Scottish Government

31 January 2008

A National Statistics Publication for Scotland

This document is also available in PDF format and full tables are available in excel format.
Further information can be found on the Business Enterprise Research and Development website.

BUSINESS ENTERPRISE RESEARCH AND DEVELOPMENT SCOTLAND 2006

This publication presents information on research and development (R&D) performed by businesses operating in Scotland in 2006. In addition, figures are presented for total R&D expenditure in Scotland for 2005, 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 2006 was £579 million, 4% of the UK total and 0.56% of GDP. Expenditure decreased from £586 million in the previous year (a 4% decrease in real terms), mainly due to a decrease in expenditure on services R&D. This follows a large increase in overall expenditure in 2005. Almost two thirds of Scottish BERD supported just 3 product groups: 'pharmaceuticals' (42%), 'precision instruments' (19%), and 'machinery and equipment' (9%). Scottish business R&D provided employment for 7,325 people in 2006.

R&D Funding and Size & Ownership of R&D performing businesses

Three quarters (75%) of R&D undertaken by businesses in Scotland was funded by UK businesses, 6% was funded by the UK Government and 19% came from overseas. In terms of business size, the largest companies (400 employees and over) accounted for 75% of BERD expenditure, while
companies employing 100 to 399 employees accounted for a further 12%. USA owned firms undertook 53% of business R&D expenditure in Scotland, followed by Scottish based firms (25%).

International and Regional Comparisons

In 2006 BERD expenditure was equivalent to 0.56% of GDP in Scotland compared to 1.08% of GDP in the UK. BERD expenditure as a percentage of GDP is lower in Scotland than in most important competitor countries. In 2006 the average EU expenditure on business R&D as a percentage of GDP was 1.09%. The leading countries have expenditure levels more than five times higher than Scotland (e.g. 2.86% of GDP in Sweden).

Within the UK, the bulk of business R&D expenditure takes place within the East of England (25%) and the South East (23%). In terms of expenditure as a percentage of GDP, Scotland ranked eight out of the 12 UK regions in 2006.

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. Data for 2006 is not available, but in 2005 Scottish GERD reached £1,582 million, 7.5% of the UK total. This is an increase of £159 million since 2004. GERD represented 1.61% of GDP in Scotland, compared to 1.76% 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 2004.

Government Expenditure on Research and Development (GovERD)

Government expenditure on R&D stood at £308 million in 2005, 13.4% of the UK figure and 0.31% of GDP. This is an increase of £22 million since 2004. In comparison to other regions within the UK, Scotland ranks third in terms of government R&D expenditure as a percentage of GDP.

Higher Education Research and Development (HERD)

Scotland performs very well in terms of R&D undertaken by the higher education sector. In 2005, Higher Education R&D (HERD) was £688 million in Scotland, 12.4% of the UK total and 0.70% of GDP. This is an increase of £47 million since 2004. In comparison to other regions within the UK, Scotland ranks first in terms of HERD as a percentage of GDP. Scotland also performs well at the international level, with Scotland's HERD as a percentage of GDP in the first quartile of OECD countries and below only that of Sweden and Canada.

Background Notes

1. This publication presents the most recent data for BERD in 2006 and GERD in 2005, with some revisions for the two previous years.

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:

Issued by:

Analytical Services
Enterprise, Energy & Lifelong Learning
Meridian Court
Cadogan Street
Glasgow G2 6AT

Telephone

Press Office: Tim Jays 0131-244-5122
Statistician: Lynn Graham 0141-242-5605

email: industrystatistics@scotland.gov.uk

Website: www.scotland.gov.uk/Topics/Statistics/Browse/Business/BERD