Science and Technology Statistical Compendium

«MEETING OF THE COMMITTEE FOR SCIENTIFIC AND TECHNOLOGICAL POLICY AT MINISTERIAL LEVEL 29-30 JANUARY 2004 Science and Technology Statistical Compendium ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT 2004

Science and Technology Statistical Compendium 2004 MEETING OF THE COMMITTEE FOR SCIENTIFIC AND TECHNOLOGICAL POLICY AT MINISTERIAL LEVEL 29-30 JANUARY 2004 ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT

ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT Pursuant to Article 1 of the Convention signed in Paris on 14th December 1960, and which came into force on 30th September 1961, the Organisation for Economic Co-operation and Development () shall promote policies designed: to achieve the highest sustainable economic growth and employment and a rising standard of living in member countries, while maintaining financial stability, and thus to contribute to the development of the world economy; to contribute to sound economic expansion in member as well as non-member countries in the process of economic development; and to contribute to the expansion of world trade on a multilateral, non-discriminatory basis in accordance with international obligations. The original member countries of the are,,,,,,,,,,, the,,,,,,, the and the. The following countries became members subsequently through accession at the dates indicated hereafter: (28th April 1964), (28th January 1969), (7th June 1971), (29th May 1973), (18th May 1994), the (21st December 1995), (7th May 1996), (22nd November 1996), (12th December 1996) and the (14th December 2000). The Commission of the European Communities takes part in the work of the (Article 13 of the Convention). Publié en français sous le titre : Compendium statistique 2004 de la science et de la technologie RÉUNION DU COMITÉ DE LA POLITIQUE SCIENTIFIQUE ET TECHNOLOGIQUE DE L OCDE AU NIVEAU MINISTÉRIEL 29-30 JANVIER 2004 Permission to reproduce a portion of this work for non-commercial purposes or classroom use should be obtained through the Centre français d exploitation du droit de copie (CFC), 20, rue des Grands-Augustins, 75006 Paris,, tel. (33-1) 44 07 47 70, fax (33-1) 46 34 67 19, for every country except the. In the permission should be obtained through the Copyright Clearance Center, Customer Service, (508)750-8400, 222 Rosewood Drive, Danvers, MA 01923 USA, or CCC Online: www.copyright.com. All other applications for permission to reproduce or translate all or part of this book should be made to Publications, 2, rue André-Pascal, 75775 Paris Cedex 16,.

FOREWORD This document has been prepared for the 2004 meeting of the Committee for Scientific and Technological Policy (CSTP) at Ministerial level and mainly draws on databases, indicators and methodology developed by the CSTP s Working Party of National Experts on Science and Technology Indicators (NESTI), and compiled by the Directorate for Science, Technology and Industry (DSTI). It presents a wide selection of the most policy-relevant and internationally comparable indicators currently available in the field of science and technology. The S&T Statistical Compendium 2004 looks at the state of science and technology in the across four broad dimensions: Section A: Innovation and R&D. Section B: Human Resources in Science and Technology (HRST). Section C: Patents. Section D: Other areas (ICT, globalisation, industrial structure). Many of these indicators are drawn from or are updates to the Science, Technology and Industry Scoreboard 2003 (www.oecd.org/sti/scoreboard) which also includes more detailed methodological explanations and notes. Member country rankings should be interpreted with caution when absolute differences are small since data are subject to ongoing revisions. In addition to well-established S&T data, this report presents a wide range of recently developed indicators in the areas of patents and human resources in science and technology (including data drawn from the work of the Education Directorate). Patent indicators are mainly drawn from the work conducted within the framework of the Patent Project (www.oecd.org/sti/ipr-statistics). The HRST indicators include, among others, labour force participation of university graduates, growth of scientific and technical occupations and international mobility of students and scientists and engineers. This compendium includes a number of experimental indicators in areas such as biotechnology, nanotechnology and the international mobility of human resources for S&T. While these indicators do not benefit from the decades of experience that other S&T indicators enjoy, such as R&D, they are included to give policy makers some indication of trends in areas high on the policy agenda as well as current developmental work being undertaken by NESTI. These indicators should be used with an appreciation of their limitations given their early stage of development. 3

