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Newsletters - Innovation and Technology Update - Bulletin No. 7, December 2002
 
 

Special Articles
  • Foreign ownership characteristics of information technology businesses
  • Foreign ownership characteristics of businesses undertaking R&D

Contents

1Introduction
2
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
Information and Communication Technology (ICT) Statistics
Household use of IT
Business use of IT
Government use of IT
Farm use of IT
Internet activity
Information technology and telecommunications industries
ICT regional information
ICT satellite account work
3Research and Experimental Development (R&D) Statistics
3.1Business R&D survey 2000-01
3.2Government and private non-profit R&D surveys 2000-01
3.3Release of summary R&D data
3.4Business R&D survey 2001-02
3.5International standards
4Biotechnology Statistics
4.1Introduction
4.2

5
Developments

Human Resources in Science and Technology (HRST)
6Knowledge-Based Economy and Society Framework and Indicators
7Innovation
8
8.1
8.2
Special Articles:
Foreign ownership characteristics of information technology businesses
Foreign ownership characteristics of businesses undertaking research and experimental development activity in Australia
9For more information ....



1 INTRODUCTION

Welcome to the 7th edition of the ABS'
Science and Technology Statistics Update, a biannual electronic newsletter which provides you with information on statistical developments and data releases in the science and technology field.

We hope you find the Update useful and would appreciate any feedback you have to offer. Please send any comments to andrew.major@abs.gov.au.

During 2002, the Science and Technology Statistics area of the ABS has seen structural and name changes. Work in the field is now centred in two locations (previously three). The New Economy National Statistics Centre is located in Canberra and has responsibility for, among other things, general strategy, research and analysis, and statistical standards. The New Economy Business Statistics Centre is located in Perth and will progressively take on responsibility for conducting the suite of new economy collections and disseminating the results. The changes form part of a more general restructure of ABS economic statistics.

Subscriber e-mailing list

We are happy to add new subscribers to the Update to our e-mailing list. If you did not receive a link to this edition directly from us and would like to be alerted to future editions, please contact Andrew Major, whose email address is andrew.major@abs.gov.au

Science and Technology statistics information on the ABS web site

We have two "theme" pages on the ABS web site. The theme pages provide links to the web version of the Update and will give you current information on statistical releases and contacts. They will also enable you to link up to other sites of interest. The theme pages can be found as follows:
If you have any questions about our theme pages, please contact Andrew Major, whose email address is andrew.major@abs.gov.au


2 INFORMATION AND COMMUNICATION TECHNOLOGY (ICT) STATISTICS

Note that ABS is introducing a change in terminology for this field of statistics. Previous terminology (Information Technology and Telecommunications - IT&T) is gradually being replaced by Information and Communication Technology (ICT) in line with more general changes in international and Australian usage. Even though there is a slight technical difference in meaning between the terms, they are generally understood to be synonymous.

2.1 Household use of IT

The November quarter 2000 Population Survey Monitor (PSM) was the last PSM to be conducted by the ABS. As the PSM was the source of our Household Use of Information Technology (HUIT) data, these data will no longer be produced by the ABS on a quarterly basis.


For 2001, a HUIT module of questions was included in the Survey of Education and Training (now called the Survey of Education, Training and Information Technology - SETIT). HUIT results are expected to be released from SETIT in early 2003 (Cat. no. 8146.0). For 2002, HUIT questions were included in the new General Social Survey conducted by the ABS. Results are expected to be released about the middle of 2003 in Cat. no. 8146.0.

Main Features from catalogue 8146.0 can be found on the ABS web site.

2.2 Business use of IT

The ABS publication Business Use of Information Technology, Australia (Cat. no. 8129.0) presents details from the ABS Business Technology Survey. The latest results were released on 20 March 2002 in respect of the 2000-2001 financial year.

The Business Technology survey is an annual economy wide survey collecting information from approximately 12,000 private sector businesses about their use of computers, the Internet and the web. These businesses are randomly selected to represent all industries, with the exception of Agriculture, Forestry, Fishing, Education, Religious organisations and Private households employing people.

Results from the 2001-02 collection are due to be released in March 2003 and development for the 2002-03 survey is in progress.

Main Features from catalogue 8129.0 can be found on the ABS web site.

