Research and Development Indicators in the Czech Republic 2003

Understanding the world based on scientific knowledge is essential for further development of human society. Research and development is a challenging job and it is essential for further economic and social human development. Research and development is one of the main keys to opening up new opportunities for growth, stimulating competition, and delivering new, more effective ways of approaching common problems. Therefore, there is improving need for harmonizing research and development statistics based on the EU and the OECD standards. Research and development statistics have proved to produce valuable indicators that have been used in various national and international reports. In the Czech Republic, we have been collecting information and data on R&D needed for the evaluation of the Czech research and development policy based on hereinbefore mentioned standards since 1995.

A new strategy of the European Union aimed at the increase of employment, economic reform and social coherence as a part of knowledge society was approved at the European Council meeting in Lisbon on March 23–24, 2000. The Czech Republic in line with other Candidate countries joined in 2001 this strategy. To monitor the progress in reaching the strategic target, the European Commission has created a list of structural indicators, in which R&D indicators have been included.

The system of R&D indicators (for all Member States of EU; the Czech Republic is the Member State since 1 May 2004) was projected to Commission Regulation (EC) No 753/2004 of 22 April 2004 implementing Decision No 1608/2003/EC of the European Parliament and of the Council as regards statistics on science and technology of 22 July 2003. The calendar year 2003 is the first reference year for Member States of EU to give required indicators to Eurostat according this regulation.

Research and development: terms definition and concept

The concept of ‘research and development’ in the Czech Republic is defined in Act. No. 130/2002 Coll. on State Support to Research and Development from the Public sources. The Act provides for a system of state support to research and development and associated rights and duties of legal and natural persons engaged in R&D, as well as of the state authorities supporting them.

Research and experimental development (R&D) comprise creative work undertaken on a systematic basis in order to increase the stock of knowledge, including knowledge of human, culture and society, and the use of this stock of knowledge to devise new applications (Frascati Manual 2002, OECD, Paris 2002). The term R&D covers three activities: basic research, applied research and experimental development.

Research is systematic and creative work that enriches understanding, including understanding the human, culture, and society, and with methods, which allow confirmation, supplementation or refutation of acquired knowledge. It includes:

a) Basic research is experimental or theoretical work undertaken primarily to acquire new knowledge of the underlying foundation of phenomena and observable facts, without any particular application of use in view.

b) Applied research is also original investigation undertaken in order to acquire new knowledge. It is, however, directed primarily towards a specific practical aim or objective.

Experimental development is systematic work, drawing on existing knowledge gained from research and/or practical experience, which is directed to producing new materials, products or devices, to installing new processes, systems and services, or to improving substantially those already produced or installed.

Research and development statistics are internationally based on the Frascati manual - The Proposed Standard Practice for Surveys of Research and Experimental development. Since 1995, research and development indicators have been in the Czech Republic adapted to the hereinbefore-mentioned internationally recognized standard for this area. Data are also collected in line with the recommendations provided by this manual.

Research and development survey for reference year 2003 (R&D survey 2003)
Research and development indicators were collected in the Czech Republic by annual exhaustive survey of all possible R&D performers regardless of size and sector by means of the single “Annual Questionnaire on R&D“. In the Czech Republic, R&D survey is a mandatory survey as it is included in the Statistical surveys program by Act. No. 89/1995 Coll. on State Statistical Service, in a valid version. This questionnaire is a part of this Statistical surveys program. The questionnaire is of the cross-sectional nature – i.e. data are collected in all industries and sectors of the national economy.
In general terms, the R&D survey of the Czech Statistical Office respects fundamental methodical principles of the EU and the OECD and Commission Regulation (EC) No 753/2004 of 22 April 2004. This survey is identified for the measure of financial and personnel resources devoted to all research and development activities in the R&D performing units. However non-response is very low (only about 5% of units do not respond), since 2001, mathematical-statistical methods for estimations of Non-response have been used.

Identification of research and development units

According to the recommendations of the Frascati manual, all legal and natural persons who carry out R&D (or their local units - working places devoted to R&D) as their primary or secondary activities despite their size were included in the reporting units (R&D units). R&D covers both formal R&D in R&D units and informal or occasional R&D in other units.

The basic criterion for differentiating the R&D activities is the measurable presence of innovation in R&D. Further information on R&D methodology relevant for definition of the R&D activities can be find in Annual Questionnaire on R&D in the section – methodological comments.

