Business Enterprise Research and Development in Scotland 2002
Appendix 2: Sector Summary
Introduction: This appendix summarises the main findings for selected products and sectors. The product groups featured have been selected on the basis of their potential for R&D expenditure, demonstrated in the rest of the UK or abroad.
Research effort is directed to different products in the UK than elsewhere. The most researched products in the OECD are electronics (14%), pharmaceuticals (7%), precision instruments (6%) office machinery (5%) and aerospace (4%). These are classified by OECD as the high technology industries. Among the medium technology industries R&D for motor cars is probably also considerable.
In the UK R&D for pharmaceuticals (25%) and aerospace (10%) are relatively more important, followed by radio, TV and comms equipment (including electronic components) and motor vehicles. Percentages in brackets are the share of total R&D.
In the following the employment and turnover statistics for sectors have been compared with R&D expenditure for the sectors' products.
Pharmaceuticals: This is the major UK R&D spender - UK R&D expenditure was 3.3 billion in 2002, one quarter of all UK expenditure on R&D. Scottish R&D spending was 217 million, 7% of the UK total, 60% more than in 2001. The sector employed 5,200 people in Scotland and spent 42,000 per industry employee on R&D, nearly the same as in the UK. As a percentage of sales R&D expenditure weighed in at 36% in the UK. R&D expenditure in Scotland for pharmaceuticals has significantly increased from 1999 onwards, reached a level of some 120 million, and has increased again in 2002 to over 200 million, contributing a third to total Scottish business R&D. In 2002 3,100 people undertook R&D for pharmaceutical products in Scotland (including research consultancies); Scottish spending per R&D employee was lower than in the UK, 70,000 compared over 110,000 in the UK.
Transport equipment (excluding cars) and aerospace: Scottish R&D spending in 2002 was 11 million, only 0.7% of the UK total of 1.7 billion. The sector employed 12,000 people in Scotland (including 6,000 in shipbuilding and 5,500 in aerospace) and spent only 900 per employee on R&D - in the UK 10,500 were spent per employee, mainly on R&D in the aerospace sector. For Scotland the R&D statistics for shipbuilding and aerospace cannot be separated for confidentiality reasons. Over the past five years expenditure on R&D in other transport equipment (excluding cars) has been low in Scotland, between 1 million and 2 million per annum, but rising to 11 million in 2002. In the UK this sector is a major R&D spender but neither shipbuilding nor aerospace spend comparable amounts in Scotland, despite a considerable manufacturing presence. Around 200 people undertook R&D for the sector in Scotland; expenditure per R&D employee was 55,000 compared to 95,000 in the UK.
Manufacturing of motor vehicles and parts: Scottish R&D spending was 2.2 million, only 0.2% of the UK total. The sector employed about 4,000 people in Scotland and spent 540 per industry employee on R&D - in the UK 4,400 were spent per employee. Over the past five years Scottish expenditure on R&D for motor vehicles has varied between 1.9 million and 3.4 million per annum. In the UK this sector spends 930 million per annum on R&D. About 60 people undertook R&D for that sector in Scotland, the expenditure per R&D employee was 38,000 compared to 84,000 in the UK.
Electrical machinery and apparatus / radio, TV and communications equipment including electronic components / precision instruments: These sectors have been combined as there has been considerable volatility in the past few years in these related areas. R&D for Machinery and Apparatus has varied during the past four years between 26m and 115m, radio TV and comms equipment has varied between 15m and 109m and precision instruments between 16m and 106m. In combination R&D in the three sectors has increased gradually from 102m in 1999 to 214m in 2002. The rapid changes that have been observed are due to projects starting and finishing, not re-coding of ongoing activities. Scottish R&D spending in this area was 11% of the UK total. The sectors employed 34,500 people in Scotland and spent 6,200 per employee on R&D - in the UK 5,000 were spent per industry employee. 4,000 people worked in R&D in these three sectors in Scotland giving a spend of 54,000 per R&D employee, compared to 66,000 per employee in the UK.
Office machinery and computers: Scottish R&D spending was 5 million, 4% of the UK total. The sector employed 10,000 people in Scotland, a quarter of the UK total, and spent 530 per employee on R&D - in the UK 3,600 are spent per employee. This sector maintained a considerable manufacturing presence in Scotland in 2002, but spending was low in Scotland compared to the UK. R&D employment of 40 people contrasts with UK employment of 2,000.
All services: Scottish R&D spending was 70 million, 2.6% of the UK total. In Scotland the sector spent 130 per employee on R&D - in the UK 380 were spent per employee. R&D employment in Scotland was 1,400, giving expenditure per R&D employee of 50,000 compared to 68,000 per employee in the UK. In Scotland most R&D for service sector products was undertaken by small Scottish based firms, in contrast to the manufacturing sector, where large foreign owned firms dominate.