2.3 Government use of IT

The latest edition of the ABS publication Government Use of Information Technology, Australia (Cat. no. 8119.0) was released on 28 May 2002. This publication presented results, in respect of the 1999-2000 financial year, from an ABS survey on the use of information technology and telecommunications (IT&T) by government organisations. This was the third ABS survey of IT&T use by government, with the previous collections being conducted in respect of the 1993-94 and 1997-98 financial years. The 1999-2000 survey provided information on government expenditure on IT&T and IT employment. Development work for the 2002-03 survey is currently underway.

Main Features from catalogue 8119.0 can be found on the ABS web site.

2.4 Farm use of IT

Data relating to the use of computers and the Internet on farms are obtained from the ABS Agricultural Commodity Survey (ACS). The survey covers all farms with an estimated value of agricultural operations (EVAO) of $5,000 or more. Results for 2000 were released in the ABS publication
Use of Information Technology on Farms, Australia (Cat. no. 8150.0) on 26 September 2001.

The next farm use of IT survey has been conducted in respect of 2002, with results due to be released about the middle of 2003.

Main Features from catalogue 8150.0 can be found on the ABS web site.

2.5 Internet activity

On 18 September 2002, the ABS released the publication Internet Activity, Australia in respect of the March quarter 2002 (Cat. no. 8153.0). Following a review, the ABS has reduced the frequency of this collection from quarterly to six montlhly. It is now conducted in respect of September and March quarters each year.

Some of the key findings from the latest survey are:
  • The number of Internet Service Providers (ISPs) in Australia decreased by 32 to 571 over the six month period to the end of March 2002, continuing the series of declines recorded since the end of September 2000 (when there were 718 ISPs).
  • There were 4.2 million Internet subscribers in Australia at the end of March 2002, a small decline (-43,000) on the number of subscribers at the end of September 2001. The fall in the number of subscribers can be accounted for by a large fall in subscribers with free access (-180,000).
  • ISPs provided 2,131 points of presence and 447,050 access lines across Australia at the end of March 2002. There were 7% fewer access lines than at the end of September 2001. On average, there were 9.5 subscribers per Internet access line at the end of March 2002.
  • There were 1,234 m megabytes (Mbs) of data downloaded by Internet subscribers during the March quarter 2002. This was nearly 3% higher than the volume downloaded during the September quarter 2001. An average of 290 Mbs of data per subscriber were downloaded during the March quarter 2002.
  • While there is a wide distribution of ISPs across Australia, capital cities accounted for 73% of subscribers and 75% of the access lines at the end of March 2002. There were, on average, 9.3 subscribers per access line in capital cities, downloading an average of 320 Mbs of data during the March quarter 2002. This compared to 9.9 subscribers per access line in other areas, downloading an average of 205 Mbs of data during the March quarter 2002.

Other details, including more information for states/territories and smaller regions, are shown in the Main Features, which can be found on the ABS web site.


2.6 Information technology and telecommunications industries

Results from the ABS survey on the production and distribution of information technology and telecommunications (IT&T) goods and services by Australian businesses in 2000-01 were released on 19 September 2002 in the ABS publication Information Technology, Australia (Cat. no. 8126.0). The publication also included IT&T import and export data and IT&T international trade in services data obtained from other sources. This is the fourth survey covering the IT&T sector with the third one being in respect of 1998-99.

Key findings from the latest publication show that the IT&T industry has undergone significant change over the two years to 2000-01, for example:
  • IT&T specialist businesses recorded strong growth in total income (24%) from 1998-99 to 2000-01, but there was a substantial decrease in their operating profit before tax (-35%) between these two periods. The operating profit margin for these businesses declined from 12.2% in 1998-99 to 6.5% in 2000-01. The greatest declines were in the computer services industry grouping (from 8.1% in 1998-99 to 1.4% in 2000-01), wholesale trade industry grouping (from 4.5% to -1.4%) and telecommunication services industry (from 21.2% to 16.2%).
  • Between 1998-99 and 2000-01, income from the domestic production of IT&T goods and services increased by 25% (to reach $50.2 billion) while imports of IT&T goods and services increased by 28% (to reach $17.3 billion). There was a trade deficit in IT&T goods and services of $11.3 billion for 2000-01, compared with a deficit of $9.1 billion for 1998-99.
  • The number of IT&T specialist businesses grew by 25% or 4,487 businesses, over the two years to 30 June 2001 (to reach a total of 22,475 businesses). The computer wholesale trade industry increased by 50% or 775 businesses, while the computer consultancy services industry grew by 24% or 3,350 businesses.
  • 238,521 people were employed in IT&T specialist businesses at 30 June 2001, an increase of 20% (39,932 people) since 30 June 1999. Employment was greatest in the computer consultancy services industry (88,222), followed by the telecommunication services industry (77,275) and the computer wholesale trade industry (38,656). More males (52%) were employed in positions whose main activity was computing and technical related compared to females (28%).

