The statistics presented in this release have been compiled from data collected in the Survey of Research and Experimental Development (R&D), Businesses. The Survey of R&D, Businesses is a biennial survey.
Research and Experimental Development, Businesses, Australia methodology
Scope and coverage
From 2005-06, the survey scope was adjusted to:
- include businesses classified to Division A (Agriculture, Forestry and Fishing) of the Australian and New Zealand Standard Industrial Classification (ANZSIC); and
- exclude businesses with intramural expected expenditure on R&D of less than $100,000 in the reference period (i.e. introduction of an expenditure based scope cut-off).
Intramural expenditure is defined as expenditure for R&D performed by the statistical unit regardless of the source of funds. Expenditures made outside the statistical unit but in support of intramural R&D are included; for example, payments for analytical work, engineering or specialised services which form part of an R&D project performed by the statistical unit. R&D funded by the statistical unit but performed wholly by another organisation on their behalf (extramural R&D) is excluded. R&D performed overseas by Australian businesses is included. For further information, refer to the OECD Frascati Manual 2015.
Prior to the 2005-06 cycle, the Survey of R&D, Businesses included all Australian businesses performing R&D (regardless of the expenditure value) with the exception of businesses mainly engaged in agriculture, forestry and fishing activities.
The ABS identifies businesses for inclusion in the Survey of R&D, Businesses frame if the business:
- reported expenditure on R&D in previous surveys;
- applied for an AusIndustry administered R&D Tax Incentive and/or grant for industry R&D;
- were identified through other sources such as newspapers, journals, research compendia, etc. as likely to have expenditure on R&D.
Collection of data included in this release was undertaken based on a stratified random sample of 4,124 businesses sourced from the Survey of R&D, Businesses frame. The sample was stratified by Industry Division and/or Subdivision, and Size group based on their expected R&D expenditure. All businesses on the Survey of R&D, Businesses frame within certain strata were included in the sample if they met industry specific thresholds. Thresholds were based on industry characteristics, expected expenditure and number of businesses in the strata. While the sample design excludes businesses with intramural expected expenditure on R&D of less than $100,000, data of selected businesses which reported expenditure below this threshold are included in the estimates.
For the 2021-22 reference period, the survey has been conducted predominantly via online forms. The survey achieved a response rate of 79%.
Modelled estimates of GERD
Prior to 2010-11, data for each sector were collected separately for Gross Expenditure on R&D (GERD). Results were published in the Research and Experimental Development, Australia, All Sector Summary (last released in October 2010).
From 2010-11, estimates of GERD could not be produced in the same manner as the frequency and timing of some collections used to produce the components of GERD had changed. As a result, gross expenditure on R&D has been modelled since 2010-11.
Until 2015-16, a predictive model was used to estimate GERD. This utilised a combination of budget papers and annual reports as input variables for modelling the expenditure for the Government, Private Non-Profit and Higher Education sectors.
Since 2017-18 estimates of GERD applied an ARIMA (1,1,0) time series modelling method to produce estimates for the Government, Private Non-Profit and Higher Education sectors. Expenditure for the Business sector uses data included in this release.
Whilst estimates produced by the two methods are comparable, the introduction of time series modelling improves efficiency, being the most recommended and widely used technique in the ABS for time series analysis and forecasting.
Businesses were asked to report the number of persons working for the business during the last pay period in June 2022. For output purposes, businesses are classified to employment size groups based on data reported in the survey.
Definition of R&D
R&D, as collected by the ABS, is defined in accordance with the Organisation for Economic Co-operation and Development (OECD) standard as "creative and systematic work undertaken in order to increase the stock of knowledge - including knowledge of humankind, culture and society - and to devise new applications of available knowledge".
For a more comprehensive interpretation of the definition of R&D, see the Australian and New Zealand Standard Research Classification (ANZSRC), 2020 or refer to the OECD publication The Measurement of Scientific and Technological Activities: Proposed Standard Practice for Surveys of Research and Experimental Development - Frascati Manual 2015.
