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Internationalization Indicators

A more complete picture of investment in knowledge should include expenditure on the design of new goods and cost of job-related training programmes.

The R&D effort (expenditure and personnel) is usually broken down among four sectors of performance: business enterprises, higher education, government and private non-profit institutions serving households (PNP). R&D has various sources of financing. Five sources are generally considered: the four R&D-performing sectors previously mentioned and funds from "abroad".

When measuring R&D performance in the higher education sector and its evolution, it should be remembered that many of the figures for this sector are estimates by the national authorities and evaluation methods may vary.

Business enterprise R&D (BERD) covers R&D activities carried out in the business sector by performing firms and institutes, regardless of the origin of funding. While the government and the higher education sectors also carry out R&D, industrial R&D is most closely linked to the creation of new products and production techniques, as well as to a country’s innovation efforts.

The marked growth in R&D expenditures in APEC economies leads to:

• Growing of internationalisation of R&D activities of multinational firms as the result of an increase in the number of R&D laboratories located abroad; and
• Emergence and development of international networks of co-operation agreements or alliances either between firms or between firms and government or university R&D bodies

The business sector is the major source of financing of total domestic R&D (GERD). The role of the business sector in funding R&D differs sharply across the three main regions. About 72% of R&D in Japan and 67% of R&D in the United States is funded by the business sector.