The next survey will be called the ICT Industry Survey and will be undertaken in respect of 2002-03. Results are expected to be released around July 2004.


2.7 ICT regional information

Policy makers and others are increasingly interested in regional ICT data. Within the limitations of survey methodology, ABS is striving to meet this demand and is able to offer regional data as follows:

  • Initial results from the 2001 Population Census were released on 17 June 2002. The Census included the following IT questions asked of all persons in the household:

    Did the person use a personal computer at home last week? No

    Yes

    Did the person use the Internet anywhere last week? No

    Mark all applicable boxes Yes, at home
    Yes, at work
    Yes, elsewhere
  • Data down to the Statistical Division level, in respect of farm use of IT, are collected via the ABS Agricultural Commodity Survey. Survey results in respect of 2000 are available from catalogue 8150.0.
  • As the survey of Internet service providers (ISPs) includes all businesses, some regional data in relation to 'points of presence' are available at Statistical Division level. See catalogue 8153.0 for more details.

2.8 ICT satellite account work

An ICT satellite account brings together data on all of the ICT goods and services produced and consumed by all sectors/industries, allowing for better measurement and analysis of the impacts of these activities on the economy. Satellite accounts generally enable attention to be focussed on a certain field or aspect of economic and social life within the context of the balanced supply and use framework, which is a central feature of the national accounts.

As the national accounts provide a comprehensive measure of the whole economy and are compiled using consistent concepts, definitions and methods, this approach would enable the supply (production, imports) and use (including exports) of ICT products to be analysed from a "whole of economy" perspective, and enable the calculation of the direct contribution of ICT to the main national accounting aggregates.

The development of an ICT satellite account in respect of 2002-03 has been under consideration for some time by the ABS and, over the last year or so, some exploratory work has been undertaken on defining the conceptual framework of the account and ascertaining the data requirements to populate such an account. Should the project proceed, results could be expected towards the end of 2004 or early 2005.


3 RESEARCH & EXPERIMENTAL DEVELOPMENT (R&D) STATISTICS

3.1 Business R&D survey 2000-01

The processing of the Business R&D survey for the year 2000-01 has been completed and results have been released. Available details include: R&D expenditure and human resources devoted to R&D classified by type of expenditure, type of activity, location of expenditure, source of funds, business employment size, type of employee, research fields and socio-economic objective.

Summary statistics for 2000-01 are contained in the publication Research and Experimental Development, Businesses, Australia (Cat. no. 8104.0) which was released on 1 July 2002.

Key findings include:
  • In 2000-01, Business Expenditure on R&D (BERD) was estimated to be $4,825m at current prices, 18% higher than that recorded in 1999-2000. This is the highest level recorded and reverses the declines of the previous four years. In volume terms, BERD was 12% up on 1999-2000 but 5% below the peak level of 1995-96.
  • BERD as a percentage of Gross Domestic Product (GDP) increased to 0.72% in 2000-01, following decreases in the previous four years. The percentage remains well below the high of 0.87% in 1995-96. Australia's BERD/GDP ratio remains relatively low when compared with those available for other OECD countries.
  • The Mining industry recorded a 57% increase in R&D expenditure, reversing the falls of the preceding three years. Expenditure by the Manufacturing industry increased by 8%. The Finance and insurance industry recorded an increase in R&D expenditure of 91%, while the Property and business services industry recorded an increase of 12%.
  • Major fields of research in which business R&D expenditure took place were computer software ($729m or 15%), communications technologies ($548m or 11%), manufacturing engineering ($390m or 8%), automotive engineering ($349m or 7%) and medical and health sciences ($299m or 6%).
  • The leading states in terms of business R&D expenditure were New South Wales with $1,699m and Victoria with $1,686m, each accounting for 35% of total R&D expenditure. Queensland accounted for 11% and Western Australia 10%.

Main Features from catalogue 8104.0 can be found on the ABS web site.