Respondents report and self-classify R&D survey information based on their interpretation of OECD and ABS definitions and classifications. The ABS makes every effort to ensure correct and consistent interpretation and reporting of these data by applying consistent processing methodologies. Refer to Non-Sampling Error in the Data release section for more information.
Australian and New Zealand Standard Research Classification (ANZSRC)
Type of Activity, Fields of Research and Socio-Economic Objectives statistics presented in this release have been collected and compiled based on the Australian and New Zealand Standard Research Classification (ANZSRC), 2020.
Releases prior to 2019-20 used the Australian and New Zealand Standard Research Classification (ANZSRC), 2008.
The Economics Unit Model is used by the ABS to describe the structure of Australian businesses and other organisations. The model consists of four types of units:
- Enterprise Group (EG)
- Type of Activity Unit (TAU)
- Legal Entity (LE)
- Location Unit.
Businesses contributing to the estimates in this publication are sourced from the ABS Business Register (ABSBR), and are selected at either the Australian Business Number (ABN) unit or the Type of Activity Unit (TAU) level, as described below.
In the Survey of R&D, Businesses, the statistical unit used to represent the majority of businesses, and for which statistics are reported, is the ABN unit. The ABN unit is the business unit which has registered for an ABN and appears on the Australian Tax Office (ATO) administered Australian Business Register (ABR). This unit is suitable for ABS statistical needs when the business is simple in structure. In these instances, one ABN equates to one statistical unit. These units are collectively referred to as the non-profiled population.
For more significant and diverse businesses where the ABN unit is not suitable for ABS statistical needs, the statistical unit used is the TAU, which comprises one or more business entities, sub-entities or branches of a business entity within an Enterprise Group that can report production and employment activities. When a minimum set of data items is available, a TAU is created which covers all the operations within an industry subdivision. The TAU is classified to the relevant subdivision of the Australian and New Zealand Standard Industrial Classification (ANZSIC). These units are collectively referred to as the profiled population.
Further information on the ABSBR and ABS economic units model can be found in Australian Bureau of Statistics Business Register.
The statistics in this release are classified to industry in accordance with the Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006.
Each ABN unit/TAU is classified by the ABS to the industry in which it mainly operates. For the Survey of R&D, Businesses, where an Enterprise Group sets up a dedicated research unit, that unit is classified to the predominant industry of the group rather than to Scientific research services (ANZSIC 6910), in accordance with standards set out in the OECD Frascati Manual 2015.
Location of expenditure
Location of expenditure relates to the region(s) in which the business reported having performed R&D during the reference period. This may not be the head office location of the business.
Gross Domestic Product (GDP) and Gross State Product (GSP)
The most recent GDP and GSP values available were used to calculate the R&D expenditure/GDP and R&D expenditure/GSP ratios presented in this issue. These values are referenced in the tables below and have been revised from those used to calculate ratios in previous issues.
|2013-14 ($m)||2015-16 ($m)||2017-18 ($m)||2019-20 ($m)||2021-22 ($m)|
|Gross Domestic Product||1,598,597||1,657,538||1,842,635||1,979,471||2,308,060|
|NSW ($m)||Vic. ($m)||Qld ($m)||SA ($m)||WA ($m)||Tas. ($m)||NT ($m)||ACT ($m)|
GDP is estimated by the ABS according to the international standards contained in the System of National Accounts, 2008 (2008 SNA) and is not directly comparable to GDP from countries where these standards have not been applied
Chain volume measures
The chain volume measures appearing in this release are annually reweighted chain Laspeyres indexes referenced to the current price values in a chosen reference year (currently 2021-22). They can be thought of as current price values re-expressed in (i.e. based on) the prices of the previous year and linked together to form continuous time series. They are formed in a multi-stage process of which the major steps are described in Chapter 6 of the Australian System of National Accounts: Concepts, Sources and Methods.
