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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.

• 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.

• 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%).

	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.

	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.