Statistical bulletin: UK Gross Domestic Expenditure on Research and Development, 2010

Key Points

• In 2010, the UK’s gross domestic expenditure on research and development (R&D) was £26.4 billion. This represented an increase, in cash terms, of 1.9 per cent from the level recorded in 2009.
• In real terms, gross domestic expenditure on R&D decreased by 0.8 per cent between 2009 and 2010.
• In 2010, expenditure on R&D was 1.78 per cent of gross domestic product, down from 1.84 per cent in 2009.

Summary of UK Gross Domestic Expenditure on Research and Development 2010

The UK Gross Domestic Expenditure on Research and Development is the most reliable estimate of national research and development spending that draws together information on research and development spending in the public and private sectors. This includes government departments, research councils, higher education, business enterprises and private non-profit organisations.

Gross domestic expenditure on R&D 2004 to 2010

Source: Office for National Statistics

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UK Gross Domestic Expenditure on Research and Development, 2010

Gross domestic expenditure on research and development (R&D) in the UK (Tables 1, 2 and 3)

The estimate of the UK’s gross domestic expenditure on R&D (GERD) in 2010 was £26.4 billion compared with £25.9 billion in 2009.  Expenditure on civil R&D projects was £24.4 billion in 2010, 3.2 per cent higher in cash terms than in 2009.  R&D expenditure for defence purposes, at £1.9 billion, was 12.5 per cent lower than in 2009.

Performers of R&D in the UK (Table 2, Figure 1 and Figure 2)

The sectors of the economy carrying out R&D in 2010 in cash terms were:

• Business Enterprise: £16.1 billion, up 3.7 per cent on 2009.

• Higher Education: £7.1 billion, down 1.1 per cent on 2009.

• Government: £1.4 billion, down 2.5 per cent on 2009.

• Research Councils: £1.1 billion, up 4.0 per cent on 2009.

• Private Non-Profit (PNP): £0.7 billion, down 2.1 per cent on 2009. 

Figure 1 - Sector carrying out the work, 2010

Source: Office for National Statistics

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Figure 2 - Sector carrying out the work (in real terms) 2000 - 2010

Source: Office for National Statistics

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Funding of R&D (in cash terms) in the UK (Tables 4 and 5)

In 2010, government (including Higher Education Funding Councils and Research Councils) funded 32.3 per cent of all R&D performed in the UK, down from 33.1 per cent in 2009. Government funded 29.8 per cent of civil R&D and 63.6 per cent of defence R&D. Businesses funded 44.0 per cent of all R&D, compared with 43.6 per cent in 2009. 

Background notes

1. Key issues specific to this bulletin

   This Statistical Bulletin presents estimates of gross domestic expenditure on research and development in the UK in 2010.

   It includes the estimates for research and development (R&D) in 2010 carried out by the following sectors of the economy:

   • Business Enterprise (BERD)

   • Higher Education

   • Government (GovERD)

   • Research Councils

   • Private Non-Profit (PNP)

2. Business estimates for 2010 relate to the calendar year 2010.  Government and higher education estimates relate to the financial year 2010/11.

3. A Summary Quality Report for this publication is available at http://www.ons.gov.uk/ons/guide-method/method-quality/quality/quality-information/business-statistics/index.html

   This report describes, in detail, the intended uses of the statistics presented in this publication, their quality and the methods used to produce them.

   Related Information

4. Detailed tabulations for BERD were published in November 2011 in the UK Business Enterprise Research and Development 2010 Statistical Bulletin.  Available at http://www.ons.gov.uk/ons/rel/rdit1/bus-ent-res-and-dev/2010/stb-berd-2010.html

   International comparisons are published by the Organisation for Economic Co-operation and Development (OECD) – see background note 18.

   Definition of R&D

5. R&D and related concepts follow internationally agreed standards defined by the OECD, published in the ‘Frascati’ Manual - see background note 19.  R&D is defined 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”.

6. R&D activity is distinguished by the presence of an appreciable element of novelty. If the activity follows an established pattern it is excluded; if it departs from routine and breaks new ground it is included. For example, activities such as routine testing, market research, patent applications, trial production runs and artistic work are excluded. Overheads of R&D projects are included. VAT is excluded.

   Notes on tables

7. There may be discrepancies between totals and the sum of their independently rounded totals.

8. In addition to being analysed by sector of performance, GERD may be analysed by sector of funding.  The R&D performed by any one sector of the economy can be funded by any of the other sectors, or by the performing sector itself.

9. For the purposes of estimation, the recommended practice of the OECD is to use information from those performing R&D, where this is available.  These estimates are considered more reliable than those from surveys of R&D funders.  This is why, in the UK GERD table, the estimate of businesses’ R&D funded by government is taken from the business enterprise R&D survey rather than the government R&D survey.

