1.
General
This publication presents the results of the part of the 2010–2012 Innovation Survey which
covered Research and Development in the business sector in 2012.
The survey was conducted by the Central Bureau of Statistics, and was financed in part by
the Office of the Chief Scientist at the Ministry of Economy.
The survey data were classified by division according to the Standard Industrial Classification
of All Economic Activities 2011,1 based on the principal activity of each company. Some of
the data, relating to the years 2002–2009, were classified according to the previous
Classification (1993). An examination of the transition to the new Classification revealed no
substantial effect on the series of research and development data. Therefore the same series
of data can be continued with no break.
The survey covers the entire business sector (excluding agriculture and diamonds
industries), which includes the Manufacturing, mining, and quarrying industries and the
service industries. It was carried out on the base of a sample of companies in the survey
population that were active in the business sector and had 10 or more jobs.2
Until 2008, the surveys of research and development covered the Manufacturing, mining and
quarrying industries, the Computer programming, consultancy, and related activities
division,3 and the Scientific research and development division, which included research
institutes, R&D centres, technology incubators, Fabless companies,4 and start-up
companies. The estimates of expenditure on R&D in the other service industries were
calculated as part of the national expenditure on civilian research and development.5 In view
of this, data from before 2008 for these industries are not presented in this publication.
The aims of the R&D surveys in the business sector included:
1. Estimating expenditure, inputs, and outputs of businesses in the R&D field, in order to
provide information on this activity, as well as to calculate the national expenditure on
R&D.
1
CBS (2012). Standard Industrial Classification of All Economic Activities 2011. Technical
Publication No. 80. Jerusalem: Author.
2
In the Computer programming, consultancy, and related activities division (62) and the Scientific
research and development division (72), companies with 5 or more job positions were included.
3
In the 1993 Standard Industrial Classification, this division was called the Computer and related
services division (72).
4
Fabless companies are companies that focus on planning and development, and which
manufacture through sub-contractors in Israel or abroad. The companies in Israel are only
responsible for R&D, marketing, and the management of the manufacturing process. These
companies are included in the Scientific research and development division (72).
5
Data and information regarding these expenditures are provided in: CBS (2014). National
Expenditure on Civilian Research and Development 1989-2012. Publication 1550. Jerusalem:
Author.
( 17 )
2. Producing a series of data on R&D that will allow continuous evaluation of the growth
potential generated by technological innovations.
3. Providing the government, research institutions, and other planning bodies with a
resource to help them guide Israeli research and development.
In the past, R&D surveys were published in the Current Statistics series and special
publications of the CBS.
Updates
2010: In this survey, a new, updated questionnaire was used that included new measures.
The process of constructing the questionnaire lasted a year and a half, and involved
consulting with various parties at government offices, in academia, and in the business
sector. The questionnaire underwent an initial examination at 11 companies from various
industries in the business sector.
The data for 2002–2009 were updated in this publication, for two major reasons:
1) The addition of companies that carry out a large amount of R&D, but which traditionally did
not report R&D activity in previous R&D surveys. Based on clarification of this issue with
company representatives (during the 2010 business R&D survey), the data were also
updated for past years.
2) Updating of the industrial classifications of the companies as required for the entire period,
as was done in the 2005 update.
2005: The classifications of the companies participating in the R&D survey were updated as
a result of applying the recommendations of the Helfman Commission,6 which convened in
2005 to characterize and define the national expenditure on civilian R&D. The update was
also part of an ongoing effort to adapt the data series to international definitions, in order to
enable international comparisons. The classifications were corrected retroactively as of 2003,
and as a result, there is a discrepancy between data series for the period up to 2002 and
data series for the period from 2003 onwards. Data from the previous series that relate to
2003 and 2004 are presented in Appendix A.
Part 2 of the Introduction presents data on business R&D by industries, and Part 3 presents
R&D data by geographic regions. Part 4 focuses on R&D expenditures in R&D centres, and
Parts 5 and 6 provide terms, definitions and explanations, and address the statistical
methodology.
6
The recommendations of the Helfman Commission appear in the Report of the Committee for
Characterization and Definition of National Expenditure on Civilian R&D, which was submitted to
TELEM (Forum for National Infrastructures for Research & Development) in April 2005.
( 18 )
2.
