- 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.
The R&D data have two drawbacks. First, R&D is an input and does not measure the technical
change. Second, R&D does not encompass all the efforts of firms and governments in this area,
as there are other sources of technical change, such as learning-by-doing, which are not subject
to the narrow definition.
If the objective is to live up to the Lisbon strategy one has to follow the conclusion from the
Barcelona council meeting from March 2002, where The European Council agrees ”that overall
spending on R&D and innovation in the Union should be increased with the aim of approaching
3 pct. of GDP by 2010. Two-thirds of this new investment should come from the private sector”.
The objective is therefore not to invest 3 pct. of GDP on R&D but to invest 3 pct. of GDP on
R&D and innovation. The innovation part, however, seems to have been forgotten and many
studies merely focus on R&D. Moreover, the definition from Barcelona can be understood in
two ways. First, as if two-thirds of all investments on R&D and innovation should come from
the business sector or second as if two-thirds of the new investments on R&D and innovation
should come from the business sector. If the latter is the case, the business sector would only be
obliged to invest two-thirds of the difference between 3 pct. and the level in 2002.
The Oslo Manual (OECD, 1996) gives guidelines regarding the collection of data and defines
TPP (technological product and process) innovation as:
TPP innovations comprise implemented technologically new products and processes and
significant technological improvements in products and processes. TPP innovation has been
implemented if it has been introduced on the market (product innovation) used within a
production process (process innovation). TPP innovations involve a series of scientific
technological, organisational, financial and commercial activities. The TPP innovating firm is
one that has implemented technologically new or significantly technologically improved
products or processes during the period under review.
The Commission defines innovation as:
Innovation is the renewal and enlargement of the range of products and services and the
associated markets; the establishment of new methods of production, supply and distribution; the
introduction of changes in management, work organisation, and the working conditions and
skills of the workforce. (COM(1995) 688).
R&D is therefore only a part of innovation.
4. Borderline issues
When trying to measure the amount of R&D in a society, certain borderline issues come to
surface and have to be dealt with. First of all, the Barcelona council meeting talks of both R&D
and innovation and it is therefore important to be able to distinguish between the two. Second,
how do we distinguish R&D from teaching and routine work? These two issues are important
and have to be examined.
Theoretically, there is both a definition of innovation and R&D and distinguishing between the
two should therefore not be a problem. In the real world, however, the terms are often mixed
together. Innovation is even left out in many studies. One can justify this by asserting that R&D
is a fundamental basis for innovation and therefore can represent the total innovation process
well. To be able to reap the full potential benefits of R&D it is necessary to have a well-