3.2 Government and Private Non-Profit R&D surveys 2000-01

Processing of the results from the surveys of R&D undertaken by government organisations and private non-profit organisations in 2000-01 has been completed and results released on 12 July 2002 in Research and Experimental Development, Government and Private Non-Profit Organisations, Australia (Cat. no. 8109.0). Available details include: R&D expenditure and human resources devoted to R&D classified by type of expenditure, location of expenditure, source of funds, type of employee, type of activity, research fields and socio-economic objective.

The 2000-01 surveys were the first surveys of R&D by government and private non-profit organisations to use the classifications contained in the 1998 edition of the Australian Standard Research Classification (ASRC).

Key findings include:
  • In 2000-01, Expenditure on R&D carried out by Government organisations (GOVERD) was estimated to be $2,368m at current prices, 14% higher than that recorded in 1998-99. In volume terms, GOVERD was 7% up on 1998-99.
  • Expenditure on R&D carried out by Private non-profit organisations in 2000-01 was estimated to be $283m at current prices, 29% higher than that recorded in 1998-99. In volume terms, R&D expenditure was 20% up on 1998-99.
  • R&D expenditure by Commonwealth government organisations rose by $218m or 18%, while state/territory government organisations increased their R&D expenditure by $81m or 9%.
  • Most expenditure on R&D by Government organisations was directed towards Economic development ($1,375m or 58%). Expenditure directed towards the Environment accounted for a further $431m or 18%.
Main Features from catalogue 8109.0 can be found on the ABS web site.

3.3 Release of summary R&D data

Summary statistics of expenditure and human resources devoted to R&D carried out in Australia by organisations within the Business, Government and Private non-profit sectors during 2000-01 and the Higher education sector during the 2000 calendar year were released on 19 July 2002 in the publication Research and Experimental Development, All Sector Summary, Australia (Cat. no. 8112.0).

Key findings include:
  • After levelling off in the period 1996-97 to 1998-99, gross expenditure on R&D (GERD) increased by 15% from $8,936m in 1998-99 to $10,251m in 2000-01. All sectors showed an increase in R&D expenditure compared with 1998-99.
  • In 2000-01, 47% of GERD was expended in the Business sector, 27% in the Higher education sector, 23% in the Government sector and 3% in the Private non-profit sector. By comparison, in 1998-99, 46%, 29%, 23% and 2% of GERD was expended in these sectors respectively.
  • GERD as a percentage of GDP rose from 1.51% in 1998-99 to 1.53% in 2000-01, still well below the high of 1.66% in 1996-97.
Main Features from catalogue 8112.0 can be found on the ABS web site.

3.4 Business R&D survey 2001-02

Dispatch of the survey of R&D undertaken by businesses in 2001-02 took place in August 2002. Details of R&D expenditure and human resources devoted to R&D classified by type of expenditure, location of expenditure, source of funds, type of employee, research fields and socio-economic objectives are being collected. The survey also includes a question on biotechnology R&D.

3.5 International standards

The ABS surveys of R&D are conducted in accordance with standard guidelines promulgated by the Organisation for Economic Co-operation and Development (OECD) and contained in the OECD publication, The Measurement of Scientific and Technological Activities ('Frascati Manual' 1993). These guidelines have recently being reviewed and Australia was represented on several of the working groups that undertook the revisions.


4 BIOTECHNOLOGY STATISTICS

4.1 Introduction

There is growing recognition worldwide that biotechnology offers many opportunities for delivering economic and social benefits to citizens of both developed and developing countries. However, there is currently little statistical information available to monitor the diffusion of biotechnology and to assist with policy choices.

4.2 Developments

The ABS is continuing to participate in an OECD Working Group which is developing a set of internationally comparable biotechnology statistical indicators. This work has formed the basis for the development of strategies for the possible collection of Australian biotechnology statistics. Papers have been prepared specifying user requirements, international experiences and outlining various strategies, including the collection of additional data in the existing R&D surveys and the conduct of a new biotechnology survey.

A question on biotechnology R&D was added to the survey of R&D undertaken by businesses in 2001-02. Development work is proceeding through 2002-03 with the aim of conducting a biotechnology survey in 2003-04 (in respect of 2002-03).


5 HUMAN RESOURCES IN SCIENCE AND TECHNOLOGY (HRST)

Work is underway on the preparation of a publication, scheduled for release in early 2003, which presents data on human resources in science and technology.

Human Resources in Science and Technology (HRST), Australia 2001 (cat no. 8149.0) will be the second publication in the series, the first being in respect of 1996.

