Gross Domestic Expenditures on Research and Development (GERD)

Gross Domestic Expenditures on Research and Development (GERD)
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Detailed information for 2017

Status:

Active

Frequency:

Annual

Record number:

5198

Gross domestic expenditure on research and development (GERD) is a statistical series, constructed by adding together the intramural expenditures on research and development (R&D) as reported by the performing sectors.

Data release - January 30, 2018 (intentions); December 12, 2018 (preliminary); January 30, 2020 (final)

Description

Gross domestic expenditure is a term used by OECD Member countries, and is defined as "total intramural expenditure on R&D performed on the national territory during a given period. GERD includes R&D performed within a country and funded from abroad but excludes payments for R&D performed abroad".

GERD serves as a general indicator of R&D activity and not as a detailed inventory of R&D projects within an organization, sector, or province. It is an estimate and as such can show trends in R&D expenditures by sector and sub-sector, by province and country, from year-to-year. In this capacity, the GERD estimates are sufficiently reliable for their main use as an aggregate indicator for science policy.

Reference period: Fiscal year

Subjects

  • Government
  • Research and development
  • Science and technology

Data sources and methodology

Target population

The GERD is the aggregate of the total R&D expenditures of the performing sectors. Sectors are reviewed in terms of an international (OECD) framework for measuring R&D expenditures. There are four major sectors of R&D performance and five for funding:

- Government;
- Business enterprise;
- Higher education;
- Private non-profit organizations;
- Foreign (funding only).

The sectors for the GERD, as chosen and defined by the OECD, are based largely on existing United Nations classifications and in particular, the System for National Accounts (SNA).

Instrument design

This methodology does not apply.

Sampling

This methodology type does not apply to this statistical program.

Data sources

Data are collected from other Statistics Canada surveys and/or other sources.

Government data

In Canada the distribution of GERD amongst the government sub-sectors is published. The sub-sectors are the federal government, the provincial governments and the provincial research organizations (PRO). Currently Canada has seven PROs. They are the New Brunswick Research and Productivity Council, the "Centre de recherche industrielle du Québec (CRIQ)", the Industrial Technology Centre (Manitoba), the Saskatchewan Research Council, the Yukon Research Institute, the Nunavut Research Institute and the Aurora Research Institute (Northwest Territory).

Federal government intramural R&D expenditures are provided by the annual Federal Science Expenditure and Personnel survey. Intramural R&D expenditures represent spending on R&D performed by federal departments and agencies.

The provincial governments' intramural R&D expenditures were derived from annual provincial surveys of scientific activities until 2012. Data for the provincial government performing sector is currently modelled based on responses from the 2010 Provincial Scientific Activities Survey. However, this release includes 2013 data on R&D activities performed by the provincial government of Quebec as they conducted their own survey and provided this information to Statistics Canada. Provincial research organization data are collected through a Statistics Canada survey.

Business enterprise

The annual survey of Research and Development in Canadian Industry is the source of the business enterprise sector's R&D expenditure data. This sector is composed of all firms, organizations and institutions whose primary activity is the production of goods or services for sale to the general public at a price intended approximately to cover at least the cost of production as well as non-profit institutes serving such firms. Included are government-owned enterprises.

Higher education

An estimation model is used to populate R&D intramural expenditures for the higher education sector. This sector is composed of all universities, colleges of technology and other institutes of post-secondary education. It also includes all research institutes, experimental stations and clinics operating under the direct control of or administered by higher education establishments. Revised time-use coefficients have been applied in Statistic's Canada Higher Education Research and Development (HERD) model commencing with reference year 2012. Data from previous years for the Higher education sector are not comparable. Data for the Gross domestic expenditure on research and development (GERD) data series should be used with caution for years prior to 2012.

Private non-profit organizations

The annual survey of Research and Development in Private Non-Profit Organizations provides national R&D expenditure data for this sector. This sector comprises private or semi-private organizations which are not established primarily with the aim of making a profit.

Foreign

The foreign sector is included in the GERD only as a funding sector, since by definition the GERD includes R&D performed within a country and funded from abroad but excludes payments made abroad for R&D. Thus, funding from the foreign sector is implicitly included in the intramural expenditures of the four performing sectors.