Research and Development in the Business Sector by Industry
2.1
Total Expenditure on Business R&D
Total expenditure on business R&D includes all expenditure on R&D in companies (internal –
directly within companies; and external – by acquiring R&D services). The expenditure items
included in this indicator are labour cost, purchase of raw materials, payments to external
factors, other expenditures and overhead, and fixed capital formation for R&D activity.
In 2012, companies in the business sector spent approximately NIS 39.9 billion on R&D
activity, an increase of 14% compared to 2011 (NIS 34.9 billion). This increase occurred in
every industry group, led by the knowledge-intensive services divisions (Computer
programming, consultancy, and related activities division and the Scientific research and
development division), which grew by 18.3%.
In the Computer programming, consultancy, and related activities division, the total
expenditure on R&D increased by 25.4% – from NIS 10.2 billion in 2011 to NIS 12.8 billion in
2012. Expenditure in the Scientific research and development division, which grew by 12.5%,
still comprised the largest share of the expenditure in the knowledge-intensive services
divisions (NIS 14.2 billion). In the Manufacturing, mining and quarrying industries, there was
a 6.5% increase – from NIS 11.7 billion in 2011 to NIS 12.5 billion in 2012.
Diagram 1 presents the total real expenditure on R&D by industries during 2003–2012.
During that period, expenditure in the Scientific research and development division increased
by 47% – a 4% average annual increase. Note that the Scientific research and development
division includes start-up companies, which increased substantially in number. It also
includes R&D centres of multi-national companies, whose activities increased appreciably
during that period. This increase reflects the considerable change in the nature of R&D in
general and Israeli R&D in particular, as well as the increase in the scope of R&D services.
Expenditure in the Computer programming, consultancy, and related activities division
increased by 65% during that period – an average annual increase of 5%; and expenditure in
the Manufacturing, mining, and quarrying industries increased by 31% during that period –
an average annual increase of 3%.
( 19 )
1. TOTAL EXPENDITURE ON R&D, BY INDUSTRY
2003-2012
(2010 prices)
16
14
NIS Billion
12
10
8
6
4
2
0
2003
2004
2005
2006
2007
2008
2009
2010*
2011
2012
Computer programming, consultancy, and related activities division
Scientific research and development division
Manufacturing, mining, and quarrying industries
*As of 2010 - according to the 2011 classification.
In 2012, the expenditure on R&D by companies in the Scientific research and development
division constituted 36% of the total R&D expenditure in the entire business sector; the
expenditure on R&D by companies in the Computer programming, consultancy, and related
services division constituted 32%; and R&D in the High-technology industries constituted
24% of the total R&D expenditure in the entire business sector (Diagram 2).
2. TOTAL EXPENDITURE ON R&D BY ECONOMIC
Manufacturing medium-high
technology* 4%
2012
Manufacturing - high
technology* 24%
Other service
industries 1%
Manufacturing medium-low
technology* 2%
Manufacturing - low
technology* 1%
Scientific research
and development
division 36%
NIS 39.9 billion
*Manufacturing, mining and quarrying divisions, by technological intensity.
( 20 )
Computer
programming,
consultancy, and
related activities
division 32%
2.2
Labour cost
Human capital is the main production factor in research and development. Therefore, the
main item in expenditure on internal R&D is labour cost. In 2012, labour cost in the business
sector amounted to NIS 23.9 billion – a 12% increase compared with 2011.
In 2012, the labour cost for a full-time equivalent (FTE – see the Terms, Definitions and
Explanations chapter) job in R&D was NIS 331,000 (Table A) – a decrease of 2% compared
to 2011 (NIS 339,000).
Table A.- Labour Cost per FTE Job, by Industry (2011 Classification)
NIS Thousands, 2010 prices
2009
2010
2011
2012
Total business sector
355
357
339
331
Manufacturing, mining and quarrying
297
302
290
295
Computer programming, consultancy, and related services
323
340
306
273
Scientific research and development
450
431
435
448
The highest labour cost per FTE job (NIS 448,000) was recorded in the Scientific research
and development division. A substantial decrease occurred in the Computer programming,
consultancy, and related services division (11%), following a decrease of 10% in 2011.
It should be noted that labour cost included the labour cost for all jobs in R&D during 2012,
whereas the number of FTE jobs was for the month of December 2012 only.
