Industrial research and development characteristics, 2014 (intentions)
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Spending intentions on industrial research and development, 2014
Industrial research and development spending will slow in 2014
Business enterprises in Canada anticipate spending $15.4 billion to perform research and development (R&D) activities in 2014, down 0.9% from 2013 intentions. Recovery from the 2008 economic downturn continues to be slow and business enterprises did not anticipate increasing R&D spending levels for 2014.
Industrial R&D spending is composed of two main categories, current and capital R&D spending. In 2014, current R&D spending is expected to total $14.3 billion, representing 93% of total industrial R&D spending. Wages and salaries will account for $9.5 billion. The remaining $4.8 billion will be directed to other current costs, such as the purchase of non-capital materials, contracts for on-site consultants and products required to support R&D activities.
Spending on capital R&D, such as machinery, equipment, land and buildings, is anticipated to be $1.1 billion in 2014 and to account for 7% of total industrial R&D spending. This proportion has hovered around 7% since 2002, after decreasing from 11% in 2001.
Industrial R&D spending is highly concentrated among businesses in Canada, with 100 business enterprises expected to perform one-half of total R&D spending in 2014.
Similarly, six industry groups will account for over half (54%) of industrial R&D spending in 2014, with two of the six industries in the manufacturing sector and four in the services industries. These six key industry groups have been leading industrial R&D performance since 2008.
Aerospace products and parts manufacturing ($1.4 billion) and communications equipment manufacturing ($1.3 billion) will lead manufacturing R&D spending. The sector's overall total is expected to reach $7.1 billion in 2014, down 0.4% from 2013. As a result, the share of total industrial R&D spending by manufacturers will continue the downward trend it started in 2001.
In services industries, scientific research and development services ($1.9 billion); computer systems design and related services ($1.3 billion); wholesale trade ($1.2 billion); and information and cultural industries ($1.2 billion) will lead R&D spending. R&D spending in services industries is expected to reach $6.9 billion in 2014, down 0.5% from 2013. The share of R&D spending by service industries has generally been expanding since 2001.
Characteristics of industrial research and development spending, 2012
Industrial R&D spending concentrated in Ontario and Quebec
Nationally, industrial R&D spending was $16.2 billion in 2012. Industrial R&D spending in Ontario decreased 4.0% from 2011 to $7.3 billion. Quebec spending declined 3.6% from the previous year to $4.6 billion. Together, the two provinces continued to account for about three-quarters of industrial R&D spending performed in 2012. Ontario experienced declines in R&D spending across most sectors. The decline in Quebec occurred mainly in services.
Industrial R&D rose 7.8% to $2.0 billion in Alberta in 2012. The increase was entirely attributable to the mining, oil and gas extraction industry, where R&D spending rose by $234 million.
British Columbia experienced lower industrial R&D spending in 2012, down 4.4% from the previous year to $1.6 billion. Spending on R&D in the services declined, offsetting a moderate rise in the province's manufacturing sector.
In Manitoba, industrial R&D spending increased 9.7% in 2012 to $215 million, mainly as a result of higher spending in the manufacturing sector. Meanwhile, R&D spending in Saskatchewan fell 2.6% from 2011 to $188 million in 2012, as current R&D spending, including spending on wages, salaries and R&D support, edged down.
Newfoundland and Labrador ($95 million) and Nova Scotia ($81 million) continued to spend the most on R&D among the Atlantic provinces. Industrial R&D spending in New Brunswick declined 29.6% to $69 million between 2011 and 2012, mostly as a result of declines in R&D spending in services industries. Spending on industrial R&D in Prince Edward Island was up, reaching $24 million in 2012.
Industrial R&D spending mainly focused on engineering and technology
R&D spending in engineering and technology totalled $12.7 billion in 2012, accounting for 79% of all industrial R&D performed in 2012. Natural and formal sciences, and medical and health sciences followed, each representing 10% of total spending. Agricultural sciences accounted for the remaining 2%.
Within engineering and technology, three fields of science or technology represented more than half (52%) of industrial R&D spending: electrical engineering, electronic engineering and information technology ($3.6 billion); software engineering ($2.6 billion); and mechanical engineering ($2.3 billion).
R&D spending in medical and health sciences reached $1.6 billion in 2012, with four industries accounting for 91% of such R&D spending: scientific research and development services ($522 million), wholesale trade ($493 million), pharmaceuticals and medicine manufacturing ($360 million) and health care and social assistance ($66 million).
In 2012, natural and formal sciences industrial R&D spending totalled $1.5 billion. Within this major field of science, R&D spending was led by computer and information sciences ($673 million), earth and related environmental sciences ($280 million) and chemical sciences ($269 million).
In 2012, $745 million was spent on environmental engineering and $280 million on earth and related environmental sciences. The mining, oil and gas extraction sector performed 77% ($577 million) of spending in environmental engineering R&D, as well as 64% ($178 million) of spending in R&D in earth and related environmental sciences.
Energy-related R&D grew rapidly
Energy-related R&D rose 18.4% from 2011 to $2.0 billion in 2012, mostly as a result of increases in R&D expenses related to fossil fuel technologies. R&D spending on fossil fuel technologies was concentrated in oil sands and heavy crude oil technologies, up 53.6% to $886 million, and in crude oil and natural gas technologies, almost unchanged at $554 million.
In contrast, R&D spending for energy efficiency technologies fell 5.9% to $80 million and spending for renewable energy resources technologies fell 18.9% to $86 million between 2011 and 2012.
Industrial R&D funded predominantly by performing firms
Businesses in Canada continued to finance most of their R&D activities through business operations, with internal corporate funds covering $13.8 billion (or 85%) of all industrial R&D spending in 2012. Funds from foreign sources followed at $1.7 billion.
Funds from government sources increased 6.4% from 2011 to $644 million in 2012, as an increase in provincial funding more than offset a decline in federal funding.
Industrial R&D personnel declined
The number of industrial R&D personnel continued to decline, falling 9.2% from 2011 to 132,156 full-time equivalents in 2012.
Note to readers
These data are subject to revision.
Data for 2012 on employment in research and development (R&D) activities, sources of funds for R&D, industrial R&D spending by province, extramural R&D payments and technology payments and receipts are now available.
Spending intentions for 2013 and 2014 are indications of the direction of R&D investments. Revised R&D expenditures for 2010 to 2013 are now available.
Also available are 2012 data from the Energy Research and Development Expenditures by Area of Technology survey.
Table CANSIM table358-0024: Industrial research and development (R&D) expenditures and personnel, Canada.
Table CANSIM table358-0161: Industrial R&D expenditures and personnel, provinces and territories.
Table CANSIM table358-0140: Industrial R&D expenditures and personnel, by field of science or technology.
Table CANSIM table358-0206: Business enterprise extramural payments for R&D, by location of recipient.
Tables CANSIM table358-0205, CANSIM table358-0207 to 358-0211: Business enterprise intramural R&D expenditures, selected characteristics.
Table CANSIM table358-0212: Business enterprise expenditures and payments for intellectual property and other technology assistance.
Table CANSIM table358-0213: Business enterprise foreign receipts and payments for technological services.
Table CANSIM table358-0214: Industrial energy R&D expenditures.
Definitions, data sources and methods: survey numbers survey number4201 and survey number4205.
The publication Industrial Research and Development: Intentions, 2014 (Catalogue number88-202-X), is now available from the Browse by key resource module of our website under Publications.
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