EXPLANATORY NOTES


INTRODUCTION

1 The statistics presented in this release have been compiled from data collected in the Survey of Research and Experimental Development, Higher Education Organisations for 2014.

2 The Survey of R&D, Higher Education is a biennial collection based on a calendar year reference period.

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 The Measurement of Scientific and Technological Activities: Proposed Standard Practice for Surveys of Research and Experimental Development - Frascati Manual 2002.

5 Data providers report and self-classify R&D expenditure based on their interpretation of OECD and ABS definitions and classifications. The ABS makes every effort to ensure correct and consistent interpretation and reporting of these data by applying consistent processing methodologies. See also the Non-Sampling Error and Revisions sections of the Technical Note under the Explanatory Notes tab.

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 2014 survey, 41 Australian higher education institutions were in scope and reported for this collection.

7 Intramural expenditure, which is defined as expenditure for R&D performed by in scope institutions during the reference period irrespective of the source of funds, is included in the survey. Expenditure made outside the institution but in support of intramural R&D is included. For further information, refer to the OECD Frascati Manual 2002. Intramural expenditure includes research performed by institutions:

• as a participant in unincorporated Cooperative Research Centres (CRCs); and
• on behalf of other legal entities where the institution maintains full management and control of the project.

8 R&D performed on an institution's campus, where the R&D is controlled by other legal entities, is excluded from the survey. The R&D performed by these entities will be in scope of the relevant R&D sector (business, government or private non-profit).

9 R&D performed overseas by Australian higher education institutions is included. Due to the very small amount of overseas expenditure, it is not separately identified.

LOCATION OF R&D

10 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 (ADFA), 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

11 Type of activity, fields of research and socio-economic objective 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

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

13 Institutions were 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 PRODUCT (GDP) AND GROSS STATE PRODUCT (GSP)

14 The most recent GDP and GSP values available were used to calculate the R&D expenditure/GDP and R&D expenditure/GSP ratios presented in this issue. These values are referenced in the table below and have been revised from those used to calculate ratios in previous issues.

GROSS DOMESTIC PRODUCT, current prices
	2004 - 05	2006 - 07	2008 - 09	2010 - 11	2012 - 13	2014 - 15
	$m	$m	$m	$m	$m	$m
GDP	921 929	1 086 534	1 258 459	1 409 795	1 524 383	1 609 513
Source: Australian National Accounts: National Income, Expenditure and Product, December 2015 (cat. no. 5206.0), released 2 March 2016.

GROSS STATE PRODUCT, current prices
	NSW	Vic.	Qld	SA	WA	Tas.	NT	ACT
	$m	$m	$m	$m	$m	$m	$m	$m
2012 - 13	480 592	336 158	290 416	94 436	244 965	24 508	19 114	34 194
2014 - 15	513 309	360 550	305 354	98 629	248 557	25 681	23 139	34 774
Source: Australian National Accounts: State Accounts, 2014-15 (cat. no. 5220.0), released 20 November 2015.

15 GDP is estimated by the ABS according to the 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 2014 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 2014). All price values for previous years are re-expressed in (i.e. based on) the prices of the current 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).

R&D deflators

18 With the implementation of the 2008 SNA, deflators used to calculate the chain volume measure of expenditure on R&D were 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. The revised deflators have been used for Higher Education R&D statistics since the 2008 survey cycle.

ROUNDING

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

UPCOMING RELEASES

20 Upcoming releases of R&D statistics include:

Research and Experimental Development, Government and Private Non-Profit Organisations, Australia, 2014-15 (cat. no. 8109.0), scheduled for release in July 2016.

OTHER RELATED RELEASES

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

Australian and New Zealand Standard Research Classification (ANZSRC), 2008 (cat. no. 1297.0)
Australian National Accounts: National Income, Expenditure and Product, December 2015 (cat. no. 5206.0)
Australian National Accounts: State Accounts, 2014-15 (cat. no. 5220.0)
Innovation in Australian Business, 2012-13 (cat. no. 8158.0)
Microdata: Business Longitudinal Database, Australia, 2006-07 to 2010-11 (cat. no. 8168.0.55.001)
Research and Experimental Development, Businesses, Australia, 2013-14 (cat. no. 8104.0)
Research and Experimental Development, Government and Private Non-Profit Organisations, Australia, 2012-13 (cat. no. 8109.0)
Selected Characteristics of Australian Businesses, 2013-14 (cat. no. 8167.0)
Summary of IT Use and Innovation in Australian Business, 2013-14 (cat. no. 8166.0)

22 Relevant OECD publications include:

Main Science and Technology Indicators 2016
The Measurement of Scientific and Technological Activities: Proposed Standard Practice for Surveys of Research and Experimental Development - Frascati Manual 2002