TABLE OF CONTENTS A. Innovation and R&D........................................................................ 7 A.1. Investment in knowledge................................................................ 8 A.2. Trends in domestic R&D expenditure...................................................... 9 A.3. R&D financing and performance........................................................... 10 A.4. R&D expenditure by type and growth by source of financing.................................. 11 A.5. Business R&D.......................................................................... 12 A.6. R&D performed by the higher education and government sectors.............................. 13 A.7. Government R&D budgets............................................................... 14 A.8. Tax treatment of R&D.................................................................... 15 A.9. R&D in non- economies............................................................ 16 A.10. Industry-science relations................................................................ 17 A.11. Venture capital......................................................................... 18 A.12. Biotechnology.......................................................................... 19 A.13. Nanotechnology........................................................................ 20 B. Human Resources in Science and Technology................................................. 21 B.1. Tertiary education...................................................................... 22 B.2. Flows of university graduates............................................................. 23 B.3. Foreign PhD students................................................................... 24 B.4. Science and engineering doctorates awarded to foreign citizens in the............. 25 B.5. Labour force participation of university graduates........................................... 26 B.6. Employment of tertiary-level graduates.................................................... 27 B.7. Scientific and technical occupations....................................................... 28 B.8. International mobility................................................................... 29 B.9. R&D personnel......................................................................... 30 B.10. Researchers............................................................................ 31 B.11. Foreign scholars in the...................................................... 32 B.12. Researchers in non- economies...................................................... 33 C. Patents.................................................................................... 35 C.1. Trends in patent applications............................................................. 36 C.2. Evolution of patent filings to the EPO and the USPTO........................................ 37 C.3. Triadic patent families................................................................... 38 C.4. EPO patent applications................................................................. 39 C.5. Patent intensity......................................................................... 40 C.6. ICT patents............................................................................ 41 C.7. Cross-border ownership of inventions..................................................... 42 C.8. International co-operation............................................................... 43 D. Other Areas................................................................................ 45 D.1. Internationalisation of manufacturing R&D.................................................. 46 D.2. Access to the Internet................................................................... 47 D.3. Technology- and knowledge-intensive industries............................................ 48 D.4. High-tech trade......................................................................... 49 Annex. Main Databases Used.............................................................. 51 5

A. INNOVATION AND R&D In the area, investment in knowledge the sum of investment in R&D, software and higher education amounted to about 4.8 of GDP in 2000. In the, this figure reached almost 7 of GDP, well above the share for (4.7) or the European Union (4.0). At the level, R&D accounted for almost one-half of total investment in knowledge. In 2001, countries allocated about USD 638 billion (current purchasing power parity) to R&D, or 2.3 of GDP. The accounted for approximately 43 of the total, the European Union for 29 and for 16. R&D expenditure in the area rose annually by 4.5 in real terms over 1995-2001. During that period, R&D expenditure rose faster in the (5.0 a year) than in the European Union (3.8) and (2.9). In 2001, the R&D intensity of the European Union reached 1.9 of GDP, its highest level since 1990, but still well below the Lisbon target of 3 in 2010. In 2001,,, and were the only countries in which the R&D to GDP ratio exceeded 3. In 2002, the R&D intensity of the remained stable at 2.7 of GDP. Most of the rise in R&D expenditure is due to higher business investment. The business sector is the major source of financing of domestic R&D accounting for almost two-thirds of funding in countries in 2001. R&D expenditure by the higher education sector increased in the first half of the 1990s and then stabilised. R&D by the government sector has declined in recent years, partly owing to the reduction in defence R&D and the transfer of some public agencies to the private sector. Government R&D budgets have grown substantially in most countries, by 5 or more annually during 1995-2003 in more than one-third of these countries. Defence-related R&D usually accounts for a small share of such budgets (less than 10), the exceptions being, the United Kingdom and (between 25 and 40) and the (more than 50). R&D expenditure in the major non- economies is currently more than one-fifth that of the area. In 2002, Israel allocated 4.7 of GDP to R&D (excluding R&D for defence), a higher ratio than the leading country,. R&D expenditure in China grew rapidly over the past decade and in 2002 reached USD 72 billion. This is behind the (USD 277 billion) and (USD 104 billion in 2001), but ahead of (USD 55 billion) which has the third highest level in the area. India spent about USD 20 billion on R&D in 2000-2001, which puts it among the top ten countries worldwide. When compared with countries, Brazil, the Russian Federation and Chinese Taipei rank below the G7 and in terms of R&D expenditure, but ahead of all others. The importance of industry-science relations is growing as measured by the increasing share of business-funded R&D in the higher education and government sectors, but also by the number of science linkages, as measured by scientific article citations in patents. Certain new technologies account for a growing part of R&D spending. Nanotechnology, for example, is among the most rapidly growing targets of R&D funding, but it still accounts for only a small share of total R&D. Between 1997 and 2000, government R&D funding for nanotechnology trebled to USD 293 million in the, and doubled to USD 210 million in the European Union and to USD 190 million in. 7

Science and Technology Statistical Compendium 2004 A.1. Investment in knowledge Investment in knowledge As a percentage of GDP, 2000 or latest available year R&D Software Higher education 8 6 4 2 0 Source of change in investment in knowledge As a percentage of GDP, 1995-2000 or closest available years R&D Software Higher education -0.5 0.0 0.5 1.0 1.5 2.0 Source:, Annual National Accounts of countries, Economic Outlook, MSTI database, Education database; and International Data Corporation, June 2003. Investment in knowledge is defined as the sum of R&D expenditure, expenditure for higher education (public and private) and investment in software. In 2000 investment in knowledge amounted to 4.8 of GDP in the area and would be around 10 if expenditure for all levels of education were included in the definition. The ratio of investment in knowledge to GDP is 2.8 percentage points higher in the than in the European Union. In (7.2), the (6.8) and (6.2) investment in knowledge exceeds 6 of GDP. In contrast, it is less than 2.5 of GDP in southern and central European countries and in. Most countries are increasing investment in their knowledge base. During the second half of the 1990s, it increased by more than one percentage point (as a share of GDP) in, the and, and more than 1.5 in and. 8 For most countries, increases in software expenditure were the major source of growing investment in knowledge during the second half of the 1990s. Among those countries with relatively high growth, notable exceptions are (where R&D was the main source of increase) and (expenditure for higher education being the largest component). For countries which experienced a relatively low growth, this was mainly due to declining expenditure on higher education.

