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Measuring R&D Expenditure. ECO - UIS Regional Workshop on Science, Technology and Innovation (STI) Indicators Tehran, Iran 8-10 December 2013. Rohan Pathirage, UIS. R&D expenditure - general issues. Basic measure: “intramural expenditures”

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Measuring r d expenditure

Measuring R&D Expenditure

ECO - UIS Regional Workshop on Science, Technology and Innovation (STI) Indicators

Tehran, Iran

8-10 December 2013

Rohan Pathirage, UIS

R d expenditure general issues
R&D expenditure - general issues

  • Basic measure: “intramural expenditures”

    • All expenditures for R&D performed within a statistical unit or sector of the economy

  • Another measure: “extramural expenditures”

    • covers payments for R&D performed outside the statistical unit or sector of the economy

  • Current costs and capital expenditures are measured

R d expenditure current costs 1
R&D expenditure: current costs (1)

  • Current costs are composed of labour costs and other current costs:

    • labour costs of R&D personnel

      • annual wages and salaries

      • all associated costs or fringe benefits

      • Share of R&D in total labour costs: could be estimated using R&D coefficients derived from time-use studies; (could be applied at an appropriate level; individual, institute, department, university).

R d expenditure current costs 2
R&D expenditure: current costs (2)

  • other current costs

    • materials, supplies and equipment (incl. water, gas and electricity);

    • books, journals, reference materials, subscriptions;

    • materials for laboratories;

    • costs for on-site consultants;

    • administrative and other overhead costs;

    • costs for indirect services;

    • labour costs of non-R&D personnel.

    • Current costs may be prorated if necessary to allow for non-R&D activities within the same statistical unit.

R d expenditure capital expenditure 1
R&D expenditure: capital expenditure (1)

  • Capital expenditures: annual gross expenditures on fixed assets used in the R&D programmes of statistical units

    • land and buildings

    • instruments and equipment

    • computer software

R d expenditure capital expenditure 2 pro rata expenditure
R&D expenditure: capital expenditure (2): Pro rata expenditure

  • Share of R&D in ‘Capital expenditure’ and ‘Other current costs’: could be estimated (by the institutes) on the basis of intended use

  • If intended use is not feasible as a criterion, the same distribution coefficients as for labour costs may be used

    • Eg: consider a new laboratory that will be used for R&D (included), testing (excluded) and quality control (excluded). If the intended use of this new laboratory for R&D purposes maybe 40% of the total usage (ie. the other 60% for other activities), only 40% of the total construction cost of the building should be considered as the relevant R&D expenditure.

R d expenditure capital expenditure 3
R&D expenditure: capital expenditure (3) expenditure

  • Expenditure should be reported in full for the period when it took place

  • All depreciation provisions, whether real or imputed, should be excluded

    • Practical reasons

    • Government sector – no depreciation provisions; comparisons with other sectors

    • If depreciation is included in current costs, the addition of capital expenditures would result in double counting

    • Different accounting systems

R d expenditure general issues1
R&D expenditure – general issues expenditure

  • R&D involves significant transfers of resources among units, organisations and sectors

    • In particular between government and other performers

    • Important information for science policy

  • R&D expenditure = resources actually spent on R&D activities, rather than only budgeted.

  • For sound data  rely on responses of R&D performers rather than funding agencies

R d expenditure general issues cont
R&D expenditure – general issues expenditure(cont)

  • Issues when using secondary data from national budget

    • New sources of funds emerging (NGOs, Foreign entities, BE)

    • Discrepancy between voted and allocated budget

    • Budgetary commitments are not followed up

    • Mixing of budgetary records and annual reports from performing units

    • Definition of S&T / R&D budgets

    • Identifying R&D components in the national budget

  • State-owned enterprises, university-owned companies and national scientific academies

  • Public vs. Private universities

  • Fiscal year vs. calendar year

  • Information systems in government and higher education inadequate for statistics

Measuring r d expenditure1
Measuring R&D expenditure expenditure

  • A statistical unit may have intramural and extramural expenditures on R&D

  • The full procedure for measuring expenditures:

    • Identify intramural expenditure on R&D performed by each statistical unit

    • Identify the sources of funds as reported by the performer

    • Aggregate the data by sectors of performance and sources of funds to derive significant national totals

    • Optional: Identify the extramural R&D expenditures of each statistical unit

Sources of r d expenditure
Sources of R&D expenditure expenditure

Criteria for identifying flows of R&D funds

  • There must be a direct transfer of resources

  • The transfer must be both intended and used for the performance of R&D

Public general university funds guf
Public general university funds (GUF) expenditure

Universities draw on three types of funds to finance their R&D

  • R&D contracts and earmarked grants from government and other outside sources credited to their original source

  • Universities’ “own funds”

    • Income from endowments, shareholdings and property

    • fees from individual students

    • subscriptions to journals

    • sale of serum or agricultural produce

  • General grant from the ministry of education (or corresponding authorities) in support of their overall research/teaching activities  the R&D content of these public general university funds should be credited to government as a source of funds.

Gerd sector of performance and source of funds
GERD: expenditureSector of performance and source of funds


Abroad: 200 (10%)

Abroad: 200 (10%)

PNP: 250 (13%)

PNP: 250 (13%)

HE: 200 (10%)

HE: 200 (10%)

GOV: 950 (48%)

GOV: 950 (48%)

BE: 400 (20%)

BE: 400 (20%)





















PNP: 240 (12%)


HE: 530 (27%)

GOV: 800 (40%)

BE: 430 (22%)


GERD: Gross domestic expenditure on R&D

National totals
National totals expenditure

  • Gross domestic expenditure on R&D (GERD): total intramural expenditure on R&D performed on the national territory during a given period.

    • includes R&D performed within a country (which financed by national institutions and also funded from abroad) but excludes payments for R&D performed abroad.

    • constructed by adding together the intramural expenditures of the four performing sectors.

  • Gross national expenditure on R&D (GNERD): total expenditure on R&D financed by a country’s institutions during a given period.

    • includes R&D performed abroad but financed by national institutions or residents; it excludes R&D performed within a country but funded from abroad.

    • constructed by adding the domestically financed intramural expenditures of each performing sector and the R&D performed abroad but financed by domestic funding sectors

Breakdowns of r d expenditure
Breakdowns of R&D expenditure expenditure

  • Sector of performance

  • Source of funds

  • Type of activity

  • Type of costs (current vs. capital cost)

  • Fields of science

  • Socio-economic objective

Summary expenditure

  • R&D Expenditure: Definitions

    • Intramural expenditures; Extramural expenditures; Current costs; Capital expenditures

  • Measurement of R&D expenditure

    • Procedure for measuring expenditures; flows of R&D funds; GERD Matrix; sector of performance; sources of funds

Thank you
Thank you! expenditure

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