Innovation expenditure

Innovation expenditure includes the following items of both current expenditure and investment.

Research and development is understood as systematic work to increase knowledge and use of existing knowledge to develop new applications. Prototype development is often a key element of R&D activity. Software development is classified as R&D whenever the purpose is to make an advance in software technology or when the software is an integral part of an R&D project. R&D is carried out both by an enterprise's own staff and through outsourced R&D projects.

Acquisition of machinery and equipment for innovation. Purchases that are either required to make new products or that are process innovations owing to their technological characteristics. This also includes directly relevant software programs.

Acquisition of technological knowledge for innovation. This includes patents, inventions, licences, trade marks, designs, consultancy services (excluding R&D), other know-how and software not classified elsewhere.

Tooling up the production process required for innovation, and industrial design. Plans and drawings intended to define procedures, technical specifications and operational features required for making new products and implementing new process innovations. Also changes required in production, quality control, standards and software. This also includes product or process modifications and post-R&D trial production required for production start-up.

Arrangements for introducing new services, production and distribution. Measures designed to define procedures, specifications and practical features required to produce innovations.

Training and skills acquisition for innovation. Training and other skills taught to staff directly involved in producing innovation. Both in-house and outsourced training services.

Launch of new products. This includes preliminary market research, market tests and launch advertising, but excludes the development of distribution networks.

Statistics using the definition

Validity of the definition

  • 1 January 1995 - 31 December 2016

Source organisation

  • OECD