Industrial R&D spending will decline this year by 2.8% to $15.6 billion after posting modest increases in 2012 and 2011, according to the latest data from Statistics Canada. Business R&D outlays are now 6.7% off from their all-time high of $16.8 billion in 2007, as firms appear increasingly reluctant to take on risk amidst global financial uncertainty.

Business expenditures were even down in the resource rich provinces of Alberta and British Columbia in 2011 (the latest year for which provincial data are available), despite a healthy 15.2% increase in energy-related R&D to $1.7 billion. Since 2000, the R&D share of mining, oil and gas has tripled and accounted for 6% of the total between 2008 and 2012 before falling to 5% in 2013.

The top energy sub-sectors for 2011 are: oil sands and heavy crude oil ($577 million), crude oils and natural gas ($553 million), renewable energy resources ($106 million), electric power ($91 million), nuclear fission and fusion ($68 million), industry energy efficiency ($47 million), hydrogen and fuel cells ($35 million).

Manufacturing remains the single largest R&D-performing sector at $7.3 billion, down 5.3% from 2009. The sector accounts for a 47% share of the total, well off from its high of 68% in 2000. It includes communications and equipment ($1.4 billion), aerospace products and parts ($1.4 billion), machinery ($618 million), pharmaceuticals and medicine ($508 million) and navigational, measuring, medical and control instrument manufacturing ($334 million).

The service sector accounts for $7.1 billion or 45% of the total and includes scientific R&D ($1.9 billion), computer systems design ($1.3 billion), wholesale trade ($1.3 billion) and information and cultural industries ($1.2 billion). Service R&D increased rapidly in the 2000s, rising from $2.9 billion in 1999 to $7.5 billion in 2008 before the impact of the economic downturn.

Another major trend that continues in 2013 is the declining share of the industrial R&D total firms with large R&D outlays. The top 25 R&D performers saw their share fall from 48% in 1989 to just 33% in 2013. The story is the same for the top 100 performers, which fell from 68% in 1989 to just 50% today.

R&D PERSONNEL

In 2011, 140,423 people were engaged in R&D, up slightly from the year before. The levelling off of personnel follows a period of decline between 2008 and 2011 when Canadian companies shed 32,321 or 18.7% of their R&D workforce. While employment by R&D professionals held relatively steady during that period - 93,443 in 2011- significant losses were experienced by R&D technicians and technologists (down 14,205 or 27.3%) and other R&D support staff (11,747 or 56%).

Services accounted for 75,583 of R&D personnel, followed by manufacturing (58,164), construction (1,821), mining, oil and gas extraction (1,814), agriculture, forestry, fishing and hunting (1,738) and utilities (1,303). Ontario and Quebec are home to 110,611 or 79.5% of all R&D personnel.

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