This project has received funding from the European Union’s Seventh Framework Programme for research, technological development and demonstration under grant agreement No. 612774

A Methodology for Disentangling Public Funded R&D (GBARD) by Industries

Matilde Mas (University of Valencia and Ivie)Eva Benages (Ivie)

Juan Fernández de Guevara (University of Valencia and Ivie)

Thessaloniki, SEM Conference. 2016

1. Introduction

2. Public transfers in R&D

3. Disaggregation of pubic funded R&D (GBARD) by industries

4. From GBARD to ICT GBARD by industries

5. Results

6. Main issues

Introduction

2

• SPINTAN Project aims, among other goals, to build a database that comprises investment and capital stock of intangibles in the public sector.

• The project complements previous projects (INTAN-Invest, COINVEST and INNODRIVE) which covered the market sector (8 industries): SPINTAN covers the non-market sector.

• SPINTAN conceptual framework (Corrado, Haskel and Jona-Lasinio, 2015) clarifies:1. Definition of the non-market sector

2. Assets boundaries in the context of intangibles in the non-market sector

3. Implications to the SNA of the inclusion of public intangibles

4. The return of non-market public capital

5. Function of the government related to SPINTAN

6. Which government expenditures have to be capitalized

Introduction

3

• Which part of the government expenditures have to be capitalized?– This question is particularly important given the fact that public sector

transfers (current and capital expenditures) are not included as government GFCF.

• They are habitually considered expenditures of the industries that receive the transfer.

– Need for measurement of the public transfer for the acquisition of intangible assets, particularly in the case of R&D.

• The relevance of knowing the contribution of the public sector to R&D goes beyond of the SPINTAN project.– Target 2 of Europe 2020 strategy (EC) is aimed to reach 3% of the EU's

GDP invested in R&D.• Action 55 of the Digital Agenda for Europe (DAE,first flagship initiative of E2020) aims for

Member States to double their annual public spending on ICT R&D.

– However, monitoring trends in the public funding of ICT R&D is not straightforward given the lack of readily data.

Introduction

4

• The aim of this paper is to:

1. To develop a methodology for estimating GBARD by industry and

2. To disaggregate it into ICT and non-ICT GBARD within each industry.

• Based on an homogenous industry classification (following NACE Rev. 2)

• High level of industry disaggregation: 37 industries, of which 7 ICT industries (following OECD, 2007, ICT sector definition)

• For the 2004-2013 period

• For Member States and EU28

3. To analyse the results of applying the proposed methodology

• GBAORD by industry and country

• ICT GBAORD by industry and country

• In the methodology developed, the approach of Stančik (2012) and Stančik and Rohman (2014) is the starting point, but modified to achieve the objectives of this paper.

Introduction

5

• How to measure public transfers in R&D, i.e. the resources the government endow to R&D?

• Frascati Manual (OECD, 2015):– Performance-based approach: aggregation of the amount each industry

receive for their intramural R&D.• Recommended by OECD (2015)

• Government-financed GERD (Gross Expenditure on R&D)

• Disadvantages:

1. As it is based on surveys delays in the information are habitual

2. Performers are not necessarily able to link their gov. funding to policy objectives.

– Funder-based approach. GBARD (Government budget allocations for R&D): aggregation of the sums committed by government to fund other industries R&D.• Useful to increase the timeliness of R&D statistics.

• Released by socioeconomic objectives (NABS chapters).

Public transfers in R&D

6

• None of the two approaches suffice the SPINTAN objectives:– SPINTAN needs to compute how the public funding of R&D is

distributed by NACE industries, instead of the NABS chapters.

• We develop a methodology that allows disentangling which part of the Eurostat GBARD can be attributed to various different NACE industries.

• Additional step: estimate also which part of the public funding invested in each NACE industry is addressed to ICT assets.

• In the methodology developed, Stančik (2012) and Stančik and Rohman ’s (2014) approach is the starting point.

Public transfers in R&D

7

• GBARD: measure of the government expenditure on R&D based on budgetary information (Frascati Manual).

• It is based on the funder rather than the performer.

• It requires to identify all the budget items involving R&D and to measure or estimate their R&D content in terms of funding.

• “Government” should cover central (or federal) and provincial (or state) government, when its contribution is significant (public enterprises excluded).

• It covers government-financed R&D performed in government establishments but also government-financed R&D in the other national sectors as well as abroad (including international organisations).

• These estimates are less accurate than performance-based data but, as they are derived from the budgets, they can be linked to policies through classification by “objectives” or “goals”.

Public transfers in R&D

8

NABS* chapters1Exploration and exploitation of the earth

2Environment3Exploration and exploitation of space

4Transport, telecommunication and other infrastructures

5Energy

6Industrial production and technology

7Health

8Agriculture

9Education

10Culture, recreation, religion and mass media

11Political and social systems, structures and processes

12General advancement of knowledge: R&D financed from General University Funds (GUF)

13General advancement of knowledge: R&D financed from other sources than GUF

14Defence

• Available GBARD data from Eurostat:– EU28 and Member States– 2004-2014 for most Member States and 2006-2014 for the EU aggregates– Classified by socio-economic objective (SEO), using the NABS 2007 classification:

Public transfers in R&D

9

* Nomenclature for the Analysis and Comparison of Scientific Programmes and Budgets.

