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8104.0 - Research and Experimental Development, Businesses, Australia, 2005-06  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 21/08/2007   
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MAIN FEATURES


EXPENDITURE ON RESEARCH AND EXPERIMENTAL DEVELOPMENT (R&D)

Business expenditure on R&D (BERD) in Australia during 2005-06 was $10,080.7 million. This represented an increase of 16.6% in current price terms over 2004-05 and 11.8% in chain volume terms and was the seventh successive year of increase.

Resources Devoted to R&D

2001-02
2002-03
2003-04
2004-05
2005-06

Expenditure on R&D
Current prices $m
6 191.9
6 940.3
r7 769.9
r8 654.6
10 080.7
Chain volume measures(a) $m
6 702.7
7 397.3
8 036.9
8 654.6
9 679.8
Human resources devoted to R&D PYE
32 209
35 939
r37 430
r40 417
42 837

r revised
(a) The reference year for chain volume measures is 2004-05. See paragraph 22 of the Explanatory Notes.


Over the five years to 2005-06, BERD increased by an average of 12.6% per year in current price terms and 8.9% per year in chain volume terms.

Business expenditure on R&D
Graph: Business expenditure on R&D




Proportion of GDP

BERD increased as a proportion of GDP between 2004-05 and 2005-06, moving from 0.97% to 1.04%. This was the first time that the ratio of BERD to GDP exceeded 1.0%.

Business expenditure on R&D, proportion of GDP(a)
Graph: Business expenditure on R&D, proportion of GDP(a)



Although Australia remained below the OECD average of 1.53%, it recorded one of the largest increases in BERD/GDP ratio of all OECD countries between 2004-05 and 2005-06. The following table shows BERD/GDP ratios for selected OECD countries.

BERD/GDP RATIOS OF OECD COUNTRIES(a)

2001-02
2002-03
2003-04
2004-05
2005-06
%
%
%
%
%

Sweden
3.28
na
2.93
2.73
2.88
Japan
2.30
2.36
2.40
2.38
2.54
Finland
2.35
2.34
2.42
2.42
2.47
Korea
1.97
1.90
2.00
2.18
2.30
United States of America
2.00
1.86
1.84
1.79
1.82
Germany
1.72
1.72
1.76
1.74
1.71
Denmark
1.64
1.73
1.78
1.70
1.67
Austria
na
1.42
na
1.51
1.64
Iceland
1.75
1.71
1.48
na
1.45
Luxembourg
na
na
1.48
1.46
1.34
France
1.39
1.41
1.36
1.34
1.32
Belgium
1.51
1.37
1.31
1.29
1.24
United Kingdom
1.20
1.19
1.14
1.09
1.10
Canada
1.29
1.17
1.13
1.12
1.07
Australia
0.84
0.89
0.92
0.97
1.04
Netherlands
1.05
0.98
1.01
1.03
1.02
Czech Republic
0.72
0.73
0.76
0.80
0.92
Ireland
0.77
0.76
0.80
0.82
0.83
Norway
0.95
0.95
0.98
0.87
0.82
Spain
0.48
0.54
0.57
0.58
0.61
Italy
0.53
0.54
0.52
0.52
0.55
New Zealand
0.42
na
0.49
na
na
Hungary
0.37
0.35
0.34
0.36
0.41
Portugal
0.26
0.25
0.24
0.27
0.29
Slovak Republic
0.43
0.37
0.32
0.25
0.25
Mexico
0.12
0.15
0.15
0.22
0.25
Poland
0.22
0.11
0.15
0.16
0.18
Turkey
0.24
0.19
0.14
0.16
na
Greece
0.17
0.16
0.16
0.15
0.14
Total OECD
1.57
1.51
1.51
1.49
1.53

na not available
(a) Ranked by 2005-06 BERD/GDP ratio.
Main Science and Technology Indicators, 2007/1, OECD, Paris, 2007



Industry

In 2005-06, the largest contributors to BERD were Manufacturing ($3,888.7 million or 38.6% of BERD), Property and business services ($1,717.0 million or 17.0%) and Mining ($1,683.4 million or 16.7%). Of all industries, Mining and Manufacturing reported the largest absolute growth from 2004-05, increasing their expenditure on R&D by $417.2 million (33.0%) and $416.5 million (12.0%) respectively. Other industries to record large increases included Property and business services (up $151.1 million or 9.6%) and Wholesale trade (up $105.9 million or 17.8%).

Business expenditure on R&D, by selected industries(a)
Graph: Business expenditure on R&D, by selected industries




Type of expenditure

As in previous years, BERD in 2005-06 was mainly comprised of Current expenditure ($9,439.7 million or 93.6% of BERD). Current expenditure was in turn comprised of $3,886.8 million in Labour costs and $5,553.0 million in Other current expenditure. Capital expenditure in 2005-06 totalled $641.0 million.


