BUSINESS RESOURCES DEVOTED TO RESEARCH AND EXPERIMENTAL DEVELOPMENT (R&D)

During 2015-16, expenditure on R&D by Australian businesses was $16,659 million. Business expenditure on R&D (BERD) decreased by 12% in current price terms and decreased by 13% in chain volume terms from 2013-14.

Business human resources devoted to R&D in 2015-16 totalled 70,467 person years of effort (PYE), a decrease of 11% from 2013-14.

The decrease was largely driven by the Mining and Manufacturing industries down $954 million (34%) and $936 million (19%) respectively from 2013-14. This is the second consecutive decrease for the Mining industry. Since 2011-12 there has been a decrease in the Mining industry contribution to BERD down from contributing $4,104 million (22%) in 2011-12 to $1,876 million (11%) in 2015-16. Manufacturing contribution decreased from $4,844 million (26%) in 2013-14 to $3,908 million (23%) in 2015-16.

BUSINESS RESOURCES DEVOTED TO R&D
			2009-10	2010-11	2011-12	2013-14	2015-16
Expenditure on R&D
	Current prices	$m	16 760	18 007	18 321	18 849	16 659
	Chain volume measures(a)	$m	17 877	19 209	19 054	19 255	16 659
Human resources devoted to R&D		PYE	57 936	56 511	64 906	78 839	70 467
(a) The reference year for chain volume measures is 2015-16. Refer to the Explanatory Notes for details.

Subsequent expenditure figures and supporting commentary relate to current price terms.


BERD as a proportion of Gross Domestic Product (GDP) decreased from 1.19% in 2013-14 to 1.01% in 2015-16.

BUSINESS EXPENDITURE ON R&D, summary statistics: values and proportions
			EXPENDITURE ON R&D		PROPORTION OF TOTAL EXPENDITURE ON R&D
			2013-14	2015-16	2013-14	2015-16
			$m	$m	%	%
Type of expenditure
	Capital expenditure
		Land, buildings and other structures	291	181	1.6	1.1
		Other capital expenditure	872	680	4.6	4.1
		Total(a)	1 163	861	6.2	5.2
	Current expenditure
		Labour costs	8 701	8 010	46.2	48.1
		Other current expenditure	8 986	7 788	47.7	46.7
		Total(a)	17 686	15 798	93.8	94.8
Total expenditure on R&D(a)			18 849	16 659	100.0	100.0
(a) Where figures have been rounded, discrepancies may occur between the sum of the component items and totals.

BUSINESS EXPENDITURE ON R&D (BERD) 

INDUSTRY

Manufacturing remained the largest contributor to total BERD, contributing $3,908 million (23%) in 2015-16. Professional, Scientific and Technical Services ($3,751 million or 23%), Financial and Insurance Services ($3,215 million or 19%) and Mining ($1,876 million or 11%) were the next largest contributors. Together, these four industries accounted for more than three quarters (77%) of total BERD in 2015-16.

Mining showed the largest decrease in BERD from 2013-14 down $954 million (34%), followed by Manufacturing down $936 million (19%). Financial and Insurance Services showed the largest increase in BERD from 2013-14 up $122 million (4%), followed by Information, Media and Telecommunications up $72 million (13%).

EMPLOYMENT SIZE

BERD for all employment size groups decreased in 2015-16. Businesses with 200 or more employees had the largest decrease down $1,572 million (14%), followed by; businesses with 20-199 employees down $552 million (12%), businesses with 0-4 employees down $41 million (4%) and businesses with 5-19 employees down $25 million (1%).

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 2015-16, with $6,421 million (39% of total BERD) and $4,275 million (26% of total BERD) respectively.

In 2015-16, BERD in Queensland showed the largest decrease down $744 million (28%), followed by Western Australia down $650 million (24%). Overseas as a location of expenditure showed the largest growth in BERD, up $176 million (28%), followed by Tasmania up $37 million (25%).

BERD AND GROSS STATE PRODUCT (GSP)

In 2015-16, the state or territory with the highest level of BERD as a proportion of GSP was New South Wales (1.19%). Tasmania was the only state that showed an increase in the BERD/GSP ratio (up 0.12 percentage points to 0.70% in 2015-16). The Northern Territory showed the largest decrease (down 0.68 percentage points) from 1.00% in 2013-14 to 0.31% in 2015-16.

BERD, by location of expenditure - proportion of GSP(a)
	NSW	Vic.	Qld	SA	WA	Tas.	NT	ACT
	%	%	%	%	%	%	%	%
2015-16	1.19	1.14	0.62	0.77	0.87	0.70	0.31	0.25
2013-14	1.34	1.33	0.90	1.03	1.02	0.59	1.00	0.42
(a) Refer to the Explanatory Notes for details.

TYPE OF ACTIVITY

In 2015-16, businesses continued to direct the majority of BERD into Experimental development ($10,855 million or 65% of total BERD) and Applied research ($4,796 million or 29% of total BERD). All types of activity decreased between 2013-14 and 2015-16. Applied research decreased $1,339 million (22%), Experimental development decreased $667 million (6%), Strategic basic research decreased $137 million (13%). Pure basic research recorded the lowest decrease down $48 million (28%).

FIELDS OF RESEARCH

By Fields of Research, Information and Computing Sciences ($6,634 million or 40% of total BERD) and Engineering ($5,538 million or 33% of total BERD) accounted for almost three quarters (73%) of total BERD in 2015-16. Engineering showed the largest decrease, down $1,936 million (26%). Information and Computing Sciences showed the largest increase, up $561 million (9%) from 2013-14.

SOCIO-ECONOMIC OBJECTIVE

By Socio-economic Objective, Manufacturing ($4,419 million or 27% of total BERD), Commercial Services and Tourism ($3,580 million or 21% of total BERD) and Information and Communication Services ($2,965 million or 18% of total BERD), accounted for two thirds (66%) of total BERD in 2015-16. Mineral Resources showed the largest decrease in BERD down $795 million (39%). Information and Communication Services showed the largest increase up $166 million (6%) from 2013-14.


BUSINESS HUMAN RESOURCES DEVOTED TO R&D 

INDUSTRY

In 2015-16, the industry divisions of Professional, Scientific and Technical Services, Manufacturing and Financial and Insurance Services were the main contributors to total human resources devoted to R&D, at 21,364 (30%), 14,358 (20%) and 14,029 (20%) person years of effort (PYE) respectively.

Manufacturing showed the largest decrease in human resources devoted to R&D in 2015-16, down 5,596 PYE (28%).

EMPLOYMENT SIZE

In 2015-16, businesses with 200 or more employees and businesses with 20-199 employees accounted for more than three quarters (80%) of total human resources devoted to R&D (34,200 PYE or 49% and 22,061 PYE or 31% respectively). A decrease in human resources was shown across all four employment size groups. The largest decrease was for businesses with 200 or more employees (down 5,236 PYE or 13%).

TYPE OF RESOURCE

Researchers were the most prevalent type of human resource devoted to R&D in 2015-16, accounting for 33,016 PYE or 47% of total PYE. Researchers showed the largest decrease in PYE, down 6,049 PYE (15%).