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Business Enterprise Research and Development 2005

DescriptionStatistics Publication Notice - Business Enterprise Research and Development 2005
Official Print Publication Date
Website Publication DateJanuary 30, 2007

30 January 2007

A Scottish Executive National Statistics Publication

This document is also available in PDF format (154kb) and full tables are available in excel format (244kb). Further information can be found on the Business Enterprise Research and Development webpage.


This publication presents information on research and development (R&D) performed by businesses operating in Scotland in 2005. In addition, figures are presented for total R&D expenditure in Scotland for 2004, which include government and higher education R&D expenditure. The majority of the data presented in this release comes from R&D surveys conducted by the Office for National Statistics (ONS).


Expenditure and employment

The value of business enterprise research and development (BERD) undertaken in Scotland in 2005 was £584 million, 4.4% of the UK total and 0.59% of Scottish GDP. Expenditure increased from £494 million in the previous year (a 16% increase in real terms). This is the highest level of Scottish BERD in cash terms since 1999, however in real terms it is just below the levels seen in 2001 and 2002. R&D expenditure in Scotland has increased by 29% in real terms in the 6 year period between 1999 and 2005, compared to a real terms increase of 3% in the UK. Almost two thirds of Scottish BERD supported just 3 product groups: 'pharmaceuticals' (40%); 'precision instruments' (17%) and 'radio, TV and communications equipment' (9%). Business R&D provided employment for 7,400 people in 2005.

cash real

BERD by ownership

R&D funding and size & ownership of R&D performing

Over three quarters (77%) of R&D undertaken by businesses
in Scotland was funded by UK businesses. The largest
companies (400 employees and over) accounted for 72% of
BERD expenditure, while companies employing 100 to 399
employees accounted for a further 12%. USA owned firms
undertook 50% of business R&D in Scotland, followed by
Scottish based firms (24%).

International and regional comparisons

In 2005 BERD expenditure was equivalent to 0.59% of
GDP in Scotland compared to 1.08% of GDP in the UK.
BERD expenditure as a percentage of GDP is lower in BERD by UK Region
Scotland than in most important competitor countries.
In 2005 EU expenditure as a percentage of GDP was
almost twice as high as that in Scotland (1.12%). The
leading countries in terms of business R&D have
expenditure levels more than four times higher than
Scotland (e.g. 2.92% of GDP in Sweden).

Within the UK, the bulk of business R&D expenditure takes
place within the East of England (25%) and South East (24%)
regions. In terms of expenditure as a percentage of GDP,
Scotland ranked 7th out of the 12 UK regions in 2005.


Expenditure and components of GERD

Gross expenditure on R&D (GERD) comprises that undertaken by business, government
Components of GERD in OECD countriesand the higher education sector. Data for 2005 is not available, but in 2004 Scottish GERD reached £1,379 million, 7% of the UK total. This is an increase of £23 million since 2003. GERD represented 1.46% of GDP in Scotland, compared to 1.71% in the UK. Scotland performs better on this measure of R&D due to the inclusion of government and higher education activity (see below). However, the relatively low contribution of business R&D to GERD is clear when comparing Scotland to other countries.

In comparison to other regions within the UK, Scotland ranks 6th in terms of GERD as a percentage of GDP in 2004.

Government Research and Development (GovERD)

Government expenditure on R&D stood at £276 million in 2004, 13.2% of the UK figure and 0.29% of GDP. This is an increase of £4 million since 2003. In comparison to other regions within the UK, Scotland ranks 4th in terms of government R&D as a percentage of GDP.

Higher Education Research and Development (HERD)

Scotland performs very well in terms of R&D undertaken by the higher education sector. In 2004, Higher Education R&D expenditure (HERD) in Scotland stood at £610 million, 12.8% of the UK figure and 0.65% of GDP. This is an increase of £35 million since 2003. In comparison to other regions within the UK, Scotland ranks 1st in terms of HERD as a percentage of GDP. Scotland also performs well at the international level, with Scotland's HERD as a percentage of GDP in the 1st quartile of OECD countries and below only that of Canada, Finland and Switzerland.

HERD in OECD countries

Background Notes

1. This is the first Scottish Executive R&D release produced following the identification of reporting errors by ONS, relating to both product and regional classification and businesses' understanding of what is included within the definition of R&D. Revisions were made by ONS to business R&D figures back to 2001. This has caused revisions to the business and total R&D figures for Scotland, that were published previously.

2. The ONS R&D survey follows the definition of research and development proposed by the Organisation for Economic Co-operation and Development (OECD) and published in the 'Frascati' Manual. According to the manual, R&D is defined as:

"Creative work undertaken on a systematic basis in order to increase the stock of knowledge, including knowledge of man, culture and society, and the use of the stock of knowledge to devise new applications."

The definition therefore excludes activities such as market research, most software development, routine testing & quality control and artistic design work.

3. Figures on Gross R&D, Higher Education R&D and Government R&D are the latest at the time of publication. Updated figures will be published by ONS later in 2007.

Issued by

Analytical Services
Enterprise, Transport and Lifelong Learning
Meridian Court
Cadogan Street
Glasgow G2 6AT

Press Office: Angela-Claire Coutts 0131-244-2547
Statistician: Lynn Graham 0141-242-5605