Indicators for a Knowledge-Based Economy

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Indicators for a Knowledge-Based Economy
Belgrade, 2 October 2008

• The OECD perspective

Martin Schaaper OECD Directorate for Science,
Technology and Industry Economic Analysis and
Statistics Division
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(No Transcript)
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Directorate for Science, Technology and Industry
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EAS how we work
Data
Analysis
Methodology
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ST a linear model?
The model
Indicators
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A systems approach

• Innovation is dynamic and complex
• Many actors, many linkages
• Feedback and feed-forward loops
• ? innovation is non-linear

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Evidence-based policy making
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The Scoreboard an integrated view
C. Innovation policy
A. RD
B. HRST
F. Particular technologies
D. Innovation performance
E. ICT
G. Internationalisation of ST
H. Global economic flows
I. Productivity and trade
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A. Research and Development

• First edition published in 1963!
• Sixth edition published in 2002
• Data also collected since 1963

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Highlights of the 5th Frascati Manual revision

• Improved methodological guidelines
• Update various classifications
• RD in service sectors
• Human resources for RD
• Survey methods business enterprise sector
• GBAORD
• Globalisation and links to SNA (capitalisation of
  RD!)
• Annexes on health, ICT and biotechnology

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Definition of RD

• Research and experimental development (RD)
  comprise creative work undertaken on a systematic
  basis in order to increase the stock of
  knowledge, including knowledge of man, culture
  and society, and the use of this stock of
  knowledge to devise new applications.

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Exclusions from RD

• Education and training
• Other science and technology activities
• Other industrial activities
• Administration and other supporting activities

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Intramural RD expenditure

• By sector of performance (BES, HE, GOV, PNP)
• By source of funds (same plus abroad)
• By type of activity (BR, AR, ED)
• By type of cost (current and capital)
• By field of science (nat sc, eng techn, med sc,
  agri sc, soc sc, hum)
• By socio-economic objective ( NABS)

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Business Expenditure on RD

• BERD by industry (NACE/ISIC)
• Main activity
• Product field
• ISIC 73
• BERD by size-class

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Government Budget Appropriations or Outlays for
RD (GBAORD)

1. Exploration and exploitation of the earth
2. Environment
3. Exploration and exploitation of space
4. Transport, telecommunication and other
   infrastructures
5. Energy
6. Industrial production and technology
7. Health
8. Agriculture
9. Education
10. Culture, recreation religion and mass media
11. Political and social systems, structures and
    processes
12. General advancement of knowledge GUF
13. General advancement of knowledge non-GUF
14. Defence

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RD Personnel

• In headcounts and full-time equivalents
• By sector of employment
• By occupation (researchers, technicians, oss)
• By qualification (ISCED)
• By field of science
• By industry
• By sex
• By age-group

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RD intensity, 2005
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RD intensity in non-OECD countries, 2005
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Annual average growth rate of GERD, 2000-05
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RD expenditure by sector of performance, 2005
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B. Human Resources for Science and Technology
(HRST)

• The Measurement of Human Resources Devoted to
  Science and Technology Canberra Manual (1995)
• The CM is part of the Frascati family
• Careers of Doctorate Holders (CDH)

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Dimensions of HRST

• Skills
• Qualifications
• Mobility

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Definition of HRST(Canberra Manual)

• HRST are people who fulfil one or other of the
  following conditions
• a) successfully completed education at the third
  level in an ST field of study
• b) not formally qualified as above, but employed
  in a ST occupation where the above
  qualifications are normally required.

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Definition of HRST (cont.)

• Education
• ISCED Level 5- First stage of tertiary education
  (not leading directly to an advanced research
  qualification)
• ISCED 5A theoretically based/research
  preparatory or giving access to professions with
  high skills requirements
• ISCED 5B practical/technical/occupationally
  specific
• ISCED Level 6- Second stage of tertiary education
  (leading to an advanced research qualification)

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Definition of HRST (cont.)

