Industrial research and development characteristics, 2016 (intentions)
Based on the intentions of research and development (R&D)-performing firms, in-house R&D spending is expected to edge down from $18.5 billion in 2014 to $17.9 billion in 2015 and to $17.7 billion 2016.
Data from the newly redesigned Annual Survey of Research and Development in Canadian Industry showed that 80% of all in-house industrial R&D spending was Canadian sourced self-funded by the business performing the R&D, while 17% of these expenditures were financed by Canadian- and foreign-related firms.
Firms with R&D programs responsible for over one-half of in-house R&D spending
Businesses with R&D programs were responsible for most in-house spending on industrial R&D. Individual businesses that spent $10 million or more on in-house R&D accounted for almost 60% of in-house industrial R&D expenditures in 2014. Businesses that spent between $1 million and $10 million on R&D were responsible for 23% of in-house expenditures, while those that spent less than $1 million on R&D accounted for the remaining share of in-house spending.
Businesses located in Central Canada accounted for almost three-quarters of in-house R&D spending in 2014. Firms located in Ontario represented 44% of in-house R&D spending, while those located in Quebec accounted for 29%. Higher R&D expenditures in Ontario and Quebec were supported by the presence of R&D-performing manufacturers and technology-based service firms in these provinces.
Businesses in Alberta, supported by R&D spending in the oil and gas extraction sector, accounted for 12% of in-house R&D spending, while businesses in British Columbia were responsible for 10%.
Foreign-controlled firms accounted for more than one-third of in-house R&D spending.
Specialized research firms and software developers report highest levels of in-house R&D spending
Service-producing businesses were responsible for over half of all in-house R&D spending in 2014, led by specialized research firms, computer system designers and software publishers. Specialized research firms include start-up companies that focus on developing new goods or services before their entry onto the market, as well as contract research-based firms.
Manufacturing firms were responsible for one-third of in-house R&D spending. Aerospace product and parts manufacturers ($1.6 billion) spent the most, followed by machinery ($682 million) and pharmaceutical ($488 million) manufacturers in 2014.
Businesses engaged in R&D for oil and gas extraction purposes accounted for nearly 8% of all in-house industrial R&D spending.
Engineering and technology projects account for over three-quarters of industrial in-house R&D spending
In 2014, over three-quarters ($14.4 billion) of all industrial R&D expenditures were in engineering and technology. Spending on software-related sciences and technologies totalled $5.0 billion of in-house R&D spending. In-house R&D spending in natural and formal sciences amounted to over 10% of in-house R&D expenditures. Firms engaged in medical and health sciences accounted for nearly 10% of these expenditures, reflecting R&D activity related to medical biotechnology, basic medicine and clinical medicine.
In-house R&D spending for service-producing firms was relatively widespread across R&D fields. Service-producing firms dedicated over 75% of their in-house R&D spending to engineering and technology, with software-related engineering and technology accounting for over half this amount. In the manufacturing industry, engineering and technology (85.5%) accounted for most in-house R&D spending.
Data are now available for R&D spending in social sciences and humanities
Businesses spent $18 million on in-house R&D related to social sciences and humanities in 2014, reflecting research in geography, planning, organization and interdisciplinary fields, the humanities, and economics and business. Based on new data now available for this field of R&D, service-producing firms were responsible for over three-quarters of in-house R&D spending on social sciences.
Most firms that perform R&D report innovative outcomes
Data from the newly redesigned Annual Survey of Research and Development in Canadian Industry allowed for more detailed analysis on the nature of R&D and its impact on business outcomes.
In 2014, experimental development accounted for over two-thirds of R&D spending. Experimental development is defined as work that draws on existing knowledge and aims at producing new products or processes or substantially improving existing products or processes. Firms also allocated more than 20% of their in-house R&D spending to applied research and 5% to basic research.
Among firms investing in R&D from 2012 to 2014, about 55% reported that their R&D activities led to new or improved goods, while 43% reported that these activities led to new or improved services.
R&D professionals concentrated in service industries
In 2014, firms employed 149,943 full-time equivalent R&D personnel, consisting mainly of professionals such as researchers (92,027) and technologists (51,626).
On an industry basis, service-producing firms employed just over 60% of R&D personnel and manufacturers about one-third. Researchers and research managers accounted for almost 70% of the R&D workforce in service industries and 49% of the R&D workforce in manufacturing. In the manufacturing sector, technologists performed just under half of R&D.
The redesigned survey also included data on the use of on-site R&D consultants. Just over 6,000 on-site R&D consultants were employed by R&D-performing businesses in 2014, mainly in R&D services and technology-based