• What we are looking for is a correspondence between NABS chapters and NACE industries, in order to break down GBARD by NACE industries.

• For this reason, we need:• A correspondence between NABS and NACE classifications• Weights to distribute GBARD of each NABS chapter among NACE

industries since each NABS is generally distributed in more than one industry.

Disaggregation of Public Funded R&D (GBARD)

10

GB

AO

RD

by

NA

BS NABS 1

NABS 2………NABS 14

GB

AO

RD

by

NA

CENACE 01-03

NACE 05-09NACE 10-12………

• Stančik, J. (2012) (http://ftp.jrc.es/EURdoc/JRC69978.pdf) contribution to the PREDICT project (European Commission) proposed a NACE→NABS correspondence.

• However, we have to take the other way around since we need a NABS → NACE.

• However, we use their NACE-NABS correspondence as a starting point

Disaggregation of Public Funded R&D (GBARD)

11

Aggregation of

NACENABS 1NABS 2……………NABS 14

NACE 01-03NACE 05-09NACE 10-12…………NACE 99

NACE classification

NABSclassification

NACE 01-03NACE 05-09NACE 10-12…………NACE 99

NABS 1NABS2……………NABS 14

Disaggregation of

NABS

NACE classification

NABSclassification

Stančík, J. (2012): What we need:

• In addition, there is a change of NACE classification in 2008.

• Therefore, the NABS → NACE correspondence requires, in fact, two correspondences:

• NABS 2007 → NACE Rev. 1.1 → NACE Rev. 2 (2004-2007)

• NABS 2007 → NACE Rev. 2 (2008-2013)

• Thus, all the steps of the estimation have to be applied twice, once for each NACE revision.

Disaggregation of Public Funded R&D (GBARD)

12

Weights:• Since each NABS corresponds to more than one NACE, we need a

proxy variable to estimate the distribution weights of each NABS among NACE (Rev. 1.1 and Rev. 2) industries.

• We follow Stančík, J., & Rohman, I.K. (2014): Public ICT R&D funding in the European Union [Technical Report]. Seville: JRC-IPTS, European Commission. Forthcoming.

• Proxy selected: total labour costs (salaries times hours worked) of employees with higher education (ISCED codes 5a, 5b and 6)

• Assumption: the distribution of government R&D expenditures by industries is similar to the distribution of labour costs of the most qualified employees.

Disaggregation of Public Funded R&D (GBARD)

13

• Statistical information:

• GBARD by NABS from Eurostat

• LFS (Labour Force Statistics): Hours worked by employees with higher education by 3 digits NACE industries.

– Tailored request to Eurostat for the SPINTAN project.

• SES (Structure of Earnings Survey): Wages of employees with higher education by 3 digits NACE industries 2006 (NACE Rev. 1.1) and 2010 (NACE Rev. 2).

Data for the remaining years are extrapolated.– Tailored request to Eurostat for SPINTAN project.

Disaggregation of Public Funded R&D (GBARD)

14

• Starting point: Stančik, J. (2012) and Stančík, J. & Rohman, I. K.(2014) correspondence between NABS and NACE.

• We use this correspondence to break down GBARD by NABS into NACEs using labour costs as weights.

NABS-NACE correspondence

15

NABS codes

NACE codes

Labour costs Weights

NABS 1

NACE 011 100 15%

NACE 122 200 31%

NACE 221 250 38%

NACE 325 100 15%

-Total NACEs assigned to

NABS 1650 100%

Table 1Example: NABS 1 correspondence and estimation of weights

NABS 1NABS 2………………NABS 13NABS 14

NACE 011……NACE 122…NACE 221…NACE 325…NACE 990

Labo

ur c

osts

by

NA

CE

(hig

her

educ

atio

n)

• However, there are some NACE codes that are assigned to more than one NABS.

• We have to breakdown labour costs of the NACEs affected to calculate the weights.

• In these cases, we use the weight of the GBARD in the NABS involved to assign the labour costs of each NACE code to the corresponding NABS chapters

• For example, NACE Rev.2 code 512 (Freight air transport and space transport) is assigned to NABS 3 (Exploration and exploitation of space) and 4 (Transport, telecommunication and other infrastructures), but we don’t have information about how much of the labour costs of higher education employees in this industry should be assigned to each NABS.

• Therefore, we take as weights to distribute NACE 512 sector labour costs among NABS the weight of GBARD figures of each NABS (differentiating by country and year).

NABS-NACE correspondence

16

NACE codes

Labour costs

NABS codes GBARD Weights

Labour costs by

NABS

NACE 512 1000 NABS 3 100 80% 800

NABS 4 25 20% 200

Labour costs of employees with higher education assigned to NABS 3

Labour costs of employees with higher education assigned to NABS 4

NABS 1…NABS 3NABS 4…NABS 14

NACE 011…NACE 512……NACE 990

?Table 2

• Once the labour costs of employees with higher education at 3 digits NACE are assigned to each NABS, the weight of these costs are calculated by NACE within the same NABS

• This weight will be used to estimate GBARD figures by industries.

• The calculations are made for each country and year.• For each NACE industry k (in a given year and country):

where j= NABS chapter, k= NACE industry and labour costs are hours worked times wages for employees with higher education.