   Coverage

10. GERD is the measure most commonly used for international comparisons. It covers all R&D performed in the country concerned, irrespective of who pays for it, including funding from abroad.  However, it excludes R&D performed abroad even if it is funded from the UK. The components of GERD relate to R&D performed in the four sectors of the economy:

    a.  Government R&D is based on the returns of in-house R&D from all government departments in an annual survey, with the addition of ONS estimates for R&D performed by local authorities.  Research Councils are included in the annual government survey but to provide additional information, their expenditure is shown separately in the data tables.

    b.  Business Enterprise R&D is derived from the results of the ONS’s business R&D annual survey. Approximately 5000 businesses were sampled from a reference list of known R&D performers.

    c.  Higher Education R&D is estimated by the Higher Education Funding Councils for England, Scotland, Wales and the Department for Education in Northern Ireland.

    d.  Private Non-Profit R&D. Due to a planned review of the methodology used for the compilation of the R&D spend by the PNP sector, estimates are currently based on a number of sources.  These include the total reported as the GovERD ‘other UK’ spend by government, including Research Councils.

    Defence R&D

11. Defence includes all R&D programmes undertaken primarily for defence reasons regardless of their content or whether they have secondary civil applications. It includes nuclear and space R&D undertaken for defence purposes. It does not include civil R&D financed by the Ministry of Defence, for instance on meteorology or telecommunications. It includes defence R&D commissioned by overseas clients.

    Classification of sectors

12. The OECD terminology is used. “Government” corresponds to the “General Government” sector of the UK National Accounts and includes local as well as central government. “Business enterprise” corresponds to the “Corporate” sector and includes public corporations and research associations as well as commercial and industrial companies. “Private Non-Profit” corresponds to the “personal” sector of the National Accounts, except that higher education institutions are excluded and put into a separate OECD sector (“Higher Education”). “Abroad” corresponds to the “Overseas” sector.

    Real Terms

13. Figures given in “real terms” are calculated using the GDP deflator at market prices; 2010 = 100.

    Revisions

14. Revisions have been made to the Business Enterprise estimates for 2008 and 2009, the Government estimates for 2007, 2008 and 2009, and the Higher Education estimates for 2009.  This is due to some misreporting and the late receipt of data.

15. One indication of the reliability of the key indicators in this release can be obtained by monitoring the size of the revisions.  The table below records the size and pattern of revisions that have occurred over the last five years.  Please note that these indicators only report summary measures for revision.  (The revised data may itself be subject to sampling or other sources of error).

    The table covers estimates of the UK’s gross domestic expenditure on R&D first published from March 2005 (for 2003) to March 2009 (for 2007).

    Revisions table

     

    					(1) 2010 Value				(2) Mean revision					(3) Average absolute revision
    £ million
    Gross Expenditure on
    R&D performed in the UK					26,362				-378					515
    (GLBA)

    Table source: Office for National Statistics

    Table notes:

    1. (1) - Value in latest period.

       (2) - Average over the last 5 years (mean revision).

       (3) - Revisions between first publication and estimates three years later.  Average over the last 5 years without regard to sign (average absolute revision).

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16. A statistical test has been applied to the average revision to find out if there is bias in the estimates.  No statistically significant bias was identified.

    References

17. Government R&D expenditure figures are available on the Department for Business, Innovation & Skills (BIS) website at  http://www.bis.gov.uk/policies/science/science-funding/set-stats

18. Main Science and Technology Indicators (MSTI) OECD, Paris.  Available at http://masetto.sourceoecd.org/vl=22463848/cl=17/nw=1/rpsv/~4160/v2010n1/s9/p131

19. Proposed Standard Practice for Surveys of Research and Experimental Development, ‘Frascati Manual’, OECD, Paris. ISBN 92-64-19903-9.  Available at http://www.oecdbookshop.org/oecd/display.asp?lang=EN&sf1=identifiers&st1=922002081p1

    General

20. Details of the policy governing the release of new estimates are available from the media relations office.  Also available is a list of the names of those given pre-publication access to the contents of this release.

    Pre-release access list (23.4 Kb Pdf)

21. National Statistics are produced to high professional standards set out in the Code of Practice for Official Statistics. They undergo regular quality assurance reviews to ensure that they meet customer needs. They are produced free from any political interference. (c) Crown Copyright 2012.

22. Details of the policy governing the release of new data are available by visiting www.statisticsauthority.gov.uk/assessment/code-of-practice/index.html or from the Media Relations Office email: media.relations@ons.gsi.gov.uk

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