BUSINESS EXPENDITURE ON R&D (BERD)


INDUSTRY

The industry divisions of Manufacturing and Mining continued to be the largest contributors to total BERD in 2009-10, contributing $4,219 million (25%) and $3,695 million (22%), respectively. Financial and insurance services ($2,651 million or 16%) and Professional, scientific and technical services ($2,516 million or 15%) were the next largest contributors. Combined, these four industries accounted for almost 80% of total BERD.

Across all industries, Financial and insurance services had the largest dollar increase in BERD compared to 2008-09, up $548 million. Of the four largest industry contributors to total BERD, Financial and insurance services was also the only industry to increase its BERD. The largest decreases in BERD from 2008-09, were for Mining (down $639 million) and Information media and telecommunications (down $346 million).

The Financial and insurance services and Mining industries also showed the largest changes in proportional share of total BERD from 2008-09; Financial and insurance services up 4 percentage points from 12%, and Mining down 3 percentage points from 25%. Compared to 2008-09, Financial and insurance services replaced Professional, scientific and technical services as the third largest industry contributor to total BERD in 2009-10.


EMPLOYMENT SIZE

In 2009-10, businesses in the employment size group of 200 or more employees made the largest contribution to total BERD ($11,477 million or 69%), followed by businesses with 20-199 employees ($3,097 million or 19%).

The dollar decrease in BERD for businesses with 200 or more employees was larger than the overall decrease in total BERD from 2008-09; down $582 million compared to the overall decrease of $579 million. In 2009-10, these businesses also had the largest percentage decrease in BERD (down 5%) and the largest decrease in proportional share of total BERD (down 1 percentage point), compared to 2008-09.

Businesses in the employment size group of 0-4 employees had the largest percentage increase in BERD (up 8% to $690 million) compared to 2008-09, however it remained the lowest contributing group to total BERD (accounting for 4% in 2009-10).


TYPE OF EXPENDITURE

As in previous years, total BERD in 2009-10 was mainly comprised of Current expenditure ($15,965 million or 96% of total BERD). Capital expenditure accounted for $720 million (4%) of total BERD in 2009-10. Both Current and Capital expenditure decreased compared to 2008-09, down $466 million and $112 million, respectively.

A decrease of $1,039 million in Other current expenditure compared to 2008-09, partially offset by an increase of $573 million in Labour costs, resulted in the overall 3% decrease in Current expenditure. For Capital expenditure, 72% of the overall decrease in 2009-10 was due to reduced capital expenditure on Land, buildings and other structures (down 40% from $206 million in 2008-09 to $124 million). Other capital expenditure accounted for the remaining 28% of the overall decrease, down 5% from $626 million in 2008-09 to $595 million in 2009-10.

In 2009-10, the industry with the highest level of Labour costs as a proportion of its BERD was Education and training at 58%, while Mining had the lowest level, at 16%.


SOURCE OF FUNDS

As for previous years, the Business sector was the main source of BERD funds in 2009-10, with $15,930 million (96% of total BERD) coming from Own funds and $193 million (1% of total BERD) from Other business. Commonwealth government and Overseas sources were the next largest funders of BERD, at $308 million (2% of total BERD) and $166 million (1% of total BERD), respectively.


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 2009-10, at $6,194 million (37% of total BERD) and $3,750 million (22% of total BERD), respectively.

In 2009-10, NSW, Northern Territory (NT) and Overseas were the only locations with increased BERD compared to 2008-09. NSW had the largest dollar increase (up $832 million) and also the largest increase in proportional share of total BERD (up 6 percentage points to 37%). Growth in BERD in NSW was driven by the Financial and insurance services industry (up $584 million in NSW).

Compared to 2008-09, Western Australia (WA) had the largest decrease in BERD, in both dollar and percentage terms (down $689 million or 19% in 2009-10). WA also had the largest decrease in proportional share of total BERD (down 3 percentage points to 18% in 2009-10).

In 2009-10, Mining remained the dominant industry for BERD in WA (70% of WA BERD). However, it also had the largest dollar decrease (down $473 million in WA) compared to 2008-09. Manufacturing had the second largest dollar decrease in WA (down $253 million).