• Occupation
• A subset of ISCO Major Group 1 Legislators,
  senior officials and managersUsually ignored!
• ISCO Major Group 2 Professionals
• ISCO Major Group 3 Technicians And Associate
  Professionals

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HRST according to the CM
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Fields of study

• Natural sciences
• Engineering and technology
• Medical sciences
• Agricultural sciences
• Social sciences
• Humanities
• Other fields

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National stocks and flows of HRST
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International mobility of HRST

• Definitions
• Place of birth vs. citizenship
• Measurement problems
• Migration and qualification
• Data often not comparable between countries
• Migration outflows
• Relevant for many non-OECD countries
• Very little detailed information

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Sources for HRST

• Education databases
• Labour force surveys
• Population registers
• Censuses
• National administrative systems for regulating
  and monitoring immigration
• Administrative systems relating to temporary
  residence or work permits for non-nationals
• Specific surveys

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Graduation rates at doctoral level, 2004 ( of
relevant age cohort)
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Science and engineering degrees, 2004 ( of
total)
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Tertiary-level graduates in total employment,
2004 (as a of total)
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Researchers per 1000 employment, 2005
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Researchers per 1000 employment in non-OECD
economies, 2005
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Educational attainment in non-OECD economies, 2004
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Students from non-OECD economies enrolled in OECD
countries, 2004
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Careers of Doctorate Holders (CDH)

• A joint OECD/Eurostat/UNESCO project launched by
  the OECD Secretariat in 2004
• An expert group of 40 countries among which the
  United States, Japan, China, India, Argentina,
  Uganda and many European countries
• A three-component package developed by the expert
  group output tabulations, methodological
  guidelines and a model survey questionnaire

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Model questionnaire

• 7 MODULES
• MODULE EDU - DOCTORAL EDUCATION
• MODULE REC - RECENT GRADUATES
• MODULE POS - POSTDOCS
• MODULE EMP - EMPLOYMENT SITUATION
• MODULE MOB - INTERNATIONAL MOBILITY
• MODULE CAR - CAREER RELATED EXPERIENCE AND
  SCIENTIFIC PRODUCTIVITY
• MODULE PER - PERSONAL CHARACTERISTICS

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Output tabulations
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Methodological guidelines

• 1. Introduction
• 2. Purpose of statistics on CDH
• 3. The target population
• 4. Survey methodology
• 5. Collecting and processing of data
• 6. Estimation of results and data quality
• 7. Data transmission

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CDH data collection

• First collection in 2005 for 7 countries
• Second collection launched mid-November 2007
• Data received for 22 countries 20 European
  countries Australia US
• Data for Canada, Croatia and Malta still pending
  new version of Australian data based on the 2006
  census to be included two data series for Italy
• Other Japan? Non-OECD countries?

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Data sources, coverage, limitations

• 4 types of data sources used
• Dedicated CDH surveys (census or sample)
• Register data (Nordic countries)
• Other established surveys (census and LFS)
• A combination of the above
• Higher response rates for CDH sample surveys (gt
  50) than for census surveys
• Good coverage of the target population
• some difficulties with coverage of foreign
  doctorate holders

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Sex-breakdown of doctorate holders
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Active DH as a of total labour force
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Citizenship and residential status of
foreign-born DH
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DH having received their doctorate abroad
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Ten top countries of previous residence of
national DH having lived abroad
Austria Belgium Czech Republic Denmark Iceland Slovakia Spain Sweden
1 US US Germany US US US US US
2 Germany France US UK Sweden Germany UK Denmark
3 UK UK UK Germany Belgium Czech Rep. France China
4 France Netherlands France Australia Denmark France Germany UK
5 Italy Germany Austria Sweden Germany Austria Italy Iran
6 Belgium Canada Canada Canada Norway Belgium Netherlands Norway
7 Switzerland Italy Italy France Canada Japan Portugal Poland
8 Australia Switzerland Switzerland Italy Argentina UK Canada Germany
9 Netherlands Spain Netherlands Norway Austria Canada Belgium Finland
10 Spain Japan Belgium Netherlands Australia Italy Mexico Russia
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CDH conclusions

• The first results of the 2005 CDH data collection
  give interesting insights on the situation of
  doctorate holders in five countries
• Progress in the measurement of international
  mobility by cross-classifying place of birth and
  citizenship with residential status, length of
  stay in the country and other variables

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CDH conclusions (cont.)

