Transcript Science and innovation indicators

Science and innovation profiles of key OECD
and selected countries
Nils de Jager
Department of Innovation, Industry, Science and Research
Industry and Small Business Policy Division
Australasian Meeting of the Econometric Society, Adelaide, 4-7 July 2011
Science, Technology and Industry Outlook
Outline
 Graphic representation of a country’s innovation profile
(radar chart)
 Innovation indicators and alternative indicators
 Definitional issues and data difficulties
 Strengths and weaknesses
 Profiles of key countries, including Australia
 Comparison to previous profile
Science and innovation indicators (1) (alternative indicators)
INPUTS
– Gross expenditure on R&D (GERD) as % of GDP
– Business expenditure on R&D (BERD) as % of GDP
– Venture capital as % of GDP
– Industry financed GERD as % of GDP
GERD/BERD sources: OECD, Main Science and Technology Indicators (MSTI)
Database 2010/1; data for Brazil, Chile, Estonia and India have been compiled from
national sources.
Venture capital: OECD, based on data from Thomson Financial, PwC, EVCA, National
Venture Capital Associations, and Venture Enterprise Centre. OECD, Entrepreneurship
Financing Database, 2009. Australia’s data sourced from the Australian Bureau of
Statistics. Its preferred definition of VC includes investment at the pre-seed, seed, startup and early expansion stages of development only.
Input definitions (a)
‘Gross expenditure on R&D (GERD) as a percentage of GDP’ is the main
aggregate used for international comparison of R&D expenditures. It represents a
country’s domestic R&D-related expenditure for a given year
‘Business enterprise expenditure on R&D (BERD) as a percentage of GDP’ is an
indicator of R&D activities carried out in the business sector by performing firms
and institutes, regardless of the origin of funding. Industrial R&D is most closely
linked to the creation of new products and production techniques, as well as to a
country’s innovation efforts.
‘Venture capital as a percentage of GDP’ is a measure of one important source of
funding for new technology-based firms. Venture capital plays a crucial role in
promoting the radical innovations often developed by such firms and is one of the
decisive determinants of entrepreneurship.
Alternative: Industry financed GERD as % of GDP
Input definitions (b)
The OECD defines venture capital (VC) as the sum of “seed/start-up stages” and
“early development and expansion stages”.
The coverage of VC stages within these two broad groups differs across countries
and the data may therefore not be fully comparable.
For example, “early development and expansion stages” includes:
•Australia, early expansion, late expansion and turnaround;
•Canada, other early stage, expansion and turnaround;
•Korea, initial-early stage, middle stage-early (firms 3-5 years), and middle stagelate (firms 5-7 years);
•United Kingdom, other early stage and expansion; for the United States and
Israel, early stage and expansion;
•European countries (except United Kingdom), growth and rescue/turnaround.
The OECD is currently revising its VC data and the future definition of VC is likely to
exclude turnaround, rescue and late expansion stages. Due to data availability, the
average does not include Chile, Iceland, Japan, Luxembourg, Mexico, New Zealand,
Slovak Republic, Slovenia, or Turkey.
Science and innovation indicators (2) (alternative indicators)
OUTPUTS/OUTCOMES
– Triadic patents per million population
– Scientific articles per million population
– % of firms with new-to-market innovation (% of all firms)
– % of firms undertaking non-technological innovation (% of all firms).
– Share of services in business R&D
– Triadic patents: 10-year average growth rate.
OECD Patent Database, 2010, based on EPO Worldwide Statistical Patent Database
(PATSTAT, 2010). Population data sourced from OECD, Main Science and Technology
Indicators (MSTI) Database, 2010-1. International Monetary Fund, World Economic Outlook.
Scientific articles: OECD Calculations, Scopus Custom Data, Elsevier, December 2009.
Innovation: OECD, Working Party of National Experts in Science and Technology (NESTI)
Innovation Microdata Project based on CIS-2006, June 2009, and national data.
OECD, ANBERD Database, 2009.
Output definitions (a)
‘Triadic patents per million of the population’ is an indicator of innovation outputs,
adjusted to account for the size of the country. Triadic patents are a set of patents taken at
the European Patent Office, the Japan Patent Office and the US Patent and Trademark
Office that protect the same invention.
The use of triadic patents as an indicator eliminates the problems of home advantage and influence of
geographical locations that are encountered with single-office patent indicators and thus improves the
international comparability of the data.
‘Scientific articles per million of the population’ is an indicator often used to highlight the
scientific “productivity” of countries and is an important measure of research output, since
publication is the main means of disseminating and validating research results. Article
counts are based on science and engineering articles, notes and reviews published in a
set of the world’s most influential scientific and technical journals.
Some caveats regarding this indicator should be noted—the journals have good international coverage,
although journals of regional or local importance may not be included; there is an English-language bias;
the propensity to publish differs across countries and fields of study; and incentives to publish can lead to
questions about quality.
Calculations are based on the address of the institution to which authors belong, and fractional
counts. The calculations include articles, reviews, conference papers, conference reviews and notes
sourced from journals and conference proceedings.
Output definitions (b)
‘Percentage of firms with new-to-market product innovations’ provides a measure of