BERD and gross state product (GSP)

In 2009-10, WA (1.59%) and NSW (1.52%) had the highest levels of BERD as a proportion of GSP. NSW and NT were the only states to increase their BERD/GSP ratio compared to 2008-09, up 0.16 and 0.14 percentage points, respectively. Over the same period, WA had the largest decrease in BERD/GSP ratio (down 0.43 percentage points).

BERD, by location of expenditure - proportion of GSP(a)
		NSW	Vic.	Qld	SA	WA	Tas.	NT	ACT
2009-10	%	1.52	1.24	0.96	0.98	1.59	0.50	0.75	0.31
2008-09	%	1.36	1.45	1.00	1.21	2.02	0.62	0.61	0.36
Change	%pts	0.16	-0.21	-0.04	-0.23	-0.43	-0.12	0.14	-0.05
(a) See Explanatory Note 29 for details.

TYPE OF ACTIVITY

In 2009-10, the majority of BERD continued to be directed into Experimental development ($10,074 million or 60% of total BERD) and Applied research ($5,772 million or 35% of total BERD). These types of activity had the largest dollar decreases between 2008-09 and 2009-10, with Experimental Development down $316 million and Applied research down $150 million.


FIELDS OF RESEARCH

The research fields of Engineering and Information and computing sciences accounted for more than 80% of total BERD in 2009-10. This was also the case in previous years. Engineering ($8,790 million in 2009-10) had the largest decrease in proportional share of total BERD compared to 2008-09 (down from 55% to 53%). In contrast, over the same period, Information and computing sciences ($4,763 million in 2009-10) had the largest increase in proportional share of total BERD (up from 26% to 28%).

With the exception of Engineering and Information and computing sciences, the overall distribution of total BERD across the research fields remained relatively unchanged from 2008-09.


SOCIO-ECONOMIC OBJECTIVE (SEO)

The distribution of BERD across the SEO sectors of Defence, Economic development, Society, Environment and Expanding knowledge remained relatively stable between 2008-09 and 2009-10.

At the SEO division level, Manufacturing accounted for the largest share of total BERD in 2009-10, at $4,383 million, or 26%. Commercial services and tourism and Energy SEOs had the next highest levels of BERD, at $3,161 million (19% of total BERD) and $2,722 million (16% of total BERD), respectively.

Of all SEO divisions, Mineral resources (excluding energy resources) had the largest dollar and percentage decrease in BERD, down $846 million (or 32%) compared to 2008-09, and the largest decrease in proportional share of total BERD (down 4 percentage points from 15% to 11% in 2009-10).

The Commercial services and tourism SEO division had the largest dollar increase in BERD compared to 2008-09 (up $745 million) and the largest increase in proportional share of total BERD (up 5 percentage points from 14% to 19% in 2009-10).


FOREIGN OWNERSHIP

Wholly Australian owned businesses again made the largest contribution to total BERD, accounting for $8,614 million or 52% in 2009-10. These businesses also had the largest dollar increase (up $767 million) and largest increase in proportional share of total BERD (up 6 percentage points from 46%) compared to 2008-09.

Businesses with 10% to 50% foreign ownership had the largest dollar decrease in BERD (down $814 million) compared to 2008-09, and the largest decrease in proportional share of total BERD (down from 13% to 8% in 2009-10). Compared to 2008-09, businesses with Greater than 50% foreign ownership had the second largest dollar decrease (down $783 million) and the second largest decrease in proportional share of total BERD (down from 36% to 32% in 2009-10).

BERD, by level of foreign ownership(a)
	EXPENDITURE ON R&D			PROPORTION OF TOTAL EXPENDITURE ON R&D
	2007-08(b)	2008-09(b)	2009-10	2007-08(b)	2008-09(b)	2009-10
	$'000	$'000	$'000	%	%	%
Wholly Australian owned (0%)	6 678 028	7 847 195	8 614 175	44.4	45.5	51.6
Greater than 0% and less than 10%	774 734	1 045 027	1 297 127	5.1	6.1	7.8
10% to 50%	2 104 285	2 233 553	1 419 071	14.0	12.9	8.5
Greater than 50%	5 490 313	6 137 916	5 354 709	36.5	35.6	32.1
Total	15 047 360	17 263 691	16 685 082	100.0	100.0	100.0
(a) A definition of foreign ownership was not provided in the survey and data were accepted as reported.
(b) Some 2007-08 and 2008-09 data have been revised. See the Revisions section of the Technical Note for details.