2.3
Jobs in R&D in the Business Sector
Jobs in R&D are those of researchers, developers, technicians, programmers, and other
workers who engage in R&D in companies or establishments, or who directly supply services
or support to R&D activity. For example, the job of an accountant or bookkeeper who
manages the accounts of an R&D unit is considered a job in R&D. However, the job of the
director of the company or establishment, who does not deal directly with matters concerning
the R&D unit, is not considered a job in R&D. Nonetheless, the labour cost of the director's
job is included in the overhead item.
In 2012, there were 68,700 jobs in R&D, an increase of 9.1% compared to 2011. The number
of FTE jobs in R&D increased by 8.8%, from 59,500 in 2011 to 64,700 in 2012. In the
Manufacturing, mining, and quarrying industries, there were 18,800 jobs in R&D. In the
Computer programming, consultancy, and related activities division there were 26,000 jobs in
R&D (an increase of 21% compared to 2011), and in the Scientific research and
development division, there were 19,100 jobs in R&D (Diagram 3).
( 21 )
Thousands
80
70
60
50
40
30
20
10
0
2002
3. JOBS IN R&D, BY INDUSTRY
2002-2012
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Total
Manufacturing, mining, and quarrying industries
Computer programming, consultancy, and related activities division
Scientific research and development division
In 2012, 82% of the jobs in R&D were for academics holding any degree (including
engineers), and 5% were for holders of third degrees or higher. In the Scientific research and
development division, 86% of the jobs were for persons holding an academic degree (Table
B).
Practical engineers, technicians, and persons with other technological education held 10.2%
of the jobs in R&D in the entire business sector. Workers with no relevant education (Others)
held only 7.5% of the jobs in the entire business sector.
Table B.- Jobs in the Entire Business Sector, by Industry
2102
Thousands
Industry
Total business sector
Manufacturing, mining, and
quarrying industries
Computer programming,
consultancy, and related
activities division
Scientific research and
development division
Total jobs in R&D
Total
academics
Other
workers
56.6
Practical
engineers and
technicians
7.0
68.7
20.0
15.3
2.9
1.8
27.5
23.0
2.4
2.1
20.3
17.6
1.6
1.2
5.1
Most of the jobs that were added in the entire business sector were for academics (including
engineers). Part of the increase in labour cost per FTE job might be explained by this
increase, because wages of academic workers are higher than those of non-academics.
In 2012, FTE jobs in R&D constituted 94.2% of all R&D jobs. This is similar to the percentage
published in 2011 (94.1%).
( 22 )
2.4
Income from the sale of R&D
The income from the sale of R&D in 2012 amounted to NIS 22.3 billion, an increase of 17.0%
compared to 2011 (NIS 19.1 billion). In the Computer programming, consultancy, and related
activities division income, income from the sale of R&D increased by 18.6% (NIS 1,608
million more than in 2011). In the Manufacturing, mining, and quarrying industries, income
from the sale of R&D increased by 11% (NIS 301 million more than in 2011), and in the
Scientific research and development division, this income increased by 13.6%.
4. INCOME FROM SALE OF R&D
2011-2012
24,000
Scientific
research and
development
division
20,000
NIS Million
16,000
12,000
Computer
programming,
consultancy, and
related activities
division
8,000
4,000
0
R2011
2012
Income from sale of R&D
R2011
2012
Income from sale of R&D to
affiliated companies abroad*
Manufacturing,
mining, and
quarrying
industries
* This figure is included in the total income from sale of R&D.
2.5
Income from the sale of new or improved products (goods or services)
Income from the sale of new or improved products is an indicator that reflects the influence of
R&D and innovation on the companies' output. Although innovation does not necessarily
result from R&D, in companies engaging in R&D it forms a substantive part of the innovative
process.
Out of the total income of companies that engaged in R&D in 2012, NIS 22.6 billion resulted
from the sale of new or improved products (11% of income), a decrease of 33.8% compared
to 2011 (NIS 49.2 billion). In comparison, only 6% of the income of companies not engaged
in R&D resulted from the sale of new or improved products – more than 3 times lower.7
7
See CBS. (2012). Innovation in the Business Sector 2006–2008. Publication 1463. Jerusalem:
Author.
