Study shows $25 billion in U.S. economic benefits from Baldrige Quality Program

November 16, 2001

Economic professors Albert N. Link, University of North Carolina, and John T. Scott, Dartmouth College, recently examined the Malcolm Baldrige National Quality Award program and estimated the total economic benefits of the program to the U.S. economy at almost $25 billion, for a benefit-to-cost ratio of 207 to 1. They determined the total operational costs, including the value of executives' volunteered time to review applications, at $119 million.

From the program's inception in 1987 through 2000, 41 companies have received the Malcolm Baldrige National Quality Award and NIST has received 785 applications. However, thousands of other organizations of all sizes and in all sectors of the economy have benefited by using the Baldrige Criteria for Performance Excellence as the foundation for performance management and quality improvement programs.

To determine the benefits to the U.S. economy as a whole, Link and Scott examined data from a survey of corporate members of the American Society for Quality. The economists estimated the total benefits to the ASQ members from using the Baldrige criteria to be $2.17 billion, for a benefit-to-cost ratio of 18 to 1. They then extrapolated the ASQ data based on the assumption that other companies in the economy benefit to the same extent as ASQ members' companies.

A copy of the report is available at prog-ofc/report01-3.pdf or by faxing a request to NIST Public and Business Affairs at 301-926-1630.

National Institute of Standards and Technology (NIST)

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