With the implementation of 2008 SNA, deflators used to calculate the chain volume measure of expenditure on R&D were revised to better capture changes in the unit value of labour used in the production of R&D services, and to increase and refine the number of products included in the deflators. The revised deflators have been used for Business R&D statistics from the 2007-08 survey cycle.
Where figures have been rounded, discrepancies may occur between the sum of the component items and totals.
Statistics presented in this release have been compiled from data collected by the Australian Bureau of Statistics (ABS) from Australian businesses in the Survey of Research and Experimental Development (R&D), Businesses. The survey also provides R&D data for the Business Longitudinal Analysis Data Environment (BLADE). The data were collected under the authority of the Census and Statistics Act 1905.
For information about the institutional environment of the ABS, including its legislative obligations, financing and governance arrangements and mechanisms for scrutiny of ABS operations please see ABS Institutional Environment.
This release presents statistics on R&D undertaken by Australian businesses in respect of the 2021-22 financial year.
R&D statistics produced by the ABS enable the nature and distribution of R&D activity in Australia to be monitored and analysed for policy formulation, allocation of funds and determination of research priorities.
Since the release of the 2008-09 Australian System of National Accounts, R&D has been treated as capital formation. This resulted from the implementation of the new international standards System of National Accounts, 2008 (2008 SNA) and represents a change in treatment of R&D (as intermediate consumption) from SNA 1993.
The ABS aims to produce high quality data from its research and experimental development collections, while minimising the reporting burden on businesses. To achieve this, extensive effort is put into survey and questionnaire design, collection procedures and processing.
The Survey of R&D, Businesses is a sample survey of in-scope organisations (refer to Scope and Coverage in the Data collection section for more information). The survey achieved a response rate of 79%.
Non-sampling errors may arise as a result of errors in the reporting, recording or processing of data. These errors can be introduced through inadequacies in the questionnaire, treatment of non-response, inaccurate reporting by data providers, errors in the application of survey procedures, incorrect recording of answers and errors in data capture and processing.
The extent to which non-sampling error affects the results is difficult to measure. Every effort is made to minimise non-sampling error by careful design and testing of the collection instrument, the use of efficient operating procedures and systems, and the use of appropriate methodologies.
When interpreting the statistics in this release, the reliability and comparability of the estimates may be affected by the following specific non-sampling errors:
- Many businesses provided estimates due to a lack of separately recorded data on R&D activity.
- Some businesses may not have reported data as per the definition of R&D used in this survey. This is potentially a result of slight differences in the survey definition of R&D and those used in industry R&D schemes for the allocation of grants, and the AusIndustry administered R&D Tax Incentive scheme for tax deductibility for specific R&D activities.
- Data were self-classified by businesses to Type of Activity, Fields of Research and Socio-Economic Objectives at the time of reporting. Some businesses may have experienced difficulty in classifying their R&D projects. The ABS makes every effort to ensure correct and consistent interpretation and reporting of these data by applying consistent processing methodologies.
- The estimation method for R&D related overhead costs varied across businesses and reference periods.
As the estimates in this publication are based on information relating to a sample of businesses, they are subject to sampling variability, that is, they may differ from the estimates that would have been produced if the information had been obtained from all businesses.
The difference between estimates obtained from a sample of businesses, and the estimates that would have been produced if the information had been obtained from all businesses, is called sampling error. This should not be confused with inaccuracy that may occur because of imperfections in reporting by respondents or in processing by the ABS. Please see the section on Non-Sampling Error for more detail regarding these types of errors. The expected magnitude of the sampling error associated with any estimate can be estimated from the sample results. One measure of sampling error is given by the standard error (SE), which indicates the degree to which an estimate may vary from the value that would have been obtained from a full enumeration (the 'true' figure). There are about two chances in three that a sample estimate differs from the true value by less than one standard error, and about nineteen chances in twenty that the difference will be less than two standard errors.