* See in Tables 1, 2 and 3 examples of how these weights are computed

Public Funded R&D (GBARD) by industry

17

𝐺𝐵𝐴𝑂𝑅𝐷𝑘=∑𝑗=1

14

𝐺𝐵𝐴𝑂𝑅𝐷 𝑗∗[ 𝐿𝑎𝑏𝑜𝑢𝑟 𝑐𝑜𝑠𝑡𝑠 𝑗 ,𝑘

∑❑

𝑘∈ 𝑗

𝐿𝑎𝑏𝑜𝑢𝑟 𝑐𝑜𝑠𝑡𝑠 𝑗 ,𝑘 ]  

Example of the estimation procedure

18

Table 3Example: NABS 3 and 4 distribution by NACE industries and estimation of weights

Assignment of labour costs (higher education)

NACE codes

Labour costs

NABS codes GBARD Weights

Labour costs by

NABS

NACE 512 1000 NABS 3 100 80% 800

NABS 4 25 20% 200

Table 2Example: Distribution of NACE 512 between NABS 3 and 4 using GBARD weights

NABS codes

GBARD by NABS

NACE codes

Labour costs

higher educ. WeightsGBARD by

NACE

NABS 3 4,000

NACE 302 100 8% 333NACE 511 200 17% 667NACE 512 800 67% 2,667NACE 611 100 8% 333

Total NACEs assigned to

NABS 3 1200 100% 4,000

NABS 4 15,000

NACE 301 150 8% 1,125NACE 421 600 30% 4,500NACE 512 200 10% 1,500NACE 711 300 15% 2,250NACE 712 750 38% 5,625

Total NACEs assigned to

NABS 3 2000 100% 15,000

Procedure for NACEs assigned to more than one NABS

GBAORD NACE 512=2,667+1,500= 4,167

NABS 1NABS 2NABS 3NABS4NABS 5…………………NABS 13NABS 14

…NACE 301NACE 302

NACE 421…NACE 511NACE 512…NACE 611…NACE 711NACE 712…

• As LFS and SES data are classified following different revisions of NACE classifications:

• NACE Rev.1.1 for the period 2004-2007• NACE Rev.2 for the period 2008-2013

• For this reason we apply the correspondence between NACE Rev.1.1 and NACE Rev.2 to convert GBARD by NACE Rev. 1.1.

– Final NACE Classification: 37 2-digits NACE Rev.2 industries comprising 7 ICT sectors (OECD classification).

–Data on GBAORD by NACE has been smoothed to take into account the effects on the dataset of the NACE revision in 2008. The procedure followed is the estimation of a linear regression with a trend and a step dummy for 2008-2013.

Several adjustments: Correspondence between NACE Rev.1.1 and NACE Rev.2

19

• Final NACE Classification: 37 2-digits NACE Rev.2 industries, differentiating ICT sectors:

Final NACE Rev.2 industry classification

20

Industry description NACE Rev. 2 code1 Agriculture, forestry and fishing 01-032 Mining and quarrying 05-093 Manufacture of food products, beverages and tobacco products 10-124 Manufacture of textiles, apparel, leather and related products 13-155 Manufacture of wood and paper products, and printing 16-186 Manufacture of coke, and refined petroleum products 197 Manufacture of chemicals and chemical products 208 Manufacture of pharmaceuticals, medicinal chemical and botanical products 219 Manufacture of rubber and plastics products, and other non-metallic mineral products 22-2310 Manufacture of basic metals and fabricated metal products, except mach. & eq. 24-2511 Manufacture of computer, electronic and optical products (except ICT industries) 26(nonICT)12 Manufacture of electronic components and boards ICT26113 Manufacture of computers and peripheral equipment ICT26214 Manufacture of communication equipment ICT26315 Manufacture of consumer electronics ICT26416 Manufacture of magnetic and optical media ICT26817 Manufacture of electrical equipment 2718 Manufacture of machinery and equipment n.e.c. 2819 Manufacture of transport equipment 29-3020 Other manufacturing, and repair and installation of machinery and equipment 31-3321 Electricity, gas, steam and air-conditioning supply 3522 Water supply, sewerage, waste management and remediation 36-3923 Construction 41-4324 Transportation and storage 49-5325 Publishing, audiovisual and broadcasting activities (except ICT industries) 58-60(nonICT)26 ICT Computer and related activities ICT5820+62+631+95127 Telecommunications ICT6128 Computer programming, consultancy and related activ.; Information service activ. (exc. ICT) 62-63(nonICT)

29 Legal and accounting, head offices, management consultancy, architectural and engineering activ; technical testing and analysis 69-71

30 Scientific research and development 7231 Advertising and market research; other professional, scientific and technical activities; veterinary activities 73-7532 Administrative and support service activities 77-8233 Public administration and defence; compulsory social security 8434 Education 8535 Human health and social work 86-8836 Arts, entertainment and recreation 90-9337 Activities of membership organisations 94

2nd Step: Once GBARD by NACE industries has been computed, we take a further step: we split GBARD of each industry and year into ICT and non-ICT “assets”. • We again follow Stančík, J., & Rohman, I.K. (2014): we apply the ICT

share to total GBARD for each country, industry and year:

where k= NACE industry and

• In the definition of the ICT occupations we follow Stančik, J. (2012) and Stančík, J. & Rohman, I. K.(2014): ISCO-88 codes: 123, 213, 214, 231, 311, 312 and 313

ISCO-08 codes: 133, 215, 216, 235, 243, 251, 252, 351, 352 and 742.

