The ONS is currently transforming the way it produces statistics on research and development (R&D). In this post Heather Bovill guides us around the latest figures and explains why one of our bulletins has changed slightly.
As I explained in a recent blog, our figures on R&D are going through a period of significant transformation. Some users had previously queried why our figures recorded lower levels of R&D than those produced by HM Revenue and Customs, which are calculated using information on those claiming R&D tax credits.
When we looked in detail at the responses to our Business Expenditure on Research & Development (BERD) Survey and compared them with information from our large Annual Business Survey, we found that more smaller businesses were undertaking R&D than we had previously assumed.
We initially reweighted the data for 2018-2020, which showed an uplift of around £16.1bn in the latest year and tomorrow we will publish an article that will give more details about how these reweighted data were produced.
The next annual releases of BERD and Gross Expenditure on R&D (GERD) will also be published tomorrow. As well as the improvements to the BERD estimates, GERD will also incorporate a new, more comprehensive source of data on R&D in the Higher Education sector (TRAC). Taken together these changes provide our best ever headline estimates of the level of R&D in the UK.
Our annual BERD release would usually include detailed breakdowns of R&D, including by detailed industry and region. However, this year we are reweighting the returns from our survey to produce improved headline estimates and, as a result, there is increased uncertainty in the breakdowns below the total level, so we will be publishing less detail for 2018 onwards. The data we are publishing will cover broad product groups, source of funding, industry, size-band, and groups of regions.
Due to the more limited nature of this year’s release, while the existing National Statistics designation for the total BERD figure will remain, to help further convey the uncertainty ONS have asked the OSR (Office for Statistics Regulation) to temporarily pause the National Statistics status of the detailed breakdowns until the further redevelopment takes place and there is more certainty on the distribution below the total level.
We will continue the longer-term redevelopment of R&D statistics, which includes developing an improved sampling frame to better take account of the types of businesses undertaking R&D. When we receive and publish the returns from this survey next year, we plan to reintroduce the detailed aggregates that users need.
Transforming these key statistics is not a quick or straightforward process, but the work we are doing ensures we will be able to produce the best estimates yet of this key driver of economic growth.
Heather Bovill, Deputy Director for Surveys and Economic Indicators