An example of the use of a standard error is as follows (all figures shown are in $'000). From the publication, the estimated total expenditure on R&D was $20,641,516 with a standard error of $592,412. There would be about two chances in three that a full enumeration would have given an estimate in the range $20,049,104 to $21,233,928 and about nineteen chances in twenty that it would be in the range $19,456,693 to $21,826,339.
In this publication, indications of sampling variability are measured by relative standard errors (RSEs). The relative standard error is a useful measure in that it provides an immediate indication of the percentage errors likely to have occurred due to sampling, and thus avoids the need to refer to the size of the estimate. RSEs are obtained using the formula: RSE = SE/estimate x 100. RSEs are shown in the Relative Standard Error tables in this section. RSEs for all data included in this release (including data downloads content) are available upon request.
Estimates with RSEs between 25% and 50% are annotated to indicate they are subject to high sample variability and should be used with caution. In addition, estimates with RSEs greater than 50% have been included and annotated to indicate they are considered too unreliable for general use. All cells in the data downloads with RSEs greater than 25% contain a comment indicating the size of the RSE. These cells can be identified by a red indicator in the corner of the cell. The comment appears when the mouse pointer hovers over the cell.
|0 - 4 persons||10.56|
|5 - 19 persons||8.90|
|20 - 199 persons||5.67|
|200 or more persons||4.24|
|Type of expenditure|
|Land, buildings & other structures||11.32|
|Other capital expenditure||9.53|
|Total capital expenditure||8.10|
|Other current expenditure||4.00|
|Total current expenditure||2.82|
|Source of funds|
|Business - Other business||26.97|
|Other Australian (a)||36.61|
|Location of expenditure (b)|
|New South Wales||4.63|
|Australian Capital Territory||20.91|
|Type of activity|
|Pure basic research||9.13|
|Strategic basic research||6.40|
|Total expenditure on R&D||2.87|
(a) Includes funding from Joint business/government, Higher education and Private non-profit organisations.
(b) For the definition of Location, refer to Location of expenditure in the Data processing section for details.
n/a not applicable
(a) Business is the only sector collected as a sample survey.
Comparability of estimates over time
The comparability of estimates over time may be affected by the following changes in classifications:
- Employment size classification groups are defined on data reported in the reference period, and as such businesses may be categorised to different employment size groups across different reference periods.
- Businesses can also be classified to different industry divisions across survey reference periods as a consequence of structural change. Refer to the Data processing section for more information.
The ABS seeks to maximise consistency and comparability over time by minimising changes to the survey, sound survey practice requires ongoing development to maintain the integrity of the data, its relevance to the changing needs of users and the efficiency of the collection.
In addition to non-sampling errors, factors which may affect the comparability of current estimates with those of previous cycles are described below:
- Employment size classification groups are defined on data reported in the reference period, and as such businesses may be categorised to different employment size groups across different reference periods. See the Technical note for more information.
- Businesses can also be classified to different Industry Divisions across survey reference periods due to structural change. Refer to the Data processing section for more information.
- From the 2019-20 cycle, Type of Activity, Fields of Research and Socio-Economic Objectives data have been collected and compiled based on the Australian and New Zealand Standard Research Classification (ANZSRC), 2020. Prior to this, these data were based on the Australian and New Zealand Standard Research Classification (ANZSRC), 2008 and the Australian Standard Research Classification (ASRC). The implementation of updated classifications in the 1999-2000, 2007-08 and 2019-20 reference periods represent breaks in the relevant time series.
R&D, as collected by the ABS, is defined in accordance with the OECD standard as "creative and systematic work undertaken in order to increase the stock of knowledge - including knowledge of humankind, culture and society - and to devise new applications of available knowledge".
The ABS Survey of R&D, Businesses also uses classifications specific to R&D: results presented in this release are based on the ANZSRC, 2020.
Data providers report and self-classify R&D survey information based on their interpretation of OECD and ABS definitions and classifications. The ABS makes every effort to ensure correct and consistent interpretation and reporting of these.