From GBARD to ICT GBORD

21

𝐼𝐶𝑇 𝐺𝐵𝐴𝑂𝑅𝐷𝑘=𝐺𝐵𝐴𝑂𝑅𝐷𝑘∗ h𝐼𝐶𝑇𝑠 𝑎𝑟𝑒𝑘

𝐼𝐶𝑇 h𝑠 𝑎𝑟𝑒𝑘=𝐿𝑎𝑏𝑜𝑢𝑟 𝑐𝑜𝑠𝑡𝑠 𝑓𝑜𝑟 𝑒𝑚𝑝𝑙𝑜𝑦𝑒𝑒𝑠 h𝑤𝑖𝑡 h h𝑖𝑔 𝑒𝑟 𝑒𝑑𝑢𝑐𝑎𝑡𝑖𝑜𝑛𝒊𝒏 𝑰𝑪𝑻 𝒐𝒄𝒄𝒖𝒑𝒂𝒕𝒊𝒐𝒏𝒔

𝐿𝑎𝑏𝑜𝑢𝑟 𝑐𝑜𝑠𝑡𝑠 𝑓𝑜𝑟 𝑒𝑚𝑝𝑙𝑜𝑦𝑒𝑒𝑠 h𝑤𝑖𝑡 h h𝑖𝑔 𝑒𝑟 𝑒𝑑𝑢𝑐𝑎𝑡𝑖𝑜𝑛

1. GBARD(Eurostat data):

22

Results

Results

23

GBARD by Member State (2013). Millions of euros

Source: Eurostat

German

y

France

United

King

dom

ItalySpa

in

Netherl

ands

Sweden

Austria

Denmark

Belgium

Finlan

d

Portug

al

Poland

Czech

Rep

ublic

Irelan

d

Greece

Hunga

ry

Croatia

Roman

ia

Luxe

mbourg

Slovak

ia

Sloven

ia

Estonia

Lithu

ania

Bulgari

a

Cyprus

Latvi

aMalt

a0

5,000

10,000

15,000

20,000

25,000

30,000

25,3

54

13,9

86

10,8

60

8,32

4

5,31

0

4,60

2

3,55

6

2,62

1

2,54

7

2,53

8

1,99

7

1,57

9

1,43

8

1,00

5

773

711

601

316

300

292

266

190

158

126

102

59 32 22

Total EU-28 GBARD: 90,506 million euros

Results

24

GBARD distribution by Member State (2013). Percentage

Source: Eurostat

Germany28.3%

France15.6%

United Kingdom12.1%

Italy9.3%

Spain5.9%

Netherlands5.1%

Sweden4.0%

Austria2.9%

Denmark2.8%

Belgium2.8%

Finland2.2%

Portugal1.8%

Poland1.6%

Czech Republic1.1%Ireland0.9%Greece0.8%

Hungary0.7%Croatia 0.4%Romania 0.3%Luxembourg 0.3%Slovakia 0.3%Slovenia 0.2%Estonia 0.2%

Results

25

GBARD intensity (GBARD / GDP) by Member State (2013). Percentage

Source: Eurostat

Finlan

d

Denmark

Portug

al

German

y

Estonia

Sweden

Austria

Netherl

ands

CroatiaEU28

France

Czech

Rep

ublic

Belgium

Luxe

mbourg

Hunga

ry

United

King

dom

Sloven

iaIta

lySpa

in

Irelan

d

Greece

Poland

Slovak

ia

Lithu

ania

Cyprus

Malta

Bulgari

a

Roman

iaLa

tvia

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

103.

22%

102.

32%

95.3

0%92

.61%

84.8

5%84

.50%

83.7

3%76

.36%

73.2

5%69

.25%

67.9

0%67

.25%

66.3

1%64

.26%

61.3

6%57

.18%

53.7

3%53

.36%

51.9

1%47

.12%

39.0

5%36

.91%

36.8

8%36

.28%

36.0

2%30

.37%

25.6

6%21

.12%

13.8

9%

Results

26

Distribution of GBARD by NABS chapters (2013). EU28. Percentage

Source: Eurostat

General advancement of knowledge: R&D financed from General University Funds

(GUF)34.7%

General advancement of knowledge: R&D fi-

nanced from other sources than GUF

17.9%

Industrial production and technology

9.2%Health8.8%

Exploration and exploitation of

space5.2%

Defence4.6%

Energy4.1%

Agriculture3.3%

Political and social sys-tems, structures and

processes2.8%

Transport, telecom-munication and other

infrastructures2.7%

Environment2.6%

Exploration and ex-ploitation of the earth

2.0%Education

1.2%

Culture, recreation, re-ligion and mass media

1.1%

GBARD and ICT GBARD by NACE(our estimation):