The R&D units are grouped by sector of R&D performance (sectors of performance), the main institutional classification of national R&D efforts. Four sectors of performance according to the OECD and the Eurostat recommendation are identified (business enterprise, government, higher education and private non-profit). In order to ensure maximum comparability with regular economic or social statistics, these are, as far as possible, based on existing UN classifications.

a) Business enterprise sector includes all firms, organizations and institutions, whose principal activity is to produce goods or services (excluding the area of higher education) for sale to general public at an economically significant price. It also includes private non-profit institutions providing services to these firms, organizations or institutions.
b) General government sector includes state administration authorities at all levels (central, regional, local), except for publicly managed institutes of higher professional and university education. The general government sector carries out a wide range of activities such as administration, defence, public order protection, health, education, culture, recreation and other services. The sector should also include non-profit organizations and entities, which serve the government and are financed and managed by the government, except for higher professional and university education. In the Czech Republic the state sector comprises resort research institutes and also the Academy of Science.
c) Higher professional and university education sector (Higher education sector) comprises all universities, colleges of technology, and other institutes of post-secondary education. It also includes all research institutes, experimental stations and clinics operating under the direct control or administration of higher professional and university education establishments or are associated with them. The sector is not any separate institutional sector of national accounting – the OECD separated it out as it has an important role to play in research and development.
d) Private non-profit institutions serving households sector (Private non-profit sector) comprises private or semi-public institutions not established to make profits (excluded are organisations managed by institutions classified to other sectors) and private individuals and households. It consists of civil interest associations (clubs societies, trade and other unions, movements, federations, etc.) and organisational components thereof, foundations, religious societies, private school, etc.

Since 2001 the R&D indicators based on the recommendations of the OECD and the Eurostat have been broken down by region – R&D data are collected from the local R&D units (working places devoted to R&D of enterprise establishment or other state, non-profit or university organizations). The Czech Statistical Office annually up-dates the existing database of the R&D units with the cooperation of the Council of government for R&D, with the help of filter questions in various statistical surveys (such as Structural Business Survey etc.) and from other information of the relevant official administrative sources.

Research and development indicators

Indicators of R&D are described in the internationally recognized standard for this area – in the Frascati Manual. Since 1995, the R&D data have been in the Czech Republic compiled on the basis of the methodology hereinbefore several times mentioned the Frascati Manual. Two main indicators are measured through the R&D survey – research and development expenditure and research and development personnel. These two indicators should cover all resources allocated to our national R&D efforts.

The R&D effort (expenditure and personnel) is usually broken down by four sectors of performance: business enterprise, higher education, government and private non-profit. This breakdown is largely based on the System of National Accounts, but higher education is viewed as a special sector, due to the important role played by universities and similar institutions in the performance of R&D.

R&D personnel indicator

R&D personnel are researchers who are employed directly on R&D, other helping persons, technicians, administrators and other persons working at R&D performing units. Further R&D personnel are persons who provide direct services such as R&D managers, secretaries, and clerical staff. Persons providing an indirect service, such as canteen and security staff, are excluded.

The category of R&D personnel covers all persons of age above 15, in paid employment. Formal connection with occupation is called employment relationship and special short-term working contracts (individuals engaged in R&D under special contracts of service or for a short-term work) with individuals for R&D performance are also included.

Reporting of R&D personnel
· Registered number of employees 31 December in Head Count and by gender. It includes actual persons directly engaged in R&D as researchers, technicians, managers, administrative clerks, etc. who signed a contract of employment with the reporting unit. Headcount data measure the total number of persons who are mainly or partially employed on R&D (human resources in R&D) and allow the most appropriate measuring additional information about R&D stuff, such as age, gender and etc. This way of recording data has also its limits as it records number of employees at the end of the year and does not record full time devoted to R&D activities. The special short-term contracts (individuals engaged in R&D under special contracts of service or for a short-term work) with individuals for R&D performance are also included.
· Number of special short-term R&D contracts signed during the reference year. It includes individuals engaged in R&D under special contracts of service or for a short-term work for R&D performance. Short-term R&D contracts are relatively common in the Czech R&D performing sectors everywhere, especially at the universities.
· Average registered number of R&D employees in full time equivalent by gender. This indicator takes into account registered number of persons engaged in R&D during the reference year (average registered number). The indicator “average registered number” is further calculated on full time equivalent – conversion from part-time employment into full-time employment (full working hours) is used. The short-term contracts are included in the average number and they are also recalculated on full time employment.
· Full-time equivalent (FTE) devoted to R&D by gender. FTE is the best measure of the real time devoted to R&D activity of R&D employees. One FTE is equal one-year's full time work of employee on R&D. For employees, who are engaged also in another activity, than R&D, there is calculated only adequate proportion of their working time in concordance with the OECD methodology in the Frascati Manual. The conversion gives a true picture of the time spent on R&D activities, avoiding overestimation of the number of employees engaged in R&D. The number of persons engaged in R&D must therefore, also be expressed in full-time equivalents on R&D activities. FTE is used for international comparisons.

