FASTS update: Business expenditure on R&D

Business expenditure on R&D (BERD) increased for the eighth consecutive year in 2006/07, to a total of $12,036 million, according to figures released on Tuesday by the Australian Bureau of Statistics (ABS).

R&D expenditure in 2006/07 was up 16% in current prices and 11% in real terms on 2005/6.

As a % of GDP, BERD increased to 1.15% - a record high and only the 2nd year that it has passed 1.0% although it remains below the OECD average of 1.56%. However, in 2002, BERD was 0.89% of GDP in Australia and OECD average was 1.51% which means the gap has closed by a third in the past 5 years.

There is considerable variation between states when looking at BERD by location as a share of GDP. WA was the highest at 1.37% up from 1.06% in 2004/5. Then came Victoria with 1.34% (1.07%); SA 1.20% (0.88%); QLD 0.84% (0.67%); NT 0.75% (0.36%); TAS 0.48% (0.45%) and ACT O.44% (0.41) - although the ACT is easily the top when you look at gross expenditure (GERD) because of CSIRO, ANU and other Commonwealth research agencies.

The largest contributors to BERD by Industry sector were Manufacturing ($3,780 million or 31% of BERD), Mining ($2,541 million or 21%) and Professional, scientific and technical services ($2,012 million or 17%). Of all industries, Mining and Information media and telecommunications reported the largest absolute growth from 2005-06, increasing expenditure on R&D by $746 million (42%) and $341 million (77%) respectively.

70% of the total growth by socio-economic objectives (SEO) was accounted for by information and communication services (up $491m), mineral resources (up $402m) and energy resources (up $304m).

83% of BERD by fields of research (RFCDs) was in engineering and technology ($6.8b - 57%) and information, computing and comms sciences ($3.16b – 26%) with the largest growth being, predictably enough, resource engineering (up $555m - 34%).

In 2006-07, businesses with 200 or more employees made the largest contribution to BERD ($8,381 million or 70%), followed by firms with 20-199 employees ($2,284 million or 19%); 5-19 employees ($990 million or 8%) and 0-4 employees ($380 million or 3%). Businesses with 200 or more employees contributed 89% ($1,509 million) of the total growth in BERD between 2005-06 and 2006-07. (Yet public policy persists in privileging SMEs with concessions, grants, loans and cash outs...)