R&D intensity


Source

Expertisecentrum Onderzoek en Ontwikkelingsmonitoring (ECOOM) (Centre for Research & Development Monitoring)


Definitions
 

R&D intensity: expenditure for research and development (R&D) as a percentage of gross domestic product (GDP). In compliance with the Europe 2020 objectives, the Government of Flanders has committed itself to spending 3% of GDP on R&D, in order to reinforce Flanders’ competitive and innovative position.

Gross domestic expenditure on R&D or GERD (Gross Expenditure on Research and Development) can be broken down according to the sectors in which R&D is implemented:

  • Businesses: BERD, or Business Expenditure on R&D: the private businesses component and the Collective Research Centres (COC)
  • Government agencies: GOVERD or Government Expenditure on R&D
  • Higher Education: HERD or Higher Education Expenditure on R&D (which includes universities and university colleges, as well as research institutions associated with universities)
  • Non-profit institutions: PNP or Non-Profit Organisations Expenditures on R&D (both semi-public and private organisations and international organisations)


Remarks on quality
 

There are two calculation methods. The calculation based on the R&D survey by the Organisation for Economic Co-operation and Development (OECD) yields the most accurate estimates. These estimates are published in the 3% memorandum. On the minus side, this survey is conducted only once every two years. For the interim years, we draw on the latest CIS data (Community Innovation Survey). The CIS survey particularly enquires into the innovation efforts made by private businesses, alongside a few questions pertaining to R&D expenditure. As for the OECD R&D survey, it very specifically focuses on the R&D efforts. As such, the CIS survey produces a slightly less accurate estimate of R&D variables.  Since the calculations presented here are based on the CIS data, and not on the OECD R&D survey, they result in a ‘light’ version of the 3% memorandum. More robust figures based on the OECD R&D survey will be available in the 3% memorandum of the following year.

GDP as the denominator in these figures is frequently adjusted to national and regional revisions. For example, the figures concerning the regional GDP in the 2020 version underwent the following changes:

  • Impact of the global revision of the national accounts (end 2019)
  • Important regional changes
    • Distribution key for enterprises with branches in multiple arrondissements: in the past, macro-economic variables were distributed according to the number of jobs. Now there are several distribution keys according to the variable. For gross value added, investments and exports and imports, this is now based on wages. Indeed, there is a better correlation between the variables in question and wages than the number of jobs. This has improved the quality of the regional distribution.
    • From now on, the gross value added of credit and insurance institutions will no longer be distributed among the arrondissements of a multi-regional institution solely according to the remuneration of employees, but also partly according to the sum of received and payed interests and commissions and received premiums. Here, too, the quality had been improved.
       

Both revisions were carried out simultaneously, so that the impact of each one can sometimes be difficult to distinguish.

It is important that the Institute of National Accounts implements these changes in phases: 2015-2018 will be adjusted in February 2020. The variables for 2009-2014 will be adjusted in the summer period of 2020 and the remaining years 2003-2008 in the autumn of 2020.



References

ECOOM: Indicatorenboek – De middelen voor O&O (Indicators Book- The resources for R&D)

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