APPENDIX GROSS EXPENDITURE ON R&D


GROSS EXPENDITURE ON R&D (GERD)

Gross expenditure on R&D (GERD) represents the total expenditure devoted to R&D by the business, government, higher education and private non-profit sectors. A method of estimating or modelling the 'missing' higher education sector has been developed that provides the best estimate of the 2011-12 higher education expenditure on R&D. The 2011-12 HERD component was carefully modelled using a linear interpolation methodology.


Recent Changes

The 2011-12 GERD is the first GERD to be compiled using data for three sectors collected as a census (government, private non-profit, and higher education) and one sector collected as a sample (business). The introduction of sampling for the business sector introduces sampling variance. This is represented by Relative Standard Errors (RSEs) and these have been calculated for the GERD estimates, repesented in the GERD, RSE table. See Sampling Error section below.


GERD 2011-12

The 2011-12 GERD for Australia was $31,665 million, an increase of $750 million (2%) from 2010-11.

GERD, by sector
	2002-03	2004-05	2006-07	2008-09	2010-11(a)	2011-12
	$m	$m	$m	$m	$m	$m
Business	6 940	8 676	12 639	17 291	r18 007	18 321
Government	2 482	2 486	3 095	3 420	(b)3 833	3 533
Higher education	3 430	4 327	5 434	6 844	r8 161	(b)8 885
Private non-profit	360	479	609	744	(b)914	925
Total(c)	13 212	15 969	21 777	28 299	r(b)30 915	(b)31 665
r revised
(a) 2010-11 data have been revised. See the Revision section of the Technical Note for details.
(b) These estimates have been carefully modelled.
(c) Where figures have been rounded, discrepancies may occur between the sum of the component items and totals.

Following large increases between 2002-03 and 2008-09, the rate of growth of GERD has slowed since 2010-11.


GERD and Gross Domestic Product (GDP)

GERD as a proportion of GDP fell slightly, down from 2.20% in 2010-11 to 2.13% in 2011-12. This was due to slower rates of growth in the government sector over the period compared to the rate of growth of GDP.

GERD, as a proportion of GDP(a)
	2002-03	2004-05	2006-07	2008-09	2010-11	2011-12
	%	%	%	%	%	%
GERD/GDP	1.65	1.73	2.00	2.25	2.20	2.13
(a) See Explanatory Notes 14 to 16 for details.

Sampling Error

As the estimates for GERD now include a sample of businesses rather than a census, the GERD estimates are subject to sampling variability, that is, they may differ from the estimates that would have been produced if the information had been obtained from the entire population.

The difference between estimates obtained from a sample of businesses, and the estimates that would have been produced if the information had been obtained from all businesses, is called sampling error.

In this appendix, indications of sampling variability are measured by Relative Standard Errors (RSEs). The relative standard error is a useful measure in that it provides an immediate indication of the percentage errors likely to have occurred due to sampling, and thus avoids the need to refer to the size of the estimate. RSEs are obtained using the formula: RSE = SE/estimate x 100. RSEs are shown in the Relative Standard Error table below.

GERD, RSE
	2010-11	2011-12
	%	%
Business(a)	. .	1.82
Government	. .	. .
Private non-profit	. .	. .
Higher education	. .	. .
Total	. .	1.04
. . not applicable
(a) 2011-12 was the first year that the business sector was collected as a sample.