1. RESPONDING TO THE ECONOMIC CRISIS
1.7. Business R&D by firm size
Small and medium-sized firms (SMEs) play an impor-
tant role in innovation. They are a constant source of
Classification by size
technological change and competitive pressure for
The classification of firms by size follows the
large firms, which are compelled to innovate to main-
recommendations of the 2002 Frascati Manual
tain their technological edge. The credit crunch cre-
(para. 183). Small firms are defined as those with
ated by the current crisis is likely to affect SMEs
 fewer than 50 employees and medium-sized
severely, owing to their typically limited access to
firms as those with  50 to 249 employees . This
finance.
definition is consistent with the size classifica-
The effects of the recession on business research and
tion adopted by the European Commission for
development (R&D) expenditure are also likely to be
SMEs.
stronger in smaller OECD economies, where the share
of R&D performed by SMEs (defined here as firms with
fewer than 250 employees) is generally greater than in
larger economies. In 2007, SMEs accounted for a large
share of business R&D in New Zealand (73%), Greece
(60%), the Slovak Republic (57%), Norway (50%), Spain
(49%), and Ireland (46%). In the larger EU countries,
Source
their share is less than 20%, and in the United States it
is around 15%. Japan has one of the lowest shares
OECD, Main Science and Technology Indicators Data-
among OECD countries, with only 6.4%.
base, June 2009.
Small firms (those with fewer than 50 employees)
account for a significant share of business R&D (over
20%) in Greece, Ireland, and Spain, and more than 45% Going further
in New Zealand.
OECD (2002), Frascati Manual: Proposed Standard Practice
The impact of the crisis on the innovative activities of
for Surveys on Research and Experimental Development,
SMEs also depends on the government financing of
OECD, Paris, www.oecd.org/sti/frascatimanual.
business R&D, which differs greatly among OECD
countries. In Hungary, Portugal, the Slovak Republic
and Slovenia, SMEs receive 75% or more of govern-
Figure notes
ment-financed R&D. In Belgium, Hungary, Slovenia
and Switzerland, more than 40% of government- Small firms (fewer than 50 employees): for the United
financed R&D goes to firms with fewer than States, 5-49 employees; for Luxembourg, the
50 employees. The United Kingdom, France and the Netherlands and Sweden, 10-49 employees. Medium-
United States are the countries in which the greatest sized firms (50-249 employees): for Japan, fewer than
share of government-financed business R&D is 299 employees.
directed to large firms.
OECD SCIENCE, TECHNOLOGY AND INDUSTRY SCOREBOARD 2009 © OECD 2009
34
1. RESPONDING TO THE ECONOMIC CRISIS
1.7. Business R&D by firm size
Share of business R&D by size class of firms, 2007 Share of government-financed business R&D by size
class of firms, 2007
Percentage Percentage
Firms with fewer than 50 employees Firms with fewer than 50 employees
Firms with 50 to 249 employees Firms with 50 to 249 employees
New Zealand (2005) Hungary
Greece (2005)
Portugal
Slovak Republic
Slovenia (2006)
Norway
Slovak Republic
Spain (2006)
Ireland (2006)
Ireland (2006)
Belgium (2006)
Belgium (2006)
Spain (2006)
Portugal
Switzerland (2004)
Canada (2006)
Czech Republic
Poland
Greece (2005)
Australia (2006)
Australia (2006)
Czech Republic
Norway
Hungary
Denmark (2005) Korea
Austria (2006) Finland
Luxembourg (2005)
Poland
Netherlands (2005)
Canada (2006)
Slovenia (2006)
Luxembourg (2005)
Korea
Austria (2006)
Italy (2006)
Netherlands (2005)
Switzerland (2004)
Denmark (2005)
Finland
Germany (2005)
Sweden
Sweden
United Kingdom
Italy (2006)
France (2006)
United States (2006)
United States (2006)
France (2006)
Germany (2005)
Japan United Kingdom
0 20 40 60 80 100 0 20 40 60 80 100
% %
1 2 http://dx.doi.org/10.1787/742335760410 1 2 http://dx.doi.org/10.1787/742376005261
OECD SCIENCE, TECHNOLOGY AND INDUSTRY SCOREBOARD 2009 © OECD 2009
35