Innovation and R&D A.2. Trends in domestic R&D expenditure R&D intensity R&D expenditure as a percentage of GDP, 2002 or latest available year 5 4 3 2 1 0 3.5 3.0 2.5 2.0 1.5 1981 83 85 87 89 91 93 95 97 99 2001 600 400 200 Trends in R&D intensity by area As a percentage of GDP, 1981-2001 Gross domestic expenditure on R&D by area Billions of 1995 PPP dollars 0 1981 83 85 87 89 91 93 95 97 99 2001 Source:, MSTI database, November 2003. In 2001, countries allocated about USD 638 billion (current PPP) to R&D, or about 2.3 of overall GDP. -area R&D expenditure has continued to increase steadily in recent years, rising by 4.5 annually in real terms between 1995 and 2001. In 2001, R&D expenditure in the accounted for approximately 43 of the total, close to the combined share of the (29) and (16). In the three main regions, R&D expenditure relative to GDP (R&D intensity) has continued to increase steadily over the past three years, although the persistent gap between the and on the one hand, and the European Union on the other, remains an important policy concern. In 2001-2002,,, and were the only four countries in which R&D intensity exceeded 3. 9

Science and Technology Statistical Compendium 2004 A.3. R&D financing and performance R&D expenditures by source of financing Percentage shares in national total, 2002 or latest available year Business enterprises Government Other Not available (other national sources + abroad) R&D expenditures by performing sector Percentage shares in national total, 2002 or latest available year Business enterprises Government Higher education Private non-profit Not available 100 80 60 40 20 0 0 20 40 60 80 100 Source:, MSTI database, November 2003. 10 The business sector is the major source of financing of domestic R&D accounting for more than 63 of funding in countries in 2001. The role of the business sector in funding R&D differs sharply across the three main regions. The business sector funds 73 of R&D in and 64 in the, but only 56 in the European Union. During the second half of the 1990s, the share of business funding of R&D increased significantly in the, moderately in and only slightly in the European Union. Government funding of R&D retreated in all countries except the,, and the. However, government is still the major source of R&D funding in a third of countries. Foreign funding of R&D has increased in recent years., the, and receive more than 15 of their R&D funding from abroad and receives almost one-quarter. The business sector also performs most R&D. Its contribution to the overall R&D effort has increased since the mid-1990s and, according to the latest available data, accounts for about 70 of total R&D expenditure. The higher education and government sectors perform 31 of all R&D in the area. Their combined share is more than 60 in,,, and.

Innovation and R&D A.4. R&D expenditure by type and growth by source of financing Breakdown of R&D expenditure by type of research As a percentage of GDP, 2001 or latest available year Basic research Applied research Experimental development Non-specified Breakdown of GERD growth by source of financing Average annual growth rate in percentage, 1995-2001 or closest available years Business enterprise Other national Government Abroad 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0-10 -5 0 5 10 15 20 Source:, R&D database, November 2003. There is evidence that innovation efforts draw increasingly on basic research, notably in new areas such as biotechnology and ICT. In countries for which data are available, the ratio of basic research to GDP varies between 0.1 and 0.7, or 10-40 of gross domestic expenditure on R&D (GERD). In the, this ratio increased from 0.4 to 0.6 in the second half of the 1990s, mainly owing to increasing efforts by the business enterprise sector. In countries with high R&D intensity (except ), basic research usually accounts for one-fifth or less of total R&D. In,, and, the ratio of basic research to GDP is low compared with other countries, but their basic research expenditure relative to total R&D expenditure is among the highest of all countries. This is due to high shares of the government and higher education sectors which perform the bulk of basic research in total GERD. In most countries, the growth of GERD during the second half of the 1990s was largely driven by increasing funding by business enterprise. In countries with lower R&D intensities, governmentfunded R&D played an equally important role. In a small number of countries, funds from abroad were also significant contributors (e.g.,,, ). 11

Science and Technology Statistical Compendium 2004 A.5. Business R&D Business enterprise R&D intensity R&D expenditure as a percentage of value added in industry, 2002 or latest available year 6 5 4 3 2 1 0 Growth of business R&D Average annual growth rate in percentage, 1995-2002 or closest available years -20-10 0 10 20 30 Source:, MSTI database, November 2003. 12 The business enterprise sector accounts for the bulk of R&D activity in countries in terms of both performance and funding. In 2001, R&D performed by the business sector reached USD 440 billion (current PPP), or close to 70 of total R&D. Business R&D intensity is well above the average (2.2) in all Nordic countries except, and particularly in (5.2) and (3.6). has enjoyed a large increase in business R&D intensity since 1995 (2 percentage points). In the area, R&D performed by the business sector has increased steadily over the past two decades. However, the pace of growth has picked up since the mid-1990s, mostly owing to business R&D in the, which increased by 3.9 a year between 1995 and 2002, and the European Union, where it grew by 4.6 annually between 1995 and 2001. Between 1995 and 2001, -area business enterprise expenditure on R&D grew by around USD 100 billion (1995 PPP). The United States accounted for almost one-half of this growth and the for less than a quarter. Provisional figures for 2002 show a decline in business sector R&D with respect to 2001 in most of the large economies for which data are available: 4.1 in the, 1.0 in, 1.8 in, and 7.0 in Over the second half of the 1990s, annual average growth rates for business enterprise R&D were highest in,, and. Only the experienced a significant decline in business R&D spending during the period.