27

Results

Results

28

GBARD by NACE Rev. 2 industries. EU28 (2006-2013). Millions of eurosNACE Rev. 2 industries 2006 2007 2008 2009 2010 2011 2012 20131. Agriculture, forestry and fishing (01-03) 1,459 1,452 1,451 1,424 1,381 1,331 1,264 1,2242. Mining and quarrying (05-09) 551 648 737 803 848 879 888 9073. Manufacture of food products, beverages and tobacco products (10-12) 641 664 687 695 693 684 664 6554. Manufacture of textiles, apparel, leather and related products (13-15) 128 142 154 162 167 170 169 1705. Manufacture of wood and paper products, and printing (16-18) 309 329 349 360 364 365 358 3576. Manufacture of coke, and refined petroleum products (19) 0 32 66 94 117 136 149 1627. Manufacture of chemicals and chemical products (20) 1,206 1,173 1,147 1,104 1,052 997 932 890

8. Manufacture of pharmaceuticals, medicinal chemical and botanical products (21) 501 525 549 560 562 558 545 540

9. Manufacture of rubber and plastics products, and other non-metallic mineral products (22-23) 454 478 500 511 514 511 498 495

10. Manufacture of basic metals and fabricated metal products, except machinery and equipment (24-25) 1,071 1,034 1,004 960 909 856 796 756

11. Manufacture of computer, electronic and optical products (except ICT industries) (26, exc. 261-264 and 268) 342 350 359 360 356 349 337 331

12. Manufacture of electronic components and boards (261) 150 170 188 201 209 214 214 21713. Manufacture of computers and peripheral equipment (262) 0 15 41 64 82 97 107 11814. Manufacture of communication equipment (263) 158 163 168 169 168 166 160 15815. Manufacture of consumer electronics (264) 30 34 37 39 40 41 40 4116. Manufacture of magnetic and optical media (268) 0 0 0 1 3 5 6 717. Manufacture of electrical equipment (27) 335 364 392 410 419 423 418 42018. Manufacture of machinery and equipment n.e.c. (28) 1,444 1,523 1,599 1,637 1,648 1,641 1,604 1,59419. Manufacture of transport equipment (29-30) 1,381 1,277 1,188 1,088 987 892 795 72420. Other manufacturing, and repair and installation of machinery and equipment (31-33) 657 643 633 612 586 559 525 503

21. Electricity, gas, steam and air-conditioning supply (35) 2,435 2,569 2,699 2,764 2,783 2,772 2,710 2,69322. Water supply, sewerage, waste management and remediation (36-39) 1,447 1,422 1,405 1,364 1,310 1,252 1,179 1,13423. Construction (41-43) 1,487 1,374 1,278 1,171 1,062 959 855 77824. Transportation and storage (49-53) 1,827 1,738 1,666 1,572 1,469 1,368 1,257 1,18025. Publishing, audiovisual and broadcasting activities (except ICT industries) (58-60, exc. 582) 360 374 388 393 393 388 377 373

26. ICT computer and related activities (5820, 62, 631 and 951) 1,712 1,900 2,075 2,191 2,262 2,300 2,288 2,30927. Telecommunications (61) 537 489 448 404 361 320 280 25028. Information service activities (except ICT industries) (63, exc. 631) 105 99 94 89 82 76 70 6529. Legal and accounting; management consultancy; ; technical testing and analysis and architectural and engineering activities (69-71) 8,185 8,275 8,387 8,332 8,173 7,958 7,624 7,446

30. Scientific research and development (72) 14,537 15,204 15,855 16,141 16,172 16,040 15,619 15,47631. Advertising and market research; other professional, scientific and technical activities and Veterinary activities (73-75) 101 164 220 266 301 329 346 364

32. Administrative and support service activities (77-82) 0 0 0 0 2 247 448 62433. Public administration and defence; compulsory social security (84) 9,328 9,109 8,947 8,641 8,261 7,857 7,367 7,05434. Education (85) 22,329 25,186 27,826 29,650 30,827 31,527 31,504 31,91035. Human health and social work (86-88) 5,167 5,965 6,699 7,225 7,582 7,812 7,854 7,99536. Arts, entertainment and recreation (90-93) 237 264 288 304 314 320 318 32137. Activities of membership organisations (94) 271 279 287 289 286 282 272 268TOTAL 80,881 85,428 89,813 92,048 92,748 92,682 90,835 90,506

29

GBARD by NACE Rev. 2 industries. EU28 (2006-2013). PercentageNACE Rev. 2 industries 2006 2007 2008 2009 2010 2011 2012 20131. Agriculture, forestry and fishing (01-03) 1.80 1.70 1.62 1.55 1.49 1.44 1.39 1.352. Mining and quarrying (05-09) 0.68 0.76 0.82 0.87 0.91 0.95 0.98 1.003. Manufacture of food products, beverages and tobacco products (10-12) 0.79 0.78 0.77 0.76 0.75 0.74 0.73 0.724. Manufacture of textiles, apparel, leather and related products (13-15) 0.16 0.17 0.17 0.18 0.18 0.18 0.19 0.195. Manufacture of wood and paper products, and printing (16-18) 0.38 0.39 0.39 0.39 0.39 0.39 0.39 0.396. Manufacture of coke, and refined petroleum products (19) 0.00 0.04 0.07 0.10 0.13 0.15 0.16 0.187. Manufacture of chemicals and chemical products (20) 1.49 1.37 1.28 1.20 1.13 1.08 1.03 0.988. Manufacture of pharmaceuticals, medicinal chemical and botanical products (21) 0.62 0.62 0.61 0.61 0.61 0.60 0.60 0.60

