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No. 158, 03.12.2010
Economic crisis raised the research and development intensity to the
record level
According to Statistics Estonia, in 2009 the ratio of research and development (R&D)
expenditures to the gross domestic product (called the intensity of the R&D) reached
unprecedented level of 1.42% despite the actual decrease of those expenditures.
The statistical somersault was enabled by the economic crisis causing the 16% falloff of the
gross domestic product (GDP) in 2009 compared to 2008. The expenditure on R&D decreased
from 3.26 billion kroons in 2008 to 3.09 kroons in 2009 or only by 5%. As a result the R&D
intensity was lifted from 1.29% to 1.42%. For comparison: in 2008 this indicator equalled 3.73%
in Finland, 1.43% in Ireland, 1.35% in Spain and 1.03% in Russia, EU mean reaching 1.90%.
At large the units performing R&D are divided into two groups: non-profit institutional sectors
(higher education, government and private non-profit sectors) and business enterprise sector.
Analysing details of data it became apparent, that under the shadow of the expenditure
decrease truly certain rise took place, as the decrease was brought about by saving and cutting
of the labour costs.
Compared to 2008, in non-profit institutional sectors the number of R&D personnel increased
from 6,598 to 6,782 and the working time spent on R&D from 3,241 man-years to 3,507. At the
same time the labour costs remained almost on the same level implying 6% fall of those costs
per working year. That fall was even higher than 5% decrease measured for the whole Estonia.
As a total the expenditure in those sectors slumped by 140 million kroons evenly at the expense
of current expenses and investments.
The R&D expenditure in business enterprise sector remained practically at the level of 2008. A
couple of circumstances can explain that. Firstly, 75% of the R&D expenditure can be attributed
to only 58 enterprises (the total number of enterprises declaring such expenditures was limited to
a few hundreds). Mostly the main activity of mentioned 58 belonged to the list of activities of
high-tech manufacturing or knowledge intensive services less affected by economic crisis.
Secondly, quite some enterprises remembered the words of wisdom declaring that the
innovativeness (including product development) is the best remedy to deal with economic
recession.
There was also a rise in the business enterprise sector in the number of R&D personnel (from
3,023 to 3,122) and in man-years devoted to R&D (from 1,845 to 1,924). Unlike from non-profit
sectors the labour costs per working year even grew by 2%.
Trends in R&D
Year
2000
2004
2008
2009
R&D expenditure ratio The share of R&D personnel
to GDP, %
among employed persons, %
0.60
0.11
0.85
0.13
1.29
0.15
1.42
0.17
R&D expenditure per working
year, thousand kroons
156
273
640
569
No substantial changes happened in the structure of R&D financing: still half of the expenditure
is financed by government, two fifths by enterprises and one tenth by foreign sources.
Nevertheless the government financing decreased in 2009 compared to 2008 by 7% descending
to 1.5 billion kroons and that of enterprises 8% to 1.2 billion kroons level. Hereby is important to
mention that the European Union funds mediated by state budget are counted as government
sourced.
For further information:
Aavo Heinlo
Principal Analyst
Annual Statistics of Entrepreneurship Service
Statistics Estonia
Tel +372 625 9217
More detailed data have been published in the
Statistical Database (R&D in business enterprise
sector http://www.stat.ee/sdbupdate?db_update_id=6273 and general data R&D
http://www.stat.ee/sdb-update?db_update_id=6274).