Innovation and R&D A.6. R&D performed by the higher education and government sectors R&D expenditure by sector of performance As a percentage of GDP, 2002 or latest available year Higher education Government 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0 0.45 0.40 0.35 0.30 0.25 0.20 0.15 1981 83 85 87 89 91 93 95 97 99 2001 0.45 0.40 0.35 0.30 0.25 0.20 Trends in R&D expenditure in the higher education sector As a percentage of GDP, 1981-2001 (adjusted) Trends in R&D expenditure in the government sector As a percentage of GDP, 1981-2001 (adjusted) 0.15 1981 83 85 87 89 91 93 95 97 99 2001 Source:, R&D and MSTI databases, November 2003. The higher education sector performs about 17 of total domestic R&D in the area (see A.3). This represents about 0.4 of GDP., and had the highest shares of GDP for R&D by this sector at more than 0.6. The corresponding shares for the and were less than 0.2. In the area, R&D performed by the higher education sector increased steadily over the 1990s (as a share of GDP), with a slowdown in the mid-1990s. Since then, it has increased slightly relative to GDP in the European Union and the and has increased significantly in (where GDP has grown little). The government sector accounts for one-tenth of total R&D performed in the area. However, it conducts one-third or more in,, and. Government performance of R&D declined until 2000 reaching 0.23 of GDP, compared to 0.31 in 1985. It dropped in,, the and the, owing to a decrease in defence spending and transfers of public agencies to the private sector. is the only large country where R&D performed by the government sector increased between 1991 and 2001, from 0.22 to 0.29 of GDP. 13

Science and Technology Statistical Compendium 2004 A.7. Government R&D budgets Defence and civil R&D budgets Government budget appropriations or outlays for R&D (GBAORD) as a percentage of GDP, 2002 or latest available year Growth of government R&D budgets Annual average growth rate () of GBOARD, 1995-2003, or closest available years Defence Civil 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0-5 0 5 10 15 20 26.9 Source:, R&D database, November 2003. The ratio of government budget appropriations or outlays for R&D (GBAORD) to GDP varies widely from less than 0.3 in, and, to more than 1 in, and. Defence-related R&D usually accounts for a small share of GBAORD (less than 10), the exceptions being, the and (between 25 and 40), and the where defence R&D accounts for more than half (or 0.52 of GDP). During the second half of the 1990s, GBAORD has grown in real terms in all but three countries. Growth has been particularly strong in some countries which have relatively low levels (e.g.,, ), as well as in others in which GBOARD accounts for a significant share of GDP (e.g.,, ). 14

Innovation and R&D A.8. Tax treatment of R&D Rate of tax subsidies for USD 1 of R&D Large firms, 2001 SMEs Change in the rate of tax subsidies for USD 1 of R&D Large firms, 1995-2001 0.5 0.4 0.3 0.2 0.1 0-0.1-0.1 0 0.1 0.2 0.3 0.4 Source:, STI/EAS Division, November 2003. Most countries have special tax treatment for R&D expenditures, such as immediate write-off of current R&D expenditures (all countries) and various types of tax relief such as tax credits (11 countries in 2001) or allowances against taxable income (six countries in 2001). As a policy instrument, tax relief is on the rise in countries. These schemes resulted in tax subsidies for R&D in 13 countries in 2001 for large firms and in 15 for small firms. The United Kingdom and have recently introduced such schemes. While tax subsidies for R&D (for large firms) increased significantly between 1995 and 2001 in ten countries, they decreased slightly in three. Depending on the country, tax relief can be flat rate (e.g. on the amount of R&D, as in ) or incremental (taking account of the difference between current R&D and a past reference point, as in the ). Certain countries (e.g. ) have both. In ten countries, small firms or start-ups benefit from special treatment, such as higher rates or cash refunds (for firms not subject to tax)., and provide the highest subsidies for large firms;, and the are the most generous to small firms. 15

