Transcript Capitalisation of R&D in the national accounts

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Capitalisation of R&D in the
national accounts
Ann Lisbet Brathaug
Head of National accounts
Statistics Norway
[email protected]
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2008 SNA - recommendations
• Research is treated as capital formation except in any
cases where it is clear that the activity does not entail any
economic benefit for its owner in which case it is treated as
intermediate consumption (para 6.230)
• “R&D should be recognized as part of capital formation. In
order to achieve this, several issues have to be addressed.
These include deriving measures of research and
development, price indices and service lives. Specific
guidelines, together with handbooks on methodology and
practice, will provide a useful way of working towards
solutions that give the appropriate level of confidence in the
resulting measures”. (para 10.104)
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Stages of R&D capitalisation
• Discussions of method and data
– Preparation of 2008 SNA leading up to the OECD handbook on
intellectual capital
• Test compilations of R&D capital and consequences for
national accounts aggregates
– Norway has compiled test accounts
– The results seem acceptable:
 GDP level +1.2 per cent, negligible influence on GDP volume growth
• Full scale integration in the national accounts
– Issues of consistency
– Some aspects need attention
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Consistency issues
• Standard classifications should be used
 In Norway units in the R&D survey relating to higher education and
research institutes are not classified according to standard
classifications of industry and sector
 What is the situation in other countries?
• Consistency with business surveys of NACE 72 (Research
and development)
 No simple match of R&D survey and business survey for NACE 72
 NACE 72 industry also produce services that do not fill the Frascati
Manual definition of R&D
• Where should the new R&D data fit into our present SUT
 In Norway, we hope that own account capital formation can be compiled
from the R&D survey with some expert assistance
 At present R&D data are not well identified in our SUT tables
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Challenges regarding data input
• Lack of price indicies of research and development services
– In Norway we used input price index for NACE 72
– Do other countries have specialised producer price indices as
recommended in the OECD handbook? Will producer price indices
differ much form input price indices?
• Imports and exports of R&D – difficult to assess
– In Norway the R&D survey have recently started to ask for both
exports and imports of R&D services – so far difficult to assess the
quality of the data and compare with exports and imports of services
in general
– Do other countries have data on exports and imports?
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Other difficult elements
• Service lives of R&D capital
– Empirical data on service life are at least as good for R&D capital as
for several other types of capital
– The data shows wide variety of life lengths according to the specific
types of R&D capital (OECD handbook, 2009, table 2.7)
 It is not realistic, certainly not for Norway, to have a large number of
R&D capital types
 In our test calculations we took a pragmatic view and used a life length
of 10 years
– Will other countries be as pragmatic as Norway?
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Some data issues beyond the test compilation
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Quarterly data
– Probably not realistic to have quarterly R&D surveys
 In Norway, we have quarterly indicators for production in NACE 72
 Some quarterly investment statistics could also cover GFCF in R&D capital
– Have you decided how to implement R&D capitalisation in the quarterly
national accounts?
– Is R&D sensitive to cyclical changes and thus important to catch on a
quarterly basis?
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Regional data
– R&D surveys give production by county
– Probably difficult to give regional capital formation in R&D capital based on
the surveys
– If one have to distribute GFCF in R&D according to other indicators of
capital formation or production, will that disturb analyses of regional
accounts?
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Concluding remarks
• All in all, in Norway, we see capitalisation of R&D as an
improvement of the national accounts, even tough
challenging
• The capitalisation has been well prepared by task forces
• New data sources have been brought to attention for the
national accounts compilers
• In Norway, we experience that the R&D survey has been
extended the last year to meet the new demand from the
national accounts
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