Most of the information provided in the publication will be derived from the Censuses of Population and Housing, supplemented by relevant data on Higher Education statistics (sourced from Department of Education, Science and Training), Vocational Education Statistics (from National Centre for Vocational Education and Research), Labour Mobility statistics (ABS) and Migration statistics (ABS).

HRST is defined in the publication in terms of university-level HRST, that is:
  • with respect to tertiary qualifications awarded in Australia, persons who have successfully completed education at Advanced diploma, Bachelor degree, Graduate certificate, Graduate diploma, Master degree or Doctoral degree levels; or
  • persons who are not formally qualified as above, but are employed in a Science and Technology (S&T) occupation where the above qualifications are normally required. These occupations have been defined as Professionals and Specialist managers.

Data presented in the publication will be organised into four chapters:
  • Chapter 1 (main features) will summarise the information presented in more detail in subsequent chapters.
  • Chapter 2 will present stock information (HRST at a point in time) compared with relevant population estimates.
  • Chapter 3 will focus on statistics relating to persons with S&T qualifications (such as age distribution, highest educational attainment, labour force status, year completed qualification, industry of employment and average annual income). Higher and Vocational Education statistics will also be included as they represent the leading inflow into the stock of HRST.
  • Chapter 4 will present information from the S&T occupation perspective (such as age distribution by occupation, industry, duration in current job etc). Permanent and Long term arrival and departure information will also be included as a component flow into/out of HRST.


6 KNOWLEDGE BASED ECONOMY AND SOCIETY FRAMEWORK AND INDICATORS

On 28 August 2002, the Australian Bureau of Statistics released a Discussion Paper Measuring a Knowledge-based Economy and Society - An Australian Framework (Cat. no. 1375.0) in response to the needs of Australia’s policy makers to better understand the economic and social dynamics of knowledge-based activity. The paper is available free of charge on the ABS web site under the Science and Innovation theme page or under publication 1375.0 (www.abs.gov.au). The HTML version on the web site contains extensive information on data sources for the proposed indicators.

The ABS Discussion Paper presents a descriptive framework for measuring the knowledge-based economy and society (KBE/S) through use of relevant statistics. The framework proposes a range of indicators grouped in broad dimensions to enable assessment of the degree to which Australia is a knowledge-based economy and society. The dimensions are: context, innovation and entrepreneurship, human capital, information and communications technology, and economic and social impacts. Within each dimension there are identified a number of characteristics and possible statistical indicators of that characteristic (for example, within the "human capital" dimension, one characteristic is "stock of skilled people", one indicator for which might be "researchers as a proportion of the labour force"). The paper also identifies some of the more obvious data gaps and deficiencies.

The KBE/S framework covers the knowledge-based society because of the presumed importance of social factors to economic change and the potential impacts on society of an increasing emphasis on the importance of knowledge . The "digital divide" (between those who have and those who do not have computer or Internet access) is an example of an issue with both social and economic ramifications.

The next step in the project is to compile data as specified in the framework. The discussion paper raised several options for dissemination.

Comments are sought on the knowledge-based economy and society framework, the suggested indicators, and their mode of dissemination. Please send comments to Tricia O'Reilly at tricia.oreilly@abs.gov.au

Other Knowledge-based economy and society publications

A complementary compilation of relevant data has recently been published by the Department of Industry, Tourism and Resources (DITR), as Australia as a Modern Economy — Some Statistical Indicators, 2002. This publication presents much of the relevant data that is already publicly available, including comparisons with other countries and Australia’s past performance.

A summary and full text of Australia as a Modern Economy are available on the DITR web site at: http://www.industry.gov.au

A subset of these indicators in the form of an 'Innovation Scorecard' will be published by the DITR soon, as part of the government's annual report on innovation. Please visit the Innovation web site at http://www.innovation.gov.au


7 INNOVATION

Subject to available funding, ABS plans to develop an Innovation survey in respect of 2003. The proposed survey would be compatible with OECD/Eurostat guidelines ("Oslo Manual"), although it would probably also include non-technological (organisational and managerial) innovation.

Current state of innovation-related statistics

Although much of the material described in the Update bears on innovation in one way or another, conspicuously absent from the data presently available for Australia are recent measures of innovation outputs (i.e. new products and processes that are being implemented). Such "output" data provide an informative and direct way to measure the degree to which Australia is innovating and can be obtained through industry-wide business surveys. The ABS has not conducted such a survey since 1996-97.

