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1301.0 - Year Book Australia, 2002  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 25/01/2002   
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R&D IN THE INFORMATION AND COMMUNICATIONS TECHNOLOGIES INDUSTRIES

INTRODUCTION

This article looks at Research and Experimental Development (R&D) in the fast growing area of Information and Communications Technologies (ICT). R&D is examined in two ways, first, in terms of ICT-related fields of research in each of the four broad institutional sectors (see below) for which R&D is measured; and second in terms of the R&D undertaken by the ICT industries.

The ABS conducts annual R&D surveys of the Business sector; the Government, Higher education and Private non-profit sectors are surveyed every two years. The surveys collect a range of data relating to expenditure on R&D activities and the human resources devoted to R&D. The article examines ICT-related R&D in the Business sector for the four years 1996-97 to 1999-2000, in the Government sector and the Private non-profit sector for 1996-97 and 1998-99, and in the Higher education sector for the calendar years 1996 and 1998.

More detailed statistics on the supply of ICT goods and services by the ICT industries and the demand for these products across all sectors of the economy are provided in Communications and information technology.


Defining ICT Research and Experimental Development

The ABS uses Australian standard classifications, which are based on international classifications, to define R&D in terms of fields of research and industry sector.


Fields of research

A Field of Research (FOR) classification was included in the 1993 edition of the Australian Standard Research Classification (ASRC). This classification was used to classify R&D activity for the years 1996-97 to 1998-99. In the 1998 edition of the ASRC, the classification was revised and renamed the Research Fields, Courses and Disciplines (RFCD) classification. The RFCD classification was used for the 1999-2000 Business sector survey. This new classification will also be adopted for future surveys of the Government, Private non-profit and Higher education sectors.

When looking at ICT R&D, the relevant Field of Research category is Subdivision 050000 Information, computer and communication technologies. In the RFCD classification, this category has been split into Subdivision 280000 Information, computing and communication sciences, Discipline 291600 Computer hardware and Discipline 291700 Communications technologies.


The ICT industry sector

The ICT industry sector comprises that part of the economy which produces information and telecommunications goods and services. It does not constitute a defined industry Division in the Australian and New Zealand Standard Industrial Classification (ANZSIC). It covers part of the Communication Services Division, but encompasses other industries as well. The ICT sector in Australia includes telecommunication services, computer services, and selected manufacturing and wholesale trade industries.

The following ANZSIC industries have been identified as comprising the ICT sector:

  • Class 2430 Recorded media manufacturing and publishing;
  • Class 2839 Professional and scientific equipment manufacturing n.e.c.;
  • Group 284 Electronic equipment manufacturing;
  • Class 2852 Electric cable and wire manufacturing;
  • Class 4613 Computer wholesaling;
  • Class 4614 Business machine wholesaling n.e.c.;
  • Class 4615 Electrical and electronic equipment wholesaling n.e.c.;
  • Class 7120 Telecommunication services; and
  • Group 783 Computer services.


R&D undertaken in ICT fields of research

Across all R&D sectors (Business, Government, Higher education and Private non-profit), the ICT Field of Research disciplines accounted for R&D expenditure of $1.6b during 1998-99 (table S5.1), 18.5% of total R&D expenditure of $8.9b. Expenditure on ICT disciplines during 1998-99 was up 6.9% in current price terms over 1996-97 levels, a growth rate well above the average growth recorded across all disciplines; the latter was only slightly up (1.5%) from the level recorded two years earlier.

The Business sector dominated ICT R&D, accounting for $1.4b or 84% of the total; the Higher education sector accounted for 8% and the Government sector 7%. The Private non-profit sector's ICT R&D expenditure was negligible.

Other key findings are:
  • Although ICT R&D expenditure increased between 1996-97 and 1998-99, in terms of level and proportion of total R&D expenditure, it did not quite keep pace with the growth in Gross Domestic Product (GDP). In 1998-99, ICT R&D expenditure accounted for 0.28% of GDP, compared with 0.29% in 1996-97 (table S5.2).
  • ICT R&D was a significant R&D activity of the Business sector, making up 34% of total R&D expenditure by that sector in 1998-99. In contrast, ICT R&D only accounted for 6% and 5% respectively of total R&D expenditure by the Government and Higher education sectors in 1998-99.
  • There were 12,854 person years in human resources devoted to ICT R&D in 1998-99, with the Business sector accounting for 9,552 person years or 74%, the Higher education sector accounting for 18% and the Government sector 7%.
  • Of the $1,649m spent on ICT R&D in 1998-99, $618m (37%) was in the Computer software field, $492m (30%) in the Communication technologies field and $327m (20%) in the field of Information systems and technologies (table S5.3).
  • The fields of Computer software and Communication technologies were the major fields for expenditure by the Business sector; for both the Government and Higher education sectors the major field was Information systems and technologies (table S5.4).