• Important value added by introducing the
  collection of more qualitative information on the
  perception and plans of doctoral graduates
  regarding their employment and international
  mobility
• Such qualitative indicators are extremely useful
  to help understanding the complex patterns of
  international mobility that cannot only be gauged
  through quantitative data because of the
  heterogeneity of migration systems across
  countries

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International conference on the Careers and
Mobility of Doctorate Holders

• 1st December in Brussels
• Joint OECD/UIS/Eurostat event with support of EC
  DG Research
• The conference will serve as a forum to diffuse
  and discuss the results with interested
  stakeholders, academics and policy makers

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International conference on the Careers and
Mobility of Doctorate Holders

• Programme is under discussion, list of topics
• Doctoral and research training
• Human resources in research
• The labour market of doctorate holders
• The international mobility of doctorate holders

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C. Innovation policy

• Public-private cross-funding of RD
• Government RD budgets
• Tax treatment of RD
• Patenting by universities and government
• Collaboration with public research organisations
  by innovating firms
• Science linkages in technology
• Entrepreneurship

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Defence and civil RD budgets (GBAORD), 2006, as
a of GDP
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Rate of tax subsidies for USD 1 of RD, 2007 ()
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D. Innovation performance

• Patents
• Bibliometrics
• Innovation

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Patents

• Indicators of invention
• Administrative data containing much information
• Data widely available, e.g. in PATSTAT (EPO)
• Drawbacks
• Not all inventions are patented
• Value distribution skewed

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Patent Statistics Task Force

• OECD
• Eurostat
• European Patent Office (EPO)
• Japan Patent Office (JPO)
• US National Science Foundation (NSF)
• US Patent and Trademark Office (USPTO)
• World Intellectual Property Organization (WIPO)

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The Patent Manual 2008

• Part of the Frascati family
• Major revision of the 1994 Manual
• Provides background information to understand the
  patent process
• Proposes standards for compiling indicators

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Contents of the Patent Manual

1. Introduction
2. Patents as statistical indicators of ST
3. Patent systems and procedures
4. Counting patents for conducting international
   comparison
5. Technical and economic classifications of patents
6. The use and analysis of citations
7. Indicators of internationalisation
8. Indicators of patent value

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Recent work

• Regional patents
• Standardising patent holders names
• Trademarks

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Trends in triadic patent families
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Triadic patent families per million population,
2005
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Any questions?
Or is it already time for the coffee break?
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Innovation the Oslo Manual

• Jointly with the EC
• Part of the Frascati family
• Used for CIS and national innovation surveys
• 1st edition 1992
• 2nd edition 1997 ? coverage expanded to services
• 3rd edition 2005 ? including non-technological
  innovation

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Innovation definition

• An innovation is the implementation of a new or
  significantly improved product (good or service),
  or process, a new marketing method, or a new
  organisational method in business practices,
  workplace organisation or external relations

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The innovationmeasurement framework
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Innovation main concepts
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Technological innovation

• A product innovation is the introduction of a
  good or service that is new or significantly
  improved with respect to its characteristics or
  intended uses. This includes significant
  improvements in technical specifications,
  components and materials, incorporated software,
  user friendliness or other functional
  characteristics.
• A process innovation is the implementation of a
  new or significantly improved production or
  delivery method. This includes significant
  changes in techniques, equipment and/or software.

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Non-technological innovation

• A marketing innovation is the implementation of a
  new marketing method involving significant
  changes in product design or packaging, product
  placement, product promotion or pricing
• An organisational innovation is the
  implementation of a new organisational method in
  the firms business practices, workplace
  organisation or external relations

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More definitions (1)

• Innovation activities are all scientific,
  technological, organisational, financial and
  commercial steps which actually, or are intended
  to, lead to the implementation of innovations.
  Some innovation activities are themselves
  innovative, others are not novel activities but
  are necessary for the implementation of
  innovations. Innovation activities also include
  RD that is not directly related to the
  development of a specific innovation.

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More definitions (2)

• An innovative firm is one that has implemented an
  innovation during the period under review.
• A product-process innovative firm is one that has
  implemented a new or significantly improved
  product or process during the period under
  review.

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More definitions (3)

• Type of innovation successful, unsuccessful,
  ongoing
• Degree of novelty technologically new /
  significantly improved/disruptive
• Approach subject vs. object
• Degree of novelty technologically new /
  significantly improved
• Focus business enterprise sector

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Innovation activities for product and process
innovations

• Intramural (in-house) RD
• Acquisition of RD (extramural RD)
• Acquisition of other external knowledge
• Acquisition of machinery, equipment and other
  capital goods
• Other preparations for product and process
  innovations
• Market preparations for product innovations
• Training

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Innovation data

• Objectives of innovation
• Factors assisting/hampering innovation
• Expenditure on innovation
• Impacts and outcomes
• Linkages

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In-house product innovators by size (as a of
all firms), 2002-04
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In-house process innovators by sector (as a of
all firms), 2002-04
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Share of turnover due to new-to-market product
innovations by size (as a of turnover), 2002-04
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Non-technological innovators by sector (as a
of all firms), 2002-04
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E. ICT

