Service Lives of R&D Assets: Comparing survey and patent based approaches Daniel Ker UNECE Conference of European Statisticians Geneva, 7th May 2014
Download
Report
Transcript Service Lives of R&D Assets: Comparing survey and patent based approaches Daniel Ker UNECE Conference of European Statisticians Geneva, 7th May 2014
Service Lives of R&D Assets:
Comparing survey and patent based approaches
Daniel Ker
UNECE Conference of European Statisticians
Geneva, 7th May 2014
Overview
Measuring and capitalising R&D – brief intro
How long is R&D useful for and why does this
matter?
Estimating R&D service lives
Results
Conclusions
Measuring and Capitalising R&D
R&D: creative, systematic work to produce
knowledge, use of this knowledge for new
products or processes of production
Can be bought in, usually produced by user
Treated as investment in SNA08
Measuring and Capitalising R&D
3 key questions to answer:
1. How much R&D is there?
Sales for specialists
Sum-of-costs for non-market, own-account
expenditure data from ‘Frascati Manual’ sources
2. Who uses it?
Funders of R&D (from FM sources)
Exports of R&D (from ITIS)
Survey questions on intended owners
3. How long is it useful for?
How long is R&D useful for?
Service life: ‘the total period during which
[the asset] remains in use, or ready to be
used, in a productive process’
The period over which the R&D is used in:
Products sold
Licences granted
Policies implemented
Research papers published
Not infinite:
Superseded by new R&D obsolescence
Gradually becomes ‘common knowledge’
Why do R&D service lives matter?
Knowledge capital thought to explain differing economic
performance (between countries, industries)
2 key determinants of knowledge stock:
the amount of knowledge produced (i.e. R&D output)
how long it remains in the stock
“the accuracy of capital stock estimates derived from a PIM
is crucially dependent on service lives” (OECD 2009)
“Specifying
a service life of 10 years rather than 5 years
would make a huge difference to estimates of capital
measures. Net capital stock would be approximately double,
and with a typical scenario of strong growth, consumption of
fixed capital would be appreciably smaller.” (OECD 2010)
Estimating R&D asset lives
Not practical to gather information on each individual asset
Need representative (average, max, min) service lives
1. Estimate from questions on R&D surveys
‘general’ approach – ‘over how many years would the business
expect to benefit from a typical investment in R&D?’
‘specific’ approach (USA) – identify a specific product which
embodied R&D; over how many years did the business sell
this product?
2. Estimate from data on patent renewals
Assume patents protect the results of R&D
In each year the patent renewal fee is paid, the R&D must be
worth at least as much as the renewal fee
Examine number period over which patents are renewed
(‘patent lives’)
Strengths and limitations
Survey approach
+ specifically targets R&D performed by the respondent
+ more timely
+ can distinguish different types of R&D
+ linked to different industries (via respondent NACE codes)
- may be challenging for respondents – response burden
- delay while responses are collected
Patent approach
+ readymade administrative source
+ direct observations for large population of patents
- assumes patent lives are representative of R&D lives
- have to wait to observe patent ‘death’
- assumes patents only renewed if of value
- ‘artificial’ maximum life due to patent rules
- industry breakdown requires linking to information on owner
Different methods
Mean or Median average lives
Frequency distribution of lives highly positively skewed
median preferable, less prone to bias
But mean common in literature
Weighted or un-weighted averages
Desirable to give greater weight to:
Survey responses from firms which perform the most R&D
Patents of highest value
Different methods
Survival analysis (patents only)
patents can be renewed for up to 21 years (in the UK)
patent data covered the 24 years between 1986 and 2010
so relatively few patents had the opportunity to reach the
maximum age of 21 years (only those filed before 1989)
downward bias in average life
Many cases are “censored”
Observe many patents surviving a number of years (e.g. from
1990 to 2010 = 20 years)
BUT do not get to observe the time of death (as it is after 2010)
Kaplan-Meier survival analysis uses the information
we have about these patents to produce improved
estimates of average patent lives
R&D survival profiles
Proportion of R&D/Patents surviving
100
90
Questionnaire: unweighted
composite life
80
Questionnaire: expenditure
weighted composite life
70
Patents: unweighted life
60
Patents: value weighted life
50
40
Patents: average life
30
20
10
0
0
2
4
6
8 10 12 14 16 18 20 22 24 26 28 30 32 34
Age of R&D/Patents in years
Illustrative impact of different service lives on R&D stocks
Stock of R&D
200
180
20.0
160
18.8
140
16.9
120
14.1
100
14.0
10.5
80
10.0
60
9.5
40
8.2
20
8.0
0
6.0
0
1
2
3
4
5
6
7
8
9 10 11 12 13 14 15 16 17 18 19 20
Years
These are all average R&D lives from the above sources and methods!
Large spread (14 years):
shortest = 6 years…un-weighted median from survey
longest = 20 years…from Kaplan-Meier analysis of patent lives
Conclusions
R&D service lives are a key determinant of
knowledge stocks and hence economic
performance
Countries face choices over the data sources
used to estimate R&D asset lives
Countries also face choices of the methods
applied to these data
Different choices will introduce artificial variation
in R&D service lives and reduce the international
comparability of R&D stock statistics