Research and development expenditure has tripled during five years

The year 2008 as distinct from a year earlier, was characterised by a more rapid growth in the government financing of the research and development (R&D) activities compared to that by enterprises. Based on the data collected from R&D performers, the amount of the government financed R&D expenditure reached 1.6 billion kroons in 2008, growing 31% compared to a year before. At the same time, despite the economic crisis, the enterprise financed R&D expenditure equalled 1.3 billion kroons with just 15% increment. Hereby, it is important to mention that the European Union funds mediated by the state budget are counted as government sourced.

Above all, such a trend increased the R&D expenditure in non-profit institutional sectors (higher educational institutions, state scientific institutions, private non-profit sector) as R&D in enterprises is mainly financed by enterprises themselves. So, of the 3.2 billion kroons allocated to R&D, 43% were spend on R&D in both enterprises and higher educational institutions, 12% in the government sector and 2% in the private non-profit sector (non-profit associations such as professional associations, scientific societies, etc.).

In the international comparison, one of the indicators characterizing the domain under consideration is the rate of R&D expenditure per inhabitant. With respect to the R&D expenditure per inhabitant, Estonia has passed Greece and is about to reach the level of Portugal (these two position as the last ones among the old EU Member States), but despite the fast growth in the R&D expenditure, Estonia’s level is still far below the EU mean level. On the other hand, Estonia’s value of the indicator is twice as high as that of Russia or other Baltic countries.

R&D expenditure per inhabitant^a

Source: Eurostat.
^aThe reference year for Estonia, Finland and Ireland is 2008, for others 2007.

Labour expenses comprise a half of R&D expenditure, and during five years, they have grown in the same proportion as total expenditure, but in 2008 even more slowly — compared to a year earlier, the expenditure increased by 20% and the labour expenses by 14%. Putting the working time dedicated to R&D alongside with financial data, it is clear that the growth in labour expenses is first and foremost related to the increase in wages and salaries, because over the five years, the number of man-years has increased only by one fifth.

In 2008 the age distribution of researches was measured in the business enterprise sector for the first time. It came out that the mean age of researchers was slightly under 40 years. But in the non-profit sectors it was over 45 years. The career in enterprises is attractive for the youth as it poses a practical challenge in the form of applied research and experimental development and also provides a higher level of wages and salaries. In 2008, labour expenses per one R&D man-year comprised 368,000 kroons in the business enterprise sector, but only 258,000 kroons in the non-profit sectors.