• OECD Guide to Measuring the Information Society
• OECD definition of the ICT sector
• OECD classification of ICT products
• Model survey of ICT use in households and by
  individuals
• Model survey of ICT use by businesses
• OECD definitions of Internet and e-commerce
  transactions
• Impacts
• Annex for developing countries

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Households with broadband access, 2000-06 ()
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Individuals using the Internet from any location,
2006 ()
83
Broadband penetration by size class, 2006. As a
of businesses with 10 or more employees
84
Percentage of enterprises' total turnover from
e-commerce, 2003-06 ()
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Trade in ICT goods as a of total trade
86
Business RD expenditure by selected ICT
manufacturing industries, as a of GDP
87
F. Particular technologies

• Biotechnology
• Nanotechnology
• Environmental science

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Biotechnology

• A series of ad-hoc meetings of a NESTI spin-off
  group
• A framework for biotechnology statistics (2005)
• Definitions
• Model survey of biotechnology use and development
  
• Classifications
• OECD biotechnology statistics - 2006

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The single definition of biotechnology

• The application of science and technology to
  living organisms, as well as parts, products and
  models thereof, to alter living or non-living
  materials for the production of knowledge, goods
  and services.

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The list-based definition of biotechnology
technoques

• DNA/RNA Genomics, pharmacogenomics, gene probes,
  genetic engineering, DNA/RNA sequencing/
  synthesis/amplification, gene expression
  profiling, and use of antisense technology.
• Proteins and other molecules Sequencing/synthesis
  /engineering of proteins and peptides (including
  large molecule hormones) improved delivery
  methods for large molecule drugs proteomics,
  protein isolation and purification, signaling,
  identification of cell receptors.
• Cell and tissue culture and engineering
  Cell/tissue culture, tissue engineering
  (including tissue scaffolds and biomedical
  engineering), cellular fusion, vaccine/immune
  stimulants, embryo manipulation.
• Process biotechnology techniques Fermentation
  using bioreactors, bioprocessing, bioleaching,
  biopulping, biobleaching, biodesulphurisation,
  bioremediation, biofiltration and
  phytoremediation.
• Gene and RNA vectors Gene therapy, viral
  vectors.
• Bioinformatics Construction of databases on
  genomes, protein sequences modelling complex
  biological processes, including systems biology.
• Nanobiotechnology Applies the tools and
  processes of nano/microfabrication to build
  devices for studying biosystems and applications
  in drug delivery, diagnostics, etc.

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Other relevant definitions

• Biotechnology product
• Biotechnology process
• Biotechnology active firm (enterprise)
• Dedicated biotechnology firm
• Innovative biotechnology firm
• Biotechnology RD
• Biotechnology sales/revenue
• Biotechnology expenses

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Biotechnology statistics indicators

• Biotechnology products and processes
• Biotechnology RD
• Biotechnology firms by type (dedicated,
  innovative)
• Biotechnology sales/revenue
• Biotechnology expenses
• Biotechnology employment
• Biotechnology patents

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Recommended biotechnology RD question

• Did the RD reported above include any
  biotechnology RD (see definitions)? Yes /
  No
• If yes, please provide an estimate of the share
  of the total intramural RD expenditure reported
  earlier that is attributable to biotechnology.
  ________

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Number of firms active in biotechnology, 2003
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Total expenditures on biotechnology RD by
biotech-active firms, millions of USD PPP
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Biotechnology patents as a of national total
(PCT filings), 2002-04
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G. Internationalisation of ST

• Foreign ownership of domestic inventions
• Domestic ownership of inventions made abroad
• International co-operation in research
• Sources of RD funding from abroad
• International collaboration in science
• Internationalisation of RD
• Foreign collaboration on innovation

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Data sources

• Patents
• RD data
• Publications (SCI)
• FATS and AFA
• CIS

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Foreign ownership of domestic inventions, 2001-03
()
100
Domestic ownership of inventions made abroad,
2001-03 ()
101
Patents with foreign co-inventors, 2001-03 ()
102
Funds from abroad, as a of business enterprise
RD, 2005
103
Firms with foreign co-operation in innovation,
2002-04 ()
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H. Global economic flows

• International trade
• FDI
• Foreign affiliates statistics
• Technology balance of payments