Science and Technology Statistical Compendium 2004 A.9. R&D in non- economies Gross domestic expenditure on R&D As a percentage of GDP, 2002 or latest available year Evolution of gross domestic expenditure on R&D Average annual growth rate, 1993-2002 or closest available years 6 360 638 412 2 130 10 902 570 72 077 14 190 13 175 19 795 183 93 2 637 951 Israel Singapore Chinese Taipei Slovenia China Russian Federation Brazil India Lithuania Estonia South Africa Hong Kong, China Singapore Estonia Israel Lithuania Cyprus Chinese Taipei Latvia Russian Federation Slovenia 261 R&D expenditure Bulgaria 723 in millions of USD Chile Chile 86 latest available year (current PPP), 2002 or Latvia Bulgaria 1 560 Argentina 542 Romania Argentina 33 Cyprus Romania 5 4 3 2 1 0-10 -5 0 5 10 15 Source:, MSTI database, November 2003; Eurostat, NewCronos database, November 2003; and, based on national sources. Non- economies account for a growing share of the world s R&D. When combined with that of countries, the non- economies included here accounted for 17 of R&D expenditure in 2001, and probably for more than 18 in 2002, a share that is expected to increase in coming years. In 2002, Israel allocated 4.7 of GDP to R&D (excluding R&D for defence), more than, which has the highest R&D intensity in the area, at 4.3 (in 2001). R&D expenditure in China has grown rapidly over the past decade and in 2002 reached USD 72 billion (current PPP), placing it behind the (USD 285 billion in 2003) and (USD 104 billion in 2001), but ahead of (USD 55 billion). In 2000-01, India is estimated to have spent almost USD 20 billion on R&D, which puts it among the top ten worldwide. When compared with countries, Brazil, the Russian Federation and Chinese Taipei rank below the G7 and in terms of R&D expenditure, but ahead of all others. In most of Central and Eastern Europe and South America, R&D intensity is below 1, far below the average. Except for Russia and Brazil, their absolute levels of R&D expenditure are also low. From 1993 to 2002, the three Asian economies for which calculations are possible and the three Baltic states have experienced high average annual growth of R&D expenditure (in constant 1995 USD PPP). Slovenia and Russia have had growth rates around the average, while the Latin American economies, Bulgaria and Romania were subject to low or negative growth. 16

Innovation and R&D A.10. Industry-science relations Business-funded R&D in the higher education (HE) and government (GOV) sectors As a percentage of total R&D performed in the sectors, 2001 or latest available year Science linkages Average number of scientific articles cited per patent granted in the, average for the period 1995-2002 1985-95 (HE only) (GOV only) (HE only) 20 15 10 5 0 0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 Source:, R&D database; CHI Research, November 2003. Co-operation between firms and other actors in science and innovation systems takes many forms and is often difficult to quantify. Direct financial flows are one example: business enterprise has been funding a growing share of R&D performed in the higher education and government sectors, averaging 5.2 in the area in 2001 (and 6.5 in the ). Despite the increase in many countries, these flows only account for a modest share (less than 5) in most large economies. A second indicator which can be used to measure the relative importance of industry-science relations is the number of science linkages. The large increase of science linkages over the second half of the 1990s can by explained by a combination of factors. Firstly, the growing use of electronic databases of scientific publications which has increased the relative ease of citing (while the incentives to do so have also grown). Secondly, the overall growth of science-based industries (in which such citations are more prevalent) has also resulted in an increasing number of citations, notably in biotechnology. Finally, the uneven growth across countries suggests that these linkages are playing a relatively more important role in some economies, particularly in Central and Northern Europe as well as in North America. 17

Science and Technology Statistical Compendium 2004 A.11. Venture capital Investment in venture capital By stage, as a percentage of GDP, 1998-2001 Early stages Expansion 0.5 0.4 0.3 0.2 0.1 0 Share of high-tech sectors in venture capital As a percentage of total venture capital, 1998-2001 Communications Information technology Health/biotechnology 0 20 40 60 80 100 Source:, based on data from EVCA, NVCA, CVCA and Asian Venture Capital Journal, 2003. Relative to GDP, venture capital investment is quite small, but it is a major source of funding for new technology-based firms. It plays a crucial role in promoting the radical innovations often developed by such firms. Over 1998-2001, the and had the largest venture capital investment as a share of GDP, at nearly 0.5. Other countries had substantially less. About one-third of venture capital goes to firms in their early stages and two-thirds to those in the expansion stage. In, and, half is attributed to firms in early stages. 18 High-technology firms attract half of venture capital investment, but disparities among countries are large. In and, they receive more than 80 of total venture capital, but in and they account for less than a quarter. In the, they attract over half of venture capital, of which about half goes to the communications industry. In and, investment tends to focus on IT firms, while in central European countries and communications firms attract most of the investment. In, health and biotechnology firms account for over 25 of total venture capital investment and in and for almost 20 of the total.

Innovation and R&D A.12. Biotechnology Biotechnology venture capital Per million units of GDP, 2001 Biotechnology patents As a percentage of total patents at the EPO, 2000 1995 Israel China Russian Federation South Africa 500 400 300 200 100 0 0 2 4 6 8 10 12 Source:, Venture Capital and Patent databases, 2003. Although the field of biotechnology has grown markedly owing to scientific advances in areas such as genomics and genetic engineering, internationally comparable data remain scarce. Venture capital is important for biotechnology firms, which often have high R&D expenditure and limited revenues for several years. and the are the countries in which the largest shares of venture capital go to biotechnology (more than 0.03 of GDP in 2001). Biotechnology patent applications at the European Patent Office (EPO) increased significant during the 1990s. Between 1991 and 2000, such applications at the EPO increased by 10.2 a year compared with 6.6 for the total patents. The ratio of biotechnology patents to total patents is far higher in the than in the European Union and. However, has the highest such ratio, followed by the Slovak Republic and : in these countries, around one in ten patents is related to biotechnology. 19

