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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 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
  • 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 (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
  • 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

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)

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: Sector of performance and source of funds

Sources

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%)

30

50

100

20

50

100

50

50

30

20

100

50

50

300

500

100

50

50

100

200

PNP: 240 (12%)

Performers

HE: 530 (27%)

GOV: 800 (40%)

BE: 430 (22%)

TOTAL GERD: 2000

GERD: Gross domestic expenditure on R&D

national totals
National totals
  • 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
  • Sector of performance
  • Source of funds
  • Type of activity
  • Type of costs (current vs. capital cost)
  • Fields of science
  • Socio-economic objective
summary
Summary
  • 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!

http://www.uis.unesco.org

[email protected]

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