Business Expenditure on R&D (update from FASTS)

The ABS has just released the latest data on business expenditure on R&D (BERD) in 2007/8. BERD increased to $14.379billion up from $12.548b in 2006/7. This was an increase of 15% in nominal terms and 9% in real terms (chain volume measures). However, I expect it will drop significantly in the next survey due to GFC.

As a share of GDP, BERD increased to 1.27% up from 1.2% in the previous year. This is the highest it has ever been – BERD didn’t exceed 1.0% of GDP until 2005/6. This places Australia at about 14th in the OECD rankings of BERD (Australia is in top 10 for Gross expenditure (GERD) due to relatively high Government and Higher Education expenditure on R&D).

Please note that BERD is reported annually but Higher Education (HERD), Government expenditure (GOVERD) and Private not for profit (PNPERD) are reported every second year. The next round of HERD, GOVERD, PMPERD will be about this time in 2010.

The BERD average across the OECD is 1.59% although the figure is distorted up by the weight of Japanese and US expenditures. The leading nation is Japan at 2.63%, followed by Sweden (2.66%), Korea (2.65%), Finland (2.51% and USA (1.93%). Australia leads UK (1.15%) and Canada (1.05%).

69.8% of R&D is carried out by large firms employing > 200 people (and that share is trending up). Interestingly, most Government programs supporting/funding BERD target SMEs.

Experimental development (62.4%) and applied (32.1%) account for a significant majority of BERD by type of activity with strategic basic (5.0%) and pure (0.5%).

Manufacturing accounted for 29.9% (trending down) with mining (22.8%), professional, scientific and technical services (15.5%) and financial services (9.9%) being the 4 largest industry sectors.

$7.9b/55.1% of BERD was in engineering with Information and computing sciences ($3.67b - 25.6%), Medical and Health sciences ($897m-6.2%), technology ($661m - 4.6%), Agriculture and Vet sciences ($320.9m - 2.2%) the top 5 fields of research.

Other SET fields of research were mathematical sciences ($19m – 0.15); Physical sciences ($28.9m – 0.2%); Chemical sciences ($227.5m - 1.65%), earth sciences ($227.5 - 1.6%), environmental sciences $123m 0.9%) and biological sciences ($99m – 0.7%).

Researchers were 51.7% of the human resources devoted to R&D (by EFT not income) which is trending down; it was 54.5% in 2005/6.

Cheers
Bradley

Bradley Smith
Executive director
Federation of Australian Scientific and Technological Societies (FASTS)
PO Box 259
Canberra city, act 2601
bradley.smith@fasts.org
www.fasts.org