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Technical Note: Increase research and development spending

Increase Research and Development Spending

DESCRIPTION:

This indicator compares Scotland’s Gross Expenditure on Research and Development (GERD) as a percentage of GDP with the equivalent average figure for the EU 28.

GERD comprises Research and Development undertaken by the business, government and higher education sectors so GERD as a percentage of GDP serves as a general indicator of expenditure on R&D: a technical input to the innovation process.

SOURCE:

The gap in total Scottish GERD compared with the EU average is calculated by subtracting the Scottish GERD as a percentage of GDP from the EU28 GERD as a percentage of GDP.

Data on the components of GERD in Scotland are published annually by the Office for National Statistics (ONS). These data are then published, in more detail, by the Scottish Government as part of its annual Gross Expenditure on R&D Scotland publication.  Detail on the underlying sources for each component of GERD is available within the background notes of the Gross Expenditure on R&D Scotland publication.

Gross Expenditure on R&D Scotland is a National Statistics publication.

ONS also publish regional Gross Value Added (GVA) – also referred to as GDP at basic prices - figures (including figures for Scotland) on an annual basis. The GDP and GERD figures are combined by the Scottish Government to show GERD as a percentage of GDP, comparable with the OECD figures. Please note that these figures are back-revised every year, which may result in the GERD as a percentage of GDP time-series changing as data are revised.

Annual figures for the EU28 are published by OECD's Directorate for Science Technology and Industry (DSTI) in the Main Science and Technology Indicators release. Volume 2 of this release provides figures for the EU28. Please note that until 2007 there were 25 countries in the EU, and up until 2011 there were 27. The current series provides figures for the EU28, and the series has been back-revised to reflect this.

DEFINITIONS:

The definition of R&D follows internationally agreed standards defined by the Organisation for Economic Co-operation and Development (OECD) and published in the Frascati manual. R&D is defined as "creative and systematic work undertaken in order to increase the stock of knowledge - including knowledge of humankind, culture and society – and to devise new applications of available knowledge".

Gross Expenditure on R&D (GERD) comprises any expenditure on R&D carried out by businesses, government or higher education institutions in Scotland, irrespective of either ownership or the source of funding for that investment.

The methodology for producing regional estimates of expenditure on R&D for the government sector has been reviewed by the Office for National Statistics (ONS). Estimates previously used government departments’ full-time equivalent (FTE) R&D employees by region as a proxy to calculate regional expenditure. Departments now provide actual breakdowns of their R&D expenditure by region.  To allow comparison of the government data, values using both methods have been published by the ONS for the 2015 year only.  For the Scottish Government GERD publication we have back-revised the government sector data to bring the series into line with the new methodology.  Note that although this methodological change is significant for the regional government sector figures in themselves, the overall impact on regional Gross Expenditure on R&D (GERD) is relatively small given the relatively small size of government sector R&D spend compared to that of the higher education and business sectors.  

Note that GERD for Scotland, for the purpose of the National Indicator, does not include any R&D expenditure carried out in the Private Non-Profit (PNP) sector.  ONS have published an estimate of R&D expenditure carried out by the Private Non-Profit (PNP) sector in Scotland.  This estimate is currently only available from 2011 onwards.  Therefore it is currently excluded from the GERD estimate used to measure the national indicator.

EU28 is a term used to refer to the 28 member countries of the European Union.

BASELINE AND PAST TRENDS

The baseline figures used for this target relate to 2006, the last data point before the start of the first term of the current administration.

In 2006 Scottish Gross Expenditure on R&D as a percentage of GDP was 1.22% and the EU28 figure was 1.68%. The gap between Scotland and the EU28 average was 0.46 percentage points in 2006.

Gross expenditure on R&D as a percentage of GDP:

Country

2002

2003

2004

2005

2006

2007

2008

2009

2010 2011 2012 2013 2014 2015 2016

Gap (pp)

0.30

0.41

0.44

0.39

0.46

0.42

0.45

0.42

0.43 0.46 0.52 0.46 0.44 0.44 0.40

CRITERIA FOR RECENT CHANGE ARROW:

This evaluation is based on: any difference in the gap within +/- 0.05 percentage points of last year's figure suggests that the position is more likely to be maintaining than showing any change. A decrease in the gap of 0.05 percentage points or more suggests the position is improving; whereas an increase of 0.05 percentage points or more suggests the position is worsening.

http://www.gov.scot/About/Performance/scotPerforms/NPFChanges/Methodology

FUTURE ISSUES OR REVIEWS:

Data for previous years are subject to revision with each release of new data.

ASSOCIATED TARGET:

No associated target.