30 June 2009
A National Statistics Publication for Scotland
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Further information can be found on the Business Enterprise Research and Development website.
BUSINESS ENTERPRISE RESEARCH AND DEVELOPMENT SCOTLAND 2007
This publication presents information on research and development (R&D) performed by businesses operating in Scotland in 2007 as well as revisions to previously published data, for more information on the revisions see Background Note 1. In addition, figures are presented for total R&D expenditure in Scotland for 2007 , which includes government and higher education expenditure. The majority of the data presented in this release comes from R&D surveys conducted by the Office for National Statistics (ONS).
BUSINESS ENTERPRISE RESEARCH AND DEVELOPMENT (BERD)
Expenditure and Employment
The value of business enterprise research and development (BERD) undertaken in Scotland in 2007 was £513 million, 3.2% of the UK total and 0.46% of Scottish GDP. Expenditure increased from £461 million in the previous year (a 8.3% increase in real terms). There was a decrease in expenditure on services R&D, while there was a modest increase in expenditure on manufacturing R&D and a proportionally higher increase in expenditure on R&D in other sectors such as extractive industries. Almost half of Scottish BERD supported just 2 product groups: 'pharmaceuticals' (25%) and 'precision instruments' (23%) ( Table 2). Scottish business R&D provided employment for 6,707 people in 2007 ( Table 3).
R&D Funding and Size & Ownership of R&D performing businesses
Nearly two thirds (62%) of R&D undertaken by businesses in Scotland was funded by businesses operating in the UK, 11% was funded by the Government and 27% came from overseas ( Table 7). In terms of business size, the largest companies (400 employees and over) accounted for 66% of BERD expenditure, while companies employing 100 to 399 employees accounted for a further 16% ( Table 8). USA owned firms undertook 39% of business R&D expenditure in Scotland, followed by Scottish based firms (29%) ( Table 9).
International and Regional Comparisons
In 2007 BERD expenditure was equivalent to 0.46% of GDP in Scotland compared to 1.13% of GDP in the UK. BERD expenditure as a percentage of GDP is lower in Scotland than in most important competitor countries. In 2007 the average EU expenditure on business R&D as a percentage of GDP was 1.12%. The leading countries have expenditure levels more than five times higher than Scotland (e.g. 2.66% of GDP in Sweden) ( Table 6A).
Within the UK, the bulk of business R&D expenditure takes place within the East of England (27%) and the South East (22%). In terms of expenditure as a percentage of GDP, Scotland ranked eight out of the 12 UK regions in 2007 ( Table 5A).
GROSS EXPENDITURE ON RESEARCH AND DEVELOPMENT (GERD)
Expenditure and components of GERD
Gross expenditure on R&D (GERD) comprises that undertaken by business, government and the higher education sectors. In 2007 Scottish GERD reached £1,710 million, 6.7% of the UK total. This is an increase of £189 million since 2006. GERD represented 1.52% of GDP in Scotland, compared to 1.79% in the UK. Scotland performs better on this measure of R&D due to the inclusion of government and higher education activity (see below). However, the relatively low contribution of business R&D to GERD is clear when comparing Scotland to other countries.
In comparison to other regions within the UK, Scotland ranks sixth in terms of GERD as a percentage of GDP in 2007 ( Table 4A).
Scottish GERD forms the basis of the National Indicator: At least halve the gap in total research and development spending compared with EU average by 2011. The gap between Scotland and the EU average, in terms of GERD as a percentage of GDP, decreased by 0.08 percentage points from 0.33 percentage points in 2006 to 0.25 percentage points in 2007 ( Table 4B).
Higher Education Research and Development (HERD)
Scotland performs very well in terms of R&D undertaken by the higher education sector. In 2007, Higher Education R&D (HERD) was £870 million in Scotland, 13.4% of the UK total and 0.78% of GDP. This is an increase of £98 million since 2006. In comparison to other regions within the UK, Scotland ranks first in terms of HERD as a percentage of GDP ( Table 5B). Scotland also performs well at the international level, with Scotland's HERD as a percentage of GDP highest among the OECD countries ( Table 6B).
Government Expenditure on Research and Development (GovERD)
Government expenditure on R&D stood at £327 million in 2007, 14.6% of the UK figure and 0.29% of GDP. This is an increase of £39 million since 2006. In comparison to other regions within the UK, Scotland ranks third in terms of government R&D expenditure as a percentage of GDP ( Table 5C).
1. This publication presents the most recent data for BERD in 2007 and GERD in 2007. The BERD figures for 2001 to 2006 have been revised and as a consequence the GERD figures for this period have also been revised.
2. The ONSR&D survey follows the definition of research and development proposed by the Organisation for Economic Cooperation and Development (OECD) and published in the 'Frascati' Manual. According to the manual, 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 the stock of knowledge to devise new applications."
The definition therefore excludes activities such as market research, most software development, routine testing and quality control and artistic design work.
3. Further information on BERD can be found at:
4. Further information on GERD can be found at:
Business & Enterprise Statistics
Office of the Chief Economic Advisor
Glasgow G2 6AT
Press Office: Stewart Cooper 0131-244-2175
Statistician: Marina Curran 0141-242-5566