8104.0 - Research and Experimental Development, Businesses, Australia, 2013-14 Quality Declaration 
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 04/09/2015   
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BUSINESS EXPENDITURE ON R&D (BERD)

INDUSTRY


Manufacturing remained the largest contributor to total BERD, contributing $4,844 million (26%) in 2013-14. Professional, scientific and technical services ($3,753 million or 20%), Financial and insurance services ($3,093 million or 16%) and Mining ($2,830 or 15%) were the next largest contributors. Together, these four industries accounted for more than two thirds (77%) of total BERD in 2013-14.

Graph: shows BERD top industries. Ranking in order: 1 Manufacturing; 2 Professional, scientific and technical services; 3 Financial and insurance services; 4 Mining; 5 Wholesale trade; 6 Construction; 7 Information media and telecommunications; 8 Transpor
(a) Ranked by 2013-14 BERD

Professional, scientific and technical services recorded the largest dollar increase in BERD from 2011-12 (up $921 million or 32%), followed by Manufacturing (up $370 million or 8%). Conversely, Mining recorded the largest dollar decrease in BERD from 2011-12 (down $1,274 million or 31%).

In terms of share of total BERD and ranking order, the top ten contributing industries remained almost unchanged in 2013-14. Mining showed the largest change in proportional share of total BERD from 2011-12, down seven percentage points to 15%.


EMPLOYMENT SIZE


In 2013-14, businesses with 200 or more employees contributed $11,107 million (59%) to total BERD, followed by businesses with 20-199 employees ($4,560 million or 24%). The employment size groups of 5-19 employees and 0-4 employees contributed $2,079 million (11%) and $1,103 million (6%) respectively to total BERD in 2013-14.

Businesses with 200 or more employees recorded the only decrease in BERD, while all other business size groups recorded increases in BERD. Businesses with 20-199 employees recorded the largest dollar increase (up $743 million or 19%), and businesses with 5-19 employees recorded the highest increase in percentage terms (up $622 million or 43%). Conversely, businesses with 200 or more employees recorded a decrease in BERD (down $971 million or 8%).


TYPE OF EXPENDITURE


As in previous years, Current expenditure was the largest type of expenditure in 2013-14, accounting for $17,686 million or 94% of total BERD. Capital expenditure accounted for the remaining $1,163 million or 6% of total BERD. Current expenditure increased in 2013-14 (up $619 million or 4%), while Capital expenditure decreased (down $91 million or 7%).

The increase in Current expenditure was the result of an increase in Labour costs (up $1,432 million or 20%), which was offset by a decrease in Other current expenditure (down $813 million or 8%). Compared to 2011-12, Labour costs recorded an increase in its proportional share of total BERD (up seven percentage points to 46% in 2013-14). Other current expenditure recorded a decrease in its proportional share of total BERD (down six percentage points to 48%).

The shift in BERD from Other current expenditure to Labour costs for 2013-14 can be partially attributed to businesses moving from using contractors for R&D work to using own employees 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 decrease for Other capital expenditure (down $184 million or 17%) was offset by an increase in Land, buildings and other structures (up $93 million or 47%), resulting in the overall decrease in Capital expenditure in 2013-14. Other capital expenditure accounted for 5% of total BERD in 2013-14, while Land, buildings and other structures contributed 2%.


SOURCE OF FUNDS


The Business sector remained the principal source of funds for BERD in 2013-14, with $17,887 million (95% of total BERD) coming from Own funds and $233 million (1% of total BERD) from Other business funds. Commonwealth government and Overseas sources were the next largest funders of BERD, at $353 million (2% of total BERD) and $301 million (2% of total BERD) respectively.


LOCATION OF EXPENDITURE


Location of expenditure relates to the region in which the R&D activity was performed (refer to the Explanatory Notes for more information). New South Wales and Victoria continued to have the highest levels of BERD in 2013-14, with $6,652 million (35% of total BERD) and $4,623 million (24% of total BERD) respectively.

Graph: shows BERD by location of expenditure.

In 2013-14, Victoria recorded the largest growth in dollar terms (up by $645 million or 16%) followed by New South Wales (up $269 million or 4%). Western Australia recorded the largest decrease in BERD in 2013-14 (down $853 million or 24%).


BERD and Gross State Product (GSP)


In 2013-14, the state or territory with the highest level of BERD as a proportion of GSP was New South Wales (1.35%). The Northern Territory recorded the largest increase in BERD/GSP ratio (up 0.27 percentage points to 1.00% in 2013-14), while Western Australia recorded the largest decrease (down 0.45 percentage points).


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

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

2013-14
1.35
1.32
0.91
1.04
1.03
0.59
1.00
0.40
2011-12
1.37
1.22
0.88
1.15
1.48
0.67
0.73
0.26

(a) Refer to the Explanatory Notes for details.

TYPE OF ACTIVITY

In 2013-14, businesses continued to direct the majority of BERD into Experimental development ($11,521 million or 61% of total BERD) and Applied research ($6,134 million or 32% of total BERD). These types of activity recorded the largest dollar movements in BERD between 2011-12 and 2013-14, with Applied research up $312 million (5%) and Experimental development up $119 million (1%). Pure basic research remained the smallest type of activity in 2013-14, accounting for 1% of total BERD.


FIELDS OF RESEARCH


As in previous years, the research fields of Engineering ($7,474 million or 40% of total BERD) and Information and computing sciences ($6,073 million or 32% of total BERD) together accounted for the majority (72%) of total BERD in 2013-14. Engineering recorded the largest decrease in dollar terms (down $1,212 million or 14%). Conversely, Information and computing sciences recorded the largest increase in dollar terms (up $577 million or 10%).


SOCIO-ECONOMIC OBJECTIVE


The majority of BERD in 2013-14 was directed towards the socio-economic objective (SEO) divisions of Manufacturing ($4,902 million or 26% of total BERD), Commercial services and tourism ($3,528 million or 19% of total BERD) and Information and communication services ($2,799 million or 15% of total BERD), which together accounted for more than half (60%) of total BERD.

Information and communication services recorded the largest dollar increase in BERD (up $964 million or 52%) compared to 2011-12.

Mineral resources (excluding energy resources) (down $689 million or 25%) and Commercial services and tourism (down $281 million or 7%) recorded the largest dollar decreases in BERD in 2013-14.


FOREIGN OWNERSHIP


Wholly Australian owned businesses made the largest contribution to total BERD in 2013-14, accounting for $9,836 million or 52% of total BERD, followed by businesses with greater than 50% foreign ownership ($5,133 million or 27%).


BERD, by level of foreign ownership(a)

EXPENDITURE ON R&D
PROPORTION OF TOTAL EXPENDITURE ON R&D
2011-12
2013-14
2011-12
2013-14
$m
$m
%
%

Wholly Australian owned (0%)
10 367
9 836
56.6
52.2
Greater than 0% and less than 50%
2 366
3 881
12.9
20.6
Greater than 50%
5 588
5 133
30.5
27.2
Total(b)
18 321
18 849
100.0
100.0

(a) A definition of foreign ownership was not provided in the survey and data were accepted as reported.
(b) Where figures have been rounded, discrepancies may occur between the sum of the component items and totals.