9. Manufacture of rubber and plastics products, and other non-metallic mineral products (22-23) 0.56 0.56 0.56 0.56 0.55 0.55 0.55 0.55

10. Manufacture of basic metals and fabricated metal products, except machinery and equipment (24-25) 1.32 1.21 1.12 1.04 0.98 0.92 0.88 0.84

11. Manufacture of computer, electronic and optical products (except ICT industries) (26, exc. 261-264 and 268) 0.42 0.41 0.40 0.39 0.38 0.38 0.37 0.3712. Manufacture of electronic components and boards (261) 0.19 0.20 0.21 0.22 0.23 0.23 0.24 0.2413. Manufacture of computers and peripheral equipment (262) 0.00 0.02 0.05 0.07 0.09 0.10 0.12 0.1314. Manufacture of communication equipment (263) 0.20 0.19 0.19 0.18 0.18 0.18 0.18 0.1715. Manufacture of consumer electronics (264) 0.04 0.04 0.04 0.04 0.04 0.04 0.04 0.0416. Manufacture of magnetic and optical media (268) 0.00 0.00 0.00 0.00 0.00 0.00 0.01 0.0117. Manufacture of electrical equipment (27) 0.41 0.43 0.44 0.44 0.45 0.46 0.46 0.4618. Manufacture of machinery and equipment n.e.c. (28) 1.79 1.78 1.78 1.78 1.78 1.77 1.77 1.7619. Manufacture of transport equipment (29-30) 1.71 1.49 1.32 1.18 1.06 0.96 0.88 0.8020. Other manufacturing, and repair and installation of machinery and equipment (31-33) 0.81 0.75 0.70 0.67 0.63 0.60 0.58 0.5621. Electricity, gas, steam and air-conditioning supply (35) 3.01 3.01 3.00 3.00 3.00 2.99 2.98 2.9822. Water supply, sewerage, waste management and remediation (36-39) 1.79 1.66 1.56 1.48 1.41 1.35 1.30 1.2523. Construction (41-43) 1.84 1.61 1.42 1.27 1.15 1.04 0.94 0.8624. Transportation and storage (49-53) 2.26 2.03 1.86 1.71 1.58 1.48 1.38 1.3025. Publishing, audiovisual and broadcasting activities (except ICT industries) (58-60, exc. 582) 0.44 0.44 0.43 0.43 0.42 0.42 0.42 0.4126. ICT computer and related activities (5820, 62, 631 and 951) 2.12 2.22 2.31 2.38 2.44 2.48 2.52 2.5527. Telecommunications (61) 0.66 0.57 0.50 0.44 0.39 0.35 0.31 0.2828. Information service activities (except ICT industries) (63, exc. 631) 0.13 0.12 0.11 0.10 0.09 0.08 0.08 0.0729. Legal and accounting; management consultancy; ; technical testing and analysis and architectural and engineering activities (69-71) 10.12 9.69 9.34 9.05 8.81 8.59 8.39 8.2330. Scientific research and development (72) 17.97 17.80 17.65 17.54 17.44 17.31 17.19 17.1031. Advertising and market research; other professional, scientific and technical activities and Veterinary activities (73-75) 0.13 0.19 0.24 0.29 0.33 0.35 0.38 0.4032. Administrative and support service activities (77-82) 0.00 0.00 0.00 0.00 0.00 0.27 0.49 0.6933. Public administration and defence; compulsory social security (84) 11.53 10.66 9.96 9.39 8.91 8.48 8.11 7.7934. Education (85) 27.61 29.48 30.98 32.21 33.24 34.02 34.68 35.2635. Human health and social work (86-88) 6.39 6.98 7.46 7.85 8.18 8.43 8.65 8.8336. Arts, entertainment and recreation (90-93) 0.29 0.31 0.32 0.33 0.34 0.34 0.35 0.3537. Activities of membership organisations (94) 0.33 0.33 0.32 0.31 0.31 0.30 0.30 0.30                 TOTAL 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

77.2% GBARD in

2013

Results

31

Education sector (NACE 85) share in GBARD. EU28 and Member States (2013). Percentage

Malta

Austria

Croatia

Lithu

ania

Netherl

ands

Sweden

Denmark

Greece

Portug

al

Slovak

ia

Cyprus Ita

ly

German

yEU28

Spain

Finlan

d

France

United

King

dom

Czech

Rep

ublic

Irelan

d

Hunga

ry

Luxe

mbourg

Belgium

Bulgari

a

Poland

Roman

ia

Estonia

Latvi

a

Sloven

ia0

10

20

30

40

50

60

70

80

90

10093.3

59.054.9 54.7

51.5 50.247.0 46.2 44.1 43.3

40.7 40.6 39.835.3

30.1 27.8 27.825.1 25.0

21.0 20.917.0 16.6 16.5

6.9 6.53.4 2.6 1.4

Results

32

Human health and social services sector (NACE 86-87) share in GBARD. EU28 and Member States (2013). Percentage