One FTE may be thought of as one person-year. Thus, a person who normally spends 30% of his/her time on R&D and the rest on other activities (such as teaching, university administration and student counselling) should be considered as 0.3 FTE. Similarly, if a full-time R&D worker is employed at an R&D unit for only six months, this results in 0.5 FTE.

Categories of R&D personnel

R&D personnel are structured in the framework of four main R&D performance sectors (business enterprise, government, higher education a private non-profit) and within them further break down:

1. Classification by occupation and by gender (CZ-ISCO-88). Czech National Classification of Occupations (CZ-ISCO-88, Volume 1, Rev. 1) published by the Czech Statistical Office in 1995 was used. This classification is compatible with the international classification ISCO-88. The following definitions of occupations are especially designed for R&D surveys. However, they can be linked to broad categories of CZ- ISCO-88.
a. Researchers are professionals engaged in the conception or creation of new knowledge, products, processes, methods and systems and also in the management of the projects concerned. Researchers are the most important group of R&D employees – they create a pillar of R&D activity. There are mostly employees included into major group 2, “Professionals” (Research and professional intellectual workers) and subdivision 1237 (R&D Department Managers) of the present valid CZ- ISCO-88.
b. Technicians and equivalent staff are persons whose main tasks require technical knowledge and experience in one or more fields of engineering, physical and life sciences or social sciences and humanities. They participate in R&D by performing scientific and technical tasks including the application of concepts and operational methods, normally under the supervision of researchers. Equivalent staff performs the corresponding R&D tasks under the supervision of researchers in the social sciences and humanities. There are mainly employees included in the class 31 (Technicians in physical, technical and related fields) and class 32 (Technicians in the field of biology, health and agricultural professionals and staff in related fields) CZ- ISCO-88.
c. Other supporting staff include craftsmen, secretarial and clerical staff participating in R&D activities or directly associated with such projects. There are included managers and administrators insofar as their activities are direct serving to R&D.

Comment: Detailed description of each category of activities, which fall into above mentioned categories of occupation, is given in the Annual R&D questionnaire 2002 - section Methodological comments.

