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Research and Experimental Development, Government and Private Non-Profit Organisations, Australia methodology

Reference period
2016 - 2017
Released
1/06/2020
Next release Unknown
First release

Explanatory notes

Introduction

1 The statistics presented in this release have been compiled from data collected in the Survey of Research and Experimental Development (R&D), Government and Private Non-Profit Organisations for 2016-17.

2 The Survey of R&D, Government and Private Non-Profit Organisations is a biennial collection based on a financial year reference period.

Definitions

3 R&D, as collected by the Australian Bureau of Statistics (ABS), is defined in accordance with the Organisation for Economic Co-operation and Development (OECD) standard as "creative and systematic work undertaken in order to increase the stock of knowledge - including knowledge of humankind, culture and society - and to devise new applications of available knowledge".

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 Frascati Manual 2015: Guidelines for Collecting and Reporting Data on Research and Experimental Development.

5 Data providers report and self classify R&D survey information 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 section of the Technical Note on the Methodology page.

Statistical unit

6 The Economics Unit Model is used by the ABS to describe the structure of Australian businesses and other organisations. The model consists of four types of units:

  • Enterprise Group (EG)
  • Type of Activity Unit (TAU)
  • Legal Entity (LE)
  • Location Unit
     

7 Organisations contributing to the estimates in this publication are sourced from the ABS Business Register (ABSBR), and are selected at either the Australian Business Number (ABN) unit or the Type of Activity Unit (TAU) level, as described below.

8 In the Survey of R&D, Government and Private Non-Profit Organisations, the statistical unit used to represent the majority of organisations, and for which statistics are reported, is the ABN unit. The ABN unit is the organisation unit which has registered for an ABN, and appears on the Australian Tax Office (ATO) administered Australian Business Register (ABR). This unit is suitable for ABS statistical needs when the organisation is simple in structure. In these instances, one ABN equates to one statistical unit. These units are collectively referred to as the non-profiled population.

9 For more significant and diverse organisations where the ABN unit is not suitable for ABS statistical needs, the statistical unit used is the Type of Activity Unit (TAU). A TAU comprises one or more entities, sub-entities or branches of an organisation within an Enterprise Group that can report production and employment activities. When a minimum set of data items are available, a TAU is created which covers all the operations within an industry subdivision. The TAU is classified to the relevant subdivision of the Australian and New Zealand Standard Industrial Classification (ANZSIC). These units are collectively referred to as the profiled population.

10 Further information on the ABSBR and ABS economic units model can be found in Australian Bureau of Statistics Business Register.

Scope and coverage

11 The Survey of R&D, Government and Private Non-Profit Organisations aims to be a complete enumeration of Australian government and private non-profit organisations with intramural expenditure on R&D during the reference period.

12 Intramural expenditure, which is defined as expenditure for R&D performed by in scope organisations during the reference period irrespective of the source of funds, is included in the survey. Expenditure made outside the statistical unit but in support of intramural R&D is also included. For further information, refer to the OECD Frascati Manual 2015. 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.
     

13 R&D performed by in scope organisations, 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 or higher education).

14 From the 2004-05 cycle of the Survey of R&D, Government and Private Non-Profit Organisations, the scope for the government and private non-profit sectors has been based on the Standard Institutional Sector Classification of Australia (SISCA); more specifically, Sector 3 (General Government) and Sector 5 (Not-For-Profit Institutions (NPIs) Serving Households).

15 Some information about SISCA Sector 3 and Sector 5 is provided below. For further details about the ABS sector classifications, refer to Standard Economic Sector Classifications of Australia (SESCA) 2008 (cat. no. 1218.0).

General government sector

16 The General Government sector comprises all government units of the Australian government, each state and territory government, and all local government authorities. It includes courts, the Governor General's office, public universities, government departments, and all resident non-market Not-For-Profit Institutions (NPIs) that are controlled and mainly financed by those government units.

17 While the Government sector for the Survey of R&D, Government and Private Non-Profit Organisations is based on SISCA, the survey excludes higher education institutions, e.g. universities (which are included in the Survey of R&D, Higher Education Organisations), as per the Frascati Manual 2015 guidelines. Local government organisations are also excluded from the survey, as they are considered to have minimal R&D expenditure.

18 Government entities mainly engaged in market production or financial activities are not included in the General Government sector.

NPIs serving households sector

19 The NPIs Serving Households sector consists of resident non-market operators providing goods and services to households free or at prices that are not economically significant. It includes NPIs that are mainly financed from household member subscriptions and produce benefits primarily for the household members, and NPIs created for philanthropic purposes which are financed mainly from donations or government grants.