innovation and novelty. Firms that first develop innovations can be considered as drivers of
the process of innovation. Many new ideas and knowledge originate from these firms, with
the full economic impact of their innovations depending on their adoption by other firms.
Innovation survey data from Canada, France, Korea and Japan were not included when calculating the
average. Data collected from national sources might not be fully compatible with the OECD Innovation
Micro data Project.
‘Percentage of firms undertaking non-technological innovation’ looks more closely at
marketing and organisational innovations, an important dimension of many firms’ innovation
activities. They are particularly relevant for service firms.
Science and innovation indicators (3) (alternative indicators)
LINKAGES
– % of firms collaborating (% of all firms)
– % patent applications with foreign co-inventors
– % of GERD financed from abroad.
– R&D expenditure of foreign affiliates as % of R&D
– Business funded R&D in higher education and government.
OECD, Working Party of National Experts in Science and Technology (NESTI) Innovation
Microdata Project based on CIS-2006, June 2009 and national data sources.
OECD, R&D Database, June 2010. OECD Patent Database, 2010.
OECD, Main Science and Technology Indicators (MSTI) Database 2010/1.
OECD, Main Science and Technology Indicators (MSTI) Database 2010/1
Linkages definitions (a)
‘Percentage of innovative firms collaborating’ aims to highlight the extent of active
participation in joint innovation projects with other organisations. Collaboration is an
important part of the innovation activities of many firms, and can involve the joint
development of new products, processes or other innovations with customers and
suppliers, as well as horizontal work with other enterprises or public research bodies.
‘Patents with foreign co-inventors’ is a measure of the internationalisation of research.
It constitutes an indicator of formal R&D co-operation and knowledge exchange between
inventors located in different countries. It highlights how institutions seek competences or
resources beyond their national borders.
Patent counts are based on the earliest priority date, the inventor's country of residence, using simple
counts. Share of patent applications to the European Patent Office (EPO) with at least one foreign coinventor in total patents invented.
‘Percentage of GERD financed by abroad’ is another measure of internationalisation.
Foreign funding of R&D is an important source of financing for many countries.
Due to data availability, the average does not include Chile, Greece, Switzerland and the United
States.
Science and innovation indicators (4) (alternative indicators)
HUMAN RESOURCES IN SCIENCE AND TECHNOLOGY (HRST)
– Researchers per thousand employment
– Science and engineering degrees as % of all new degrees
– HRST occupations as % of total employment
– Educational attainment % population aged 25-64 with tertiary degree
– Tertiary level graduates % in total employment.
Researchers: OECD, Main Science and Technology Indicators (MSTI) Database 2010/1,
data for Brazil, Chile, Estonia and India have been compiled from national sources.
S&E degrees: OECD, Education Database 2009, UNESCO Institute for Statistics and China
Statistical Yearbook.
HRST: OECD, Science and Technology and Industry Scoreboard 2009. OECD calculations,
based on data from the EU Labour Force Survey; US Current Population Survey; Australian,
Canadian, Japanese and New Zealander labour force surveys, as well as Korean Economically
Active Population Survey.
Education: OECD, Educational Attainment database, 2009.OECD, Education Database 2010.
HRST definitions
‘Researchers per thousand of total employment’ measures one of the central human
resource elements of the research and development system. Researchers are
professionals engaged in the conception and creation of new knowledge, products,
processes, methods and systems and are directly involved in the management of projects.
‘Science and engineering degrees as a percentage of all new degrees’ is an indicator of
a country’s potential for assimilating, developing and diffusing advanced knowledge and
supplying the labour market with human resources that possess critical skills for research
and development.
‘HRST occupations as a percentage of total employment’ is an indicator of the extent
of innovation-related skills in the workforce. This category of workers corresponds to
professionals and technicians as defined in the International Standard Classification of
Occupations (ISCO-88).
Radar chart methodology
To construct the radar graphs, the raw data for each indicator is transformed into an index,
The OECD country with the maximum value of the indicator taking an index value of 100
and the other countries taking proportional values below this.
For example, for the indicator on GERD as a percentage of GDP, Israel was the country
with the highest value (4.86%), but based on the data and the time of writing, was not yet
an OECD country. Sweden had the highest OECD value (3.75%), and therefore took the
index value of 100. Following the transformation of the raw data into indices, an OECD
average for each indicator was obtained where possible.
This allows the construction of an average value for each indicator (the dotted line in the
radar graphs) against which individual country results were plotted (the solid line in the
radar graphs)
In some cases, OECD countries were excluded from the average due to data comparability
(e.g. when the data only represented a particular sector).
Also, in some cases, it was not possible to construct an “OECD average” because the data
were unavailable, e.g. not all countries run an innovation survey, so an arithmetic ‘average’
was constructed with available data.
In some instances of data unavailability, alternative indicators were used, if considered a suitable
replacement.

