of Sam Houston State University on my earlier posted paper, "Untapped Assets: The $3 Trillion Value of U.S. Enterprise Documents." I subsequently referred to Hiranya’s and Uday M. Apte’s paper, "Size, Structure and Growth of the US Information Economy," in a follow-on to that post discussing supporting views for document assets occupying trillions of dollars in US economic activity. The following is reprinted with Hiranya’s permission.
This is an important and interesting study that attempts to measure the value of corporate 'documents' in the U.S. It not only measures the cost of creating new documents but also the cost of handling or mishandling of documents. This study measures the benefits from improved document access and use. The value of corporate documents is assessed under three major categories: internal documents, web documents (which generally reside in public domain) and 'opportunities and threats'. The first two categories provide information for internal or external use while the third category of documents is to obtain solicited grants and contracts or to satisfy regulatory requirements.
In an economy which has increasingly been information-based, the importance and challenges of managing information have reached a proportion that was never witnessed before. Quantifying the value of creating and handling documents is extremely important and, to my knowledge, this study is one of the first attempts in that direction. However, as the author admits, the estimates are compiled from various sources and, therefore, they are extremely fragmentary and may have been inconsistent. In the following paragraphs, I present my thoughts on how I would proceed if I were to conduct the study. Nevertheless, this white paper has done an excellent job in initiating a research agenda.
First, define and explain the terms and concepts. The terms and concepts used in the study need some explanations as they may be useful for a reader to have a good grasp over the issues associated with quantifying the value of documents. Some of the terms related to information economy have not yet entered the general vocabulary. The dictionary meaning of 'document' is proof or evidence in a written format. Oxford dictionary has extended the definition to include the digital format as well. Also, concepts like knowledge industry, knowledge worker, information industry, information worker need to be defined. Studies like Machlup (1962), Porat (1977) have conceptualized these terms but they have not entered mainstream research vocabulary. More generally, a more settled, well accepted vocabulary has not been developed yet.
Merriam-Webster Dictionary: Document
Function: noun
1 a archaic : PROOF, EVIDENCE b : an original or official paper relied on as the basis, proof, or support of something c : something (as a photograph or a recording) that serves as evidence or proof
2 a : a writing conveying information b : a material substance (as a coin or stone) having on it a representation of thoughts by means of some conventional mark or symbol
Function: transitive verb
1 : to furnish documentary evidence of
2 : to furnish with documents
3 a : to provide with factual or substantial support for statements made or a hypothesis proposed; especially : to equip with exact references to authoritative supporting information b (1) : to construct or produce (as a movie or novel) with authentic situations or events (2) : to portray realistically
4 : to furnish (a ship) with ship’s papers
Oxford Advanced Learner's Dictionary : Document
Function: noun
1 an official paper or book that gives information about sth, or that can be used as evidence or proof of sth: legal documents travel documents Copies of the relevant documents must be filed at court. One of the documents leaked to the press was a memorandum written by the head of the security police.
2 a computer file that contains text that has a name that identifies it: Save the document before closing.
Function: verb
1 to record the details of sth: Causes of the disease have been well documented. The results are documented in Chapter 3.
2 to prove or support sth with documents: documented evidence
Second, categorize and identify various documents. This is important because it will provide operational guideline for collecting relevant information for estimating the value of documents. From the standpoint of an organization, I think the documents can be divided into the following categories:
- The first category includes traditional/conventional documents which are necessary for the operation of the organization. These documents play the role of 'intermediate inputs' in the production process. They do not directly contribute to creation of new knowledge but mostly act as store of information. There are two sub categories:
i) The first comprises documents that record operational details such as documents created by the accounting or payroll departments. Gathering of information and documentation thereof follow standard practices. With the advent of new technology the format of these documents may have changed but the standards have not changed much. I would assume that the cost of mishandling this category of documents is minimal. This category also includes documents which are created to satisfy legal requirements.
ii) The other sub category includes documents which are mainly for dissemination of information. An organization generally interacts with a target group and for optimum outcome from this interaction it is important that this target group is fully informed. Basically, these documents are created to reduce information asymmetry among agents so that problems related to asymmetric information do not arise. There is a marketing aspect to this category of documents. With the availability of new technology, constant changes in media, and people's access to diverse sources of information, this category of documents is expected to grow in volume and value. But this might cause substantial reduction in overall cost of production by reducing inefficiency that arises from information asymmetry.
- The second category includes documents that directly contribute to knowledge creation. In the process of production, the firm/corporation constantly tries to invent and innovate. Invention and innovation add to the pool of existing knowledge. Documentation of newly created knowledge is crucial for the progression of human civilization. The cost of creating this type of document is expected to be relatively higher than that of other types. Since some of the documents created in this process may turn out to be useless later on, the cost of creating and recreating these documents could be enormous.
Third, develop a methodology to measure the value of the documents. The first category should not be too hard to measure. Since every organization has well-defined departments responsible for creating and handling this category of documents, the information should be relatively easily available. I would anticipate some formidable problems in measuring the value of the second category. These documents may be created without specific planning or without following standard practices. Also, measuring the value of large amount of 'unnecessary' documents will be challenging yet important for overall value of the documents
Among other issues, since most documents are created and used at the intermediate level, a cost-based valuation will be appropriate. But some documents could be priced and if price-based valuation is used for those documents then appropriate adjustments should be made to make them consistent with each other.
References:
Machlup, F. (1962), The Production and Distribution of Knowledge in the United States, (Princeton University Press, Princeton, NJ).
Porat, Marc U and Rubin, Michael R. (1977), The Information Economy (9 volumes), Office of Telecommunications Special Publication 77-12 (US Department of Commerce, Washington D.C.)