2. Classification by level of formal qualification and gender – ISCED provides the basis for classifying R&D personnel by formal qualification. There are five classes used for the breakdown of R&D personnel by qualification in the Czech Republic for the purposes of R&D statistics. They are defined exclusively by level of education, regardless of the field in which personnel are qualified. The Czech Standard Classification of Education (KKOV) that consists, but for a few exceptions, with the ISCED was used.
a. Holders of doctorate degrees of university level or equivalent (ISCED level 6). This category includes holders of degrees earned at universities proper and also at specialised institutes of university status.
b. Holders of tertiary-level degrees below the PhD level (ISCED level 5A and 5B). Category 5A includes holders of degrees earned at universities proper and also at specialised institutes of university status. For ISCED level 5B, subject matter is typically specialised, presented at a level requiring the equivalent of full secondary level education to master it. It provides a more practically oriented/occupation-specific education than programmes at ISCED levels 5A and 6.
c. Holders of other post-secondary non-tertiary diplomas (ISCED level 4). This class includes holders of degrees preparing students for studies at level 5, who although having completed ISCED level 3, did not follow a curriculum which would allow entry to level 5, i.e. pre-degree foundation courses or short vocational programmes.
d. Holders of diplomas at the secondary level, upper stage (ISCED level 3). This class includes not only all ISCED level 3 diplomas obtained in the secondary school system but also equivalent level 3 vocational diplomas obtained from other types of educational establishments.
e. Other qualifications. This includes all those with secondary diplomas at less than ISCED level 3 or with incomplete secondary qualifications or education not falling under any of the other four classes.
3. Classification by field of science and technology and by gender. This classification is used for functional distribution. Number of the R&D personnel is classified into six major fields of science and technology suggested in UNESCO‘s “Recommendation Concerning the International Standardisation of Statistics on Science and Technology (1978). The responding unit determines Field of science and technology. There are mainly provided research and development activities.
a. Natural sciences – include mathematics and computer sciences (only software), physical, chemical and biological sciences, earth and related environmental sciences.
b. Engineering and technology - include civil engineering, electrical engineering, electronics (only hardware) and other engineering sciences and technology (chemical, aeronautical and space, mechanical, food production, metallurgical, textile etc.).
c. Medical sciences - include basic medicine, clinical medicine, health sciences and related medical sciences.
d. Agricultural sciences - include agriculture, forestry, fisheries and allied sciences, veterinary medicine.
e. Social sciences - include psychology, economics, education and training and other social sciences (anthropology, ethnology, demography, geography, management, law, linguistics, political sciences, sociology etc.).
f. Humanities - include history, languages and literature, philosophy, arts, history of art, theology etc.
4. Classification by region and by gender (NUTS 3). On 1 January 2000, a new territorial structure of the Czech Republic, dividing the country into 14 Regions (“higher territorial administrative units”), became effective based on Constitutional Act No. 347/97 Coll. Number of the R&D personnel is classified into these regions: Capital Prague, Středočeský, Jihočeský, Plzeňský, Karlovarský, Ústecký, Liberecký, Královéhradecký, Pardubický, Vysočina, Jihomoravský, Olomoucký, Zlínský, Moravskoslezský.
5. Classification by main activity of economic subjects - only in the framework of business enterprise sector. The number of the R&D personnel is classified by economic activity (CZ-NACE) of the R&D reporting unit. We used common classification of OECD and Eurostat – International Standard Industrial Classification arranged for the purposes of R&D statistics.
Three new indicators for researchers in the annual questionnaire VTR 5-01:
§ researchers with PhD
§ researchers with PhD aged 25-34
§ researchers with PhD aged 25-34 newly qualified during the year 2003

R&D expenditure indicator

Expenditure data measure the total cost of carrying out the R&D concerned, including indirect support (anxillary) activities. Intramural R&D expenditures is the most used indicator of international comparison of R&D. R&D expenditure means total expenditures on R&D activities within the organisation, i.e. domestic expenditures. Both R&D current and capital expenditures on fixed assets are included. From expenditures being spent outside the organisation only those are included which serve as a support to the internal research and development (e.g. purchase of equipment for R&D). The depreciation of buildings, machinery equipment and equipment is excluded.

Categories of R&D expenditure

R&D intramural expenditures are structured within the framework of four main R&D performance sectors (business enterprise, government, higher education and private non-profit) and within them they are further reported by:

1. Source of funds – as far as possible, five main sectors are identified for sources of funds according to Frascati Manual (R&D financing sectors)
a. Business enterprise sector includes own enterprise, other enterprise in the same group and other enterprise.
b. Government sector includes central or federal government budget appropriated for R&D (excluding general university funds), provincial or state government budget and public general university funds.
c. Higher education sector sets own receipts of higher education sector.
d. Private non-profit sector
e. Rest of the world includes all institutions and individuals located abroad.
2. Field of science and technology - natural sciences, engineering and technology, medical, agricultural, social sciences and humanities
3. Type of expenditures – current costs and capital expenditures on intangible and tangible assets.
4. R&D type – basic and applied research, experimental development
5. Region (NUTS 3) - 14 regions:: Capital Prague, Středočeský, Jihočeský, Plzeňský, Karlovarský, Ústecký, Liberecký, Královéhradecký, Pardubický, Vysočina, Jihomoravský, Olomoucký, Zlínský, Moravskoslezský.
6. Main activity of economic subjects - only in the framework of business enterprise sector. Intramural expenditures on R&D are classified by economic activity (CZ-NACE) of the R&D reporting unit. We used common classification by OECD and Eurostat – International Standard Industrial Classification arranged for the purposes of R&D statistics.
7. Socio-economic objectives – it includes exploration and exploitation of the Earth, infrastructure and general planning of land use, control and care of the environment, protection and improvement of human health, production, distribution and rational utilization of energy, agricultural production and technology, industrial production and technology, social structures and relationship, exploration and exploitation of space, general university research, non-oriented research, other civil research, defense.

Information on classifications and nomenclatures used in this publication you can be found on the official Czech Statistical Office website: www.czso.cz.