Industrial R&D spending increases 5% after four years of decline: StatsCan

Industrial R&D expenditures are increasing for the first time since the 2008 economic crisis with planned outlays of $15.6 billion in 2011. The 2011 tally is up 5% from the 2010 total but still 6.6% short of the all-time high of $16.8 billion in 2007. When measured in 2002 constant dollars, the gap between 2007 and 201l widens to 14%, according to the latest data from Statistics Canada.

The 2011 increase is led by the manufacturing sector, with anticipates an 8% increase in R&D to $7.7 billion or 49.2% of the total, down from a high of 68% in 2000. The largest manufacturing sectors are aerospace products and parts ($1.4 billion) and communications equipment ($1.4 billion).

R&D performed by service sector firms is expected to climb 3.1% to $6.8 billion or 43.5% of the total, although that's down from the $7.4 billion registered in 2008. Between 1998 and 2000, services accounted for just 28% of the total. In recent years, the industries driving the shift to the services sector are scientific R&D services ($1.7 billion), wholesale trade ($1.3 billion), information and culture ($1.2 billion) and computer system design and related services ($1.1 billion).

R&D conducted in areas outside of manufacturing and services have been slowly increasing from less than 4% in 2001 to 9% in 2010 and 8% in 2011. These industry sectors include oil and gas extraction, forestry, fishing, mining and agriculture.

energy R&D increasing

In 2009, energy R&D spending was $1.3 billion, with fossil fuels accounting for the single largest share ($928 million). That includes $478 million related to oil sands and heavy crude oil technologies for surface and sub-surface production and separation of bitumen and tailings management. Crude oils and natural gas exploration, development and storage accounted for $388 million. Renewable energy sources accounted for fraction of the total ($91 million) with hydro and bio-energy the largest sub-sectors.

Not surprisingly, Alberta has increased its share of the national total, rising from $1.2 billion or 7.7% in 2005 to $1.4 billion or 9.4% in 2009 (the last year for which a geographical breakdown is available). During the same time frame, Ontario's share of the total dropped from 52.4% to 46.1% as downsizing in the manufacturing sector accelerated.

Another major shift in Canadian industrial R&D is share of total spending by the largest R&D performers. In 1987, the Top 25 spent 49% of the total, dropping to 31% by 2011. The Top 100 spent 67% of the total in 1987 and dropped to 49% by 2011.

As of 2009, the services sector employed 76,636 R&D personnel for 51.1% of the total (149,923) Manufacturing employed 66,107 for a 44.1% share. Making up the remainder are: agriculture (2,070), construction (1,908), mining and oil and gas extraction (1,825) and utilities (1,377).

Spending on intellectual property (IP) was $435 million in 2009, of which patents accounted for $133 million. Payments received for IP totalled $741 million with patents accounting for nearly 75% of the total.

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