What is an "innovation survey" and what information can it provide?

An innovation survey is a survey of businesses which ascertains what proportion and types of business are innovating (i.e. introducing new products and processes), what types of innovations are occurring and what impact they are having on the output and productivity of the businesses concerned.

Other issues which can be addressed include:

  • the costs of innovation (and their breakdown into R&D and other components),
  • the extent of linkages between firms and research institutions,
  • the links between technological innovation and organisational change (including new ICT), and
  • the use (or non-use) of relevant government programs.

For further information, please contact Tony Weir (from February) at tony.weir@abs.gov.au


8 SPECIAL ARTICLES:

Foreign ownership studies

As part of an initiative to expand the data available on economic globalisation issues, the ABS has embarked on a series of studies of the economic activity of majority foreign-owned businesses in Australia (a business is determined to be majority foreign-owned if more than 50% of its equity is held by foreigners).

Recent studies have examined the foreign ownership characteristics of specialist Information Technology (IT) businesses (in respect of 1998-99) and businesses undertaking research and experimental development (R&D) activity (in respect of 1999-2000).

The following articles summarise the results of those studies. Full results were reported in Australian Economic Indicators (Cat. no. 1350.0) editions of March and August 2002.

8.1 Foreign ownership characteristics of information technology businesses

Summary

This study examined the foreign ownership characteristics of specialist Information Technology (IT) businesses in 1998-99. The results showed a strong contribution by majority foreign-owned businesses. Majority foreign-owned businesses dominate the Wholesale Trade of IT goods, both in terms of employment and income. In the Computer Services industry, they provide a similar level of employment to Australian-owned businesses, but they account for more than half the income. Foreign-owned businesses involved in the manufacture of IT goods have a similar level of employment and income as Australian-owned businesses manufacturing IT goods. However, this industry experienced significant decline between 1995-96 and 1998-99 and was a minor contributor to the IT "industry" as a whole.

Majority USA-owned businesses had the largest economic activity of foreign owned businesses to the extent that they rivalled Australian-owned businesses in terms of employment and exceeded Australian-owned businesses in terms of income.

Data sources

The study used data collected by the ABS as part of the 1998-99 Information Technology Survey, published in Information Technology, Australia (ABS Cat. no. 8126.0). Businesses in that survey were linked to the foreign ownership characteristics from the ABS Survey of International Investment for those businesses included in both surveys. For other businesses, a number of other sources were used, with most ownership data compiled from extensive Internet searches.

Scope of the Study

While the Information Technology Survey included the Telecommunications sector, this study excluded that sector because the split of data between Australian and foreign-owned would have breached ABS confidentiality requirements.

IT&T Specialists

The Information Technology Survey covers the main industries involved in the production and distribution of information technology and telecommunications (IT&T) goods and services as defined by international standards. Within these industries, there is a large subset of businesses which specialises in IT&T and which is the main focus of the statistics in Information Technology, Australia 1998-99 and therefore of this study.

Results

In 1998-99, foreign-owned businesses made a strong contribution to the economic activity of domestic IT businesses, employing nearly 54,000 (43% of all employment in IT), having IT income of $20.1b (60%), total income from all sources of $22.7b (62%) and paying wages and salaries of $3.5b (54%). By comparison, businesses which were positively identified as Australian-owned provided employment of nearly 36,000 (29%), IT income of $8.8b (26%), total income of $9.2b (25%) and wages and salaries of $1.7b (26%).

Economic activity was also undertaken by businesses for which ownership characteristics could not be determined. Such businesses accounted for 28% of employment, 14% of IT income, 13% of total income and 20% of wages and salaries. They tended to be smaller in size and it is expected that most were majority Australian-owned. The dominance of foreign-owned IT businesses would be reduced, particularly in respect of employment, if the ownership of "unknowns" were predominantly Australian.

IT income per person employed in foreign-owned businesses is higher than in Australian-owned businesses ($373,000 compared with $244,000), with the average wage/salary per person employed also following this pattern ($65,000 compared with $48,000).

Businesses with majority ownership from the USA provided almost as much employment as businesses which were specifically identified as Australian-owned (32,000 and 36,000 respectively), and derived more IT income ($10.5b and $8.8b respectively). Businesses with majority ownership from the European Union made a significant contribution across the board, providing employment of over 10,000 (8% of all employment) and deriving IT income of $4.8b (14%). Japan was the most significant contributor to the estimates from the Asian region, with businesses with Japanese majority ownership providing employment of over 8,000 (7%) and IT income of $3.9b (12%).

