Concepts and definitions

Other R&D; personnel

Other R&D staff such as technical experts, other personnel carrying out R&D tasks (e.g. laboratory technicians, computer programmers) and staff providing other kinds of support for R&D projects.

R&D; in full-time equivalents (FTE)

R&D in full-time equivalents refers to the amount of time spent on R&D work during one year of full-time work (approx. 35 hours per week), allowing for 4-6 weeks of holidays.

R&D work done outside normal working hours is taken into account in calculating R&D in full-time equivalents, provided it is remunerated.

Research and development activity

Research and development activity (R&D) is understood as systematic work undertaken to increase the stock of knowledge and use it to devise new applications. The defining criterion is that the purpose of the activity should be the presence of an appreciable element of novelty. Research and development activity includes basic research, applied research and experimental development.

Basic research is defined as work undertaken to acquire new knowledge, without any particular application in view. Basic research includes analyses of properties, structures and relationships with a view to formulating and testing hypotheses, theories or regularities.

Applied research is work undertaken to acquire new knowledge directed primarily towards a specific practical application. Applied research includes seeding applications for the findings of basic research or determining new methods or ways of solving a particular problem.

Product and process development (experimental development) is systematic work that draws on existing knowledge gained from research and/or practical experience with the aim of producing new materials, products, processes, methods and systems or of substantially improving existing ones.

Research and development expenditure

The labour costs of R&D personnel are calculated as the proportion of labour costs of people doing R&D work accounted for by R&D. Labour costs include actual wages, fringe benefits counted under current costs, holiday pay and holiday bonuses. They also include social security payments, contributions to unemployment insurance, compulsory and voluntary pension contributions, and contributions to mutual benefit funds.

Current expenditure on buildings includes the R&D share of, for example, the following items of expenditure: heating, electricity, water, rents, maintenance of premises, cleaning and insurance.

Materials and equipment: materials and equipment needed for R&D activities, which also include the R&D share of the following items of expenditure: books, journals, etc., as well as purchases of machinery, appliances or instruments whose estimated service life is not more than one year.

Services bought in: these are defined as purchases of services relevant to an enterprise's own R&D activities. Whole R&D projects that are contracted out are considered to be contracted research. Services bought in might be construction work, software activities or other planning services, which are not generally considered R&D activities from the point of view of the service provider. However, whole R&D projects that are contracted out are not included.

Other current expenditure: this includes the R&D share in postal and telephone charges, as well as administrative costs (including labour costs of administrative and maintenance personnel that are not counted as research staff labour costs).

Building acquisition costs include the total booked costs of constructing laboratories, production plants and other buildings used for R&D, or the proportion of costs accounted for by R&D activities according to utilisation if the building is also used for other purposes. Acquisition costs essentially also include such things as major improvements that extend service life or enhance capacity.

Other acquisition costs for fixed assets include the total costs of acquiring equipment and machinery that are used exclusively for R&D activities; otherwise the proportion of expenditure accounted for by R&D activities is estimated according to use.

Expenditure is reported minus value-added tax (VAT), and should include costs incurred by activities during the statistical year and items counted as assets on the balance sheet. Depreciation provisions are excluded. In the absence of detailed monitoring, the R&D share of the various expenditures can be calculated for example from the labour costs of research personnel and total labour costs of the unit.

Research and development personnel

Research and development personnel are people who during the statistical year have spent at least 0.1 person-years (or 10% of their time) in an R&D unit doing administrative, office or other support work that is directly linked to R&D work or R&D projects. This category does not include people belonging to central departments who have done general administrative or office work serving the whole unit.

Product development engineers, researchers or equivalent are persons whose job is to produce new knowledge or develop new applications in product, process or other development work. This category also includes people responsible for the managing and planning of the contents of R&D projects.

Other R&D staff, such as technical experts, other personnel carrying out R&D tasks (e.g. laboratory technicians, computer programmers) and staff providing other kinds of support for R&D projects belong to this category.


A researcher or equivalent is a person whose job is to produce new knowledge or develop new applications in product, process or other development work. This category also includes people responsible for managing and planning the content of R&D projects. People who are responsible only for R&D-related administrative tasks are classified as other R&D personnel.

State research institute

Research institutes attached to ministries are one of the main sources of information needed in social decision-making. There are currently 12 publicly financed research institutes in seven administrative sectors.

State research institutes, with abbreviations (administrative sector):

Finnish Institute of International Affairs, UPI (Parliament of Finland)

Government Institute for Economic Research, VATT (Ministry of Finance)

Natural Resources Institute Finland LUKE (Ministry of Agriculture and Forestry)

Finnish Food Safety Authority, EVIRA (Ministry of Agriculture and Forestry)

National Land Survey of Finland NLS (Ministry of Agriculture and Forestry)

Finnish Meteorological Institute (Ministry of Transport and Communications)

Geological Survey of Finland, GTK (Ministry of Employment and the Economy)

VTT Technical Research Centre of Finland Ltd * (Ministry of Employment and the Economy)

Radiation and Nuclear Safety Authority, STUK (Ministry of Social Affairs and Health)

National Institute for Health and Welfare, THL (Ministry of Social Affairs and Health)

Finnish Institute of Occupational Health, TTL (Ministry of Social Affairs and Health)

Finnish Environment Institute, SYKE (Ministry of the Environment)

* non-profit state enterprise with special tasks

The primary task of state research institutes, which are the main actors in sector research, is to acquire, produce and provide information as the basis for political decision-making and development of society. In addition to research duties the institutes have a varying number of different specialist, monitoring, training, guidance and other official functions, charged and other service activities and so on. Research institutes produce services horizontally to many different administrative sectors and to the rest of the public sector. They also provide services to businesses and to third sector operators.

The majority of research and development activities carried out in research institutes are financed with appropriations allocated in the state budget. In addition to budget funding R&D activities are increasingly financed by external funding consisting of income from charged services and funding from elsewhere than the institute's own budget classes. External funding mainly comes on a competitive basis from several sources and from both domestic public and private sectors and international sources. The share of external funding is based on the performance targets of the institutes and is thus estimated.


In the statistics on university education universities refer to educational institutions belonging to type 42 of educational institutions. Lower (bachelor's) and higher (master's) level university degrees can be attained in universities, as well as further academic degrees, e.g. licentiate's or doctor's degrees. Universities also provide continuing education and open university teaching.

University of applied sciences

In the statistics on university of applied sciences education, a university of applied sciences education means and educational institution in category 41 of the classification of educational institutions. Students of university of applied sciences education can obtain university of applied sciences degrees and higher university of applied sciences degrees. University of applied sciences are maintained by municipalities, or by municipal or private limited companies or foundations.

Referencing instructions:

Official Statistics of Finland (OSF): Research and development [e-publication].
ISSN=2342-6721. Helsinki: Statistics Finland [referred: 20.11.2018].
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