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NOTES


CHANGES IN THIS ISSUE

Changes have been made to the format and content of this publication. Cross-classifications of data included in previous issues may be available on request.

COMPARISONS TO PREVIOUS STATISTICS

A range of quality improvements was implemented for the 2004-05 Government and Private non-profit R&D survey. These improvements have impacted on comparability to previously published estimates. See paragraph 9 of the Explanatory notes for further detail.

No revisions were made to 2002-03 data in this issue. However, 2004-05 data presented in this publication may subsequently be revised.

DATA QUALITY

When interpreting the results in this publication it is important to take into account factors which may affect the reliability of the estimates. These factors are described in the Non-sampling error section of the Technical note.

INQUIRIES

For further information about these and related statistics, contact the National Information and Referral Service on 1300 135 070 or Kirsty Rothenbury on Perth (08) 9360 5382.

SUMMARY COMMENTARY


CHAPTER 1: GOVERNMENT EXPENDITURE ON R&D

Expenditure by Government organisations on R&D (GOVERD) in 2004-05 was $2,550.7 million. This represented an increase of 2.8% in current price terms over 2002-03, but a decrease of 4.3% in chain volume terms.

Government RESOURCES DEVOTED TO R&D
			1996-97	1998-99	2000-01	2002-03	2004-05
Expenditure on R&D - Current prices
	Commonwealth	$m	1 266.6	1 179.4	1 404.8	1 531.3	1 573.4
	State/territory	$m	797.7	863.6	951.0	950.9	977.3
	Total	$m	2 064.3	2 043.1	2 355.8	2 482.2	2 550.7
Expenditure on R&D - Chain volume measures(a)
	Commonwealth	$m	1 599.4	1 378.9	1 592.9	1 644.7	1 573.4
	State/territory	$m	1 008.4	1 015.4	1 081.6	1 021.9	977.3
	Total(b)	$m	2 607.6	2 393.9	2 674.3	2 666.5	2 550.7
Human resources devoted to R&D
	Commonwealth	PYE	10 377	9 353	9 565	10 185	9 335
	State/territory	PYE	8 813	9 069	8 587	8 357	7 654
	Total	PYE	19 190	18 422	18 152	18 542	16 989
(a) The reference year for chain volume measures is 2004-05. See paragraph 18 of the Explanatory notes for details.
(b) Chain volume measures are not additive for most periods; the component measures do not sum to a total in the same way as the corresponding current price components do.

Since 1996-97, GOVERD increased by an average of 2.9% per year in current price terms but decreased by an average of 0.3% in chain volume terms.

Government Expenditure on R&D

GOVERD as a Proportion of GDP(a)

GOVERD/GDP RATIOS OF OECD COUNTRIES
	2000-01	2001-02	2002-03	2003-04	2004-05
	%	%	%	%	%
Iceland	0.70	0.61	0.76	0.73	na
France	0.37	0.36	0.37	0.36	0.36
Korea	0.32	0.32	0.34	0.33	0.34
United States of America	0.28	0.31	0.32	0.33	0.33
Germany	0.33	0.34	0.34	0.34	0.33
Finland	0.36	0.35	0.36	0.34	0.33
New Zealand	na	0.37	na	0.33	na
Japan	0.30	0.29	0.30	0.29	0.30
Australia	0.34	na	0.32	na	0.29
Czech Republic	0.31	0.29	0.28	0.29	0.27
Hungary	0.21	0.24	0.33	0.30	0.26
Netherlands	0.23	0.25	0.24	0.25	0.26
Norway	na	0.23	0.26	0.26	0.25
Poland	0.21	0.20	0.26	0.23	0.23
Canada	0.22	0.22	0.22	0.20	0.21
United Kingdom	0.23	0.18	0.17	0.18	na
Italy	0.20	0.20	0.20	0.19	0.17
Denmark	0.28	0.28	0.18	0.18	0.17
Spain	0.14	0.15	0.15	0.16	0.17
Slovak Republic	0.16	0.15	0.15	0.18	0.16
Belgium	0.12	0.13	0.14	0.13	0.14
Sweden	na	0.12	na	0.14	na
Portugal	0.19	0.18	0.15	0.13	na
Greece	na	0.14	na	0.13	na
Mexico	0.16	0.15	0.11	0.11	na
Ireland	0.09	0.09	0.10	0.09	0.09
Turkey	0.04	0.05	0.05	na	na
Total OECD	0.26	0.27	0.27	0.28	0.28
na not available
Main Science and Technology Indicators, 2006/1, OECD, Paris, 2006

Level of government

Expenditure on R&D by Commonwealth government organisations increased by 2.7% to $1,573.4 million in 2004-05. Over the same period, expenditure by State and territory government organisations increased by 2.8% to $977.3 million.