Further important contextual information, to be considered when interpreting the results presented in this release, is provided in the Data collection and Glossary sections.
Additionally, for a more comprehensive interpretation of the definitions and classifications relating to R&D activity, refer to:
- the OECD publication The Measurement of Scientific and Technological Activities: Proposed Standard Practice for Surveys of Research and Experimental Development - Frascati Manual 2015; and
- the Australian and New Zealand Standard Research Classification (ANZSRC), 2020.
Other related publications
Relevant OECD publications include:
The ABS acknowledges the ongoing contribution made by the Department of Industry, Science and Resources in providing R&D tax incentive and grants lists.
ABS publications draw extensively on information provided freely by individuals, businesses, governments and other organisations. Their continued cooperation is very much appreciated; without it, the wide range of statistics published by the ABS would not be available. Information received by the ABS is treated in strict confidence as required by the Census and Statistics Act 1905.
In addition to the main features, data (in spreadsheet format) are included on the ABS website.
ABS data available on request
As well as the statistics included in this and related publications, the ABS may have other relevant data available on request. Inquiries should be made to the ABS Consultancy Service on 1300 135 070 or email email@example.com
|ABN||Australian Business Number|
|ABR||Australian Business Register|
|ABS||Australian Bureau of Statistics|
|ABSBR||Australian Bureau of Statistics Business Register|
|ACT||Australian Capital Territory|
|ANZSIC||Australian and New Zealand Standard Industrial Classification|
|ANZSRC||Australian and New Zealand Standard Research Classification|
|ARIMA||Autoregressive Integrated Moving Average|
|ASRC||Australian Standard Research Classification|
|ATO||Australian Taxation Office|
|BERD||Business Expenditure on R&D|
|FoR||Fields of Research|
|GDP||Gross Domestic Product|
|GERD||Gross Expenditure on R&D|
|GSP||Gross State Product|
|NSW||New South Wales|
|OECD||Organisation for Economic Co-operation and Development|
|PYE||Person Years of Effort|
|R&D||Research and Experimental Development|
|RSE||Relative Standard Error|
|SNA||System of National Accounts|
|TAU||Type of Activity Unit|
Original work undertaken primarily to acquire new knowledge with a specific application in view. It is undertaken either to determine possible uses for the findings of basic research or to determine new ways of achieving some specific and predetermined objectives.
Expenditure on the acquisition of fixed tangible assets such as land, buildings, vehicles, plant, machinery and equipment which is attributable to R&D activity.
Commonwealth government funds
As a source of R&D funding, this includes R&D grants, and payments for R&D projects funded by or carried out on behalf of Commonwealth government organisations.
Expenditure on direct labour costs, materials, fuels, rent and hiring, repairs and maintenance, data processing, etc. and the proportion of expenditure on general services and overheads which are attributable to R&D activity.
Systematic work, using existing knowledge gained from research or practical experience, which is directed to: producing new materials, products, devices, policies, behaviours or outlooks; to installing new processes, systems and services; or to improving substantially those already produced or installed.
Fields of Research (FoR)
The FoR classification enables R&D to be categorised according to common knowledge domains and/or methodologies used in the R&D. It describes the nature of the research being performed and reflects the area of knowledge discovery.
Human resources devoted to R&D
The effort of researchers, technicians and other staff directly involved with R&D activity. Overhead staff (e.g. administrative and general service employees such as personnel officers, janitors, etc.) whose work indirectly supports R&D, are excluded.
Joint business/government funds
As a source of R&D funding, this includes R&D funds raised via industry levies.
Expenditure relating to: wages and salaries; overtime earnings; penalty payments; shift allowances; employer contributions into superannuation; fringe benefits and payroll taxes; severance, termination and redundancy payments; workers compensation premiums/costs; provisions for employee entitlements; salaries and fees of directors and executives; retainers and commissions of persons who received a retainer; bonuses; annual and other types of paid leave.
