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8104.0 - Research and Experimental Development, Businesses, Australia, 2011-12 Quality Declaration 
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 06/09/2013   
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BUSINESS EXPENDITURE ON R&D (BERD)


INDUSTRY

Manufacturing and Mining remained the largest contributors to total BERD in 2011-12, contributing $4,474 million (24%) and $4,104 million (22%) respectively. Financial and insurance services ($2,985 million or 16%) and Professional, scientific and technical services ($2,832 million or 16%) were the next largest contributors. Together, these four industries accounted for more than three quarters (79%) of total BERD in 2011-12.

BERD, Top 10 industries (a)
Graph: BERD, Top 10 industries (a)


Three of the four largest contributing industries recorded increases in total BERD in 2011-12. Mining recorded the largest dollar increase in BERD from 2010-11 (up $265 million or 7%), followed by Financial and insurance services (up $217 million or 8%). Professional, scientific and technical services recorded the fourth largest increase (up $125 million or 5%). The exception was Manufacturing, which recorded a decrease of $331 million or 7%, the largest decrease for any industry.

In terms of share of total BERD and ranking order, the top ten contributing industries remained almost unchanged in 2011-12. Manufacturing showed the largest change in proportional share of total BERD from 2010-11, down three percentage points to 24%.


EMPLOYMENT SIZE

In 2011-12, the contribution to total BERD increased with each successive employment size group. Businesses with 200 or more employees contributed $12,079 million (66%) to total BERD, followed by businesses with 20-199 employees ($3,817 million or 21%). The employment size groups of 5-19 employees and 0-4 employees contributed $1,457 million (8%) and $969 million (5%) respectively to total BERD in 2011-12.

Businesses with 0-4 employees and businesses with 20-199 employees recorded increases in BERD for 2011-12, while businesses with 5-19 employees and businesses with 200 or more employees both recorded decreases. Businesses with 20-199 employees recorded the largest dollar increase (up $378 million or 11%), followed by businesses with 0-4 employees (up $147 million or 18%). Conversely, businesses with 200 or more employees recorded the largest dollar decrease (down $187 million or 2%), followed by businesses with 5-19 employees (down $23 million or 2%).

The comparability over time of estimates by employment size group may be affected by moves in classification between reference periods. See the Comparability of Estimates Over Time section of the Technical Note for more information.


TYPE OF EXPENDITURE

As in previous years, Current expenditure was the largest type of expenditure in 2011-12, accounting for $17,067 million or 93% of total BERD. Capital expenditure accounted for the remaining $1,254 million or 7% of total BERD. Capital expenditure increased in 2011-12 (up $333 million or 36%), while Current expenditure was almost unchanged (down $19 million or less than 1%).

The small decrease (less than 1%) in Current expenditure was the result of a decrease in Other current expenditure (down $1,083 million or 10%), which was mostly offset by an increase in Labour costs (up $1,064 million or 17%). Compared to 2010-11, Labour costs recorded an increase in its proportional share of total BERD (up five percentage points to 40% in 2011-12). Conversely, Other current expenditure recorded a decrease in its proportional share of total BERD (down six percentage points to 54%).

The shift in type of expenditure from Other current expenditure to Labour costs observed in 2011-12 can be partially attributed to businesses moving from contractor work to using persons employed by the business for R&D work. Payments to contractors who are not on the payroll of the business are excluded from Labour costs, instead being included in Other current expenditure (see the definitions for Labour Costs and Other Current Expenditure in the Glossary for more information). The increased reliance on businesses own employees rather than contractors contributed to the increase in human resources devoted to R&D in 2011-12, as described in the Industry section of Business Human Resources Devoted to R&D.

Increases for both Other capital expenditure (up $262 million or 33%) and Land, buildings and other structures (up $71 million or 56%), resulted in the overall increase in Capital expenditure in 2011-12. Other capital expenditure accounted for 6% of total BERD in 2011-12, while Land, buildings and other structures contributed 1%.


SOURCE OF FUNDS

The Business sector remained the principal source of funds for BERD in 2011-12, with $17,532 million (96% of total BERD) coming from Own funds and $184 million (1% of total BERD) from Other business funds. Commonwealth government and Overseas sources were the next largest funders of BERD, at $288 million (2% of total BERD) and $212 million (1% of total BERD) respectively. Other business (down $44 million or 19%) recorded the largest decrease among sources of funds in 2011-12.


LOCATION OF EXPENDITURE

Location of expenditure relates to the region in which the R&D activity was performed; see also Explanatory Note 26. New South Wales (NSW) and Victoria continued to have the highest levels of BERD in 2011-12, with $6,383 million (35% of total BERD) and $3,978 million (22% of total BERD) respectively.