Type of expenditure

Growth in GOVERD between 2002-03 and 2004-05 was mainly due to a 4.7% ($106.3 million) increase in Current expenditure. This in turn was driven by a 12.6% ($161.6 million) increase in Labour costs. In contrast, Capital expenditure on R&D decreased during the period by 17.3% ($37.8 million).

Source of funds

As in previous years, the majority of GOVERD in 2004-05 (66.7% or $1,701.0 million) was sourced from Own funds. The next largest source of R&D funds was Other Commonwealth government ($287.2 million or 11.3%).

Type of activity

In 2004-05, the majority of GOVERD was directed into Applied research (51.8% or $1321.9 million) and Strategic basic research (29.6% or $754.2 million). However, of all types of R&D activity, only expenditure on Strategic basic research increased between 2002-03 and 2004-05 (up 25.2% or $151.7 million).

Location

Locations in Victoria and New South Wales recorded the highest levels of GOVERD in 2004-05 ($608.1 million and $560.6 million respectively). Victoria also recorded the highest growth since 2002-03 (up $62.8 million), followed by South Australia (up $24.7 million).

Between 2002-03 and 2004-05, GOVERD as a proportion of Gross State Product (GSP) decreased for all states and territories. The largest decreases were recorded for the Australian Capital Territory (down from 1.85% to 1.42%) and Tasmania (down from 0.88% to 0.70%).

GOVERD as a proportion of GSP(a), by location
		NSW	Vic.	Qld	SA	WA	Tas.	NT	ACT
		%	%	%	%	%	%	%	%
2002-03
	Commonwealth	0.10	0.19	0.11	0.42	0.10	0.81	0.23	1.81
	State/territory	0.10	0.09	0.19	0.18	0.13	0.07	0.33	0.04
	Total	0.20	0.28	0.30	0.60	0.23	0.88	0.55	1.85
2004-05
	Commonwealth	0.09	0.18	0.10	0.40	0.10	0.68	0.27	1.41
	State/territory	0.10	0.09	0.15	0.17	0.10	0.02	0.24	0.02
	Total	0.18	0.27	0.25	0.58	0.20	0.70	0.51	1.42
(a) See paragraph 2 of the Explanatory notes.

Socio-economic objectives

The majority of GOVERD in 2004-05, as in previous years, was directed into Economic development (48.9% or $1,248.2 million). The largest components of expenditure within Economic development were: Plant production and plant primary products ($337.5 million); and Animal production and animal primary products ($286.5 million). Accounting for the next largest share of GOVERD, were the Environment (20.3% or $517.1 million) and Society (16.6% or $423.4 million) SEO divisions.

Research fields

In 2004-05, the Research fields accounting for the largest share of GOVERD were Agricultural, veterinary and environmental sciences (29.9% or $761.8 million) and Engineering and technology (16.7% or $426.0 million). Since 2002-03, Medical and health sciences recorded the largest increase in expenditure by Government, rising by $91.2 million (46.0%).

Human resources devoted to R&D

Human resources devoted to R&D in 2004-05 totalled 16,989 person years of effort (PYE), down 8.4% from 2002-03. Researchers accounted for 8,530 PYE devoted to R&D in 2004-05 (50.2% of total PYE), up 6.1% from 2002-03. In contrast, Technicians and Other staff PYE devoted to R&D dropped over the period (by 25.2% and 7.5% respectively). Part of the decrease in Technicians over this period was, however, a result of their reclassification by some government departments since 2002-03.

Government Human resources devoted to R&D

PNP RESOURCES DEVOTED TO R&D
			1996-97	1998-99	2000-01	2002-03	2004-05
Expenditure on R&D
	Current prices	$m	185.8	225.3	289.0	359.5	493.2
	Chain volume measures(a)	$m	240.3	276.9	327.5	385.4	493.2
Human resources devoted to R&D		PYE	2 351	2 551	2 791	3 117	3 930
(a) The reference year for chain volume measures is 2004-05. See paragraph 18 of the Explanatory notes.

Since 1996-97, PNPERD increased by an average of 20.7% per year in current price terms and 13.2% in chain volume terms.

