Concepts and definitions

Extramural research and development

Extramural R&D means R&D projects or services which have been acquired outside of the unit and which from the point of view of the service provider are its intramural R&D. Extramural R&D is characterized by the fact that the developer largely determines the implementation of the project content.

Other R&D; personnel

Other R&D staff includes technical experts, other personnel carrying out R&D tasks (e.g. laboratory technicians, computer programmers) and staff providing other kinds of support for R&D projects.

R&D; in full-time equivalents (FTE)

R&D on full-time equivalents refers to the amount of time spent on R&D work during one year of full-time work (including holidays).

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.

Research and development expenditure

Labour costs of internal R&D personnel

Share of R&D work in annual wages according to R&D person-years. Labour costs include actual wages, fringe benefits in actual value, holiday pay and holiday bonuses. They also include social security payments, contributions to unemployment insurance and compulsory and voluntary pension contributions.

Materials, equipment and other current expenditure

Materials and equipment needed for R&D activities including acquisition of machinery and equipment with operating life at most one year. Other current expenditure includes the share of R&D activity in cost items such as buildings and premises, information technology, travel and administrative costs (also labour costs of administrative and maintenance personnel, which are not included in the R&D wages).

Purchased services

Purchases of services integrated into enterprise's own R&D activities. Services that are produced by external personnel, but which are closely linked to the intramural R&D of an enterprise. They may include software services, consultancy and other planning services, which are not considered as intramural R&D activities from the point of view of the service provider.

Capital costs (acquisition of machinery, equipment, buildings and the like)

Acquisitions which serve R&D only are included in total, in other cases the share of R&D is estimated by the share of use for R&D purposes. Item covers also acquisition of software for R&D activities along with licence fees.

Research and development personnel

Internal R&D personnel are persons employed by the statistical unit and who contribute to the unit’s intramural R&D activities (at least 10% of their normal annual work time) by performing R&D or administrative, office or other support work that is directly linked to R&D work or R&D projects. This category does not include people belonging to central departments who have done general administrative or office work serving the whole unit.

Research and development personnel by function

Product development engineers, researchers or equivalent are persons whose job is to produce new knowledge or develop new applications in product, process or other development work. This category also includes people responsible for the managing and planning of the contents of R&D projects. Person performing only administrative activities linked to the R&D projects belong to the group other R&D staff. According to the R&D definition every statistical unit performing R&D has at least one person who is product development engineer, researcher or equivalent.

Other R&D staff includes technical experts, other personnel carrying out R&D tasks (e.g. laboratory technicians, computer programmers) and staff providing other kinds of support for R&D projects.

Researcher

Product development engineers, researchers or equivalent are persons whose job is to produce new knowledge or develop new applications in product, process or other development work. This category also includes people responsible for the managing and planning of the contents of R&D projects. Person performing only administrative activities linked to the R&D projects belong to the group other R&D staff. According to the R&D definition every statistical unit performing R&D has at least one person who is product development engineer, researcher or equivalent.

State research institute

The 12 central government research institutes in Finland operate in seven different administrative sectors. Ten of them are performance-managed agencies, one a limited company owned and controlled by the state, and one an independent public corporation. The institutes define the research priorities together with the ministry responsible for performance management. The actual research is independent and its funding comes increasingly on a competitive basis from several sources in the domestic public and private sectors, as well as from international funders.

State research institutes, with abbreviations (administrative sector):

Finnish Institute of International Affairs, UPI (Parliament of Finland)

VATT Institute for Economic Research (Ministry of Finance)

Natural Resources Institute Finland LUKE (Ministry of Agriculture and Forestry)

Finnish Food Authority (Ministry of Agriculture and Forestry)

National Land Survey of Finland NLS (Ministry of Agriculture and Forestry)

Finnish Meteorological Institute (Ministry of Transport and Communications)

Geological Survey of Finland, GTK (Ministry of Employment and the Economy)

VTT Technical Research Centre of Finland Ltd * (Ministry of Employment and the Economy)

Radiation and Nuclear Safety Authority, STUK (Ministry of Social Affairs and Health)

National Institute for Health and Welfare, THL (Ministry of Social Affairs and Health)

Finnish Institute of Occupational Health, TTL (Ministry of Social Affairs and Health)

Finnish Environment Institute, SYKE (Ministry of the Environment)

* non-profit state enterprise with special tasks

Central government research institutes conduct solution-oriented research which supports social decision-making and the renewal of business life. In addition to research activities, the institutes have a varying number of different expert and official tasks, as well as charged and other service activities. The research institutes maintain significant research infrastructures, data files and long time series on different sectors of society. Research institutes produce services horizontally to most administrative branches, the rest of the public sector, as well as enterprises and third sector operators. International co-operation plays a key role both in research activities of research institutes and in expert and official tasks.

The majority of research and development activities carried out in research institutes are financed with appropriations allocated in the state budget. In addition to budget funding R&D activities are increasingly financed by external funding consisting of income from charged services and funding from elsewhere than the institute's own budget classes. External funding mainly comes on a competitive basis from several sources and from both domestic public and private sectors and international sources. The share of external funding is based on the performance targets of the institutes and is thus estimated.

University

In the statistics on university education universities refer to educational institutions belonging to type 42 of educational institutions. Lower (bachelor's) and higher (master's) level university degrees can be attained in universities, as well as further academic degrees, e.g. licentiate's or doctor's degrees. Universities also provide continuing education and open university teaching.

University of applied sciences

In the statistics on university of applied sciences education, a university of applied sciences education means and educational institution in category 41 of the classification of educational institutions. Students of university of applied sciences education can obtain university of applied sciences degrees and higher university of applied sciences degrees. University of applied sciences are maintained by municipalities, or by municipal or private limited companies or foundations.

Referencing instructions:

Official Statistics of Finland (OSF): Research and development [e-publication].
ISSN=2342-6721. Helsinki: Statistics Finland [referred: 9.12.2021].
Access method: http://www.stat.fi/til/tkke/kas_en.html