( 23 )
Table C.- Income from the Sale of New or Significantly Improved Products,
by Industry
2012
Industry
Total income in
companies
engaged in R&D
Total business sector
Manufacturing, mining, and
quarrying industries
Computer programming,
consultancy, and related
activities division
Scientific R&D division
Other service industries
2.6
NIS Million
299,597
Distribution of
Income from the
income in
sale of new or
companies
improved products
engaged in R&D
Percentages
100
11
173,560
58
10
42,176
20,107
63,753
14
7
21
15
44
1
Concentration of R&D
R&D activity in Israel is very concentrated (Table D). The 10 establishments (CR10) with the
highest expenditure are responsible for 30%–50% of the total expenditure on R&D. While in
the Manufacturing, mining, and quarrying industries this percentage is increased in 2012, in
the Computer programming, consultancy, and related activities division and in the Scientific
R&D division the percentage is decreased compared to 2011. These data are identical for
the other indices (CR20 and CR50).
Table D.- Concentration of Total Expenditure on R&D in the Business Sector
Percentages
Industry
Year
CR10
CR20
CR50
Manufacturing, mining, and quarrying
industries
2011
2012
41
43
55
56
73
75
Computer programming, consultancy, and
related activities division
2011
2012
34
32
42
40
57
54
Scientific research and
development division
2011
2012
49
46
59
55
73
68
( 24 )
3.
Business R&D by Geographic Location
This section presents data on R&D activity according to a geographic division, and presents
relative indicators for the purposes of comparison and analysis of gaps among the various
districts in Israel. The Jerusalem district also included the R&D activity in the Judea and
Samaria Area (Israeli localities). The data reveal great variations in R&D activity among the
different districts, with most of the R&D activity concentrated in the centre of the country.
Table E.– Selected R&D Indicators, by District
2012
Percentages, unless otherwise specified
Indicator
Total R&D
expenditure (NIS
million)
Distribution of
expenditure on
internal R&D
Total
District
Haifa
Central
Jerusalem
Northern
Tel Aviv
Southern
23,887
1,981
3,047
6,720
16,794
10,179
1,166
100
5
7
18
40
27
2
13
24
7
12
14
24
4
17
10
20
7
23
12
39
8.2
2.9
4.4
11.7
12.4
14.2
1.6
5,042
1,511
2,325
7,208
8,791
7,765
1,027
369
347
269
418
390
360
259
Intensity of internal
R&D (1)
Ratio of external to
internal R&D
FTE jobs in R&D per
1,000 residents
(whole numbers)
R&D expenditure per
1,000 residents
(NIS thousand)
Labour cost per FTE
job (NIS thousand)
(1) R&D intensity is the ratio between expenditure on R&D and income from sales.
( 25 )
Percentages
Diagram 5 presents the distribution of expenditure on internal R&D, financing from
government sources and from international foundations, and the percentage of this financing
out of the expenditure on internal R&D. The diagram indicates that the Northern and
Southern Districts enjoyed a larger portion of the financing from government sources and
from international foundations compared to their share in the expenditure on internal R&D.
For example, companies in the Southern District were responsible for 2.5% of the
expenditure on internal R&D in the business sector, and received 11.9% of the total financing
from government sources and international foundations.
45
40
35
30
25
20
15
10
5
0
5. FINANCING FROM GOVERNMENT SOURCES AND INTERNATIONAL
FOUNDATIONS, AND DISTRIBUTION OF EXPENDITURE ON INTERNAL
R&D, BY DISTRICT
2012
Jerusalem
Northern
Haifa
Central
Tel Aviv
Southern
Percentage of financing from government sources and international foundations
Distribution of expenditure on internal R&D
Distribution of financing from government sources and international foundations
( 26 )
4.
R&D Centres
4.1 Foreign ownership and multi-national companies’ R&D centres
An R&D centre is a company in which most of the R&D services of the R&D department are
provided to a group of companies abroad with which it is affiliated.
Israel's human resources draw many multi-national companies to the country. These
companies establish development centres, which they use only as R&D units, in order to
benefit from the innovative and creative thinking of Israeli researchers and developers. This
mode of activity of the R&D centres forms a significant component of the amount of R&D
activity in Israel, and the phenomenon has increased in recent years. The vast majority of the
R&D centres are concentrated in the Computer programming, consultancy, and related
activities division (62) and in the Scientific research and development division (72). The main
activity of these centres is provision of R&D services to their parent companies or to other
companies in their company group. Sometimes the activity includes the marketing and sale
of the parent corporation's products as well. There are also R&D centres in the
Manufacturing, mining, and quarrying industries, in which the R&D activity is carried out
separately from the manufacturing activity, and the intellectual property is not transferred
directly to the production lines but is instead transferred first to the parent company.