S5.1 R&D IN ICT FIELDS OF RESEARCH, By Sector - 1996-97 and 1998-99

Expenditure
Human resources


Sector
1996-97

$m
1998-99

$m
1996-97

person years
1998-99

person years

Business
1,224.2
1,392.6
10,055
9,552
Government
178.4
117.1
1,541
954
Higher education(a)
139.3
139.2
2,418
2,345
Private non-profit
0.7
0.5
7
3
Total
1,542.6
1,649.4
14,022
12,854

(a) Data for the calendar year ending within the financial year shown.

Source: ABS data available on request, Survey of Research and Experimental Development.


S5.2 R&D EXPENDITURE IN ICT FIELDS OF RESEARCH,
Proportion of Sector R&D Expenditure and of GDP - 1996-97 and 1998-99

Proportion of Sector R&D expenditure
Proportion of GDP


Sector
1996-97

%
1998-99

%
1996-97

%
1998-99

%

Business
28.9
34.2
0.23
0.23
Government
8.6
5.7
0.03
0.02
Higher education(a)
6.0
5.3
0.03
0.02
Private non-profit
0.4
0.3
0.00
0.00
Total
17.5
18.5
0.29
0.28

(a) Data for the calendar year ending within the financial year shown.

Source: ABS data available on request, Survey of Research and Experimental Development.


S5.3 R&D IN ICT FIELDS OF RESEARCH, By Field - 1996-97 and 1998-99

Expenditure
Human resources


Field of research
1996-97

$m
1998-99

$m
1996-97

person years
1998-99

person years

Information systems and technologies
357.0
326.8
3,805
2,970
Computer hardware
55.9
55.7
563
497
Computer software
504.7
617.9
4,974
5,813
Communication technologies
426.1
491.9
3,214
2,278
Other information, computer and communication technologies
198.9
157.1
1,466
1,296
Total ICT fields
1,542.6
1,649.4
14,022
12,854

Source: ABS data available on request, Survey of Research and Experimental Development.


S5.4 R&D IN ICT FIELDS OF RESEARCH, By Sector - 1998-99

Field of research
Business

$m
Government

$m
Higher education(a)

$m
Private non-profit

$m
Total

$m

Information systems and technologies
216.8
54.7
55.2
-
326.8
Computer hardware
48.5
2.3
5.0
-
55.7
Computer software
582.2
13.2
22.5
-
617.9
Communication technologies
439.9
17.3
34.6
-
491.9
Other information, computer and communication technologies
105.2
29.5
21.9
0.5
157.1
Total ICT fields
1,392.6
117.1
139.2
0.5
1,649.4

(a) Data for the calendar year ending within the financial year shown.

Source: ABS data available on request, Survey of Research and Experimental Development.


R&D undertaken by the ICT industry sector

As defined above, the ICT industry sector is a hybrid which encompasses ANZSIC classes from a number of the ANZSIC industry divisions. The data presented here are drawn from the ABS Business sector R&D surveys, which provide annual data for which the latest reference year is 1999-2000.

During 1999-2000, expenditure on R&D by the ICT sector was $1,208m, almost 30% of the total Business sector R&D expenditure. In current price terms, this expenditure was 3% lower than the level recorded in 1998-99, but 7% higher than in 1997-98 (table S5.5).

Of the $1,208m expenditure on R&D in 1999-2000 by the ICT sector, $959m (79%) was in the ICT fields of research, $189m (16%) in Other engineering and technology fields and $24m (2%) in the Physical sciences. Within the ICT research fields, the major fields were Computer software ($404m or 33%) and Communication technologies ($324m or 27%) (table S5.6).

The ICT industries' R&D expenditure in ICT fields of $959m accounted for 70% of the $1,366m total expenditure on R&D in ICT fields by the Business sector in 1999-2000 (table S5.7). The Finance and insurance industry accounted for 9%, the Technical services industry 4% and the Industrial machinery and equipment manufacturing industry 3%. Computer software was the largest Business sector ICT field of research ($542m or 40%), followed by Communications technologies ($356m or 26%) and Information systems ($264m or 19%).

Other highlights include:
  • There were 8,869 person years in human resources devoted to R&D by the ICT industries in 1999-2000; 6% higher than in 1998-99 and 11% higher than in 1997-98. In 1999-2000, the ICT industries accounted for 34% of the total human resources devoted to R&D by the Business sector.
  • The Computer consultancy services industry spent $489m on R&D (40% of R&D expenditure by the ICT industries in total) in 1999-2000. Significant R&D expenditure was also incurred by the Electrical and electronic equipment wholesaling n.e.c. industry ($145m or 12%), the Telecommunication, broadcasting and transceiving equipment manufacturing industry ($131m or 11%) and the Telecommunication services industry ($115m or 10%).

