OECD Taxonomy of Economic Activities Based on R&D Intensity

New taxonomy of industries according to their level of R&D intensity - the ratio of R&D to value added within an industry. Manufacturing and non-manufacturing activities are clustered into five groups (high, medium-high, medium, medium-low, and low R&D intensity industries), drawing on new and expanded evidence from most OECD countries and some partner economies.

Type of content: Assets
Type of asset:
Code list / Ontology / Taxonomy / Vocabulary
Big data potential
Policy domains: Economy & Finance
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Ease of use
SWOT Analysis for
OECD Taxonomy of Economic Activities Based on R&D Intensity
Helpful Harmful
Strengths• Focuses on a measure of R&D performance intensity as the defining criterion that is an indicative but insufficient measure of high technology
• It extends the analysis of R&D intensity to economic activities in services: covering not only manufacturing but also nonmanufacturing industries, namely agriculture, mining, utilities, construction and a broad range of services
• It is based on the latest revision of the International Standard Industrial Classification, ISIC Revision 4.
Weaknesses• Measuring R&D intensity or embedded R&D in their purchases may not effectively characterise the innovative performance of firms or industries
• R&D intensity may be a rather imperfect indicator of other concepts such as reliance on/use of highly educated personnel, advanced technology or wider forms of knowledge-based capital.
• Delimitation between the medium and the medium-low R&D intensity industries, where there is a fairly small distance between the extremes
• Risk that for some industries, their measured R&D intensity may be under- or over-stating the true global picture as a result of missing economies like Brazil, India or China, whose share in the global industry’s value added and R&D may differ according to specialisation or other factors.
• The robustness of the taxonomy over time cannot be completely verified as it is not possible to create a balanced sample across years. Although historical data are available in the National Accounts as National offices produce back-calculations when new industrial classifications are adopted, this is not generally the case for R&D data.
• It is not possible at present to fully test whether the rise in absolute levels of R&D intensity in some industries in the OECD area has been associated to a fall in their share of global value added.
Opportunities• Support the pooled presentation of various statistics for groups of industries when R&D is deemed to be a relevant discriminant factor across a number of countries. Within a particular country, a given industry can be more or less R&D intensive that for the aggregate reported here
• May be expanded on in the future as evidence collected under the guidelines of the revised Frascati Manual 2015 enables a more accurate assessment of R&D performance and use within and across industries.
Threats• There can be significant heterogeneity across economies in terms of the absolute and relative R&D intensity of specific industries, reflecting what role an economy’ s industry plays in the global context.
• It is not possible to construct measures of R&D intensity at a detailed industry level for a number of major OECD partner economies. Ideally, these R&D intensity measures should be constructed on a global basis in order to ensure that entire industry value chains are captured

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