The region(s) in which the business performed the R&D. This may not be the head office location of the business.
Other business funds
As a source of R&D funding, this includes payments for R&D projects funded by or carried out on behalf of other businesses located in Australia. Transfers from related entities are only included if they specifically relate to R&D being undertaken (by the reporting business) on behalf of the related entity.
Other capital expenditure
Expenditure on office and other equipment (including capitalised computer software licence fees), furnishings, vehicles, plant and machinery.
Other current expenditure
All other non-staff expenditures including: materials, fuels and other inputs; rent, leasing and hiring expenses; repair and maintenance expenses; payments to outside organisations for use of specialised testing facilities or for analytical work, engineering or other specialised services in support of R&D projects carried out by the business; commission and consultant expenses for research projects carried out by the business (except direct labour costs); software for own account produced as part of R&D; and the proportion of expenditure on general services and overheads which is attributable to R&D activity.
Other supporting staff includes skilled and unskilled craftsmen, and administrative, secretarial and clerical staff participating in R&D projects or directly associated with such projects. Other supporting staff may include: secretarial and clerical staff working on, or directly associated with R&D activity; plant and machine operators.
As a source of R&D funding, this includes grants, and payments for R&D projects funded by or carried out on behalf of overseas organisations. Transfers from related entities are only included if they specifically relate to R&D being undertaken (by the reporting business) on behalf of the related entity.
Includes R&D performed overseas, but controlled by the Australian business. This includes analytical work, engineering or other specialised services performed by another organisation which are part of an R&D project being performed by the Australian business.
As a source of R&D funding, this includes all funding for R&D sourced from the business itself, including: equity; borrowings; retained earnings; and non-R&D specific transfers from related entities.
Person years of effort (PYE)
One person year of effort is equal to a full-time employee whose time is wholly devoted to R&D for a whole year.
Pure basic research
Experimental and theoretical work undertaken to acquire new knowledge without looking for long term benefits other than the advancement of knowledge.
Creative and systematic work undertaken in order to increase the stock of knowledge - including knowledge of humankind, culture and society - and to devise new applications of available knowledge. For an activity to be considered R&D, the activity must be: Novel (aimed at new findings); Creative (based on original, not obvious, concepts and hypotheses); Uncertain (uncertain about the financial outcome); Systematic (planned and budgeted) and; Transferable and/or reproducible (lead to results that could be possibly reproduced). R&D activity extends to modifications to existing products/processes. R&D activity ceases and pre-production begins when work is no longer experimental.
Researchers are professionals engaged in the conception or creation of new knowledge. They conduct research and improve or develop concepts, theories, models, techniques instrumentation, software or operational methods. Software developers or programmers; and executives and directors involved in the planning or management of scientific and technical aspects of R&D projects are also classified as researchers.
Socio-Economic Objectives (SEO)
The SEO classification enables R&D to be categorised according to the intended purpose or outcome of the R&D as perceived by the researcher (or data provider). It describes purpose categories that may benefit or impact from the R&D.
State and local government funds
As a source of R&D funding, this includes R&D grants, and payments for R&D projects funded by or carried out on behalf of state and local government organisations.
Strategic basic research
Experimental and theoretical work undertaken to acquire new knowledge directed into specified broad areas in the expectation of practical discoveries. It provides the broad base of knowledge necessary for the solution of recognised practical problems.
Technicians and equivalent staff are persons whose main tasks require technical knowledge and experience in one or more fields of engineering, physical and life sciences, or social sciences, humanities and the arts. They participate in R&D by performing scientific and technical tasks involving the application of concepts, operational methods and use of research equipment, normally under the supervision of researchers. Typical tasks of technicians may include: preparation and conduct of experiments or tests; carrying out bibliographic searches; recording measurements, making calculations and preparing charts and graphs.
Type of activity
This classification allows R&D activity to be categorised according to the type of research effort, namely, pure basic research, strategic basic research, applied research and experimental development.