Science and Technology Statistical Compendium 2004 A.13. Nanotechnology Estimated government R&D spending on nanotechnology USD millions, 1997-2000 1997 300 250 200 150 100 50 0 0 5 10 15 20 25 30 35 Nanotechnology publications As a percentage of total, 1997-2000 Other 29 United Kingdom 7 8 27 7 Five major spenders Five major contributors 2000 1997 8 13 30 15 13 29 14 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0 European Commission Other countries Source: European Commission; Institute for Scientific Information (ISI) and Centre for Science and Technology Studies (CWTS). Other countries In recent years, nanotechnology, the science of the very small, has been high on the policy agenda of many countries around the world. Because of its promising economic potential, it has become a target for increased R&D. Indeed, over 30 countries have established R&D programmes in nanotechnology. Although it is difficult to estimate government R&D funding precisely owing to the lack of an agreed definition of nanotechnology and the inclusion of nanotechnology-related R&D in many broader research activities such as biotechnology and materials, available figures show that between 1997 and 2000, government R&D funding for nanotechnology grew from approximately USD 114.4 million to more than USD 210.5 million in the European Union, from USD 102.4 million to USD 293 million in the and from USD 93.5 million to USD 189.9 million in. Related to the rise in governmental R&D spending is an increase in scientific output, as measured by the number of scientific publications in this area, which increased from 10 575 in 1997 to 15 667 in 2000. Over the period, scientific output was largely dominated by the, and, followed by, the and. 1997 1997 20

B. HUMAN RESOURCES IN SCIENCE AND TECHNOLOGY On average in 2001, 30 of the population at the typical age of graduation completed a university degree. Flows of graduates are dominated by people earning degrees in social sciences, law, business or humanities. Science and engineering (S&E) degrees represent only 22 of total degrees awarded in countries, 27 in the and 16 in the. Although more women get university degrees than men, they remain under-represented in S&E fields accounting for around onethird of total S&E degrees delivered in most countries. Women are also under-represented at doctorate level, receiving between one-third and one-half of total PhDs. Large investments in education over the past decades have led to a general rise in the educational attainment of the employed population. Employment of tertiary-level graduates grows at a pace of 2 to 6 a year, substantially faster than aggregate employment growth. Professional and technical workers represent between 20 and 35 of total employment in most countries, and over 35 in,, and. In 2000, approximately 3.4 million persons in the area were devoting their time to research and development and approximately two-thirds of these were engaged in the business sector. In 2002, China had the second highest number of researchers in the world (811 000), behind the (1.3 million in 1999), but ahead of (676 000 in 2001) and Russia (492 000). Among the major regions, has the highest number of researchers relative to total employment (10.2 per thousand), followed by the (8.6) and the European Union (5.9). Labour force participation of women is lower than that of men in all countries, particularly in,, and. In the area, the rapid growth of professional and technical occupations owes however more to the rapid increase of women than that of men. Nevertheless, women in research activities represent only 25 to 35 of total researchers, and women researchers are principally found in the higher education sector. Their participation is particularly low in industry and this uneven distribution across sectors has an impact on the very low overall participation of women. The number of foreign students enrolled in tertiary education abroad has doubled in 20 years and is growing more rapidly than overall enrolment in tertiary education. Foreign students represent more than a third of PhD enrolments in, and the and 27 in the United States. In absolute numbers however, the has far more foreign PhD students than other countries, with around 79 000. The follows with some 25 000. In 2001, 36 of S&E doctorates in the were awarded to foreign citizens. Among these a little more than a quarter went to Chinese citizens, 9 to ns or Indians, 6 to citizens from Chinese Taipei and the rest to foreigners from a wide diversity of countries. S&E doctorates granted to non-us citizens in the represent on average 1 or 2 of those delivered in the origin country. In the, the largest number of non-us scientists and engineers with S&E doctorates originating from the area come from the and ; relatively few are from and. The main foreign contributors to the S&E workforce in the are from non- countries: there are three times as many foreign scientists from China and twice as many from India as from the. In 2002 in the European Union countries, the relative share of non-national human resources in science and technology is between 3 and 3.5, with,, and the having high shares. 21

Science and Technology Statistical Compendium 2004 B.1. Tertiary education Persons aged 15-64 with tertiary-level education As a percentage of the population, 2002 Expenditure per student for tertiary-level education 2000 USD using PPP 40 30 20 10 0 0 5 000 10 000 15 000 20 000 25 000 Source:, Educational Attainment and Education databases, November 2003. Educational attainment is the most commonly used proxy for human capital. The data presented here refer to the population as a whole; the educational attainment of employed population is examined in B.6. In the area, 23 of the population aged 15-64 has completed tertiary-level education. The share is much higher in (36) and the (32) than in the European Union (19). It exceeds 25 in,,, and. In contrast, it is below 15 in southern, Central and Eastern Europe (,, the,, the Slovak Republic,, and ). Expenditure per student for tertiary-level education varies by a factor of six between and the. Expenditure per student is highest in the (USD 20 358 in purchasing power parities PPP) and in (USD 18 450 in PPP), more than 1.5 times the average (USD 11 109 in PPP). Expenditure per student in southern, central and eastern European countries as well as in is less than half the average. 22