This sector includes all international organizations (except business enterprises), including facilities and operations within the country's borders. Foreign-owned subsidiaries are not included in this sector (e.g., Ford Canada is, for the purposes for measuring R&D expenditures, a domestic organization in the Canadian business enterprise sector, even though its parent company is the Ford Motor Company of the United States).

Error detection

Editing is a process to ensure the data are acceptable, complete, consistent and correct. Data are edited to ensure internal and historical logic and consistency and analyzed for trends and validity. For example, GERD data are validated by province, by science type and by sector.

Imputation

This methodology does not apply.

Estimation

Data are received in aggregate form then categorized, checked, compiled and analysed. While GERD is a matrix of performing and funding sectors, it is based only on the intramural research and development (R&D) expenditures as reported by the performing sectors. Intramural R&D expenditures are spent within organizations performing the R&D. The R&D performing organizations indicate the source of funds, by sector, for their intramural R&D expenditures. This is an important distinction because it explains the financial sources of performers' R&D activities. In the GERD matrix, the sources of funds data are shown by funding sector. The funding sectors include all of the performing sectors and foreign sources of funds.

Quality evaluation

In order to assure the highest quality of the GERD data, Statistics Canada continually monitors the coverage of the population, to ensure that all sectors in the universe are accurately accounted for. Following the completion of the edit process, data are verified and are compared against previous years' estimates.

Disclosure control

Statistics Canada is prohibited by law from releasing any information it collects that could identify any person, business, or organization, unless consent has been given by the respondent or as permitted by the Statistics Act. Various confidentiality rules are applied to all data that are released or published to prevent the publication or disclosure of any information deemed confidential. If necessary, data are suppressed to prevent direct or residual disclosure of identifiable data.

In order to prevent any data disclosure, confidentiality analysis is done using the Statistics Canada Generalized Disclosure Control System (G-Confid). G-Confid is used for primary suppression (direct disclosure) as well as for secondary suppression (residual disclosure). Direct disclosure occurs when the value in a tabulation cell is composed of or dominated by few enterprises while residual disclosure occurs when confidential information can be derived indirectly by piecing together information from different sources or data series.

Revisions and seasonal adjustment

When any historical revisions are necessary they are reconciled with the various data sources.

Data accuracy

The GERD, like any other social or economic statistic, can only be approximately true. Different components are of different accuracy: sector estimates probably vary from 5% to 15% in accuracy. However, the GERD estimates are sufficiently reliable for their main use as an aggregate indicator for science policy.

One of the most important problems relating to GERD concerns its definition. There remains some ambiguity in defining precisely what constitutes R&D or, for example, in a continuing project, determining the precise point at which the project passes the boundary of R&D and becomes exploitation of a process or product on which it may be said that the R&D stage has been completed. This ambiguity is perhaps less serious in internal time series, where it may be expected that the year-to-year application of the definitions by the same reporting units are at least consistent.

A second difficulty arises with regards to survey design. The people best qualified to apply the R&D definitions and classifications - scientific and technical personnel engaged in the direct management of S&T activity - rarely participate in the statistical agency's data collection process. Because the data collected are concerned not with scientific and technical content, but financial and labour inputs to achieving this content, the questionnaires tend to be addressed to and completed by financial and management staff. This is a fundamental problem of all surveys addressed to large organizations, whether they are public or private.

These two problems account for the limited amount of geographic and scientific detail in the published GERD. The amount of detail presented, for example, in the Canadian GERD as published by Statistics Canada is limited by the nature of the surveys, and the other data collection and analysis instruments. Nor is it possible to increase the amount of detail because this would require switching to new kinds of data collection instruments in a vastly expanded survey operation.

To summarize, the GERD serves as a general indicator of R&D activity and not as a detailed inventory of R&D projects within an organization, sector, or province. It is an estimate and as such can show trends in R&D expenditures by sector and sub-sector, by province and country, from year-to-year. In this capacity, the GERD estimates are sufficiently reliable for their main use as an aggregate indicator for science policy.

Documentation

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