EXPLANATORY NOTES


INTRODUCTION

1 The statistics presented in this release have been compiled from data collected by the Australian Bureau of Statistics (ABS) from Australian higher education institutions in the Survey of Research and Experimental Development (R&D). For the higher education sector, the survey is conducted biennially and based on a single calendar year reference period.

2 The reference period for statistics presented in this issue is the year ended 31 December 2010.


DEFINITIONS

3 R&D as collected by the ABS is defined in accordance with the Organisation for Economic Co-operation and Development (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'.

4 For a more comprehensive interpretation of the definition of R&D activity, see the Australian and New Zealand Standard Research Classification (ANZSRC), 2008 (cat. no. 1297.0) or refer to the OECD publication Proposed Standard Practice for Surveys on Research and Experimental Development - Frascati Manual 2002.

5 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 AND COVERAGE

6 The OECD definition of the higher education sector encompasses universities and other institutions of post-secondary education regardless of their source of finance or legal status. The scope of the ABS R&D survey is based on the OECD definition, but excludes colleges of Technical and Further Education. (For the 2010 survey, 40 Australian higher education institutions were in scope and data collected from each.)

7 All research activity performed by in-scope institutions during the reference period, irrespective of the source of funds, is included in the survey. This includes research performed by institutions:

• as a participant in unincorporated Cooperative Research Centres (CRCs); and
• on contract for other legal entities (such as private business or incorporated CRCs).

8 R&D performed on an institution's campus by other legal entities (such as incorporated CRCs or university controlled entities) or employees of other organisations, is excluded from the survey. The R&D performed by these entities and their employees will be in scope of the relevant R&D sector (Business, Government or Private non-profit).


LOCATION OF R&D

9 Data shown in this release represent the main campus or head office location of the reporting institution, with the exception of the Australian Defence Force Academy which is part of the University of New South Wales but is shown against the Australian Capital Territory.


AUSTRALIAN AND NEW ZEALAND STANDARD RESEARCH CLASSIFICATION

10 Fields of research, Socio-economic objective and Type of activity statistics presented in this release have been collected and compiled based on the Australian and New Zealand Standard Research Classification (ANZSRC), 2008 (cat. no. 1297.0).


DERIVED EXPENDITURE ESTIMATES

11 Total cost of R&D undertaken is equivalent to direct expenditure plus indirect (overhead) expenditure.

12 In compiling R&D statistics, institutions were asked to provide data on:

• direct staff inputs (i.e. staff directly performing R&D);
• direct expenditure (i.e. expenses directly attributable to R&D); and
• other staff and resources supporting, but not directly performing, R&D.

13 Institutions were also required to indicate whether overheads had been included in reported data. In cases where data did not include overheads, an estimate was calculated by either:

• the institution identifying the value of R&D related overhead costs to be apportioned across relevant projects/schools; or
• the ABS, using a methodology agreed to by institutions and Universities Australia.

GROSS DOMESTIC AND GROSS STATE PRODUCT

14 In calculating HERD/Gross Domestic Product (GDP) and HERD/Gross State Product (GSP) ratios presented in this issue, the most recent GDP and GSP values available were used. These values are referenced in the tables below.

GROSS DOMESTIC PRODUCT, current prices
	2000-01	2002-03	2004-05	2006-07	2008-09	2010-11
	$m	$m	$m	$m	$m	$m
GDP	706 895	800 911	920 899	1 083 060	1 252 218	1 400 126
Source: Australian National Accounts: National Income, Expenditure and Product, December 2011 (cat. no. 5206.0), released 7 March 2012

GROSS STATE PRODUCT, current prices
	NSW	Vic.	Qld	SA	WA	Tas.	NT	ACT
	$m	$m	$m	$m	$m	$m	$m	$m
2010-11	438 456	317 152	266 585	90 172	216 586	24 809	17 082	30 327
2008-09	392 445	282 891	256 942	80 203	175 051	22 103	16 420	26 163
Source: Australian National Accounts, State Accounts, 2010-11 (cat. no. 5220.0), released 23 November 2011

15 GDP is estimated by the ABS according to the recently updated international standards System of National Accounts, 2008 (2008 SNA) and is not directly comparable to GDP for countries where these standards have not been applied.

16 While statistics presented in this issue relate to the 2010 calendar year, financial year GDP and GSP data are used to ensure consistency with ratios published in other ABS R&D releases which use a financial year as the reporting period.


CHAIN VOLUME MEASURES

17 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 2010). 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 Measures and Price Indexes (cat. no. 5248.0).

18 Deflators used to calculate the chain volume measure of expenditure on R&D have been 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.


UPCOMING RELEASES

19 Upcoming releases of R&D statistics include:

Research and Experimental Development, Businesses, Australia, 2010-11 (cat. no. 8104.0), scheduled for release 11 September 2012. This release will also include the 2010-11 estimate for gross expenditure on R&D (GERD).

OTHER RELATED RELEASES

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

Australian and New Zealand Standard Research Classification (ANZSRC), 2008 (cat. no. 1297.0)
Innovation in Australian Business, 2008-09 (cat. no. 8158.0)
Microdata: Business Longitudinal Database, Expanded CURF, Australia, 2004-05 to 2009-10 (cat. no. 8168.0.55.001)
Selected Characteristics of Australian Businesses, 2009-10 (cat. no. 8167.0)
Summary of IT Use and Innovation in Australian Business, 2009-10 (cat. no. 8166.0)

21 Relevant OECD publications include:

Main Science and Technology Indicators 2011/2
Proposed Standard Practice for Surveys on Research and Experimental Development - Frascati Manual 2002

ABS WEBSITE

22 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 theme page under Topics @ a Glance/Industry.


ROUNDING

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