Human Resources in Science and Technology B.2. Flows of university graduates Graduation rates at PhD level PhD graduates as a percentage of the population of the typical graduation age by gender, 2001 Science and engineering degrees As a percentage of total new degrees, 2001 Share of men PhD Share of women PhD Men Women (total) 3.0 2.5 2.0 1.5 1.0 0.5 0.0 0 10 20 30 40 Source:, Education database, 2003. Flows of university graduates are an indicator of a country s ability to supply the labour market with highly skilled workers and increase its potential for producing and diffusing advanced knowledge. In 2001, the overall PhD graduation rate (persons receiving a PhD degree as a percentage of the population of the typical graduation age) was between 0.75 and 1.5 in half of all countries. In the vast majority of countries, women accounted for between one-third and one-half of all PhDs. One out of three students university students graduates in social sciences, law or business and the next most important fields are humanities, arts and education. S&E degrees represent 21.8 of total degrees awarded in countries, 27.1 in the and 15.9 in the. Concerns have been raised about the insufficient presence of women in higher education, particularly with regard to scientific studies. In most countries, women account for around one-third of total S&E degrees with the highest shares in, and (around 40), and the lowest in, the and (less than 20). 23

Science and Technology Statistical Compendium 2004 B.3. Foreign PhD students Foreign PhD students As a percentage of total enrolment, 2001 Number by host country, 2001 78 884 26 143 40 30 20 10 0 0 2 500 5 000 7 500 10 000 Source:, Education database, November 2003. International mobility of PhD students is an indicator of the internationalisation of both the higher education sector and the research system. In absolute numbers, the receives many more foreign PhD students than other countries, with around 79 000 in 2001. The United Kingdom follows with some 26 000. The language used in the country plays a role in the choice of destination, notably for English-speaking countries, but also for, which receives many students from Central and South America. However, a whole range of other factors plays a role in the choice of destination such as geographical proximity, cultural or historical links, the existence of exchange programmes (e.g. Erasmus) or scholarships, immigration policies or the quality of education. In relative terms, the share of foreign students is highest in, the and, representing more than one-third of PhD enrolments. Most foreign PhD students are enrolled in the social sciences, business and law or in arts and humanities. In and, however, science and engineering programmes are chosen by 37 and 35, respectively, of foreign PhD students. 24 With a few exceptions, 20 to 25 of PhD students enrolled in foreign universities originate from the European Union. These shares reach 51 in and 71 in. European students also represent 27 of foreign PhD students enrolled in and 19 of those in, but only 0.4 of those in.

Human Resources in Science and Technology B.4. Science and engineering doctorates awarded to foreign citizens in the 862 Other European 1 198 Rest of the world 1 622 India 808 Number of S&E doctorates awarded to foreign citizens in the By citizenship or origin, 2001 By type of visa, 1985-2001 Chinese Taipei 538 China 2 405 305 304 220 205 150 Brazil 141 Other 430 138 84 Argentina 69 Israel 49 Hong Kong, China 46 44 12 000 10 000 8 000 6 000 4 000 Temporary visas 2 000 Permanent US resident visas ( Green Card ) 0 1985 87 89 91 93 95 97 99 2001 Source:, based on data from US National Science Foundation, 2003. In 2001, 9 188 S&E doctorates or 36 were awarded to foreign citizens in the. Holders of temporary visas represented 86 of these foreign doctorate recipients, while 14 held resident status or a green card. The balance has changed in favour of temporary visitors over time since the latter represented only 81 of total foreigners in 1985. However, at the time when the number of S&E doctorates granted to foreign citizens reached a peak in 1996, the distribution was more balanced towards green card holders who received one-third of S&E doctorates. Their number as well as their share has decreased since. The number of S&E doctorates awarded to foreign citizens more than doubled over the period 1985-1996 and the increase was particularly steady in the first half of the 1990s. A peak of 10 844 was reached in 1996, but the number of foreign citizens receiving S&E doctorates has been decreasing since. Among S&E doctorates awarded to foreigners in the, a little more than a quarter went to Chinese citizens, 9 to ns or Indians, 6 to citizens from Chinese Taipei and the rest to foreigners from a wide diversity of countries. Asian students are therefore those who represent the bulk of PhDs awarded to foreigners in the, although their numbers have diminished over the decade in the case of India,, Chinese Taipei and Hong Kong, China. S&E doctorates granted to ns in the represent nevertheless 20 of those delivered in the country of origin. This percentage reaches 25 in the case of but is only 1 or 2 in other countries. 25

Science and Technology Statistical Compendium 2004 B.5. Labour force participation of university graduates Participation rate of university graduates 2002 Total population Differences in labour force participation by gender 2002 Women Men 100 80 60 40 20 0 0 25 50 75 100 Source:, Educational Attainment database, November 2003. Looking at labour force participation is important in the context of ageing populations and skill shortages. With the exception of and, labour force participation of university graduates is higher than that of the whole population. In one-third of countries, more than 90 of university graduates participate in the labour force. The shares are lowest (less than 80) in, and. Labour force participation of women is lower than that of men in all countries and reaches 90 or more in only three countries:, and. In addition, differences across countries in labour force participation are larger for women than they are for men. Countries where women s participation is lowest, i.e.,, and, are also those for which the overall labour force participation of university graduates is lagging behind other countries. 26

