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Concepts and definitions

R&D; appropriation

Government R&D funding refers to appropriations and outlays for research and development in the state budget, i.e. intentions to spend money. Public funding for research and development includes R&D appropriations allocated to ministries, central government agencies and institutions. Development work of government-owned enterprises and municipalities is not included in the calculations.

Research and development activity

Research and experimental development (R&D) comprise creative and systematic work undertaken in order to increase the stock of knowledge – including knowledge of humankind, culture and society – and to devise new applications of available knowledge.

The five criteria for identifying R&D:

To be aimed at new findings (novel)

The aim of the R&D is to produce new knowledge and novelties. Mere application of the existing knowledge in development of new solutions, products or procedures is not R&D activity.

To be based on original, not obvious, concepts and hypotheses (creative)

Characteristic to R&D activity is creativity, setting and testing of new hypothesis and concepts. Routine activities in the development of products, processes or other procedures in not R&D activity.

To be uncertain about the final outcome (uncertain)

R&D involves uncertainty regarding outcomes and costs.

To be planned and budgeted (systematic)

R&D is conducted in a planned way, with records kept of both the process followed and the outcome. The purpose of the R&D project and the sources of funding for the R&D performed should be identified. R&D is often organized as a project, but it can also be goal-oriented activity of a person or a group.

To lead to results that could be possibly reproduced (transferable and/or reproducible)

An R&D project should result in the potential for the transfer of the new knowledge which also can be reproduced.

Distribution by type of R&D

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

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

Experimental development is systematic work, drawing on knowledge gained from research and practical experience and producing additional knowledge, which is directed to producing new products or processes or to improving existing products or processes.

Socio-economic objective

Government budget appropriations or outlays for R&D are considered in the statistics according to the social policy (socio-economic) objective. The division of government R&D funding into different objectives depends on the viewpoint of the classifier, in this case the provider of funding. The definitions used in Finland are based on the NABS classification (Nomenclature for the Analysis and Comparison of Scientific Programmes and Budgets, rev. 2007):


Industrial production and technology


Transport, telecommunication and other infrastructures


Exploration and exploitation of the earth




Culture, recreation, religion and mass media

Political and social systems, structures and processes

General advancement of knowledge: R&D financed from other sources than GUF

General advancement of knowledge: R&D financed from general university funds (GUF)

Exploration and exploitation of space

Referencing instructions:

Official Statistics of Finland (OSF): Government R&D funding in the state budget [e-publication].
ISSN=2489-3250. Helsinki: Statistics Finland [referred: 8.12.2023].
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