Luxe

mbourg

United

King

domLa

tviaSpa

in

Poland

Portug

al

Denmark Ita

ly

Estonia

EU28

France

Sloven

ia

Roman

ia

Slovak

ia

Greece

Finlan

d

Czech

Rep

ublic

Netherl

ands

Irelan

d

German

y

Lithu

ania

Austria

Hunga

ry

Bulgari

a

Belgium

Cyprus

Sweden

Croatia

Malta

0

5

10

15

20

25

30

24.2

20.0

13.8 13.2 13.2

10.7 10.610.5 10.28.8 8.8

7.0 6.9 6.7 6.3 5.9 5.8 5.3 5.1 4.8 4.8 4.2 4.0 3.52.3 2.3 1.8

0.9 0.3

Results

33

Scientific research and development sector (NACE 72) share in GBARD. EU28 and Member States (2013). Percentage

Sloven

ia

Cyprus

Luxe

mbourg

Croatia

Estonia

Hunga

ry

Bulgari

a

Czech

Rep

ublic

Irelan

d

PolandLa

tvia

Roman

ia

Slovak

ia

Belgium

Spain

Sweden

Lithu

ania

Finlan

d

United

King

dom

Netherl

ands

EU28

Denmark

Portug

al

German

y

France

Austria

Greece Ita

lyMalt

a0

10

20

30

40

50

60

51.3

41.6 41.638.6

36.4 35.4 34.632.0 30.9

29.5 28.627.2

24.7 24.422.0 21.8 21.2

19.1 18.8 17.5 17.1 17.0 17.0 16.6 16.6

11.5

7.3

2.00.0

Results

37

ICT GBARD by NACE Rev. 2 industries. EU28 (2006-2013). PercentageNACE Rev. 2 industries 2006 2007 2008 2009 2010 2011 2012 2013

1. Agriculture, forestry and fishing (01-03) 0.02 0.02 0.02 0.03 0.03 0.03 0.03 0.032. Mining and quarrying (05-09) 0.08 0.10 0.12 0.14 0.17 0.19 0.21 0.233. Manufacture of food products, beverages and tobacco products (10-12) 0.24 0.24 0.24 0.24 0.24 0.24 0.24 0.244. Manufacture of textiles, apparel, leather and related products (13-15) 0.01 0.02 0.03 0.04 0.05 0.05 0.06 0.075. Manufacture of wood and paper products, and printing (16-18) 0.23 0.23 0.22 0.22 0.21 0.21 0.20 0.206. Manufacture of coke, and refined petroleum products (19) 0.00 0.01 0.02 0.03 0.04 0.05 0.06 0.077. Manufacture of chemicals and chemical products (20) 0.56 0.55 0.54 0.53 0.53 0.53 0.53 0.538. Manufacture of pharmaceuticals, medicinal chemical and botanical products (21) 0.35 0.35 0.35 0.34 0.34 0.34 0.33 0.339. Manufacture of rubber and plastics products, and other non-metallic mineral products (22-23) 0.11 0.11 0.11 0.11 0.12 0.12 0.12 0.1210. Manufacture of basic metals and fabricated metal products, except machinery and equipment (24-25) 0.50 0.45 0.41 0.37 0.34 0.31 0.29 0.2711. Manufacture of computer, electronic and optical products (except ICT industries) (26, exc. 261-264 and 268) 0.78 0.82 0.86 0.91 0.95 0.99 1.03 1.07

12. Manufacture of electronic components and boards (261) 0.38 0.41 0.42 0.43 0.44 0.45 0.45 0.4513. Manufacture of computers and peripheral equipment (262) 0.00 0.14 0.37 0.56 0.72 0.87 0.99 1.1114. Manufacture of communication equipment (263) 0.73 0.80 0.87 0.94 1.01 1.07 1.14 1.2015. Manufacture of consumer electronics (264) 0.10 0.10 0.10 0.10 0.10 0.10 0.09 0.0916. Manufacture of magnetic and optical media (268) 0.00 0.00 0.00 0.00 0.01 0.01 0.02 0.0217. Manufacture of electrical equipment (27) 0.36 0.37 0.37 0.37 0.38 0.38 0.38 0.3818. Manufacture of machinery and equipment n.e.c. (28) 1.19 1.23 1.26 1.30 1.34 1.37 1.40 1.4419. Manufacture of transport equipment (29-30) 1.86 1.67 1.51 1.38 1.27 1.17 1.09 1.02

20. Other manufacturing, and repair and installation of machinery and equipment (31-33) 0.36 0.41 0.47 0.51 0.55 0.59 0.63 0.67

21. Electricity, gas, steam and air-conditioning supply (35) 3.04 3.05 3.06 3.07 3.08 3.09 3.11 3.1222. Water supply, sewerage, waste management and remediation (36-39) 0.74 0.60 0.47 0.37 0.27 0.19 0.12 0.0523. Construction (41-43) 0.47 0.44 0.41 0.38 0.36 0.34 0.32 0.3124. Transportation and storage (49-53) 2.62 2.10 1.67 1.32 1.03 0.77 0.56 0.37

25. Publishing, audiovisual and broadcasting activities (except ICT industries) (58-60, exc. 582) 0.36 0.43 0.50 0.56 0.63 0.69 0.76 0.82

26. ICT computer and related activities (5820, 62, 631 and 951) 29.75 31.14 32.21 33.06 33.76 34.30 34.75 35.1527. Telecommunications (61) 2.99 2.66 2.39 2.16 1.96 1.79 1.64 1.5128. Information service activities (except ICT industries) (63, exc. 631) 0.17 0.22 0.26 0.29 0.31 0.33 0.35 0.3729. Legal and accounting; management consultancy; ; technical testing and analysis and architectural and engineering activities (69-71) 11.56 10.94 10.42 9.99 9.62 9.28 8.99 8.74

