Organisation for Economic Co-operation and Development

The OECD Science, Technology and Industry Outlook 2012 presents, in a series of country profiles, the main features, strengths and weaknesses of national STI systems and major recent changes in national STI policy. The statistical dimension of the country profiles has drawn on the work and empirical research conducted by the OECD on the measurement of innovation and the development of internationally comparable STI indicators for policy analysis.   

This database presents the 2018 edition of OECD time-series indicators of implied R&D tax subsidy rates for OECD member countries and five non-member economies (Brazil, People's Republic of China, Romania, Russian Federation, and South Africa) over the period 2000-2018, drawing on data collected in the OECD-NESTI R&D tax incentive surveys from 2007 to 2018. The 2018 edition of RDTAXSUB contains time-series estimates that are based on headline tax credit and allowance rates, by firm size and profitability scenario. Due to limited historical data availability, the estimates are not adjusted for provisions that bound the tax benefits received by firms (e.g. ceilings, thresholds). They therefore provide an upper bound for the marginal tax subsidy implied by R&D tax relief measures across countries over time. These estimates should not be confused with separate contemporary cross-sectional OECD estimates of marginal tax subsidy rates (OECD, 2018) that compute adjusted (weighted) tax credit/allowance rates for a number of countries based on available information on the proportion of eligible R&D subject to different marginal levels of relief (see 2017).The tax subsidy rate is defined as 1 minus the B-index, a measure of the before-tax income needed by a “representative” firm to break even on USD 1 of R&D outlays (Warda, 2001). As tax component of the user cost of R&D, the B-Index is is directly linked to measures of effective marginal tax rates. Measures of tax subsidy rates such as those based on the B-index provide a convenient proxy for examining the implications of tax relief provisions. These provide a synthetic representation of the generosity of a tax system from the perspective of a generic or model type of firm for the marginal unit of R&D expenditure. To provide a more accurate representation of different scenarios, B-indices are calculated for “representative” firms according to whether they can claim tax benefits against their tax liability in the reporting period (OECD, 2013). When credits or allowances are fully refundable, the B-index of a firm in such a position is identical to the profit scenario. Carry-forwards are modelled as discounted options to claim incentives in the future, assuming a constant annual probability of returning to profit of 50% and a nominal discount rate of 10%. For general and country-specific notes on the time-series estimates of implied marginal tax subsidy rates on R&D expenditures (based on the B-index), see http://www.oecd.org/sti/rd-tax-stats-bindex-notes.pdf.

Patents are a key measure of innovation output, as patent indicators reflect the inventive performance of countries, regions, technologies, firms, etc. They are also used to track the level of diffusion of knowledge across technology areas, countries, sectors, firms, etc., and the level of internationalisation of innovative activities. Patent indicators can serve to measure the output of R&D, its productivity, structure and the development of a specific technology/industry. Among the few available indicators of technology output, patent indicators are probably the most frequently used. The relationship between patents as an intermediate output resulting from R&D inputs has been investigated extensively. Patents are often interpreted as an output indicator; however, they could also be viewed as an input indicator, as patents are used as a source of information by subsequent inventors. Like any other indicator, patent indicators have many advantages and disadvantages. The advantages of patent indicators are : patents have a close link to invention; patents cover a broad range of technologies on which there are sometimes few other sources of data; the contents of patent documents are a rich source of information (on the applicant, inventor, technology category, claims, etc.); and patent data are readily available from patent offices. However, patents are subject to certain drawbacks: the value distribution of patents is skewed as many patents have no industrial application (and hence are of little value to society) whereas a few are of substantial value; many inventions are not patented because they are not patentable or inventors may protect the inventions using other methods, such as secrecy, lead time, etc.; the propensity to patent differs across countries and industries; differences in patent regulations make it difficult to compare counts across countries; and changes in patent law over the years make it difficult to analyse trends over time.

The IPP.Stat is the statistics portal of the Innovation Policy Platform containing the main available indicators relevant to a country’s innovation performance. In addition to the traditional indicators used to monitor innovation, the range of the coverage to be found in the IPP.Stat calls for the inclusion of indicators from other domains that describe the broader national and international context in which innovation occurs. Indicators are sourced primarily from the OECD and the World Bank, as well as from other sources of comparable quality. The statistics portal is still under development.

The OECD Science, Technology and Industry Outlook reviews key trends in STI policies and performance in OECD countries and major emerging economies. It is published every two years and draws on a unique international policy survey conducted by the OECD - with more than 45 countries involved in 2014 - and the latest OECD work on STI policy analysis and measurement. Following an overview of the recent STI global landscape, key current policy issues are discussed across a series of thematic policy profiles. Country profiles report the STI performance of individual countries and the most recent national policy developments.

Patents are a key measure of innovation output, as patent indicators reflect the inventive performance of countries, regions, technologies, firms, etc. They are also used to track the level of diffusion of knowledge across technology areas, countries, sectors, firms, etc., and the level of internationalisation of innovative activities. Patent indicators can serve to measure the output of R&D, its productivity, structure and the development of a specific technology/industry. The relationship between patents as an intermediate output resulting from R&D inputs has been investigated extensively. Patents are often interpreted as an output indicator; however, they could also be viewed as an input indicator, as patents are used as a source of information by subsequent inventors. Like any other indicator, patent indicators have many advantages and disadvantages. The advantages of patent indicators are :patents have a close link to invention;patents cover a broad range of technologies on which there are sometimes few other sources of data;the contents of patent documents are a rich source of information (on the applicant, inventor, technology category, claims, etc.); andpatent data are readily available from patent offices. However, patents are subject to certain drawbacks:the value distribution of patents is skewed as many patents have no industrial application (and hence are of little value to society) whereas a few are of substantial value;many inventions are not patented because they are not patentable or inventors may protect the inventions using other methods, such as secrecy, lead time, etc.;the propensity to patent differs across countries and industries;differences in patent regulations make it difficult to compare counts across countries; andchanges in patent law over the years make it difficult to analyse trends over time. 

This database provides a set of indicators that reflect the level and structure of central government support for business R&D; in form of R&D; tax incentives and direct funding across OECD member countries and ten non-member economies (Argentina, Brazil, Bulgaria, Croatia, Cyprus, People's Republic of China, Romania, Russian Federation, and South Africa). This includes time-series indicators of tax expenditures for R&D;, based on the latest 2017 OECD data collection on tax incentive support for R&D; expenditures that was completed in July 2017. These estimates of the cost of R&D; tax relief have been combined with data on direct R&D; funding, as compiled by National Statistical Offices based on reports from firms, in order to provide a more complete picture of government efforts to promote business R&D.; The latest indicators and information on R&D; tax incentives also feature on the dedicated OECD website Measuring R&D; tax incentives.Tax expenditures are deviations from a benchmark tax system (OECD, 2010) and countries use different national benchmarks. Available estimates typically reflect the sum of foregone tax revenues – on an accruals basis – and refunds where applicable, with no or minimal adjustments for behavior effects. Some countries only report claims realised in a given year (cash basis), while others report losses to government on an accrual basis, excluding claims referring to earlier periods and including claims for current R&D; to be used in the future. For general and country-specific notes on the estimates of government tax relief for R&D; expenditures (GTARD), see http://www.oecd.org/sti/rd-tax-stats-gtard-notes.pdfThe sources for the other indicators (direct funding of BERD, BERD and GDP) include the OECD databases on Main Science and Technology Indicators and Eurostat R&D; statistics.