The economic contribution of Ordnance Survey - Direct Benefits

OXERA (Oxford Ecomomic Research Associates Ltd) Final Report (public version)

5. Direct and Associated Tangible Benefit to OS Suppliers

The analysis of the economic value of OS begins, in this report, with OS production at one end of the production chain, to customers at the other, via distribution channels and competitors. The value of OS to its suppliers (upstream value) must also be taken into account. This is done by combining the direct benefit of OS with the indirect benefit to its suppliers.

Figure 5.1: The production chain

The direct value-added of OS is equal to the value of its outputs minus the value of the inputs from other industries and services-i.e. the sum of staff costs, profit and the net contribution from central government. The value of the inputs is an appropriate measure of the value of OS to its suppliers. The combined value-added is therefore equal to the value of OS output, which can be measured as turnover plus the net parliamentary grant. Table 5.1 shows this value over the past five years.

Table 5.1: The value of OS output (£m)

Source: OS, 'Annual Report and Accounts', various years.

OS's purchases of inputs from its suppliers also create an indirect economic value. There could be other benefits of OS sales to these companies-e.g. the provision of goods and services to OS may allow them to reap economies of scale and scope that would not otherwise be available, or they may develop technologies that can be used in other circumstances. Neither of these externalities is considered here.

Table 5.2 shows a breakdown of turnover by activity. Over the period shown, the average proportion of turnover from each activity has been 81% from core activities and 19% from the commercial area. Core activities relate to the provision and marketing of topographic data and mapping at scales of 1:10 000 and larger. Mapping at scales of 1: 25 000 and 1: 50 000 is also defined as core. Commercial activities are those which involve the production and marketing of mapping of scales smaller than 1: 50 000. Consultancy activities are also included in the commercial category.

Table 5.2: Turnover by activity (£m)

Source: OS, 'Annual Report and Accounts', various years.