S5.5 R&D BY THE ICT INDUSTRIES - 1997-98 to 1999-2000

Expenditure
Human resources





Industry of business
1997-98


$m
1998-99


$m
1999-2000


$m
1997-98

person
years
1998-99

person
years
1999-2000

person
years

Recorded media manufacturing and publishing
10.1
9.9
11.1
123
112
139
Professional and scientific equipment manufacturing n.e.c.
53.2
52.8
61.2
527
521
599
Computer and business machine manufacturing
48.8
34.5
39.6
318
246
226
Telecommunication, broadcasting and transceiving equipment manufacturing
185.8
174.4
131.4
947
994
1,032
Electronic equipment manufacturing n.e.c.
112.3
120.1
95.3
897
1,000
903
Electric cable and wire manufacturing
11.9
2.8
5.8
39
25
36
Computer wholesaling
46.2
49.1
65.2
400
415
627
Business machine wholesaling n.e.c.
23.3
34.3
29.3
156
155
141
Electrical and electronic equipment wholesaling n.e.c.
143.6
148.4
144.5
1,072
923
852
Telecommunication services
125.2
196.9
115.3
97
101
77
Data processing services
31.9
21.0
18.4
289
202
167
Information storage and retrieval services
n.p.
3.7
n.p.
n.p.
19
n.p.
Computer maintenance services
n.p.
-
n.p.
n.p.
-
n.p.
Computer consultancy services
334.0
401.0
489.0
3,129
3,690
4,050
Total ICT industries
1,129.0
1,248.8
1,208.0
8,024
8,402
8,869

Source: ABS data available on request, Survey of Research and Experimental Development.


S5.6 R&D EXPENDITURE BY THE ICT INDUSTRIES, By Field of Research - 1999-2000

ICT fields
Other fields









Industry of business





Information systems


$m


Artificial intelligence and signal and image processing


$m





Computer software


$m
Other information, computing and communi-
cation sciences


$m





Computer hardware


$m



Communi-
cations
tech-
nologies


$m





Total ICT fields


$m


Other engineer-

ing and techno-
logy

$m





Physical sciences


$m





Other
fields


$m






Total

$m

Recorded media manufacturing and publishing
n.p.
-
7.0
n.p.
n.p.
-
8.9
n.p.
-
n.p.
11.1
Professional and scientific equipment manufacturing n.e.c.
n.p.
0.2
3.4
n.p.
0.5
0.1
4.9
15.4
19.8
21.1
61.2
Computer and business machine manufacturing
4.4
0.8
6.1
n.p.
2.7
n.p.
37.3
2.3
-
-
39.6
Telecommunication, broadcasting and transceiving equipment manufacturing
-
-
n.p.
3.2
n.p.
67.4
122.7
n.p.
n.p.
-
131.4
Electronic equipment manufacturing n.e.c.
2.0
0.2
31.3
2.8
5.1
12.9
54.3
39.3
0.2
1.5
95.3
Electric cable and wire manufacturing
-
-
n.p.
n.p.
-
n.p.
0.5
5.0
n.p.
n.p.
5.8
Computer wholesaling
n.p.
n.p.
15.8
n.p.
n.p.
n.p.
64.8
0.3
-
-
65.2
Business machine wholesaling n.e.c.
n.p.
-
n.p.
n.p.
-
-
21.8
n.p.
-
n.p.
29.3
Electrical and electronic equipment wholesaling n.e.c.
n.p.
-
n.p.
n.p.
n.p.
102.0
138.6
5.4
n.p.
n.p.
144.5
Telecommunication services
2.0
n.p.
4.3
n.p.
-
107.9
115.2
-
-
0.1
115.3
Data processing services
n.p.
n.p.
14.2
n.p.
-
n.p.
n.p.
n.p.
-
n.p.
18.4
Information storage and retrieval services
0.9
-
0.6
-
-
-
1.5
n.p.
-
n.p.
n.p.
Computer maintenance services
-
-
n.p.
-
-
-
n.p.
-
-
-
n.p.
Computer consultancy services
78.7
2.7
257.3
11.9
5.9
14.0
370.5
n.p.
n.p.
11.3
489.0
Total ICT industries
121.7
8.4
404.3
81.9
18.7
324.2
959.1
189.3
23.8
35.8
1,208.0

Source: ABS data available on request, Survey of Research and Experimental Development.


S5.7 BUSINESS SECTOR R&D EXPENDITURE IN ICT FIELDS OF RESEARCH, By Field and Industry - 1999-2000

Field of research
ICT
industries

$m
Finance and insurance industry

$m
Technical services
industry

$m
Industrial machinery and equipment manufacturing industry

$m
Other
industries

$m
Total

$m

Information systems
121.7
52.8
n.p.
n.p.
61.0
264.0
Artificial intelligence and signal and image processing
8.4
-
n.p.
n.p.
8.8
19.7
Computer software
404.3
38.8
12.6
22.6
64.0
542.2
Other information, computing and communication sciences
81.9
n.p.
3.9
n.p.
33.5
146.2
Computer hardware
18.7
n.p.
n.p.
4.0
7.1
37.4
Communications technologies
324.2
-
n.p.
n.p.
12.5
356.1
Total ICT fields
959.1
120.2
59.2
40.1
187.0
1,365.6

Source: ABS data available on request, Survey of Research and Experimental Development.

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