Survey background
The Research and Development Survey 2006 (R&D Survey 2006) was run by Statistics New Zealand jointly with the Ministry of Research, Science and Technology (MoRST).
The R&D Survey measures the level of research and development activity, employment and expenditure by business sector enterprises, government departments, government-owned trading entities, and universities. The R&D Survey is carried out biennially by Statistics New Zealand. Results from surveys prior to 2002 have been released by MoRST.
This is the first release of data from the R&D Survey 2006. A full report will be released on the 17th September 2007
Changes to the R&D Survey 2006
After making significant changes in the R&D Survey in 2004, Statistics NZ and MoRST made only slight changes to the methodology used in the 2006 survey. These changes do not significantly affect the time series and a description of the changes can be found below in the ‘targeted population’ section.
The major change to the R&D Survey 2006 was in the university sector. Due to the fact that the financial year for universities is the year ended 31 December, there were difficulties in collecting, processing, and editing the data for the release. To improve the data quality of the university sector, the R&D Survey 2006 collected data from the universities for the financial year ended 31 December 2005 rather than 31 December 2006. This is closer to the majority of businesses financial year of 31 March and allows for greater certainty of the data. This change should be taken into account when comparing the results from the university sector between the R&D Survey 2006 and R&D Survey 2004.
Revisions were made to the 2004 university sector due to more accurate information being supplied. Revisions were made to the GDP measure which have contributed to slight revisions to the proportions of R&D to GDP.
Another change from the 2004 Hot Off The Press (HOTP) is that the ‘Scientific Research’ firms that have an ANZSIC classification of L781000 have been reclassified to the industries they predominately serve. Reclassifying these firms presents a fuller picture of which industries receive the benefits of the R&D undertaken within New Zealand. Also in accordance to international recommendations, state and local government-owned trading enterprises have been classified to the business sector. The Research and Development in New Zealand reports have historically presented industry classification in these ways.
Data collection
The R&D Survey is a postal survey consisting of four questionnaires, a business form, a government form, a Crown Research Institute (CRI) form, and a university form. These forms are specifically designed to capture data on R&D from these different organisation types.
The business, government and CRI R&D surveys were posted out in mid August 2006. Information collected included the number of personnel within an enterprise working on R&D, current and capital expenditure on R&D, expenditure by type of R&D, source of funds for R&D carried out, as well as the area of application of the R&D. Information was requested for the last financial year within the 12 months up to 30 September 2006.
The R&D Universities Survey was posted out in January 2007. Data was collected for the year ended 31 December 2005. The university questionnaire was designed to allow universities to use financial information that is generally produced for the purposes of annual reporting. This means a number of data items for universities' R&D were produced using modelled information. The New Zealand Vice-Chancellors Commission (NZVCC) and MoRST assisted Statistics NZ in the determination of these moddelling specifications. Information collected included university discretionary income, internal and external research funding, academic staff salaries, university operating expenditure by faculty, and R&D personnel data.
Target population
Enterprises (business, government and CRI) are included in the R&D Survey population if they have satisfied the following conditions:
- Economic significance (GST sales greater than $30,000) on Statistics NZ Business Frame
- Not classified to ANZSIC codes 'G', 'H', 'I' or 'N'
- Included in one of the following categories:
Category 1
Has 'Yes' as the research and development indicator which is sourced from the:
- Annual Frame Update Survey (AFUS)
- enterprises receiving Foundation for Research, Science and Technology (FRST) grants (including Technology NZ funding)
- enterprises applying for patents in the last two years
- units recording R&D activity in the 2007 Business Operations Survey or the previous two R&D Surveys (only from full coverage strata)
- units recording R&D activity in the 2007 Biotechnology Survey.
Note: Increasing the pool of firms that have an R&D indicator of ‘Yes’ has been a slight methodological change for the 2006 R&D Survey. Historically AFUS has been the sole source for this indicator. However, to better target the firms that are more likely to undertake R&D, five new sources have been added which are repeatable over time. The main purpose of this change was to increase the chances of firms who undertake R&D to be captured in the survey. Increasing the sources of the R&D indicator has not significantly changed the sample design
Category 2
Has 'No' as the research and development indicator; rolling mean employment (RME) greater or equal to 2; and is included in tiers 1 or 2 in the Statistics NZ Business Frame (tiers 1 and 2 on the Statistics NZ Business Frame include enterprises with GST turnover of greater than $200,000).
Category 3
Is included in a list of enterprises having a significant contribution to total expenditure on R&D, or to R&D funded by the enterprise but carried out by others in the R&D Survey 2004, but not satisfying the previous criteria.
