In 2011 the oil industry accounted for one third in Estonian R&D expenditure

news release no 150

According to Statistics Estonia, in 2011 the ratio of research and development expenditures to the gross domestic product rose upon a novel level – 2.41%, surpassing for the first time the EU mean of 2.03%.

In 2011, the expenditure on research and development activities (R&D) amounted to 384.5 million euros and was nearly two thirds more compared to a year earlier. The investments in new technology for the oil industry accounted for one third of that expenditure.

The guidebook of R&D statisticsa gives an answer to the question possibly arising: why the erecting of a new plant is counted as R&D? No doubt that in the case of a pilot plant based on new first time implemented technology one is facing experimental development. There have been analogous examples for other economic activities in Estonia earlier but in present case the scale of the investments is exceptional. It tends to overshadow other positive changes that were taking place. To become aware of those it is convenient to present the data by sectors.

R&D expenditure, million euros, 2009–2011
  2009 2010 2011
Total R&D expenditure 197.4 232.8 384.5
..non-profit sectors 109.2 116.0 141.6 enterprise sector 88.2 116.8 242.8
Financed by government 96.4 102.8 125.9
..non-profit sectors 86.6 89.8 109.4 enterprise sector 9.7 13.0 16.5

In 2011, for the non-profit institutional sectors (of which the higher education sector accounts for the lion’s share) was observed a 22% growth of the R&D expenditure compared to 2010. By the same margin increased the expenditures financed by government. If the oil industry investments are subtracted from the business enterprise sector R&D expenditure then nevertheless the growth for left-over enterprises remained higher – 29% – than the growth for non-profit sectors. Together with the mentioned investments the growth was rather exceptional – over two times. It is worth mentioning that the R&D expenditure financed by government increased by 27% in the business enterprise sector mainly due the support to small enterprises and research centres’ financing by Enterprise Estonia. So, even putting oil industry aside there was remarkable development in the R&D field during 2011.

The growth manifested itself not only in the form of expenditures. In 2011 compared to a year earlier, the working time spent on R&D by R&D personnel increased by 11%, therewith the working time of researchers grew by 12% in the business enterprise sector and by 8% in non-profit institutional sectors. The number of R&D personnel having doctorate increased by 89 persons or by 3%.

On 15 November Eurostat published in its public database the preliminary R&D data for 2011. There the GERD/GDP ratio for Estonia is shown somewhat lower – 2.37%. The final results published today will appear in Eurostat database only in late summer 2013. The marginal discrepancy does not change Estonian seventh position in the EU Member States ranking between Slovenia and France in 2011. Without oil industry the position would have been the 13th in the middle of the ranking list.

a Frascati Manual published by OECD

For further information:

Aavo Heinlo
Principal Analyst
Annual Statistics of Entrepreneurship Service
Statistics Estonia
Tel +372 625 9217

More detailed data have been published in the Statistical Database (General data of R&D and R&D in business enterprise sector).