For more information on this study, please refer to Australian Economic Indicators (Cat. no. 1350.0), March 2002.

8.2 Foreign ownership characteristics of businesses undertaking research and experimental development activity in Australia

Summary

The other study examined the foreign ownership characteristics of businesses undertaking research and experimental development (R&D) activity in 1999-2000, with the results showing a significant contribution by majority foreign-owned businesses. Majority USA-owned businesses made the largest contribution to R&D activity of all foreign-owned businesses to the extent that they contributed more expenditure and human resources devoted to R&D than all other foreign-owned businesses combined. Majority foreign-owned businesses dominated R&D activity by wholesale and retail businesses, both in terms of R&D expenditure and human resources devoted to R&D. However the overall level of R&D in these industries was relatively low.

The manufacturing industry contributed more than any other to total R&D activity, and this contribution was shared evenly between majority foreign-owned and majority Australian-owned businesses.

Data Sources

This study used data collected by the ABS as part of the Survey of Research and Experimental Development in respect of the year ended June 2000 and published in Research and Experimental Development, Businesses (ABS Cat. no. 8104.0). This survey sought data from all businesses identified by the ABS as likely to be undertaking R&D. Businesses responding to the R&D survey were linked to their foreign ownership characteristics from the ABS Survey of International Investment for those businesses included in both surveys. For other businesses, a number of sources were used, with most ownership data compiled from extensive Internet searches. For those businesses where the ABS was not able to determine ownership characteristics, data were imputed based on the ownership characteristics of similar businesses.

Scope of the Study

The ABS compiles a range of R&D statistics for government and private non-profit organisations, higher education organisations and businesses. This study looked at R&D expenditure by businesses only.

Results

In 1999-2000, foreign-owned businesses made a significant contribution to Australia’s R&D activity spending $1,690m (42% of total R&D expenditure) and investing 10,747 person years (41% of total human resources devoted to R&D). Both Australian and foreign-owned businesses invested approximately 10% of their total R&D expenditure on capital items. However, foreign-owned businesses spent a slightly higher proportion of their total expenditure on labour costs than Australian-owned businesses (47% and 43% respectively) and a slightly lower proportion on other current expenses (44% and 47% respectively).

For the mining industry, foreign-owned businesses had significantly less R&D expenditure than Australian-owned businesses ($97m and $176m respectively) and devoted fewer human resources to R&D (331 person years and 419 person years respectively). However, foreign-owned businesses reported higher capital expenditure on R&D than Australian-owned businesses ($18m and $10m respectively), which differs from the expenditure patterns for all other major industries.

On an industry basis, R&D activity was dominated by businesses in the manufacturing industry. Foreign-owned manufacturing businesses contributed strongly to R&D, accounting for 45% of total manufacturing R&D expenditure and 44% of human resources.

For the wholesale and retail industries, foreign-owned businesses dominated R&D expenditure and human resources, spending $265m (75% of the industry total) and investing 1,681 person years (68% of the industry total).

For the property and business services industry, R&D indicators for businesses involved in scientific research have been compiled separately to assist analysis. For businesses involved in the property and business services industry (but not scientific research), the proportion of total R&D expenditure by foreign-owned businesses was similar to the all industries total (45% and 42% respectively). In contrast, for businesses mainly involved in scientific research, the proportion of total R&D expenditure by foreign-owned businesses was relatively low (8%).

Businesses with majority ownership from the USA had total R&D expenditure of $893m (22% of total expenditure). This was slightly more than the combined total for all other foreign-owned businesses.

Large foreign-owned businesses (those with employment of 200 or more) had the same share of R&D expenditure and human resources, both approximately 30%. This close correspondence between R&D expenditure and human resources for foreign-owned businesses continued in the medium and small business size ranges. Conversely, while large Australian-owned businesses, with 30% of R&D expenditure, used only 22% of human resources, smaller Australian-owned businesses had a proportionately smaller share of R&D expenditure than human resources.

For more information on this study, please refer to Australian Economic Indicators (Cat. no. 1350.0), August 2002.


9 FOR MORE INFORMATION ...

For more information, please contact Andrew Major andrew.major@abs.gov.au or visit our theme pages on the ABS web site.

And finally.....a Happy New Year from all of us in New Economy statistics!



Commonwealth of Australia 2008

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