30. Scientific research and development (72) 22.68 22.46 22.27 22.12 22.00 21.87 21.77 21.7031. Advertising and market research; other professional, scientific and technical activities and Veterinary activities (73-75) 0.02 0.02 0.02 0.02 0.02 0.01 0.01 0.01

32. Administrative and support service activities (77-82) 0.00 0.00 0.00 0.00 0.00 0.14 0.23 0.2733. Public administration and defence; compulsory social security (84) 6.93 6.53 6.21 5.95 5.75 5.57 5.43 5.3134. Education (85) 10.01 10.53 10.89 11.15 11.34 11.45 11.52 11.5535. Human health and social work (86-88) 0.61 0.68 0.76 0.82 0.88 0.94 0.99 1.0436. Arts, entertainment and recreation (90-93) 0.10 0.10 0.10 0.10 0.09 0.08 0.08 0.0737. Activities of membership organisations (94) 0.07 0.07 0.07 0.07 0.08 0.08 0.08 0.09TOTAL 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

Results

39

31. Advertising, market research; other prof., scientific and technical activ.1. Agriculture, forestry and fishing

22. Water supply, sewerage, waste manag. and remediation35. Human health and social work

36. Arts, entertainment and recreation9. Rubber and plastics products and other non-metallic mineral prod.

2. Mining and quarrying24. Transportation and storage

37. Activities of membership organisations10. Basic metals and fabricated metal products, except mach&eq.

34. Education3. Food products, beverages and tobacco

23. Construction6. Coke and refined petroleum products

4. Textiles, apparel, leather32. Administrative and support service activities

5. Wood and paper products, and printing7. Chemicals and chemical products

8. Pharmaceuticals, medicinal chemical and botanical prod.33. Public administration17. Electrical equipment

18. Mmachinery and equipment n.e.c.21. Electricity, gas, steam and air-conditioning supply

29. Legal, account., management consultancy, architectural, engineering activ.20. Other manufacturing, repair and installation of mach&eq.

30. Scientific research and development19. Transport equipment

12. Electronic components and boards25. Publishing, audiovisual and broadcasting (except ICT)

15. Consumer electronics11. Computer, electronic and optical products (except ICT)

16. Magnetic and optical media28. Information service activities (except ICT)

27. Telecommunications14. Communication equipment

13. Computers and peripheral equipment26. ICT computer and related activities

0 10 20 30 40 50 60 70

0.10.10.20.50.91.01.11.31.31.51.51.51.71.81.81.82.32.52.63.23.83.8

4.94.95.65.95.9

8.89.29.4

13.514.2

23.725.3

32.039.5

63.9

ICT GBARD/Total GBARD by NACE industries. EU28 (2013). Percentage

Results

41

ICT GBARD/Total GBARD. EU28 and Member States (2013). Percentage

Belgium

Sloven

ia

Finlan

d

Irelan

d

Sweden

Czech

Rep

ublic

Hunga

rySpa

in

Denmark Ita

ly

United

King

dom

Roman

iaEU28

Netherl

ands

Austria

Latvi

a

Poland

Estonia

Slovak

ia

France

German

y

Bulgari

a

Greece

Luxe

mbourg

Lithu

ania

Portug

al

Cyprus

Malta

Croatia

0

2

4

6

8

10

12

9.9

8.6

7.77.1 7.0

6.56.1

5.14.9 4.8 4.7 4.7 4.6

4.3 4.1 4.0 4.03.5 3.5 3.4 3.4 3.2

2.82.3

1.5 1.40.7

0.4 0.3

Results

• This paper proposes a methodology to estimate the R&D public sector transfers by NACE industries and which part correspond to ICT assets.

• The methodology is based on GBARD data, which account for the sums committed by government to fund other industries R&D.

• The methodology closely follows Stančík, J. (2012) and Stančík, J., & Rohman, I.K. (2014).

• A correspondence between the NACE and NABS classification and the adequate weights to spilt different GBARD by NABS into NACE industries are used.

• Two key assumptions:

– the distribution of government R&D expenditures by industries is similar to the distribution of labour costs of the most qualified employees.

– the percentage of ICT R&D assets in each industry is proportional to the share of labour costs of employees with higher education in ICT occupations over total labour costs with higher education.

• The methodology is tested for the EU member states for the period 2006-2013. It offers a disaggregation of 37 2-digits NACE industries (comprising 7 ICT sectors).

Main issues

43

• Results show that R&D transfers are concentrated in a small number of industries:– 5 industries concentrate 77% of total GBARD:

• Education; Scientific Research and development; Health; Public Administration (including defense); and Legal, accounting, technical testing and analysis, architectural and engineering activities.

• As expected, ICT GBARD intensive industries (in terms of the % of total GBARD) are the ICT sectors.

Main issues

44

This project has received funding from the European Union’s Seventh Framework Programme for research, technological development and demonstration under grant agreement No. 612774

A Methodology for Disentangling Public Funded R&D (GBARD) by Industries

Matilde Mas (University of Valencia and Ivie)Eva Benages (Ivie)

Juan Fernández de Guevara (University of Valencia and Ivie)

Thessaloniki, SEM Conference. 2016