Research and development in the business enterprise sector, 2011, final figures

The final figures for R&D expenditure in 2011 are slightly higher than the preliminary figures published in October 2012, while the final figures for R&D personnel and R&D man-years show little change from the preliminary figures. In excess of 15 500 man-years were performed in 2011. This is an increase of 1 per cent from the year before. A total of 23 300 people participated in R&D activity in business enterprises.

Although R&D activity has increased in the business enterprise sector, the percentage of enterprises that have carried out R&D in recent years has fallen. Eighteen per cent of enterprises carried out R&D in 2011; two percentage points lower than in 2008.

Different development in the industries

The manufacturing industries and service industries’ contributions to the growth in R&D activity were 11 and 10 per cent respectively. Extraction of petroleum and gas and support activities carried out R&D totalling NOK 1.2 billion, but had a decrease of 7 per cent compared with 2010. R&D in fishing and aquaculture totalled NOK 294 million in 2011; 16 per cent lower than in 2010.

Increased use of hired personnel

Enterprises mainly use their own personnel in their R&D activities. Compensation of own personnel totalled nearly NOK 12.7 billion in 2011; a growth rate consistent with the development in R&D man-years. Hired personnel were also used to some extent in R&D activities. Costs for contracted personnel amounted to NOK 1.6 billion in 2011. This is an increase of NOK 370 million; almost 30 per cent from 2010.

In addition to conducting their own R&D, enterprises also outsource R&D services, which amounted to NOK 5.4 billion in 2011; a decrease of 1 per cent compared with 2010. Purchases from other Norwegian enterprises make up the largest part of the decline, falling by NOK 175 million. Acquisition of R&D services from abroad has increased by NOK 134 million. Most of the purchases from abroad are from foreign enterprises in the same enterprise group. Such purchases amounted to almost NOK 1.3 billion in 2011.

Distinguishing between purchases of R&D services and the use of hired personnel can be problematic and can lead to variations in how such costs are reported.

Business enterprise sector funds R&D from its own sources

Business enterprises funded most of their R&D activities from their own sources in 2011, about NOK 14.7 billion. This accounted for 73 per cent of total funding and is 3 percentage points lower than the year before. In addition, inter-company funding from Norwegian and foreign enterprises accounted for 14 per cent, which is 2 percentage points higher than the year before. This source of funding can be seen as a kind of internal funding in the enterprise group.

The rest of the funding is covered by other Norwegian enterprises, other foreign sources and public funding including SkatteFUNN.

High level of R&D in ICT and petroleum

Current costs for R&D in the business enterprise sector amounted to more than NOK 18.5 billion, which is NOK 1.3 billion more than in 2010. Investments in buildings, machinery etc. for R&D amounted to NOK 1.5 billion. Of the increase in current costs, 68 per cent was related to information and communication technology (ICT). In total 45 per cent of the R&D current costs were ICT-related. In service industries, this proportion was 72 per cent, while the share in the manufacturing industries was 17 per cent. Seven per cent of total current costs for R&D were related to R&D in biotechnology. For other materials technology, the percentage is the same, whereas for nanotechnology it was 0.6 per cent.

Energy is the thematic area that is reported to be the most important for R&D efforts in the business enterprise sector. NOK 4.4 billion was spent in this field in 2011, which is 24 per cent of total current R&D costs. Petroleum activities accounted for NOK 3.2 billion of this. Health is the second largest thematic area, where NOK 1.5 billion was spent.

Higher growth than the other Nordic countries

Traditionally, business enterprises’ R&D activity is low in Norway compared with other countries. One reason for this is that the Norwegian business enterprise sector is largely raw materials-based, but with relatively low production in industries with typically high R&D intensity. If we adjust to a similar industrial structure for all countries, Norway is better off, but still lower than the other Nordic countries. Despite this, business enterprises in Norway have still performed better in R&D activity in recent years than the other Nordic countries. The financial crisis in 2009 only affected R&D in Norwegian enterprises to a certain extent, and for the past two years the Norwegian business enterprise sector has had the highest growth in R&D expenditure out of all the Nordic countries.