Research and development in the business enterprise sector, 2006, preliminary figures

In addition to this, a further NOK 1.1 billion in R&D expenditure was reported from enterprises with 5-9 employees. The total R&D expenditure for all business enterprises for 2006 thus amounts to NOK 15.7 billion. This is the first time enterprises with 5-9 employees are included in the survey.

The number of R&D man-years increased by 4 per cent, from 13 815 in 2005 to 14 350 in 2006. Enterprises with 5-9 employees reported an additional 1 365 man-years.

The largest increase in R&D expenditure came in other current costs. Other current costs increased by 12 per cent compared with 2006, for enterprises with 10 or more employees. In comparison, costs for compensation of employees increased only 3 per cent. The average costs for compensation of employees have therefore decreased somewhat compared from 2005 to 2006. Part of the explanation for this, is that enterprises previously included costs for hired personnel in costs for compensation of employees, but have now shifted this amount to other current costs instead. Investments in R&D equipment increased by 23 per cent from 2005, but make up only 8 per cent of total R&D costs.

The business enterprises sector expects a certain growth in R&D activity for 2007. An estimate made by the enterprises in the second quarter of 2007, indicates a growth of 3 per cent in R&D man-years, and a 7 per cent increase in nominal R&D expenditure. Estimates made for 2007 are uncertain, but the corresponding estimates for 2006 given in the 2005 survey correlate well with actual costs for 2006.

Continued increase for the service industry

The manufacturing industry is still the largest R&D contributor, and makes up just more than 47 percent of R&D expenditure in 2006. The increase in R&D activity came in the service, continuing the trend we have seen in recent years. R&D in the service industry has grown by 30 per cent between 2004 and 2006, while the manufacturing industry has been at a standstill. The service industry now makes up 44 per cent of total R&D.

The largest enterprises, with more than 500 employees, account for more than 41 per cent of total R&D. These enterprises also have the largest growth in R&D compared with 2005, with an 11 per cent increase, thus continuing the trend we have seen in recent years. Enterprises with 10-49 enterprises have a slight increase in R&D expenditure, with 4 per cent, and make up 24 per cent of total R&D in 2006.

Large degree of own financing of R&D

As previously, the most important source of funding for R&D is own funding, which constitutes about 80 per cent of total R&D funding. Own funding is more important for the largest enterprises, but the share of own funding is between 70-85 per cent for all size groups. Financing of R&D is otherwise comparable with 2005.

Funding from the SkatteFUNN tax deduction scheme make up almost as much as other public funding for R&D. As a share of total financing, SkatteFUNN funding constitutes about 4 per cent, but for enterprises with 5-19 employees, this is an important source of funding, and makes up 10-11 per cent of their total funding. The scheme is mainly for smaller enterprises, and seems to function well in this respect. On the other hand, the R&D activity for smallest enterprises shows only little growth. Statistics Norway is currently undertaking an evaluation of the SkatteFUNN scheme, and a final report will be available in January 2008.

The R&D statistics are based on information collected from the enterprises. All enterprises with 50 employees or more are included. In addition, a sample of enterprises with 5-49 employees is drawn and total figures for this group are calculated are based on this sample. Enterprises with 5-9 employees have not previously been included in the sample. As a result, there is greater uncertainty about the results for the small enterprises.

Total R&D and international comparison

When adding R&D in universities, colleges and research institutes, total R&D expenditure amounted to NOK 32.1 billion in 2006. This represents a nominal increase of 8.5 per cent from 2005. Total R&D as a percentage of GDP was 1.49 per cent in 2006, a decrease compared with 1.52 per cent and 1.59 per cent for 2005 and 2004, respectively. The decrease is due to a strong growth in total GDP, about 11 per cent for both 2005 and 2006. The business enterprise sector has the lowest growth in R&D, 7.2 per cent, and the R&D activity in the business enterprise sector as a share of total R&D has decreased from 0.70 in 2005 to 0.68 in 2006. For the sake of comparability over time and international comparisons, the figures for business enterprises given here are for enterprises with at least 10 employees.

More detailed results are available in Statbank on our home site: http://statbank.ssb.no/statistikkbanken/ . For more information on other sectors is also available at NIFU STEP .

Tables:

• Table 1 R & D in Business Enterprise Sector. Intramural R & D, R & D personnel and R & D man-years, by sector and size classes (+ 10 employees) 2004- 2006 . NOK million and number of
• Table 2 R & D in Business Enterprise Sector. Intramural R & D, R & D personell and man-years, by NACE of enterprise (+ 10 employees). 2005 and 2006. NOK million and number of
• Table 3 Intermural R & D expenditures in the in Business Enterprise Sector, type of costs and share with R & D by size classes (+ 5 employees). 2006. NOK million and number of
• Table 4 Funding of R & D expenditures in the in Business Enterprise Sector by source and size classes (+ 5 employees). 2006. NOK million