Note: The exclusion of ANZSIC codes 'H' (Accommodation, Cafes and Restaurants) is due to the fact that these industries performed no R&D activity according to the results of the R&D Survey 2002. The contribution of industries 'G' (Retail Trade) and 'I' (Transport and Storage) to the total reported for the total expenditure on R&D was 0.06% and 0.03%, respectively. Such contributions were considered too small to justify their inclusion in the survey population. These were also excluded from the R&D Survey 2004. ANZSIC code 'D' (Electricity, Gas and Water Supply) was included in the R&D Survey 2006.
Sample design
The R&D Survey uses a stratified sample in its sample design. Strata were developed based on industries defined by their sector (ie business, government, higher education (universities)) and ANZSIC.
Substratum were then developed using the following variables:
- Whether an enterprise had a 'Yes' or 'No' to the R&D indicator. This indicator is captured from a range of sources as detailed above.
- The RME of the enterprise from the Statistics NZ Business Frame. This indicator is captured from tax data.
- Annual GST sales of the enterprise from the Statistics NZ Business Frame. This indicator is captured from tax data.
These substrata were sampled in three different ways. Firstly, they could be selected for full coverage, meaning that all enterprises in the substratum were selected for the survey. Secondly, they could be selected as forced full coverage, which meant that there was 100 percent coverage of firms seen as key to the survey. Thirdly, a sample selection of enterprises from the substratum could have been selected.
Sampling error
The sampling error on the total business sector R&D expenditure figure has been measured at 16.3 percent at the 95 percent confidence level. The business sector sample error is relatively high due to the large variance within sub-strata of responding firms that had an R&D indicator of 'No'. Based on responding business sector firms that had an R&D indicator of 'Yes', the sampling error for R&D expenditure is 4.4 percent.
There is no sampling error for either the government or university sectors due to the full coverage of these sectors.
The sampling error on the total R&D expenditure figure has been measured at 6.8 percent at the 95 percent confidence level. Based on the responding business sector firms that had an R&D indicator of 'Yes', the total sampling error for R&D expenditure is 1.9 percent.
Measurement errors
The R&D Survey results are subject to measurement errors. These need to be considered when analysing the results from the survey.
Measurement errors include mistakes by respondents when completing the questionnaire, variation in respondents’ interpretation of the questions asked, and errors made during the processing of the data. In addition, the survey applies imputation methodologies to cope with non-respondents and item non-response (see later in the technical notes for more information on imputation). These methods are not without error.
Statistics NZ adopts procedures to minimise these types of errors, but they may still occur and are not quantifiable.
Given the nature of the data collected, there are limitations on the level of accuracy that can be expected from the R&D Survey. Many respondents do not keep a separate account of their R&D expenditure, or they may include R&D with other scientific and technological services, such as consulting.
Response rate
The target overall response rate for the R&D Survey 2006 was 85 percent for business, government and CRIs. The survey achieved an actual response rate of 89 percent.
The target population for the R&D Survey 2006 consisted of 3,528 enterprises, plus the eight universities.
The target overall response rate for the university survey was 100 percent, which was achieved.
Analysis of results
The R&D survey results have been compared with annual reports and other indicators published by Statistics NZ. Where the survey results differed substantially, more detailed study of the data was made.
Imputation methodology
The following gives an outline of the imputation methodology used in the R&D Survey (business, government, and CRIs). No unit non-response was required for the R&D higher education (universities) survey as a 100 percent response rate was achieved.
Unit non-response
Unit (or complete) non-response occurs where units in the population do not return the questionnaire, or an invalid questionnaire is received. A weight adjustment method is used to rate up the responding firms to compensate for the non-responding firms within the same unit non-response estimation cell.
Item non-response
Item (or partial) non-response is where units return the questionnaire but fail to provide breakdowns for selected aggregates.
Item non-response imputation was applied to those breakdowns where a total could be sourced from another question. The item non-response imputation method then used the mean proportion of all responding linked units (excluding outliers) within the item non-response estimation cell, and applies these proportions to the sourced total.
Published sector and industry breakdowns
The published sector and industry breakdowns provided in this release have been created using recommendations from the OECD's Frascati Manual 2002. This is a change from the R&D 2004 Hot Off The Press which was based solely on the 1996 Australia and New Zealand Standard Industrial Classification (ANZSIC96) and New Zealand Institutional Sector 1996 codes. The classifications recommended in the Frascati Manual 2002 are very similar to ANZSIC96 and NZIC96, and using them allows for greater international comparability.
The OECD's Frascati Manual 2002 recommends that state-owned enterprises (Business Type 1996 (BT96) classification) be classified to the business sector. In addition, the Frascati Manual 2002 recommends that the industrial classification code for significant research organisations (L781) be changed to the industry they predominantly serve. The industry breakdowns have been applied using the Australian and New Zealand Standard Industrial Classification – NZ Version 1996 (ANZSIC).