Generally, this type of centre is the result of mergers and acquisitions of Israeli companies by
foreign multi-national companies, and of the removal of the production line to outside of
Israel. Occasionally these centres are established by parent companies without there having
been any previous merger or acquisition.
4.2
Total expenditure on R&D in the R&D centres
In 2012, the R&D centres spent a total of NIS 16.9 billion on R&D activity, an increase of
13.2% compared to 2011 (NIS 14.9 billion).
In the R&D centres, total expenditure on R&D increased steadily during 2005–2012. During
these years, total expenditure on R&D increased by 97%, from NIS 7.6 billion in 2005 to NIS
15.0 billion in 2012 (at 2005 prices). R&D centres constitute a major share of R&D activity in
the business sector. During the period 2005–2012, the share of R&D centres out of the total
business sector expenditure on R&D increased by 10 percentage points. In 2005, this
percentage was 28% and by 2012 it increased to 38%.
( 27 )
25
6. TOTAL EXPENDITURE ON R&D IN R&D CENTERES AND IN THE OTHER
COMPANIES IN THE BUSINESS SECTOR
2005-2012
(at 2010 prices)
NIS Billion
20
15
10
5
0
2005
2006
2007
2008
Other companies in the business sector
4.3
2009
2010
2011
2012
R&D centres
Jobs in R&D in the R&D centres
Jobs in R&D are those of researchers, developers, technicians, programmers, and other
workers who engage in R&D in companies or establishments, or who directly supply services
or support to R&D activity. For example, the job of an accountant or bookkeeper who
manages the accounts of the R&D unit is considered a job in R&D. However, the job of the
director of the company or establishment, who does not deal directly with matters concerning
the R&D unit, is not considered a job in R&D. Nonetheless, the labour cost of the director's
job is included in the overhead item.
In 2012, there were 26,800 jobs in R&D in the R&D centres, an increase of 13% compared to
2011 (23,600 jobs). This increase occurred in all industries in which the R&D centres were
classified.
During the period 2005–2012, the R&D centres' percentage of employment out of R&D jobs
in the business sector increased by 11 percentage points, from 22% in 2005 to 33% in 2012.
( 28 )
Table F.– Jobs in R&D, by Education
and Full-Time Equivalent (FTE) Jobs, 2012
R&D
centres
Other
companies in
the entire
business
sector
Thousands
Jobs in R&D
Jobs for holders of
academic degrees
Thereof: Third degree and above
First and second degree
(including engineers)
Practical engineers and
technicians
Others
FTE jobs
Share of R&D
centres'
contribution to
entire business
sector
Percentage
26.8
41.9
39
22.8
33.8
40
1.1
2.7
28
21.7
31.1
41
2.4
4.6
34
1.6
3.5
32
25.6
39.2
39
( 29 )
5.
Terms, Definitions and Explanations
5.1 The survey population
The survey was carried out on the basis of a sampling of companies active in the business
sector with 10 or more jobs that were included in the survey population. In the Computer
programming, consultancy, and related activities division and in the Scientific research and
development division, companies with 5 or more jobs were sampled.
The survey sample base was comprised of all industries in which the business sector
operates (excluding agriculture and diamonds), among them the Manufacturing, mining, and
quarrying industries and the service industries, which include the Computer programming,
consultancy, and related activities division (62) and the Scientific research and development
division (72) (which includes research institutes, R&D centres, technological incubators,
Fabless companies, and start-up companies). Also included were Financial activities,
Professional, scientific and technical activities, Trade, etc.
5.2 Economic classification
The companies and establishments in the 2012 Survey of Research and Development were
classified according to the Standard Industrial Classification of All Economic Activities 2011.8
5.3 The investigation unit
The investigation unit was the establishment. An establishment is an economic unit that
engages in one economic activity or one main activity and is situated in one location. It
maintains separate accounts, and sells most of its services and/or goods to external factors.
5.4 The reporting period
The establishments and companies were requested to report on their research and
development activities during 2012 (January through December). Data on the number of jobs
are for the month of December 2012.
5.5
Definitions
Foreign-owned company: Any company for which at least 50% of the ownership is held by
foreign residents.
Research and development: Systematic and creative activity which is intended to increase
the amount of knowledge of mankind, culture, and society. It also includes the use of
knowledge in order to create new applications (the OECD "Frascati Manual", 2002). The
definitions allocated to the sampling units can be found in the questionnaire, which appears
as an appendix in this publication.
