EXPLANATORY NOTES


DATA SOURCES

1 The statistics presented in this release have been compiled from data collected from government and private non-profit (PNP) organisations in the biennial Survey of Research and Experimental Development, in respect of the financial year ended 30 June 2007. The survey was conducted by mail questionnaire and a 90% response rate was achieved. The impact of non-response is estimated to be less than 1% of total expenditure on R&D for both the Government and PNP sectors.

2 GDP and GSP figures used to derive R&D expenditure ratios are referenced in the tables below.

Gross Domestic Product, current prices
	1996-97	1998-99	2000-01	2002-03	2004-05	2006-07
	$m	$m	$m	$m	$m	$m
GDP	545 698	607 759	689 262	781 675	897 642	1 046 620
Source: Australian National Accounts: National Income, Expenditure and Product, March 2008 (cat. no. 5206.0)

Gross State Product, current prices
	NSW	Vic.	Qld	SA	WA	Tas.	NT	ACT
	$m	$m	$m	$m	$m	$m	$m	$m
2004-05	300 636	225 129	159 778	61 607	102 646	17 637	11 380	18 828
2006-07	335 144	247 440	195 704	69 540	141 368	21 088	14 494	21 586
Source: Australian National Accounts, State Accounts, 2006-07 (cat. no. 5220.0)

STATISTICAL UNIT

3 Statistical units are those entities from which statistics are collected, or about which statistics are compiled. In ABS economic statistics, the statistical unit is generally the business or, in the case of this survey for the Government and PNP sectors, the organisation. The ABS Business Register (ABSBR) is used to record information about statistical units and is used to create the frames for most ABS economic collections.

4 The ABS uses an economic statistics units model on the ABSBR to describe the characteristics of organisations, and the structural relationships between related organisations. Within large, complex and diverse organisations, the units model is also used to define reporting units that can provide data to the ABS at suitable levels of detail.

5 This units model allocates organisations to one of two sub-populations:

• Australian Taxation Office maintained population (ATOMP) - This sub-population includes organisations with simple structures. Most organisations in Australia need to obtain an Australian Business Number (ABN). They are then included on the whole-of-government register of businesses, the Australian Business Register (ABR), which is maintained by the ATO. For organisations with simple structures, the unit registered for an ABN will satisfy ABS statistical requirements. As such, for these organisations, the ABS has aligned its statistical units structure with the ABN unit and uses it as the statistical unit for all ABS economic collections.
• ABS maintained population (ABSMP) - This sub-population includes large, complex and diverse organisations. For these organisations the ABN unit is not suitable for ABS statistical requirements and, as such, the ABS maintains its own units structure through direct contact with the organisation. For organisations in the ABSMP, statistical units comprise the Enterprise Group, the Enterprise and the Type of Activity Unit.

6 Combined, the ATOMP and the ABSMP make up the ABSBR from which the survey selections are taken.

7 The current economic statistics units model was introduced into the ABS in mid 2002, to better use the information available as a result of The New Tax System (TNTS). For more information please refer to the Information Paper: Improvements in ABS Economic Statistics - Arising from the New Tax System, (cat. no. 1372.0).


DEFINITIONS

8 R&D as collected by the ABS is defined in accordance with the OECD standard as 'creative work undertaken on a systematic basis in order to increase the stock of knowledge, including knowledge of man, culture and society, and the use of this stock of knowledge to devise new applications'. Although outside the economic boundary of R&D as defined by the OECD, R&D performed overseas by Australian organisations is included in these data.

9 For a more comprehensive interpretation of the definition of R&D activity, see the Australian Standard Research Classification (ASRC), 1998 (cat. no. 1297.0) or refer to the OECD publication Proposed Standard Practice for Surveys on Research and Experimental Development ('Frascati Manual' 2002).


Application of ASRC

10 This release presents statistics classified by: Socio-economic objective; Research fields, courses and disciplines; and Type of activity. Data providers self-classify R&D expenditure based on their interpretation of OECD/ABS definitions. The ABS makes every effort to ensure correct and consistent interpretation and reporting of these data and applies consistent processing methodologies. See also the Reliability of Statistics and Revisions sections of the Technical Note.


SCOPE

11 From 2004-05, the sector scope for Government and Private non-profit organisations is determined using the guidelines of the Standard Institutional Sector Classification of Australia (SISCA). The Government and the Private non-profit sectors are defined by SISCA 3000 and SISCA 5000 respectively. Further details about the ABS sector classification can be found in the Standard Economic Sector Classifications of Australia (SESCA) 2002 (cat.no. 1218.0).


Government sector

12 The general government sector comprises all government units of the Commonwealth Government, state and territory governments and each local government authority, and all resident non-market Non-profit Institutes (NPIs) that are controlled and mainly financed by those governments.

13 Government entities mainly engaged in market production or financial activities are not classified as government units. These organisations are included in the Business sector.


Private non-profit sector

14 The Private non-profit sector comprises all resident non-market NPIs that are not controlled and not mainly financed by government. Such NPIs provide goods and services to households free or at prices that are not economically significant.


COVERAGE

15 The Survey of Research and Experimental Development for the Government and Private non-profit sectors comprise a complete enumeration of organisations identified by the ABS as likely to have had expenditure on R&D during the reference period. Local government organisations are excluded as they are considered to have low R&D expenditure. Organisations were included if they:

• reported expenditure on R&D in the previous survey;
• were identified through other sources such as newspapers, journals, research compendia etc. as likely to have expenditure on R&D; or
• indicated expenditure on R&D via a coverage questionnaire.

16 As per the Frascati Manual guidelines, Government and Private non-profit sectors for the ABS R&D survey exclude the following:

• Higher education institutions, e.g. universities (which are included in the Higher education sector); and
• Private non-profit organisations mainly serving business (which are included in the Business sector).

LOCATION OF EXPENDITURE

17 Estimates for location of expenditure relate to the region(s) in which the organisation performed the R&D. This may not be the head office location of the organisation.


CHAIN VOLUME MEASURES

18 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 2005-06). 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 Section 15 of the Information Paper: Australian National Accounts, Introduction of Chain Volume and Price Indexes (cat. no. 5248.0).


RELATED RELEASES

19 Users may also wish to refer to the following ABS releases:

Australian Standard Research Classification (ASRC) 1998 (cat. no. 1297.0)
Innovation in Australian Business, 2005 (cat. no. 8158.0)
Research and Experimental Development, All Sector Summary, Australia, 2004-05 (cat. no. 8112.0)
Research and Experimental Development, Businesses, Australia, 2005-06 (cat. no. 8104.0)
Research and Experimental Development, Higher Education Organisations, Australia, 2006 (cat. no. 8111.0)
Summary of IT Use and Innovation in Australian Business, 2006-07 (cat. no. 8166.0)

20 Relevant OECD publications include:

Main Science and Technology Indicators 2008/1
Proposed Standard Practice for Surveys on Research and Experimental Development ('Frascati Manual' 2002)

ABS WEBSITE

21 Other information including data cubes in spreadsheet format, relating to R&D and innovation can be found on the ABS website <www.abs.gov.au>. See the Innovation, Science and Technology Home page under Themes/Industry.


ABS DATA AVAILABLE ON REQUEST

22 As well as the statistics included in this and related releases, the ABS may have other relevant data available on request. Inquiries should be made to the National Information and Referral Service on 1300 135 070.


ROUNDING

23 Where figures have been rounded, discrepancies may occur between the sum of the component items and totals.