THE NETHERLANDS: Science and innovation profile shows strong outcomes and sound linkages
despite weak input indicators. The Netherlands has one of the strongest patent intensities of all
OECD countries.
HRST
Netherlands
Inputs
Average
GERD as % of GDP
HRST occupations as % of total
employment
Science & Engineering degrees as % of all
new degrees
Researchers per thousand total
employment
% of GERD financed by abroad
Patents with foreign co-inventors
Linkages
% of firms collaborating (as a % of all firms)
BERD as % of GDP
Venture capital as % GDP
Triadic patents per million population
Scientific articles per million population
% of firms with new-to-market product
innovations (as a % of all firms)
% of firms undertaking non-technological
innovation (as a % of all firms)
Outputs

SWEDEN: Sweden’s science and innovation profile is one of the strongest in the OECD.
Sweden
Average
GERD as % of GDP
HRST occupations as % of total
employment
Science & Engineering degrees as % of all
new degrees
Researchers per thousand total
employment
% of GERD financed by abroad
Patents with foreign co-inventors
% of firms collaborating (as a % of all firms)
BERD as % of GDP
Venture capital as % GDP
Triadic patents per million population
Scientific articles per million population
% of firms with new-to-market product
innovations (as a % of all firms)
Share of services in business R&D

DENMARK: “a modern open market economy featuring a high-technology agricultural sector and a
sophisticated manufacturing industry, with world leaders in pharmaceuticals, maritime shipping and
renewable energy”.
Denmark
Average
GERD as % of GDP
HRST occupations as % of total
employment
Science & Engineering degrees as % of all
new degrees
Researchers per thousand total
employment
% of GERD financed by abroad
Patents with foreign co-inventors
% of firms collaborating (as a % of all firms)
BERD as % of GDP
Venture capital as % GDP
Triadic patents per million population
Scientific articles per million population
% of firms with new-to-market product
innovations (as a % of all firms)
% of firms undertaking non-technological
innovation (as a % of all firms)

FINLAND: “Collaboration with other countries is at a high level, and a large proportion of the labour
force has a tertiary qualification. Venture capital intensity is well above average and the government’s
R&D budget is large”.
Finland
Average
GERD as % of GDP
HRST occupations as % of total
employment
Science & Engineering degrees as % of all
new degrees
Researchers per thousand total
employment
% of GERD financed by abroad
Patents with foreign co-inventors
% of firms collaborating (as a % of all firms)
BERD as % of GDP
Venture capital as % GDP
Triadic patents per million population
Scientific articles per million population
% of firms with new-to-market product
innovations (as a % of all firms)
% of firms undertaking non-technological
innovation (as % of all firms)

UNITED STATES: “US firms are at or near the forefront of technological advances
in a number of areas and the country has quite a strong science and innovation
profile”.
United States
Average
GERD as % of GDP
HRST occupations as % of total
employment
Science & Engineering degrees as % of all
new degrees
BERD as % of GDP
Venture capital as % GDP
Researchers per thousand total
employment
R&D expenditure of foreign affiliates as %
R&D expenditure
Patents with foreign co-inventors
Business funded R&D in the HE and GOV
sectors
Triadic patents per million population
Scientific articles per million population
AAGR patents
Share of services in business R&D

