Gross expenditure on research and development Scotland 2020

Introduction

Changes to ONS Research & Development Statistics

The Office for National Statistics (ONS) has been leading a redevelopment project for Research and Development (R&D) statistics.  The methodology for the business sector R&D spend estimates and the source of the higher education sector R&D spend has changed for the ONS R&D statistics.  The data for the GERD Scotland 2020 is sourced from these ONS statistics.

Further detail on these methodological changes is available in the Gross Expenditure on Research and Development, UK: 2020 publication, published on 22 November 2022.

These methodological changes have been implemented for the 2018 period onwards, meaning that comparisons of estimates for total R&D performed in the UK, and R&D performed in the business and higher education sectors before 2018 are not possible.

Change to business sector R&D spend

By comparing ONS BERD spend statistics to HMRC R&D tax credit statistics, ONS found that many small businesses performing R&D were not accounted for in the BERD estimates. ONS have now reweighted the BERD returns to take account of this. This new methodology has led to significant uplift revisions to the BERD spend estimates.  Further information on this interim methodological improvement to the BERD statisics was published by the ONS on 29 September 2022: Comparison of ONS business enterprise research and development statistics with HMRC research and development tax credit statistics - Office for National Statistics and 22 November 2022: Options for Transformation of Business Enterprise Research and Development Statistics - Office for National Statistics

More work is underway to further improve how the BERD statistics are compiled in the future, including developing a new sampling method to be used in the next BERD survey.

Changes to higher education sector R&D spend

ONS have also changed the source of the Higher Education Research & Development (HERD) estimates - from Higher Education Statistics Authority (HESA) data to Transparent Approach to Costing (TrAC) data, collected by the Office for Students, resulting in uplifts to the HERD spend estimates.

National Statistics Badge

The latest ONS Business Enterprise R&D (BERD) estimates reflect these significant methodological changes. These figures provide the current best estimate of R&D at the UK level, however there is currently uncertainty around the robustness of the detailed breakdowns of the new BERD estimates, which includes the data for Scotland.

As a result the ONS asked the Office for Statistics Regulation (OSR) to temporarily pause the National Statistics status of detailed breakdowns of BERD until the second stage of the redevelopment project completes in 2023. OSR confirmed their agreement to this approach in their letter published on 21 November 2022. This is until further redevelopment takes place and there is more certainty on the quality of the sub-UK data.   

The BERD estimates used in the GERD Scotland 2020 are sourced from the ONS publication.  Therefore the Scottish Government has also asked that the OSR to temporarily pause the National Statistics status of these Scottish Government R&D publications.  OSR confirmed their agreement to this approach in this letter published on 8 December 2022.

Scottish Government statisticians will be working with the ONS on the second stage of the redevelopment project and hope to be able to resume with the National Statistics badge on the Scottish Government R&D publications in 2023.

Changes for this release

Given the current uncertainty around the GERD estimates for Scotland, this release features a reduced set of data compared with previous releases. We hope to be able to produce more detailed Scottish Government R&D publications in 2023.

R&D spend as a share of GDP

The GDP series have not yet been adjusted to incorporate the improvements to the measurement of R&D in the business sector.  This should be borne in mind when considering the R&D spend as a share of GDP estimates in this release.

It is also important to note that GDP was particularly low in 2020 as a result of the COVID-19 pandemic.

Impact of new methodology and sources

This section provides more detail on how the changes to methodology and sources have impacted the results for Scotland.  Note that the ‘Original’ spend figures for 2018 and 2019 in the tables below are sourced from Gross Expenditure on Research & Development Scotland 2019.

For Scotland, ONS previously estimated GERD spend in 2019 at £2,789 million, whereas the revised figures show spending in 2019 at £4,737 million – an uplift of 70%.    

ONS’s previous estimates put BERD spend for Scotland in 2019 at £1,409 million, whereas the revised figures show spending in 2019 at £2,907 million– an uplift of 106%.  

ONS previously estimated HERD spend for Scotland in 2019 at £1,150 million, whereas the revised figures show spending in 2019 at £1,603 million– an uplift of 39%.