Transcript R&D in the Norwegian National accounts

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Agenda item 4
Invited paper 14
R&D in the Norwegian National
accounts
Presented by
Knut Ø. Sørensen
Statistics Norway
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General approach in Norway
• Statistics Norway has a project for compiling a satellite
account, in which R&D is mainly regarded as gross fixed
capital formation
• The interest in R&D has several sources:
 The stock of knowledge capital is wanted for use in analyses of growth
and productivity
 There is a general interest in education, knowledge and R&D in Norway
(are we lagging behind other nations?)
 Revised SNA: how to treat R&D
– We have had a grant from Eurostat studying R&D
 The National accounts need to improve on some aspects of R&D
– How to use R&D statistics to supplement present sources?
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General approach
• Use the R&D statistics, collected according to the Frascati
Manual, as far as possible
• Production is compiled, using the Canberra group/NESTI
bridge tables
• Adding data from the foreign accounts (imports, exports),
total supply = total use can be estimated
• Use of R&D for fixed capital formation is derived as a
residual, based on estimates of exports, change in
inventories and intermediate consumption
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R&D capital stock
• Capital stock is estimated with the PIM method
– The price index is input price index for market production i NACE73
(business services: research and development services)
– Average service life set at 10 years
 This is not an empirical estimate, but seems to be in line with
assumptions used in other countries
– Further details of the consumption of capital as for other (market)
industries.
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Main preliminary results for Norway 2005
• Increase in GDP level, current prices:
1.1%
 Of which 60% is due to increased fixed capital formation in market
activities
• Increase in GDP volume growth:
0.2%
• Practically no change in GNI at current prices
 We have not introduced changes in the foreign accounts
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Bridge table from GERD to production
• GERD R&D intramural expenditures:
• less R&D expenditure for investments
• plus purchases of R&D for intermediate cons.
• plus consumption of capital for prod. of R&D
• plus operating surplus from R&D production
• plus net other taxes on production of R&D
• less adjustment for own account investments of
software and oil exploration already included
29643
2072
2160
1202
- 794
- (?)
2090
Equals production of R&D services in the National
Accounts
28046
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Capital services in R&D production
• In order to estimate the value of R&D production, we have
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•
to add operating surplus and consumption of capital.
We have done so on the basis of observations for the
industry Nace73
The ratio of consumption of capital to current operating
costs for NACE73 is applied to the current operating costs
stated in the R&D statistics.
 Current operating costs for Nace 73 could be adjusted for costs not
included in the R&D statistics, such as IC of R&D and FISIM
• The ratio of operating surplus to consumption of capital for
Nace73 is applied to R&D production
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Capital services in R&D production - 2
• If capital services from R&D-capital are important in
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producing R&D-services in Nace73, this should be reflected
in the observed operating surplus, even though R&Dservices are not specified.
If, alternatively, we would estimate all capital stocks involved
in the R&D-production in order to calculate capital services
from each type,
– firms in the business sector could change the use of their existing
capital stocks to produce R&D, this would not be reported as
investment expenditure in the R&D survey (?)
– R&D survey do not cover all types of capital (?) such as software or
R&D-capital
– when services from R&D capital is specified, it is demanding to use
this method to establish the R&D capital series.
15/04/08
Transactions in R&D services
• R&D services produced by unit A and sold to unit B, should
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not be gross fixed capital formation in unit A, but in unit B
If the unit B combines the purchased services from A with its
own R&D and sell the combined result to another unit C, the
R&D should be capitalized in unit C. The value added by
unit A should not be counted as value added also in unit B.
In this case the purchase by B should be intermediate
consumption of unit B
Data for transactions in R&D services are hard to find in the
R&D surveys, but are needed to get investments by industry
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