UNITED KINGDOM: “The United Kingdom performs strongly on a range of science
and innovation indicators”.
United Kingdom
Average
GERD as % of GDP
HRST occupations as % of total
employment
Science & Engineering degrees as % of all
new degrees
Researchers per thousand total
employment
% of GERD financed by abroad
Patents with foreign co-inventors
% of firms collaborating (as a % of all firms)
BERD as % of GDP
Venture capital as % GDP
Triadic patents per million population
Scientific articles per million population
% of firms with new-to-market product
innovations (as a % of all firms)
% of firms undertaking non-technological
innovation (as a % of all firms)

JAPAN: “Japan has a technologically advanced economy, with close and interlocking structures of
manufacturers, suppliers and distributors”.
Japan
Average
GERD as % of GDP
HRST occupations as % of total
employment
Science & Engineering degrees as % of all
new degrees
Researchers per thousand total
employment
% of GERD financed by abroad
Patents with foreign co-inventors
% of firms collaborating (as a % of all firms)
BERD as % of GDP
Industry financed GERD as % GDP
Triadic patents per million population
Scientific articles per million population
% of firms with new-to-market product
innovations (as a % of all firms)
% of firms undertaking non-technological
innovation (as a % of all firms)

GERMANY: “Science and technology occupations are well represented in total employment, and
medium and high-technology manufacturing exports have been robust for a number of years”.
Germany
Average
GERD as % of GDP
HRST occupations as % of total
employment
Science & Engineering degrees as % of all
new degrees
Researchers per thousand total
employment
% of GERD financed by abroad
Patents with foreign co-inventors
% of firms collaborating (as a % of all firms)
BERD as % of GDP
Venture capital as % GDP
Triadic patents per million population
Scientific articles per million population
% of firms with new-to-market product
innovations (as a % of all firms)
% of firms undertaking non-technological
innovation (as a % of all firms)

FRANCE: “France demonstrates solid science and innovation performance in a number of areas,
such as human resources in science and technology”.
France
Average
GERD as % of GDP
HRST occupations as % of total
employment
Science & Engineering degrees as % of all
new degrees
Researchers per thousand total
employment
% of GERD financed by abroad
Patents with foreign co-inventors
% of firms collaborating (as a % of all firms)
BERD as % of GDP
Venture capital as % GDP
Triadic patents per million population
Scientific articles per million population
% of firms with new-to-market product
innovations (as a % of all firms)
% of firms undertaking non-technological
innovation (as a % of all firms)

ITALY: “Policy challenges include the development of human capital and business innovation. Other
measures that could boost Italy’s innovation performance include better exchange and co-operation
between public and private sector research and better co-operation among regions”.
Italy
Average
GERD as % of GDP
HRST occupations as % of total
employment
Science & Engineering degrees as % of all
new degrees
Researchers per thousand total
employment
% of GERD financed by abroad
Patents with foreign co-inventors
% of firms collaborating (as a % of all firms)
BERD as % of GDP
Venture capital as % GDP
Triadic patents per million population
Scientific articles per million population
% of firms with new-to-market product
innovations (as a % of all firms)
% of firms undertaking non-technological
innovation (as a % of all firms)

BRAZIL: “Brazil’s economy is characterised by large and well-developed agricultural, mining,
manufacturing and services sectors”.
Brazil
Average
GERD as % of GDP
% of population aged 25-64 with tertiary
degree
Science & Engineering degrees as % of all
new degrees
Researchers per thousand total
employment
Patents with foreign co-inventors
% of firms collaborating (as a % of all firms)
BERD as % of GDP
Triadic patents per million population
Scientific articles per million population
% of firms with new-to-market product
innovations (as a % of all firms)
% of firms undertaking non-technological
innovation (as a % of all firms)

RUSSIA: “ … reliance on commodity exports makes Russia vulnerable to boom and bust cycles and
also affects the focus of R&D and innovation policy. The Russian science and innovation profile
demonstrates areas of strong performance, but also areas for future development”.
Russian Federation
Average
GERD as % of GDP
% of population aged 25-64 with tertiary
degree
Science & Engineering degrees as % of all
new degrees
Researchers per thousand total
employment
% of GERD financed by abroad
Patents with foreign co-inventors
Business funded R&D in the HE & GOV
sectors
BERD as % of GDP
Industry financed GERD as % GDP
Triadic patents per million population
Scientific articles per million population
% of firms with new-to-market product
innovations (as a % of all firms)
% of firms undertaking non-technological
innovation (as a % of all firms)