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Methodology

• Measuring Globalisation OECD Handbook on
  Economic Globalisation Indicators (2005)
• Technology Balance of Payments Manual (1990)
• Part of the Frascati family
• Now included in the Handbook on Economic
  Globalisation Indicators (Ch. 4.4)

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TBP categories

• Technology transfers
• Patents
• Unpatented inventions
• Licences (linked to know-how)
• Know-how
• Transfers of designs (sales, licences,
  franchises), trademarks and patterns
• Provision of technical services, comprising
• Technical and engineering studies (project design
  and implementation)
• Technical assistance
• Provision of industrial RD (performed abroad or
  financed from abroad)

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TBP data

• Technology receipts and payments for the whole of
  the economy and also broken down by industrial
  sector (ISIC Revision 3) and by country and
  geographical area
• Technology receipts and payments of
  foreign-controlled affiliates, broken down by
  manufacturing sector
• Technology receipts and payments for the whole
  economy, broken down by sector according to the
  main categories of transaction
• Receipts and payments of foreign-controlled
  affiliates in services separately (sectoral
  breakdown)

108
Technology balance of payments as a of GDP,
2005
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I. Productivity and trade

• Income and productivity
• OECD Manual on Measuring Productivity (2001)
• Technology- and knowledge-intensive industries
• Measuring Globalisation OECD Handbook on
  Economic Globalisation Indicators (2005)
• Revision of the High-Technology Sector and
  Product Classification (OECD, STI Working Paper
  1997/2 T. Hatzichronologou)

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Technology classification (1)

• Originally based on (STI WP 1997/2)
• RD expenditures divided by value added
• RD expenditures divided by production
• RD expenditures plus technology embodied in
  intermediate and investment goods divided by
  production

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Technology classification (2)

• For data availability reasons currently based on
  (Handbook on Economic Globalisation Indicators )
• RD expenditures divided by value added 1991-1999
• RD expenditures divided by production 1991-1999

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High-technologymanufacturing industries
ISIC Industry
353 Aerospace
2423 Pharmaceuticals
30 Computers, office equipment
32 Electronics-communication
33 Precision instruments
113
Medium-high-technology manufacturing industries
ISIC Industry
31 Electrical machinery
34 Motor vehicles
24-2423 Chemicals (except pharmaceuticals)
352359 Other transport equipment
29 Machinery and equipment
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Medium-low-technology manufacturing industries
ISIC Industry
23 Petroleum refining
25 Rubber and plastics
26 Non-metallic mineral products
351 Shipbuilding
27 Basic metals
28 Fabricated metal products (except machinery and equipment)
115
Low-technologymanufacturing industries
ISIC Industry
36-37 Other manufacturing industry
20 Wood and furniture
21-22 Paper and printing
17-19 Textiles, clothing, leather
116
Knowledge-intensive services
ISIC Industry
64 Post and telecommunications
65-67 Financial intermediation and insurance activities
71-74 Business services (except real estate)
117
Share of total gross value added, 2004, High- and
medium-high-technology manufactures
118
Share of total gross value added, 2004,
Knowledge-intensive market services
119
Growth of high- and medium-high technology
exports, 1996-2005
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Links

• www.oecd.org/sti/statistical-analysis
• www.oecd.org/sti/scoreboard
  orwww.sourceoecd.org/scoreboard
• www.oecd.org/sti/cdh
• www.oecd.org/sti/ipr-statistics
• www.oecd.org/sti/measuring-infoeconomy
• www.oecd.org/sti/measuring-globalisation

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Manuals (1)

• Frascati Manual http//213.253.134.43/oecd/pdfs/b
  rowseit/9202081E.PDF
• Oslo Manual http//213.253.134.43/oecd/pdfs/brows
  eit/9205111E.PDF
• Canberra Manual http//www.oecd.org/dataoecd/34/0
  /2096025.pdf
• Patent Manual (forthcoming) http//www.oecd.org/d
  ocument/10/0,3343,en_2649_34451_1901066_1_1_1_1,00
  .html

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Manuals (2)

• OECD Guide to Measuring the Information Society
• www.oecd.org/sti/measuring-infoeconomy/guide
• Biotechnology framework http//www.oecd.org/datao
  ecd/5/48/34935605.pdf
• Technology Balance of Payments Manual
  http//www.oecd.org/dataoecd/35/13/2347115.pdf
• Handbook on Economic Globalisation Indicators
  (for sale) http//www.oecd.org/document/44/0,3343,
  en_2649_34443_34957420_1_1_1_1,00.html

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THANK YOU!

• martin.schaaper_at_oecd.org