BERD, by location of expenditure
Graph: BERD, by location of expenditure


In 2011-12, Western Australia (WA) recorded the largest growth in dollar terms (up by $320 million or 10%) followed by South Australia (SA) (up $215 million or 26%). Queensland (down $180 million or 7%) and Victoria (down $141 million or 3%) recorded the largest decreases in BERD in 2011-12.


BERD and Gross State Product (GSP)

In 2011-12, the state or territory with the highest level of BERD as a proportion of GSP was WA (1.50%). SA recorded the largest increase in BERD/GSP ratio (up 0.21 percentage points to 1.15% in 2011-12), while Northern Territory (NT) recorded the largest decrease (down 0.12 percentage points from 0.86% in 2010-11). BERD as a proportion of GSP decreased for all states and territories in 2011-12, with the exceptions of South Australia, Western Australia and Tasmania.

BERD, by location of expenditure - proportion of GSP(a)

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

2011-12
1.40
1.21
0.88
1.15
1.50
0.68
0.74
0.27
2010-11
1.46
1.31
0.99
0.94
1.47
0.60
0.86
0.29

(a) See Explanatory Note 29 for details.



TYPE OF ACTIVITY

In 2011-12, businesses continued to direct the majority of BERD into Experimental development ($11,403 million or 62% of total BERD) and Applied research ($5,823 million or 32% of total BERD). These types of activity recorded the largest dollar movements in BERD between 2010-11 and 2011-12, with Experimental development up $349 million (3%) and Applied research down $103 million (2%). Pure basic research remained the smallest type of activity in 2011-12, accounting for 1% of total BERD. Experimental development and Applied research were the only types of activity to show changes in their proportional share of total BERD (up one percentage point to 62% and down one percentage point to 32% respectively) from 2010-11.


FIELDS OF RESEARCH

As in previous years, the research fields of Engineering ($8,686 million or 47% of total BERD) and Information and computing sciences ($5,496 million or 30% of total BERD) together accounted for the majority (77%) of total BERD in 2011-12. Engineering had the largest decrease in proportional share of total BERD, down five percentage points from 52% in 2010-11. This research field also recorded the largest decrease in dollar terms (down $597 million or 6%). Conversely, Information and computing sciences, and Technology experienced the largest increases in proportional share of BERD, both up two percentage points, to 30% and 7% respectively in 2011-12. Information and computing services also recorded the largest increase in dollar terms (up $495 million or 10%).


SOCIO-ECONOMIC OBJECTIVE

The majority of BERD in 2011-12 was directed towards the socio-economic objective (SEO) divisions of Manufacturing ($4,563 million or 25% of total BERD), Commercial services and tourism ($3,809 million or 21% of total BERD) and Mineral resources (excluding energy resources) ($2,742 million or 15% of total BERD), which together accounted for more than half (61%) of total BERD.

Mineral resources (excluding energy resources) (up $530 million or 24%) and Commercial services and tourism (up $407 million or 12%) recorded the largest dollar increases in BERD compared to 2010-11. Mineral resources (excluding energy resources) also recorded the largest increase in proportional share of total BERD, up three percentage points to 15% in 2011-12.

Construction (down $265 million or 22%) and Energy (down $208 million or 8%) recorded the largest dollar decreases in BERD in 2011-12. Construction also recorded the largest decrease in proportional share of total BERD in 2011-12, down two percentage points from 7% in 2010-11.


FOREIGN OWNERSHIP

Wholly Australian owned businesses again made the largest contribution to total BERD in 2011-12, accounting for $10,367 million or 57% of total BERD, followed by businesses with greater than 50% foreign ownership ($5,588 million or 31%). Compared to 2010-11, wholly Australian owned businesses were the only group to record a decrease in BERD (down $142 million or 1%) and a decrease in proportional share of total BERD (down one percentage point).

Businesses with greater than 50% foreign ownership had the largest increase in BERD from 2010-11 (up $285 million or 5%).

BERD, by level of foreign ownership(a)

EXPENDITURE ON R&D
PROPORTION OF TOTAL EXPENDITURE ON R&D
2009-10(b)
2010-11(b)
2011-12
2009-10(b)
2010-11(b)
2011-12
$m
$m
$m
%
%
%

Wholly Australian owned (0%)
8 712
10 509
10 367
52
58
57
Greater than 0% and less than 10%
1 240
793
923
7
4
5
10% to 50%
1 425
1 402
1 443
9
8
8
Greater than 50%
5 382
5 303
5 588
32
29
31
Total(c)
16 760
18 007
18 321
100
100
100

(a) A definition of foreign ownership was not provided in the survey and data were accepted as reported.
(b) Some 2009-10 and 2010-11 data have been revised. See the Revisions section of the Technical Note for details.
(c) Where figures have been rounded, discrepancies may occur between the sum of the component items and totals.



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