Innovation costs in the Norwegian survey on R&D and innovation

Work on the revision of the innovation costs has left three main impressions. Firstly, it seems to be low awareness among respondents of the innovation concept in itself and the boundaries between R&D and other innovation activities. This is underlined by the significant incidence of erroneous reporting in general and the lack of reporting of costs, especially among companies contacted. This implies a need for more comprehensive explanations of terms in the questionnaire even though many respondents seem to have difficulties understanding the explanations that are already included.

Secondly, the process has not resulted in any significant increase in innovation costs. However, the increase in the number and percentage of firms that report costs are significant. Contact with the ordinary enterprises has given an increase in innovation costs by around 3 percent (unweighted), while the contact with large enterprises resulted in a further increase of 1 – 1.5 percent. Overall, the work resulted in a rise of around 4 percent compared to the unweighted total before the revision work started. The main reason for this relatively modest increase is that the vast majority of the new estimates concern rather small amounts.

Thirdly, audit of large enterprises in terms of both R&D costs and other innovation costs seems very important. On the one hand, the prevalence of inadequate reporting of the innovation costs of major R&D players with suspicious reporting does matter, and audit of these gives a relatively large effect per entity. On the other hand, wrong downsizing of amounts, under suspicion of 1 000 error, is a trap that should be avoided.