CHINA: “Over the past three decades China's economy has moved from being largely closed to
becoming a major global player. Its innovation system has undergone considerable change and its
innovation performance has improved noticeably”.
China
Average
GERD as % of GDP
% of population aged 25-64 with tertiary
degree
BERD as % of GDP
Science & Engineering degrees as % of all
new degrees
Industry financed GERD as % GDP
Researchers per thousand total
employment
Triadic patents per million population
% of GERD financed by abroad
Scientific articles per million population
% of firms with new-to-market product
innovations (as a % of all firms)
Patents with foreign co-inventors
% of firms collaborating (as a % of all firms)

CANADA: “Canada has a unique innovation landscape and its science and innovation
profile displays notable strengths”.
Canada
Average
GERD as % of GDP
HRST occupations as % of total
employment
Science & Engineering degrees as % of all
new degrees
Researchers per thousand total
employment
% of GERD financed by abroad
Patents with foreign co-inventors
% of firms collaborating (as a % of all firms)
BERD as % of GDP
Venture capital as % GDP
Triadic patents per million population
Scientific articles per million population
% of firms with new-to-market product
innovations (as a % of all firms)
Share of services in business R&D

AUSTRALIA in STI Outlook 2008: Below the OECD average in 8 out of 13 indicators.

AUSTRALIA: Improved to below average in 6 out of 13 indicators. Performance improved in new-to-market
innovation, but slipped on non-tech innovation and collaboration. Performance improved on HRST, with more
science and engineering degrees, and remains solid in HRST employment.
Australia
Average
1.97% of GDP (OECD=2.33%)
GERD as % of GDP
HRST occupations as % of total
employment
35.8% (OECD = 27.8%)
BERD as % of GDP
1.2% of GDP (OECD=1.63%)
Science & Engineering degrees as % of all
new degrees
Venture capital as % GDP
20.4% (OECD = 20.9%)
0.13% of GDP (OECD=0.1%)
Researchers per thousand total
employment
Triadic patents per million population
8.48 (OECD = 7.6)
14.6 (OECD = 40.2)
% of GERD financed by abroad
Scientific articles per million population
2.4% (OECD = 5.4%)
1448 (OECD = 777)
Patents with foreign co-inventors
15.6% (OECD = 7.78%)
% of firms collaborating (as % of all firms)
12% (OECD = 9.7%)
% of firms with new-to-market product
innovations (as % of all firms) 9.6% (OECD = 13.6%)
% of firms undertaking non-technological
innovation (as % of all firms)
43% (OECD = 48.03%)
Concluding remarks
 Australia’s profile has improved.
 Strong inputs, but weaker outputs, linkages and overall innovation performance
 Sometimes strong innovation performances, despite average and below average inputs.
 Innovation profiles often reflect actual economic performances in a country.
 Some notable trends:
 Emergence of BRIICS countries: e.g. China comprise 13% of OECD GERD
 Strong growth in environmental technologies (PCT applications)
 On policy front, there is a ‘greening’ of research
 Health and quality of life are high on policy agendas.
 Strong focus on science and engineering degrees
 Impact of the global recession: The sharp falls of GDP in many countries may change
the shapes of many of the radar charts and adjustments may be necessary to correct GDP
ratios.
 More research is required to determine transmission mechanisms of innovation through to
GDP and GDP per capita that could provide clearer policy direction for best value/maximum
impact.
 The focus of new sources of growth are crucial going forward.
A case study in innovation & R&D: Nespresso
A case study in innovation & R&D: Nespresso
Key statistics

System Launch
Research
1970
1974
1978



Continued Expansion
1982
Research

Coffee bean – 9th century

Coffee beverage– 15th century

1970 – invented the capsule

1976 – lodged patent

1986 – launch Nespresso in
Switzerland
1986
1990
1994
1998
25% annual growth
since 1988
24 different models
9 machine partners
in over 35 countries.
2002
Continued expansion

1987 – launched internationally




1995 – system introduced in Australia
1997 – formed international partnerships
1998 – first major advertising campaign
2002 – new production facility to meet demand

2003 – new automatic machine launched after
5 years of R&D
2004 – new compact line of machines introduced


2010 – aggressive advertising in Australia
(George Clooney)
DEPARTMENT OF INNOVATION, INDUSTRY,
SCIENCE AND RESEARCH
email: [email protected]
Industry House
10 Binara Street
Canberra, ACT 2601, Australia
Telephone +61.2.6213 7267