20 NPIs engaged in market production are not included in the NPIs Serving Households sector.

Australian and New Zealand Standard Research Classification (ANZSRC)

21 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).

Location of expenditure

22 Location of expenditure relates to the region(s) in which the organisation reported having performed R&D, during the reference period. This may not be the head office location of the organisation.

Gross domestic product (GDP) and Gross state product (GSP)

23 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 tables below and have been revised from those used to calculate ratios in previous issues.

Gross domestic product, current prices
2006-07 ($m)2008-09 ($m)2011-12 ($m)2012-13 ($m)2014-15 ($m)2016-17 ($m)
GDP1 085 1451 258 3021 496 8001 533 8821 621 4041 758 130
Gross state product, current prices
NSW ($m)Vic. ($m)Qld ($m)SA ($m)WA ($m)Tas. ($m)NT ($m)ACT ($m)
2014-15517 886371 609295 33699 132251 15027 62124 45034 220
2016-17576 716406 525326 995103 325247 70529 28925 98438 187

Source: Australian National Accounts: State Accounts, 2016-17 (cat. no. 5220.0), released 17 November 2017.


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

Chain volume measures

25 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 2016-17). 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).

R&D deflators

26 With the implementation of 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 the Survey of R&D, Government and Private Non-Profit Organisations statistics from the 2008-09 survey cycle.

Rounding

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

Upcoming releases

28 Research and Experimental Development, Businesses, Australia, 2017-18 (cat. no. 8104.0), scheduled for release in September 2019.

Acknowledgement

31 The ABS acknowledges the ongoing contribution made by the organisation selected for the Survey of R&D, Government and Private Non-Profit Organisations.

32 ABS publications draw extensively on information provided freely by individuals, businesses, governments and other organisations. Their continued cooperation is very much appreciated: without it, the wide range of statistics published by the ABS would not be available. Information received by the ABS is treated in strict confidence as required by the Census and Statistics Act 1905.

ABS data available on request

33 As well as the statistics included in this and related publications, 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.

Technical note - data quality

Non-sampling error

1 Non-sampling errors may arise as a result of errors in the reporting, recording or processing of data. These errors can be introduced through inadequacies in the questionnaire, treatment of non-response, inaccurate reporting by data providers, errors in the application of survey procedures, incorrect recording of answers and errors in data capture and processing.

2 The extent to which non-sampling error affects the results is difficult to measure. Every effort is made to minimise non-sampling error by careful design and testing of the collection instrument, the use of efficient operating procedures and systems, and the use of appropriate methodologies.

3 When interpreting the statistics in this release, the reliability and comparability of the estimates may be affected by the following specific non-sampling errors:

  • Many organisations provided estimates due to a lack of separately recorded data on R&D activity.
  • Data were self-classified by organisations to Type of Activity, Fields of Research and Socio-economic Objective at the time of reporting. Some organisations may have experienced difficulty in classifying their R&D projects. The ABS makes every effort to ensure correct and consistent interpretation and reporting of these data by applying consistent processing methodologies.
  • The estimation method for R&D related overhead costs varied across organisations and reference periods.
     

Revisions

4 In the event of new information being identified and revisions made, revised figures will be indicated by a footnote. Revisions must be taken into consideration when interpreting results, particularly when comparing estimates over time.

Glossary

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Applied research

Original work undertaken primarily to acquire new knowledge with a specific application in view. It is undertaken either to determine possible uses for the findings of basic research or to determine new ways of achieving some specific and predetermined objectives.

Business funds

As a source of R&D funding, this includes resources coming from businesses located in Australia, including donations and grants, to specifically support R&D activity.

Capital expenditure

Expenditure on the acquisition of fixed tangible assets such as land, buildings, vehicles, plant, machinery and equipment which is attributable to R&D activity.

Commonwealth government funds

As a source of R&D funding, this includes R&D grants, and payments for R&D projects funded by or carried on behalf of Commonwealth government organisations.

Current expenditure

Expenditure on direct labour costs, materials, fuels, rent and hiring, repairs and maintenance, data processing, etc. and the proportion of expenditure on general services and overheads which is attributable to R&D activity.

Donations and bequests

As a source of R&D funding, this includes research specific donations and bequests from Australian organisations and individuals.

Experimental development

Systematic work, using existing knowledge gained from research or practical experience, which is directed to producing new materials, products, devices, policies, behaviours or outlooks; to installing new processes, systems and services; or to improving substantially those already produced and installed.

Fields of research (FOR)

The FOR classification allows R&D activity to be categorised according to the methodology used in the R&D, rather than the activity of the unit performing the R&D or the purpose of the R&D. The FOR reflects the field in which the research was undertaken and is based on the processes and techniques used.