Human Resources in Science and Technology B.6. Employment of tertiary-level graduates Employment growth of tertiary-level graduates Average annual growth rate, 1997-2002 Total employment growth Employment of tertiary-level graduates As a percentage of total employment, 2002 Women Men 9 8 6 4 2 0-2 0 10 20 30 40 50 Source:, Educational Attainment database, November 2003. Large investments in education over the past decades have led to a general rise in the educational attainment of the employed population. On average, 28.4 of employed persons in countries have a tertiary-level degree. However, the shares vary from 7.9 in to 42.6 in. (38.9) and the (37.9) rank far ahead of the European Union (24.4), which also has large cross-country disparities. (34.8), (34.4) and (32.5) score high; the, the,,, and remain below 15. In recent years, growth in employment of tertiary-level graduates has ranged between 2 and 6 a year. For the period 1997-2002, the and averages are 3.5 and 3.6, respectively. The outsiders are (9.0) at the high end and (0.7) and the (0.7 for 1998-2001) at the low end. Except in and the, total employment has increased much more slowly (when it has not decreased) at 0.9 and 1.4 in the area and the, respectively. Tertiary-level employment growth owes more to women than to men because of their greater propensity to graduate at the tertiary level. In most countries, however, there are still fewer women than men in tertiary-level employment. They represent on average 45 of this population with extremes in (61) and (29). 27

Science and Technology Statistical Compendium 2004 B.7. Scientific and technical occupations HRST occupations As a percentage of total employment, 2002 Professionals Technicians Growth of HRST occupations Average annual growth rate, 1995-2002 Women 40 30 20 10 0-2 0 2 4 6 8 10 12 Source:, calculations and estimates from national sources, November 2003. As measured here, human resources in science and technology (HRST) encompass workers in professional (e.g. engineers or medical doctors) and technical occupations. The definition goes far beyond R&D by including workers actively involved in the creation and diffusion of knowledge and technological innovation. Professionals and technicians represent between 20 and 35 of total employment in most countries. Their share is over 35 in,, and and below 20 in,, and (data for are, however, probably underestimated). Professional and technical occupations have grown at a much faster rate than overall employment over 1995-2002. In,,, and, professional and technical occupations grew by more than 5 a year. However, in, and, employment of professionals and technicians has decreased. The rapid growth of these professions owes more to the rapid increase of women s participation than that of men. The share of women is at least equal to that of men in half of all countries. It is particularly high (more than 60) in, and the and lowest in, the,, and. 28 The share of professionals is particularly high (i.e. over 17) in,, and the. The breakdown between professionals and technicians varies across countries, but there are generally more technicians than professionals.

Human Resources in Science and Technology B.8. International mobility Non-US citizens from countries with science and engineering doctorates in the 1999 Relative shares of non-national scientific and technological employment in the European Union 2002 or latest year available Share of non-national employees in all occupational groups 38.1 (44.0) 8 000 6 000 4 000 2 000 0 0 5 10 15 Source: based on data from National Science Foundation/SRS, SESTAT database, and from the Eurostat Labour Force Survey, May 2003. In recent years, the international mobility of highly skilled workers has received increasing attention from policy makers and the media. However, internationally comparable data on international flows of scientists and researchers are scarce. For example, the above data on foreign scientists and engineers (S&Es) only exist in the and thus provide only part of the picture of international mobility. In the, the largest number of non-us scientists and engineers with S&E doctorates originating from the area come from the and ; relatively few are from and. If non- countries are taken into account, there are three times as many foreign scientists from China and twice as many from India as from the in the. In 2002 in the European Union countries, the relative share of non-national human resources in science and technology (HRST), as defined by people employed as professionals and technicians, was between 3 and 3.5, but there are large differences among countries. As a percentage of national HRST, employs by far the largest share (38), in part because of a sizeable banking sector, a small labour market and the presence of various institutions. also employs a relatively large share: 7.5 for all occupational groups and 5.5 for HRST, again in part because of the presence of various European institutions and the European headquarters of many multinationals. and the also have relatively high shares. In the, the relative share of nonnational HRST is higher than that of non-nationals for all occupational groups. 29

Science and Technology Statistical Compendium 2004 B.9. R&D personnel 25 R&D personnel Per thousand total employment, 2001 or latest available year 20 15 10 5 0 Women researchers By sector of employment, as a percentage of total researchers, 2001 or latest available year Business enterprises Government Higher education Other 0 10 20 30 40 50 Source:, MSTI database, November 2003. Total R&D personnel encompasses all persons employed directly in R&D activities and therefore includes technicians and support staff in addition to researchers. R&D personnel employment is closely related to the amount of R&D expenditure. It is most intensive in the Nordic countries with and having more than 15 per thousand employees contributing to R&D. In and, 13.5 per thousand employees are also devoted to R&D activities, which is well above the average of 10.5 per thousand employees. The participation of women in R&D activities is increasingly gaining the attention of policy makers. Women are indeed under-represented among researchers. Most countries for which data are available show a percentage of women researchers comprised between 25 and 35. is the only country for which women researchers exceed 40 of total researchers, while at the other end, and are characterised by a very low percentage of women (around 11). Women researchers are principally found in the higher education sector and their participation is particularly low in the business sector, which in most countries concentrates the highest number of researchers (see B.10). This uneven distribution of women across sectors has an impact on the very low overall participation of women. 30