Government sector (excluding universities)
The government sector excludes the eight universities, central and local government trading enterprises, and includes all enterprises with the following New Zealand Institutional Sector Classification 1996 (NZISC96) codes:
NZISC96 code – description
1311* – Central Government Enterprises
1321* – Local Government Enterprises
2111 – Central Bank
2212 – Central Government Registered Banks
2213 – Local Government Registered Banks
2222 – Central Government Other Broad Money (M3) Depository Organisations
2223 – Local Government Other Broad Money (M3) Depository Organisations
2292 – Central Government Other Depository Organisations nec
2293 – Local Government Other Depository Organisations nec
2312 – Local Government Other Financial Organisations except Insurance and Pension Funds
2313 – Local Government Other Financial Organisations except Insurance and Pension Funds
2412 – Central Government Insurance and Pension Funds
2413 – Local Government Insurance and Pension Funds
3 pt – General Government (excluding universities)
* Central and local government trading enterprises are included in business sector.
Business sector
Includes central and local government trading enterprises and all other enterprises with the following New Zealand Institutional Sector 1996 codes:
NZISC96 code – description
1311* – Central Government Enterprises
1321* – Local Government Enterprises
1111 – Private Corporate Producer Enterprises
1121 – Private Non-corporate Producer Enterprises
1211 – Producer Boards
2211 – Private Registered Banks
2221 – Private Other Broad Money (M3) Depository Organisations
2291 – Private Other Depository Organisations
2311 – Private Other Financial Organisations except Insurance and Pension Funds
2411 – Private Insurance and Pension Funds
4 – Private Non-Profit Organisations Serving Households
* Central and local government trading enterprises are included in business sector
Universities
The university sector includes the eight New Zealand universities which are members of NZVCC. These are classified to NZISC96 code of 3111 (Cent Govt excl Funded Social Security), with an ANZSIC96 code of N843100 (Higher Education).
Published industries
The published industries within the business sector have been based on ANZSIC96 classification apart from the reclassification of significant scientific research organsiations (L781) to the industry the predominately serve and the inclusion of local and state owned trading enterprises.
Business sector
NZISC96
Published Industry – code
Primary Industries – A and B
Food, Beverage and Tobacco Manufacturing – C21
Textile, Clothing, Footwear and Leather Manufacturing – C22
Petroleum, Coal, Chemical and Associated Product Manufacturing – C25
Non-Metallic Mineral Product Manufacturing – C26
Metal Product Manufacturing – C27
Machinery and Equipment Manufacturing – C28
Other Machinery – C23, C24 and C29
Wholesale Trade – F
Scientific Research and Technical Services – L781 and L782
Computer Services – L783
Other Services – D to Q excluding (F, L781, L782, L783)
Government sector
NZISC96
Published Industry – code
Scientific Research – L781
Other Government Research – All ANZSIC codes except L781
Higher education (universities) sector
Total universities.
Definitions
ANZSIC: Australian and New Zealand Standard Industrial Classification System – NZ Version 1996.
Enterprise: A legal business entity operating in New Zealand.
Research and development (R&D): The definition of R&D used in this survey is consistent with the OECD recommendations contained in the Frascati Manual 2002. R&D performed by enterprises is generally investigative work which is of actual or potential use in the development of new or enhanced materials, products, devices, processes or services. R&D directed towards duplicating work already developed by others is only included if the knowledge or technology required for the development is not available to the enterprise.
Rolling Mean Employment: The rolling mean employment (RME) is a 12-month moving average of the monthly employment count (EC) figure. The EC is obtained from taxation data.
Statistics NZ Business Frame: A register of all businesses operating in New Zealand.
Basic research is carried out for the advancement of knowledge, without seeking long-term economic or social benefits or making any effort to apply the results to sectors responsible for their application.
Applied research is also investigation undertaken in order to acquire new knowledge. It is, however, directed primarily towards a specific practical aim or objective. For the purposes of this release, applied research also encompasses experimental development.
Experimental development is systematic work, drawing on knowledge gained from research and practical experience, that is directed at producing new materials, products and devices; installing new processes, systems and services; or improving substantially those already produced or installed.
More information
For more information, follow the link from the technical notes of this release on the Statistics NZ website.
Copyright
Information obtained from Statistics NZ may be freely used, reproduced, or quoted unless otherwise specified. In all cases Statistics NZ must be acknowledged as the source.
Liability
While care has been used in processing, analysing and extracting information, Statistics NZ gives no warranty that the information supplied is free from error. Statistics NZ shall not be liable for any loss suffered through the use, directly or indirectly, of any information, product or service.
Timing
Timed statistical releases are delivered using postal and electronic services provided by third parties. Delivery of these releases may be delayed by circumstances outside the control of Statistics NZ. Statistics NZ accepts no responsibility for any such delays.
Next release...
Research and Development in New Zealand: 2006 will be released on 17 September 2007.