PNP Expenditure on R&D

PNPERD as a Proportion of GDP(a)

Source of funds

The main sources of R&D funds for PNP organisations in 2004-05 were Commonwealth government ($149.1 million or 30.2% of PNPERD) and Own funds ($106.7 million or 21.6%). Of all sources of R&D funds, Commonwealth government showed the largest increase since 2002-03 (up $45.2 million) followed by Overseas organisations (up $24.6 million).

Type of activity

In 2004-05, PNP expenditure on R&D was mainly directed into Applied research ($198.2 million or 40.2%) and Strategic basic research ($186.1 million or 37.7%). Between 2002-03 and 2004-05, expenditure on Applied research increased by $88.7 million. The next largest increase occurred for expenditure on Strategic basic research (up $36.0 million).

Location

Accounting for the highest levels of PNPERD in 2004-05 were locations in Victoria ($272.0 million), New South Wales ($137.1 million) and Western Australia ($37.9 million). Locations in New South Wales recorded the highest increase in PNPERD between 2002-03 and 2004-05 (up $60.9 million) followed by Victoria (up $40.5 million).

Victoria reported the highest PNPERD as a proportion of Gross State Product (GSP) at 0.12% in 2004-05, followed by New South Wales and Western Australia (both 0.04%). Since 2002-03, PNPERD/GSP ratios have remained relatively stable for all states and territories.

PNPERD as a proportion of GSP(a), by location
	NSW	Vic.	Qld	SA	WA	Tas.	NT	ACT
	%	%	%	%	%	%	%	%
2002-03	0.03	0.12	0.01	0.01	0.03	-	np	np
2004-05	0.04	0.12	0.01	0.01	0.04	-	np	0.02
- nil or rounded to zero (including null cells)
np not available for publication but included in totals where applicable, unless otherwise indicated
(a) See paragraph 2 of the Explanatory notes.

Socio-economic objectives

The Society socio-economic objective (SEO) continued to account for the largest share of PNPERD (98.2%). Within the Society SEO, Health accounted for the majority of expenditure, at 93.0% or $458.7 million of total PNPERD.

Research fields

In 2004-05, Medical and health sciences and Biological sciences were the major fields of research expenditure, at $356.7 million and $95.9 million.

Human resources devoted to R&D

A total of 3,930 person years of effort (PYE) was devoted to R&D by PNP organisations in 2004-05. This represented an increase of 26.1% since 2002-03.

Researchers accounted for the majority (65.6%) of human resource effort devoted to R&D in 2004-05 (2,577 PYE). PYE devoted to R&D by Researchers has increased by 35.2%. In contrast, effort by Technicians over the same period decreased by 7.0%.

PNP Human resources devoted to R&D

Government expenditure on biotechnology related R&D

Expenditure on biotechnology related R&D performed by Government organisations in 2004-05 totalled $299.4 million. Commonwealth government organisations performed 74.5% ($223.1 million) of total Government expenditure on biotechnology related R&D, with State and territory governments accounting for the remainder ($76.3 million).

The majority of biotechnology related R&D performed by Commonwealth government was for the organisation's own purposes (99.1% or $221.1 million). In contrast, over a quarter of all biotechnology related R&D carried out by State and territory government organisations in 2004-05 (27.5% or $21.0 million) was performed for another.

In 2004-05, Commonwealth and State and territory government organisations each paid $0.4 million to others located within Australia, to perform biotechnology related R&D on their behalf. There were no such payments to Overseas organisations.

Private non-profit expenditure on biotechnology related R&D

Australian Private non-profit (PNP) organisations performed $138.0 million of expenditure on biotechnology related R&D in 2004-05, of which 96.2% ($132.8 million) was performed for their own purposes. Over this period, PNP organisations paid a total of $3.0 million to other organisations to perform R&D on their behalf.

Biotechnology related R&D expenditure by bio-industry

Almost three quarters of expenditure on biotechnology related R&D by Commonwealth government organisations was attributable to the Agricultural ($114.1 million) and Human health ($52.2 million) bio-industries. Similarly, the Human health and Agricultural bio-industries accounted for 91.7% of expenditure on biotechnology related R&D by State and territory government organisations (at $35.9 million and $34.1 million respectively).

In 2004-05, the Human health bio-industry accounted for 92.2% ($127.3 million) of total expenditure on biotechnology related R&D by PNP organisations.