8104.0 - Research and Experimental Development, Businesses, Australia, 2008-09 Quality Declaration 
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 23/09/2010   
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BUSINESS EXPENDITURE ON R&D (BERD)


INDUSTRY

Manufacturing and Mining were the largest contributors to BERD in 2008-09, contributing $4,348 million (26%) and $4,243 million (25%), respectively. Professional, scientific and technical services ($2,510 million or 15%) and Financial and insurance services ($2,040 million or 12%) were the next largest contributors. Combined, these four industries accounted for almost 80% of total BERD.

Of all industries, Mining (up $860 million) reported the largest dollar increase in BERD from 2007-08, followed by Financial and insurance services (up $587 million). Both these industries showed increases of more than two percentage points in their proportional share of total BERD, while Manufacturing showed a decrease of more than three percentage points in its share. All other industries showed changes in their proportional share of total BERD of less than one percentage point.

BERD, by selected industries(a)



EMPLOYMENT SIZE

In 2008-09, businesses with 200 or more employees made the largest contribution to BERD ($11,985 million or 71%), followed by businesses with 20-199 employees ($2,895 million or 17%).

Businesses with 200 or more employees accounted for almost 80% ($1,541 million) of the total dollar growth in BERD between 2007-08 and 2008-09. Businesses with 20-199 employees showed the smallest dollar growth from 2007-08 (up $31 million).

The largest percentage increase in BERD was recorded for businesses with 5-19 employees, at 27%. This compares to increases of 16%, 15% and 1% for businesses with 0-4, 200 or more and 20-199 employees, respectively.


TYPE OF EXPENDITURE

The distribution of BERD across type of expenditure components remained relatively stable in 2008-09 compared to 2007-08. As in previous years, BERD in 2008-09 was mainly comprised of Current expenditure ($16,014 million or 95% of total BERD). Current expenditure was in turn comprised of $10,265 million in Other current expenditure and $5,749 million in Labour costs.

Capital expenditure in 2008-09 totalled $844 million. From 2007-08, capital expenditure on Land, buildings and other structures increased by more than half (55%), up from $133 million to $206 million. The dollar increase for expenditure on Land, buildings and other structures was more than triple that for Other capital expenditure over the same period.

In 2008-09, the industry with the highest level of Labour costs as a proportion of its BERD was Education and training (59%), followed by Professional, scientific and technical services and Health care and social assistance (both 53%). The industry with the lowest level of Labour costs as a proportion of its BERD in 2008-09 was Mining, at 16%.


SOURCE OF FUNDS

The Business sector was the main source of BERD funds in 2008-09, with $15,943 million (95%) coming from Own funds and $313 million (2%) from Other business. Commonwealth government and Overseas sources were the next largest funders of BERD, at $345 million (2%) and $189 million (1%), respectively.

Own funds was the only source of funds to show an increase in its proportional share of total BERD in 2008-09 (up from 93% of total BERD in 2007-08).

As for 2007-08, businesses in the Health care and social assistance and Professional, scientific and technical services industries had the lowest proportions of self-funded research in 2008-09, at 50% and 80%, respectively. For all other industries, more than 90% of expenditure on R&D was self-funded by businesses.


LOCATION OF EXPENDITURE

Location of expenditure relates to the region in which the R&D activity was performed; see also Explanatory Note 25. New South Wales (NSW) and Victoria continued to record the highest levels of BERD in 2008-09, at $5,204 million (31%) and $4,122 million (24%), respectively.

Western Australia (WA) reported the largest dollar growth (up $860 million) and percentage growth (up 31%) in BERD from 2007-08. The Mining industry increased its BERD in WA by $819 million from 2007-08, representing 95% of the overall WA increase. For 2008-09, Mining was also the dominant industry in WA in terms of contribution to level, making up 69% of WA BERD.

The second largest dollar growth in BERD from 2007-08 was for NSW (up $760 million). The industry driving this growth was Financial and insurance services (up $581 million and representing 76% of the overall NSW increase). Compared to 2007-08, this industry has overtaken Manufacturing to be the largest contributor to NSW BERD in 2008-09, accounting for 28%, while Manufacturing accounts for 21%.

Decreases in BERD from 2007-08 were reported for the Australian Capital Territory and South Australia. Only small percentage increases (1%) were reported for Victoria and Tasmania.

BERD, by location of expenditure


In terms of proportional share of total BERD, WA increased its share by three percentage points from 2007-08 (accounting for 21% of total BERD in 2008-09), while Victoria showed a decrease of almost three percentage points over the same period. The second highest increase in proportional share of BERD was for NSW (up one percentage point to 31%).


BERD and gross state product (GSP)

WA and Victoria continued to record the highest levels of BERD as a proportion of GSP in 2008-09, at 2.13% and 1.41% respectively. WA also experienced the largest increase in its BERD/GSP ratio from 2007-08, rising from 1.77% to 2.13%. The only other locations to show increases in BERD/GSP ratios are NSW, Queensland and the Northern Territory.

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

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

2006-07
1.14
1.32
0.82
1.18
1.50
0.49
0.76
0.41
2007-08
1.16
1.45
0.94
1.23
1.77
0.60
0.51
0.45
2008-09
1.29
1.41
0.95
1.18
2.13
0.59
0.59
0.36

(a) See Explanatory Note 28 for details.



TYPE OF ACTIVITY

In 2008-09, the majority of BERD was directed into Experimental development ($10,206 million or 61%) and Applied research ($5,692 million or 34%). Experimental development showed the largest dollar growth between 2007-08 and 2008-09 (up $925 million), however had the smallest percentage increase (10%) and was the only type of activity to show a decrease in its proportional share of BERD.

From 2007-08, BERD directed into Strategic basic research, Applied research and Pure basic research increased by 19%, 18% and 17%, respectively.


FIELD OF RESEARCH

Accounting for 80% of BERD in 2008-09 were the research fields of Engineering ($9,118 million or 54%) and Information and computing sciences ($4,407 million or 26%). These two research fields also showed the largest changes in proportional share of total BERD from 2007-08; although the overall distribution of BERD across research fields remained relatively stable.


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 2007-08 and 2008-09.

At the SEO division level, Manufacturing accounted for the largest share of BERD in 2008-09, at $4,495 million or 27%. Mineral resources (excluding energy resources) and Energy SEOs reported the next highest levels of BERD, at $2,640 million (16%) and $2,582 million (15%), respectively.

Of all SEO divisions, Manufacturing showed the largest change in proportional share of toal BERD, down four percentage points from 31% in 2007-08.


FOREIGN OWNERSHIP

Wholly Australian owned businesses made the largest contribution to BERD at $7,764 million (46% of BERD) and also reported the largest dollar growth from 2007-08, up $1,111 million.

BERD, by level of foreign ownership(a)

Expenditure on R&D
Proportion of total expenditure on R&D
2006-07(b)
2007-08(b)
2008-09
2006-07(b)
2007-08(b)
2008-09
$'000
$'000
$'000
%
%
%

Wholly Australian owned (0%)
5 803 383
6 652 859
7 764 025
45.9
44.6
46.1
Greater than 0% and less than 10%
712 611
774 734
1 032 868
5.6
5.2
6.1
10% to 50%
1 510 613
2 090 013
2 213 283
12.0
14.0
13.1
Greater than 50%
4 612 677
5 389 378
5 848 301
36.5
36.2
34.7
Total
12 639 284
14 906 984
16 858 477
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) 2006-07 and 2007-08 data have been revised. See the Revisions section of the Technical Note for details.