Concepts and Definitions

Enterprise: The enterprise is an organizational form that produces goods and services using decision autonomy at first degree. An enterprise carries out one or more activities at one or more locations. The relation between enterprise and legal unit is directly stated by this definition:”An enterprise corresponds to a legal unit or combination of legal units.

Local unit: It is a unit that carries out activities, or some of them, related to goods and services in a geographically defined place. (EEC n. In the 696 / 93-16.3.93 regulation, the description of the procedure of local unit is accepted.)

R&D: Research and experimental development comprise creative work undertaken on a systematic basis in order to increase the stock of knowledge, including knowledge of man, culture and society, and the use of this stock of knowledge to devise new applications.

Basic research: Basic research is experimental or theoretical work undertaken primarily to acquire new knowledge of the underlying foundation of phenomena and observable facts, without any particular application or use in view.

Applied research: Applied research is also original investigation undertaken in order to acquire new knowledge. It is, however, directed primarily towards a specific practical aim or objective.

Experimental development: Experimental development is systematic work, drawing on existing knowledge gained from research and/or practical experience, which is directed to producing new materials, products or devices, to installing new processes, systems and services or to improving substantially those already produced or installed.

Researchers: Researchers are professionals engaged in the conception or creation of new knowledge, products, processes, methods and systems and also in the management of the projects concerned.

Technicians and equivalent staff: Technicians and equivalent staff are persons whose main tasks require technical knowledge and experience in one or more fields of engineering, physical and life sciences or social sciences and humanities. They participate in R&D by performing scientific and technical tasks involving the application of concepts and operational methods, normally under the supervision of researchers. Equivalent staff performs the corresponding R&D tasks under the supervision of researchers in the social sciences and humanities.

Full TimeEquivalent (FTE): One FTE may be thought of as one person-year. Thus, a person who normally spends 30% of his/her time on R&D and the rest on other activities (such as teaching, university administration and student counselling) should be considered as 0.3 FTE. Similarly, if a full-time R&D worker is employed at an R&D unit for only six months, this results in an FTE of 0.5. Since the normal working day (period) may differ from sector to sector and even from institution to institution, it is not meaningful to express FTE in person-hours.

Other supporting staff: Other supporting staff includes skilled and unskilled craftsmen, secretarial and clerical staff participating in R&D projects or directly associated with such projects.

Intramural expenditures: Intramural expenditures are all expenditures for R&D performed within a statistical unit or sector of the economy during a specific period, whatever the source of funds.

Current costs: Current costs are composed of personnel costs and other current costs.

R&D personnel cost: These comprise annual wages and salaries and all associated costs or fringe benefits, such as bonus payments, holiday pay, contributions to pension funds and other social security payments, payroll taxes, etc.

Other current cost of R&D: These comprise non-capital purchases of materials, supplies and equipment to support R&D performed by the statistical unit in a given year.

Capital expenditure: Capital expenditures are the annual gross expenditures on fixed assets used in the R&D programmes of statistical units. They should be reported in full for the period when they took place and should not be registered as an element of depreciation. All depreciation provisions for building, plant and equipment, whether real or imputed, should be excluded from the measurement of intramural R&D expenditures. This approach is proposed for two reasons: If depreciation (an allowance to finance the replacement of existing assets) is included in current costs, the addition of capital expenditures would result in double counting. In the government sector, no provision is normally made for depreciation of fixed assets. Consequently, even within a country, comparisons between sectors cannot be made unless depreciation provisions are excluded, and aggregates for a national series cannot be compiled unless the sector totals are put on a comparable basis.

Instruments and equipments: This covers major instruments and equipment acquired for use in the performance of R&D.

Land and buildings: This comprises land acquired for R&D (e.g. testing grounds, sites for laboratories and pilot plants) and buildings constructed or purchased, including major improvements, modifications and repairs.

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