2. TARGETING NEW GROWTH AREAS
2.4. Health-related R&D
Ageing is one of the major challenges facing OECD
societies and economies in the next decades. Innova- Public funding of health R&D
tion can help to meet this challenge, by improving the
Health-related R&D is difficult to measure owing
performance of health systems and reducing their
to institutional complexity and diversity; it may
costs. Health-related research and development (R&D)
be publicly or privately funded and be carried
provides a useful indicator of innovative efforts in this
out in firms, universities, hospitals and private
field.
non-profit institutions. The government budget
In OECD countries in 2008, direct government support
appropriations or outlays for R&D (GBAORD) can
of health-related R&D based on government budget
be broken down by socioeconomic objectives,
appropriations for R&D (GBAORD) was about 0.11% of
such as the protection and improvement of pub-
their combined GDP. Direct support for health-related
lic health, as defined by the Frascati Manual
R&D represented over 0.22% of gross domestic product
(OECD, 2002).
(GDP) in the United States, far above the levels for the
The GBAORD health category is used here as a
European Union (0.05% in 2006) and Japan (0.03%
proxy for total central government funding of
in 2008). Since 2000, it has decreased only in Sweden.
health-related R&D. However, this category only
The data on direct support for health-related R&D
covers programmes for which health is the pri-
suggest that the United States accounts for around
mary objective. Furthermore, the classification
three-quarters of the OECD total. However, when data
of programme and institutional funding
from additional GBAORD categories are used to adjust
depends on how governments present their R&D
for institutional differences in the funding of health
priorities as well as on the formal mandate
R&D, the picture changes. The United States is no lon-
of the institutions concerned. Arrangements
ger an outlier: health-related R&D budgets relative to
for funding R&D in hospitals also vary among
GDP approach that of the United States in a number of
countries.
countries, notably owing to the important contribu-
To address some of the limitations mentioned
tion of funding of medical science (through general
above and to provide a more complete picture of
university funds and non-oriented research). Sweden,
health-related R&D, funding of medical sciences
with a relatively modest direct government budget for
via non-oriented research and general university
health-related R&D as a percentage of GDP, is a case in
funds are included when available as are other
point.
relevant funds, notably general support for R&D
Another indicator often used as a component of
in hospitals.
health-related R&D is R&D expenditure by the phar-
maceutical industry. In 2006, it represented around
0.3% of GDP in Belgium, Sweden, the United States
and the United Kingdom, and reached almost 0.5% in
Sources
Denmark.
OECD, R&D Database, May 2009.
The share of pharmaceutical R&D in business sector
OECD, ANBERD Database, June 2009.
R&D (BERD) is above 20% in Belgium, Denmark,
Ireland and the United Kingdom, and over 40% in
Hungary. While the ratio of pharmaceutical R&D to Going further
GDP is low in the Netherlands, Poland and Spain (less
OECD (2002), Frascati Manual: Proposed Standard Practice
than 0.1%), this sector accounts for a significant share
for Surveys on Research and Experimental Development,
of total business sector R&D in the three countries
OECD, Paris, www.oecd.org/sti/frascatimanual.
(more than 10%).
Figure notes
Growth rate for 2000-07 for Spain, Portugal, Greece,
Slovenia, Belgium and Israel; 2000-06 for OECD, United
Kingdom, Canada, EU27, Mexico and Switzerland;
2001-08 for Denmark; 2002-07 for Estonia; 2002-08 for
the Czech Republic; 2004-07 for Poland; and 2005-08 for
Norway.
 Advancement of knowledge comprises non-oriented
R&D and general university funds, and  Other includes
other relevant national and international categories.
OECD SCIENCE, TECHNOLOGY AND INDUSTRY SCOREBOARD 2009 © OECD 2009
58
2. TARGETING NEW GROWTH AREAS
2.4. Health-related R&D
Health R&D in GBAORD as a percentage of GDP, 2008 Direct and indirect government support
for health-related R&D, 2008
United States 4.0
Direct health GBAORD
Spain (2007) 23.2
Advancement of knowledge
OECD (2006) 5.7
(medical sciences)
United Kingdom (2006) 3.4
Canada (2006) 11.1 Other
Iceland 5.8
Norway 8.8
United States (2007)
Italy 8.7
Australia 10.7
Sweden (2007)
Denmark 5.1
Finland 1.3
Austria
Korea 9.1
Portugal (2007) 6.9
France (2006)
EU27 (2006) 5.8
France 2.0
Spain (2007)
New Zealand . .
Hungary (2005) . .
Finland (2007)
Estonia (2007) 36.3
Czech Republic 4.4
United Kingdom (2006)
Germany . .
Netherlands
8.4
Ireland Netherlands
16.9
Japan 4.4
Luxembourg (2007) . . Germany
Austria 9.2
Greece (2007) 1.0
Denmark
Slovenia (2007) 20.6
Belgium (2007) 13.0
Czech Republic (2007)
Slovak Republic 9.6
Mexico (2006) 14.6
Ireland
Russian Federation (2007) . .
Average annual growth rate,
Switzerland (2006) 9.4
2000-08 Greece (2007)
Poland (2007) 54.3
Israel (2007) 7.4
Slovenia (2007)
Sweden -5.2
0.0 0.1 0.2 0.3 0.00 0.05 0.10 0.15 0.20 0.25 0.30
% %
1 2 http://dx.doi.org/10.1787/743056803871 1 2 http://dx.doi.org/10.1787/743084208765
R&D in the pharmaceutical industry as a percentage of BERD and of GDP, 2006
As a percentage of GDP (left-hand scale) As a percentage of BERD (right-hand scale)
% %
0.5 50
0.4 40
0.3 30
0.2 20
0.1 10
0.0 0
1 2 http://dx.doi.org/10.1787/743144573255
OECD SCIENCE, TECHNOLOGY AND INDUSTRY SCOREBOARD 2009 © OECD 2009
59
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