Research and development in the business enterprise sector, 2003, preliminary figures

Increased share of GDP

The business enterprise sector spent NOK 13.4 billion on intramural R&D in 2003. This represents an increase of NOK 1 billion, or 8.3 percent, from 2002 and is equivalent to 5 per cent in fixed prices. The sector's R&D expenditure amounts to 0.86 per cent of GDP (gross domestic product). The share in 2002 was 0.81 per cent. For the period 2001 to 2003 there is zero growth in the sector's R&D expenditure in fixed prices.

Increase in small enterprises, decrease in the largest manufacturing enterprises

Compared with the largest enterprises, small and medium sized enterprises increased their share of total R&D expenditure in 2001 and 2002, and this trend continued in 2003. While enterprises with fewer than 100 employees contributed 35 per cent of total R&D expenditure in 2002, the share had increased to 39 per cent in 2003. In nominal value, R&D expenditure in small and medium sized enterprises increased by NOK 890 million, or 20 per cent.

The manufacturing industry has traditionally been the main R&D contributor within the business enterprises sector, as was also the case in 2003. The share was 55 per cent. Manufacturing enterprises increased their R&D expenditure by more than 10 per cent from 2002, resulting in an increased share. This is due to increase in R&D activity in small enterprises.

Figure 1. Intramural R&D in the business enterprise sector by industry. 2001–2003. Billion NOK.

Although the service industry on the whole is less R&D intensive than the manufacturing industry, there are great variations. For instance, computer and related activities is the most R&D intensive industry in the business enterprise sector.

Small and medium sized enterprises in the service industry have always had a relatively high R&D activity. In contrast to the manufacturing industry, the trend with increased R&D expenditure in small enterprises has not been evident in the service industry in 2003, as the largest enterprises had the highest growth in R&D.

Increasing R&D activity in small and medium sized enterprises is a political goal in Norway. The introduction of a system of tax reduction for R&D (SkatteFUNN) in 2002 is one of the measures that have been taken to achieve this goal. This tax reduction system has been quite popular, and figures show that more than half of the smaller R&D performers in the R&D statistics have used this opportunity. In total, about 3 800 enterprises have approved R&D projects for tax reduction for 2003. It should be noted that enterprises with fewer than 10 employees are not included in the ordinary R&D statistics, but the tax reduction system also applies to the smallest enterprises.

No change in extramural R&D

In addition to intramural R&D the enterprises purchase R&D services from others (other enterprises, research institutes, universities, both national and from abroad). Total extramural R&D was NOK 3.5 billion in 2003, which is on level with 2002.

Total R&D and international comparison

Total R&D expenditure for all sectors, including government and higher education, amounted to NOK 26.9 billion in 2003. This figure represents 1.72 per cent of GDP and is a slight increase from 2002 (1.67). In comparison the share for Finland was 3.5 per cent and Denmark 2.6 per cent for 2003. The Swedish share was 4.3 (for 2001). The average for the OECD countries was 2.3 per cent (2002).

The share for the business enterprise sector only was 0.86 per cent in Norway. The corresponding share in Denmark and Finland was 1.8 and 2.5 per cent in 2003, while Sweden's figure for 2001 was 3.3 per cent. In the Norwegian figure, research institutes serving trade and industry are not included.