8
Central Bureau of Statistics (2012). Standard Industrial Classification of All Economic Activities 2011.
Technical Publication 80. Jerusalem: Author.
( 30 )
Total expenditure on R&D: Includes labour cost, other expenditure including overhead,
expenditure on raw and auxiliary materials for R&D, capital formation in construction and
equipment for R&D, and payments to external factors for research and development activity.
Current expenditure on R&D: Includes labour cost, other expenditures including overhead,
expenditure on raw and auxiliary materials for R&D, and payments to external factors for
research and development activity. This expenditure does not include investments in
buildings and machinery for R&D.
Expenditure on raw and auxiliary materials for R&D: Total expenditures on materials
used for research and development. This item includes: raw materials, auxiliary materials,
tools and instruments with a durability of less than one year, fuel, water, electricity, etc.
Other expenditures, including overhead: The establishment’s expenditures related to
R&D that are not included in the labour cost item, such as overhead, maintenance, travel
abroad related to R&D, etc.
Capital formation in construction and equipment for research and development:
Capital formation in buildings, machinery, and equipment, whose durability exceeds one
year, for purposes of research and development.
Labour cost: In addition to wages, also includes expenses supplementary to wages and
additional labour cost components, such as the employer’s share of National Insurance
payments, study funds, provident funds, severance pay expenses borne by the employer,
worker transportation, maintaining a cafeteria, worker training expenditures, etc.
Payments to external factors for R&D work (excluding payments for patent acquisition):
Research and development commissioned from external factors.
Jobs: Employee jobs, owners, and unpaid family members; kibbutz members and workers
hired through employment agencies.
Jobs in R&D: Jobs in R&D are jobs directly dealing with R&D activity or that directly supply
services or support to R&D activity, such as jobs of engineers, R&D managers, and
administrative workers. Jobs that supply indirect services to the R&D department, such as
information security, accountants, and directors are not included in the count of R&D jobs
even when part of their wages is included in the R&D department's expenditure.
Number of full-time jobs (full-time equivalent jobs): Includes a calculation of part-time
jobs as full-time jobs (e.g., 6 half-time engineers = 3 full-time jobs).
Jobs for academic professionals: Jobs for persons with an academic degree (first, second
and third degrees, including engineers), or those with an equivalent level of education (i.e.,
jobs of persons who have not yet completed their academic studies, but are employed in jobs
requiring an academic degree).
Jobs for practical engineers and technicians: Jobs for persons with practical
engineer/technician diplomas or for persons with equivalent qualification (e.g., those who
have practical experience, laboratory technicians, and draftsmen).
( 31 )
R&D centres of multi-national companies: Companies whose R&D units provide R&D
services mainly to a company group abroad with whom they are affiliated.
Financing from government sources (government financing for R&D) and international
foundations: Financing for conducting R&D activities that is provided by the Chief Scientist
of the Ministry of Economy, government ministries, international foundations, and other
governmental sources.
Price indices: Until 2002, prices were amended based on the Consumer Price Index. Since
2003, prices have been deducted based on combined indices for income, capital formation,
raw materials, and wages.
Indices of concentration (CR10, CR20 and CR50): The concentration of R&D is measured
by two indices, which represent the 10, 20 and 50 companies with the largest expenditure on
R&D.
( 32 )
6.
Methodology
6.1 Sampling method
In accordance with the definition of the survey population, the sampling units were VAT
entities. If an entity had two (or more) National Insurance Institute files, the salary and
employee job data of the multiple files were combined. The size variable used for planning
the sample was the average number of employee jobs for the year 2012.
A stratified simple random sample, without replacement, was taken, with strata defined by
groupings of sample industries x size groups. (Sample industry refers to the industry to which
the units belong.) The boundaries of the size groups were generally 10, 50, 100, and 250
employee jobs. All businesses with 250 or more employee jobs were sampled, in take-all
strata. In a small number of industries, all businesses with 100 or more employee jobs were
also sampled, in take-all strata. In addition, in most of the industries, all businesses with 50
or more employee jobs which also had recognition from the Office of the Chief Scientist were
sampled in take-all strata (even if the recognition only involved a past request for financing
from the Office of the Chief Scientist).
Many of the questions in the R&D Survey were intended to determine what percentage of
businesses had certain characteristics – for example, the percentage of businesses that
engage in R&D. (These questions are in contrast to quantitative questions such as those
concerning total expenditure). Therefore, the sampling was performed using (almost) equal
probabilities in each stratum within each industry (with the exception of the take-all strata);
the businesses in the take-some strata were sampled with probability in proportion to the
number of business in the stratum (separately in each industry grouping).