Human resources devoted to R&D

The effort of researchers, technicians and other staff directly involved with R&D activity. Overhead staff (e.g. administrative and general service employees such as personnel officers, janitors, etc.) whose work indirectly supports R&D, are excluded.

Joint business/government funds

As a source of R&D funding, this includes R&D funding raised via industry levies.

Labour costs

Expenditure relating to: wages and salaries; overtime earnings; penalty payments; shift allowances; employer contributions into superannuation; fringe benefits and payroll taxes; severance, termination and redundancy payments; workers' compensation premiums/costs; provisions for employee entitlements; salaries and fees of directors and executives; retainers and commissions of persons who received a retainer; bonuses; annual and other types of paid leave.

Land, buildings and other structures

Expenditure on land, buildings and other structures acquired for R&D purposes including testing grounds, sites for laboratories and pilot plants, landscaping, site preparation works, fit-out costs for new buildings and major improvements and modifications.

Location

The region(s) in which the organisation performed the R&D. This may not be the head office location of the organisation.

Other capital expenditure

Expenditure on office and other equipment (including capitalised computer software licence fees), furnishings, vehicles, plant, machinery and equipment.

Other current expenditure

All other non-staff expenditures including: materials, fuels and other inputs; rent, leasing and hiring expenses; repair and maintenance expenses; payments to outside organisations for use of specialised testing facilities or for analytical work, engineering or other specialised services in support of R&D projects carried out by the organisation; commission and consultant expenses for research projects carried out by the organisation (except direct labour costs); software for own account produced as part of R&D; and the proportion of expenditure on general services and overheads which is attributable to R&D activity.

Other staff

Skilled and unskilled employees, secretarial and clerical staff directly associated with R&D activity.

Overseas funds

As a source of R&D funding, this includes grants and payments for R&D projects funded by or carried out on behalf of overseas organisations. Transfers from related entities are only included if they specifically relate to R&D being undertaken (by the reporting organisation) on behalf of the related entity.

Overseas location

Includes R&D performed overseas, but controlled by the Australian organisation. This includes analytical work, engineering or other specialised services performed by another organisation which are part of an R&D project being performed by the Australian organisation.

Own funds

As a source of R&D funding, this includes all funding for R&D sourced from the organisation itself, including equity, borrowings, retained earnings, and non-R&D specific transfers from related entities.

Person years of effort (PYE)

One person year of effort is equal to a full-time employee whose time is wholly devoted to R&D for a whole year.

Pure basic research

Experimental and theoretical work undertaken to acquire new knowledge without looking for long term benefits other than the advancement of knowledge.

R&D activity

Systematic investigation or experimentation involving innovation or technical risk, the outcome of which is new knowledge, with or without a specific practical application, or new or improved products, processes, materials, devices or services. R&D activity extends to modifications to existing products/processes. R&D activity ceases and pre-production begins when work is no longer experimental.

Researchers

Those involved with the conception and/or development of new products/processes (e.g. executives and directors involved in the planning or management of scientific and technical aspects of R&D projects, and software developers/programmers). They exclude executives and directors concerned primarily with budgets and human resources rather than project content.

Socio-economic objective (SEO)

The SEO classification allows R&D activity to be categorised according to the intended purpose or outcome of the research, rather than the processes or techniques used in order to achieve this objective. The SEO reflects the dominant beneficiary or beneficiaries of the research output.

State and local government funds

As a source of R&D funding, this includes R&D grants, and payments for R&D projects funded by or carried out on behalf of state and local government organisations.

Strategic basic research

Experimental and theoretical work undertaken to acquire new knowledge directed into specified broad areas in the expectation of practical discoveries. It provides the broad base of knowledge necessary for the solution of recognised practical problems.

Technicians

Those performing technical tasks in support of R&D activity, normally under the direction and supervision of a researcher. These tasks include preparation of experiments, taking records, preparation of charts and graphs, etc.

Type of activity

This classification allows R&D activity to be categorised according to the type of research effort, namely, pure basic research, strategic basic research, applied research, and experimental development.

Quality declaration - summary

Institutional environment

Statistics presented in this release have been compiled from data collected by the Australian Bureau of Statistics (ABS) from Australian government and private non-profit organisations in the Survey of Research and Experimental Development (R&D), Government and Private Non-Profit Organisations. The data were collected under the authority of the Census and Statistics Act 1905.

For information about the institutional environment of the ABS, including its legislative obligations, financing and governance arrangements, and mechanisms for scrutiny of ABS operations, please see ABS Institutional Environment.

