13 July 2010
A National Statistics Publication for Scotland
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GROSS EXPENDITURE ON RESEARCH AND DEVELOPMENT SCOTLAND 2008
This publication presents information on research and development (R&D) undertaken by the business, higher education and government sectors in Scotland in 2008 as well as revisions to previously published data for 2007 and 2006. The majority of the data presented in this release come from R&D surveys conducted by the Office for National Statistics (ONS).
GROSS EXPENDITURE ON RESEARCH AND DEVELOPMENT (GERD)
Expenditure and components of GERD
Gross Expenditure on R&D (GERD) comprises that undertaken by the business, higher education and government sectors. In 2008 Scottish GERD reached £1,778 million, 6.9% of the UK total. GERD increased by £37 million from £1,741 million since 2007 (this is a 0.4% decrease in real terms). GERD was 1.55% of GDP in Scotland in 2008, compared to 1.79% in the UK, 1.81% in the EU and 2.33% for the OECD.
Scottish GERD forms the basis of the National Indicator: At least halve the gap in total research and development spending compared with EU average by 2011. The gap between Scotland and the EU average, in terms of GERD as a percentage of GDP, increased by 0.03 percentage points from 0.23 percentage points in 2007 to 0.26 percentage points in 2008 (Table 1). The gap between Scotland and the EU is still lower than it was in 2006, which is the baseline year for the national target.
In 2008 the average GERD spend per head of population was £344 in Scotland compared to £418 per head of population in the UK (Table 2). In comparison to other regions within the UK, Scotland ranks sixth in terms of GERD as a percentage of GDP in 2008 (Table 3).
Scotland's relative performance, regionally and internationally, differs considerably across the business, higher education and government sectors. The relatively low contribution of business R&D, alongside a high contribution of higher education R&D, is clear when comparing Scotland to other countries.
Business Enterprise Research and Development (BERD)
Business Enterprise Research and Development (BERD) expenditure stood at £547 million in 2008, 3.4% of the UK total and 0.48% of Scottish GDP. Expenditure increased from £533 million in the previous year (a 0.1% increase in real terms). In comparison to other regions within the UK, Scotland ranks equal ninth in terms of BERD expenditure as a percentage of GDP (Table 3B). Scotland's BERD as a percentage of GDP ranks in the fourth quartile of OECD countries that reported in 2008.
Higher Education Research and Development (HERD)
In 2008, Higher Education R&D (HERD) was £939 million in Scotland, 13.8% of the UK total and 0.82% of GDP. This is an increase of £69 million since 2007 (a 5.3% increase in real terms). In comparison to other regions within the UK, Scotland ranks first in terms of HERD as a percentage of GDP (Table 3C). Scotland's HERD as a percentage of GDP is highest among the OECD countries (Table 4C).
Government Research and Development (GovERD)
Government expenditure on R&D stood at £292 million in 2008, 12.4% of the UK total and 0.25% of GDP. This is a decrease of £46 million since 2007 (a 15.7% decrease in real terms). The decrease in Scottish GovERD expenditure is largely due to the reclassification of a large R&D employer in Scotland from the government sector to the higher education sector. In comparison to other regions within the UK, Scotland ranks fourth in terms of government R&D expenditure as a percentage of GDP (Table 3D). Scotland's GovERD as a percentage of GDP ranks in the second quartile of OECD countries that reported in 2008.
Sampling and Regional Estimates
1. This release presents estimates of Gross Expenditure on Research and Development (GERD) in Scotland in 2008. The majority of the data presented in this release come from Research and Development (R&D) surveys conducted by the Office for National Statistics (ONS). The release includes the estimates for R&D in 2008 carried out by the following sectors of the economy in Scotland.
- Business Enterprise
- Higher Education
- Government, which includes Research Councils
2. GERD is the measure most commonly used for international comparisons. It covers all R&D performed in the country concerned, irrespective of who pays for it, including funding from abroad. However, it excludes R&D performed abroad even if it is funded from the UK. The components of GERD relate to R&D performed in four sectors of the economy:
- Business Enterprise Research and Development (BERD) is derived from the results of the ONS's annual business R&D survey. In 2008, approximately 4,800 questionnaires were sent to businesses in the UK known to perform R&D; this included around 400 of the largest R&D spenders. Smaller R&D performers and others believed to be performing R&D are sampled.
- Higher Education Research and Development (HERD) is estimated by the Higher Education Funding Councils for England, Scotland, Wales and the Department for Education in Northern Ireland.
- Government Research and Development (GovERD) is based on an annual survey of in-house R&D from most government departments, with the addition of ONS estimates for two other components: R&D performed by local authorities, and some R&D within central government not available from the survey.
- Private Non-Profit (PNP) sector. Due to a planned review of the methodology used for the compilation of the R&D spend by the PNP sector, estimates are currently based on a number of sources. These include the total reported as the GovERD 'other' spend by government, including Research Councils. The PNP sector is not available on a regional basis. As a result it is not included in the Scottish GERD figures but is included in the UK GERD figures.
3. A summary quality report for the ONS GERD Statistical Bulletin is available at: http://www.ons.gov.uk/about-statistics/methodology-and-quality/quality/qual-info-economic-social-and-bus-stats/quality-reports-for-business-statistics/index.html.
Discontinuities in the data
4. Between the publication of the 2007 and 2008 GovERD expenditure figures a large R&D employer in Scotland has been reclassified from the government sector to the higher education sector. This reclassification has resulted in a considerable decrease in GovERD expenditure between 2007 and 2008.
Definition of R&D
5. The ONS R&D surveys follow the definition of research and development proposed by the Organisation for Economic Cooperation 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."
6. The definition therefore excludes activities such as market research, most software development, routine testing and quality control and artistic design work.
7. The cash values are converted to real terms using Treasury GDP deflators. The deflators are available at: http://www.hm-treasury.gov.uk/data_gdp_index.htm
Time period for which the results relate
8. Respondents to the ONS BERD survey were asked to make a return for the calendar year 2008 or the nearest 12 month period for which figures were available. The HERD and GovERD figures relate to the financial year 2008/2009.
9. The 2006 and 2007 BERD data and the 2007 GovERD data have been revised to take account of company misreporting and late receipt of data.
Business, Enterprise and Energy Statistics
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