4. ICT and innovation

R&D expenditure by ICT equipment and information services industries, 2015
As a percentage of business enterprise expenditure on R&D
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Source: OECD, ANBERD Database, http://oe.cd/anberd, and Research and Development Statistics Database, http://oe.cd/rds, June 2017. StatLink contains more data. See chapter notes.

 http://dx.doi.org/10.1787/888933619296

Did you know?

China, Japan, Korea and the United States account for between 70% and 80% of all patented inventions in ICT technologies.

Information and communication technologies (ICT) are key enablers of innovation. In most OECD economies, these “information industries” account for about a quarter of business enterprise expenditure on R&D (BERD). In Finland, Israel, Korea and the United States, they account for 40% to over 50% of BERD. ICT BERD alone represents about 0.8% to 1.9% of GDP, reflecting the high research intensity of these economies and the sector itself.

Patents shed light on the extent to which investment in R&D translates into innovative output. During the period 2012-15, the majority of ICT inventions continued to be patented in three main areas, namely information and communication devices (about 27%), imaging and sound technologies (about 15%) and high-speed networks (about 12%). The United States accounted for the highest relative shares of such patents in 7 out of the 13 ICT fields, including high-speed computing, large-capacity information analysis (about 33% both) and security (28%); Japan did so in five fields, including imaging and sound technology (37%), and Korea led in human interface technologies (24%). China, conversely, contributed between 5% and 17% of the inventions patented in the different ICT fields.

Innovation encompasses a broader array of activities than R&D. As distinct from patents or other valuable ideas, innovations (products, processes and methods) need to be brought to market or adopted by businesses. On average, 74% of firms in ICT manufacturing introduced innovations in 2012-14, against an average of 51% for total manufacturing. ICT services also account for a larger share of innovative firms than service industries covered by innovation surveys (64% against 50%).

Definitions

Business expenditure on R&D (BERD) includes all expenditure on R&D performed by business enterprises, irrespective of funding sources. Expenditures are classified according to the main source of value added of the enterprise. Information industries are defined as the aggregate of ICT and digital media and content industries.

IP5 patent families are patents within the Five IP offices (IP5, www.fiveipoffices.org). ICT patents are identified using the International Patent Classification (IPC) codes (see Inaba and Squicciarini, 2017) and align with OECD definitions of the ICT sector (2007) and ICT products (2008).

Innovative enterprises are defined as businesses that have introduced a new or significantly improved product or process or a new marketing or organisational method over the reference period.

Patents in ICT-related technologies and major players, 2012-15
Share of the top five players in the field
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Source: OECD, STI Micro-data Lab: Intellectual Property Database, http://oe.cd/ipstats, June 2017. StatLink contains more data. See chapter notes.

 http://dx.doi.org/10.1787/888933619315

Innovative businesses in ICT manufacturing and IT services, 2012-14
As a percentage of businesses in the relevant category
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Note: International comparability may be limited due to differences methodologies and economy-specific response patterns. European countries follow harmonised survey guidelines with the CIS.

Source: OECD, based on the 2017 OECD survey of national innovation statistics and the Eurostat, Community Innovation Survey (CIS-2014), http://oe.cd/inno-stats, June 2017. StatLink contains more data. See chapter notes.

 http://dx.doi.org/10.1787/888933619334

Measurability

Differences exist in the ways economies collect and report R&D data by economic activity. Interpretation may vary depending on whether data are collected on the basis of the main activity of the R&D performer, the industry or product at which the R&D is targeted, or a mix of the two. The Frascati Manual (OECD, 2015) advocates separate reporting of both types of data. A specific effort is also made to encourage the separate reporting of software-related R&D to understand the overlap between R&D and software investment statistics. The proliferation of software R&D within all sectors (e.g. automotive) may also explain the apparent lack of growth in the share of information industries’ BERD.

ICT patents encompass 13 areas defined according to the specific technical features and functions they accomplish (e.g. mobile communication, high-speed network, high-speed computing and large-capacity information analysis). As most inventions are only protected in certain economies, using data from different patent offices may lead to different results.

The main features and challenges of indicators derived from innovation surveys are described in dedicated sections within this chapter.