Relevance

This release presents statistics on R&D undertaken by Australian government and private non-profit organisations in respect of the 2016-17 financial year.

R&D statistics produced by the ABS enable the nature and distribution of R&D activity in Australia to be monitored and analysed for policy formulation, allocation of funds and determination of research priorities.

Since the release of the 2008-09 Australian System of National Accounts, R&D has been treated as capital formation. This resulted from the implementation of the new international standards System of National Accounts, 2008 (2008 SNA) and represents a change in treatment of R&D (as intermediate consumption) from SNA 1993.

Accuracy

The ABS aims to produce high quality data from its research and experimental development collections, while minimising the reporting burden on government and private non-profit organisations. To achieve this, extensive effort is put into survey and questionnaire design, collection procedures and processing.

The Survey of R&D, Government and Private Non-Profit Organisations is a census of in-scope organisations (refer to the Scope and Coverage section of the Explanatory Notes). The survey achieved a response rate of 99.8%.

For information about non-sampling errors, please refer to the Technical Note on the Methodology page.

Coherence

There are no other data sources with which ABS R&D data for the government and private non-profit sectors can be directly compared. However, some observations can be made which suggest the survey outputs give a reasonable indication of real world expectations and events. For example, trends are expected to broadly reflect changes in budget allocations as well as government policy relating to R&D funding, particularly for research based organisations.

While the ABS seeks to maximise consistency and comparability over time by minimising changes to the survey, sound survey practice requires ongoing development to maintain the integrity of the data, its relevance to the changing needs of users and the efficiency of the collection.

In addition to non-sampling errors and revisions, another factor which may affect the comparability of 2016-17 estimates with those of previous cycles is described below:

  • From the 2008 cycle, Type of activity, Fields of Research and Socio-economic Objective data have been collected and compiled based on the Australian and New Zealand Standard Research Classification (ANZSRC), 2008 (cat. no. 1297.0). Prior to this, data were based on the Australian Standard Research Classification (ASRC). The implementation of updated classifications in the 2000-01 and 2008-09 reference periods represent breaks in the relevant time series.
     

Interpretability

R&D, as collected by the ABS, is defined in accordance with the Organisation for Economic Co-operation and Development (OECD) standard as "creative and systematic work undertaken in order to increase the stock of knowledge - including knowledge of humankind, culture and society - and to devise new applications of available knowledge".

The Survey of R&D, Government and Private Non-Profit Organisations also uses classifications specific to R&D: results presented in this release are based on the Australian and New Zealand Standard Research Classification (ANZSRC), 2008 (cat. no. 1297.0).

Data providers report and self classify R&D survey information 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 the Non-Sampling Error section of the Technical Note for further information.

Further important contextual information, to be considered when interpreting the results presented in this release, is provided in the Explanatory Notes (including the Technical Note and Glossary).

Additionally, for a more comprehensive interpretation of the definitions and classifications relating to R&D activity, refer to:

Accessibility

    In addition to the information provided on the Topic page (which include key findings commentary) resulting from the Survey of R&D, Government and Private Non-Profit Organisations, detailed data (in spreadsheet format) are included on the ABS website free of charge. Refer to the Data downloads section for these data.

    If the information you require is not available as a standard product, inquiries can be made by contacting the National Information and Referral Service on 1300 135 070.

    Abbreviations

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    $'000thousand dollars
    $mmillion dollars
    ABNAustralian Business Number
    ABRAustralian Business Register
    ABSAustralian Bureau of Statistics
    ABSBRABS Business Register
    ACTAustralian Capital Territory
    ANZSICAustralian and New Zealand Standard Industrial Classification
    ANZSRCAustralian and New Zealand Standard Research Classification
    ASRCAustralian Standard Research Classification
    ATOAustralian Tax Office
    CRCCooperative Research Centres
    EGEnterprise Group
    excl.excluding
    FORFields of Research
    GDPGross Domestic Product
    GOVERDGovernment Expenditure on R&D
    GSPGross State Product
    LELegal Entity
    NPIsNot-For-Profit Institutions
    NSWNew South Wales
    NTNorthern Territory
    OECDOrganisation for Economic Co-operation and Development
    PNPPrivate Non-Profit
    PNPERDPrivate Non-Profit Expenditure on R&D
    PYEPerson Years of Effort
    QldQueensland
    R&DResearch and Experimental Development
    SASouth Australia
    SEOSocio-economic Objective
    SESCAStandard Economic Sector Classifications of Australia
    SISCAStandard Institutional Sector Classification of Australia
    SNASystem of National Accounts
    Tas.Tasmania
    TAUType of Activity Unit
    Vic.Victoria
    WAWestern Australia