6.2 Investigation method
The data for the Research and Development Survey were collected by telephone and by
mail. Telephone calls were used to locate reporting parties and to provide explanations
regarding the survey, its requirements, and the manner in which the questionnaires should
be answered. Questionnaires were sent and returned by mail.
Data collection process
The data-collection process included a number of stages, as described below:
Stage 1: Location of a company and mailing of the questionnaire – At this stage the survey
interviewers located the companies in the sample and the contact persons at the companies.
In most cases, the contact persons were accountants, R&D directors, and human resources
personnel. Also during this stage, questionnaires were mailed out to the contact persons.
Stage 2: Clarifications and explanations – After the questionnaires were returned to the
Central Bureau of Statistics, and after they were reviewed by the appropriate parties, there
were some instances of problems and misunderstandings that needed to be clarified with the
reporting parties at the companies. Reporting parties were contacted again in order to obtain
corrections and supplementary information.
( 33 )
6.3 Response
In all, 2,515 companies were sampled in the 2010–2012 Innovation survey, and 99% of the
companies responded to the survey in full or in part. Approximately 789 companies
responded that they engaged in research and development activity in 2012, and data for 36
companies were imputed based on administrative data.
6.4 Data handling
After receiving the reports from the companies, the data underwent a quality control
procedure that included logic checks, comparison to administrative data from different
sources (such as the Tax Authority, the Chief Scientist of the Ministry of Economy, and
various multi-national research funds), as well as comparison to the companies’ data from
previous years (where relevant). During this stage, 20% of the companies in the sample
received a second request, for clarifications and supplemental data.
In certain cases, it was impossible to receive full data from the companies (for instance, if a
company closed), or some of the data (if the company’s accounting system was unable to
provide a specific figure, or data according to a specific breakdown).
Missing data were handled by means of:
1. Imputation of missing data:
In cases in which the company provided data but some of the data were missing, the
data were completed based on imputation of averages in the company’s sampling
stratum (according to industry, company size, ownership, etc.). The missing datum was
calculated using one of two weights – workers and/or revenue.
2. Imputation of full data, in cases of non-response:
For companies whose response to the survey could not be obtained, for various reasons,
the “nearest neighbour” model was used, in which the non-responding company receives
the data of a company similar to it on R&D-related parameters. Note that data were
imputed only for companies for which there was a clear indication of R&D activity in the
relevant year (newspaper articles, data from the Chief Scientist at the Ministry of
Economy, reports from previous years, etc.).
In order to determine the “close neighbor” for each company, logistic regression was
used to calculate the probability of R&D activity for all companies in the sample. The
regression, which was used to examine a binary parameter for R&D activity, was based
on administrative data (such as number of workers, industry, rate of export, and sector).
The company closest in probability for R&D activity to the non-responding company was
chosen as its “nearest neighbour”.
( 34 )
6.5 Reliability and limitations of the data
The results of this survey, like those of any other statistical survey, were subject to a number
of limitations. The limitations in the present survey were:
(a) Lack of accurate recording by the establishments of expenditures related to R&D
(especially labour cost, when a considerable portion of jobs in R&D also included other
activities, for which there was no distinction between the labour inputs in the various
activities);
(b) The definition of “Research and Development” was not fully understood. As a result,
some establishments failed to include R&D activities, whereas activities not
necessarily related to R&D were included.
(c) Lack of complete, up-to-date information on changes in the nature of the activities that
the companies engaged in (particularly small businesses in the Manufacturing, mining,
and quarrying industries), which occasionally led to a less than optimal classification,
because the classification was based mainly on the previous survey.
(d) For a variety of reasons, some companies did not respond to one or more sections of
the questionnaire, which necessitated imputation of the missing data (based on
information from previous years, as well as on other information).
(e) It should be noted that the smaller the size of the industry (in terms of the number of
companies engaged in R&D), the greater the influence of the problems mentioned in
the two previous paragraphs. Ultimately, this leads to greater variance when the
distribution among industries is broader.
(f) The fact that a sample was used rather than a full enumeration might lead to less
accurate expenditures on R&D.
It should be noted that most of the establishments and companies that were approached
responded affirmatively, and filled out the questionnaires.
( 35 )