Retail trade had the highest level of Labour costs as a proportion of BERD (56.5%), while Mining and Construction reported the lowest levels (at 16.0% and 18.9% respectively).


At $289.8 million, Manufacturing accounted for 45.2% of all Capital expenditure on R&D in 2005-06. The next highest level of Capital expenditure was reported by Mining at $100.2 million.



Source of funds

The Business sector was the main source of R&D funds in 2005-06, with $9,191.8 million (91.2%) coming from Own funds and $223.3 million (2.2%) from Other businesses. Commonwealth government and Overseas organisations were the next largest funders of R&D, at $396.4 million (3.9%) and $177.6 million (1.8%) respectively.


Property and business services and Health and community services had the lowest proportions of self-funded research, at 76.5% and 78.2% respectively.



Type of activity

In 2005-06, the majority of R&D activity was directed into Experimental development (62.4% or $6,288.8 million) and Applied research (32.9% or $3,312.1 million). Applied research showed the largest growth between 2004-05 and 2005-06, increasing by 15.4% or $485.4 million.



Location

Locations in New South Wales and Victoria continued to record the highest levels of BERD in 2005-06, at $3,331.3 million (33.0%) and $2,954.4 million (29.3%) respectively. Victoria also reported the highest level of growth in BERD (up $541.7 million or 22.5%), between 2004-05 and 2005-06, followed by Western Australia (up $392.7 million or 35.9%) and Queensland (up $201.0 million or 18.8%).

Business expenditure on R&D, by location(a)
Graph: Business expenditure on R&D, by location



Making the largest contribution to BERD in Victoria and New South Wales, in 2005-06, was Manufacturing, with expenditure on R&D in each state of $1,486.6 million (50.3%) and $1,004.1 million (30.1%) respectively. While Manufacturing was also the largest contributor to R&D expenditure in Queensland ($444.0 million or 34.9%), Mining was the most dominant industry in Western Australia ($703.7 million or 47.4%).


Victoria (1.27%) and Western Australia (1.25%) also reported the highest state percentages of BERD as a proportion of Gross State Product (GSP).

Business expenditure on R&D, by location - proportion of GSP(a)

NSW
Vic.
Qld
SA
WA
Tas.
NT
ACT
%
%
%
%
%
%
%
%

2003-04
1.02
1.02
0.65
1.02
0.86
0.50
0.76
0.37
2004-05
1.06
1.09
0.67
0.92
1.07
0.45
0.29
0.42
2005-06
1.04
1.27
0.70
1.04
1.25
0.42
0.64
0.51

(a) See paragraph 2 of the Explanatory Notes.



Employment size

In 2005-06, businesses with 200 or more employees made the largest contribution to BERD ($6,738.2 million or 66.8%), followed by those with 20-199 employees ($2,026.5 million or 20.1%). Making the smallest contribution to BERD were businesses with 0-4 employees ($354.0 million or 3.5%) and those with 5-19 employees ($962.0 million or 9.5%). Businesses with 200 or more employees contributed 70.1% ($1,004.7 million) of the total growth in BERD between 2004-05 and 2005-06.



Socio-economic objectives (SEO)

Much of the growth in BERD, between 2004-05 and 2005-06, occurred in the Energy resources (up $324.6 million), Manufacturing (up $292.8 million) and Mineral resources (up $224.2 million) SEOs. Together these three SEOs accounted for 58.8% of the total growth in BERD over the period.



Research fields

Accounting for 82.7% of BERD in 2005-06 were the Research fields of Engineering and technology ($5,856.6 million or 58.1%) and Information, computing and communication sciences ($2,484.8 million or 24.6%). The largest growth in expenditure within these Research fields, between 2004-05 and 2005-06, was recorded for Resource engineering (up $466.8 million or 45.2%) and Computer software (up $191.1 million or 20.0%).



HUMAN RESOURCES DEVOTED TO R&D

Human resources devoted to R&D in 2005-06 totalled 42,837 person years of effort (PYE), an increase of 6.0% over 2004-05.



Industry

In 2005-06, Manufacturing and Property and business services were the main contributors to total Human resources devoted to R&D, at 43.3% and 26.5% respectively. Mining and Property and business services recorded the largest increases in Human resources devoted to R&D from 2004-05, increasing by 782 PYE (47.2%) and 450 PYE (4.1%) respectively.

Business human resources devoted to R&D, by selected industries(a)
Graph: Business human resources devoted to R&D, by selected industries




Type of resource

Researchers continued to be the main type of human resource devoted to R&D (53.9% of total PYE) in 2005-06. However, Technicians reported the largest growth, between 2004-05 and 2005-06, increasing by 1,478 PYE or 12.3%.



Employment size

Businesses with 200 or more employees accounted for 23,914 PYE (55.8%) of total Human resources devoted to R&D in 2004-05, while those with 0-4 employees contributed 1,392 PYE (3.2%).


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