UNESCO SCIENCE REPORT

UNESCO SCIENCE REPORT
Firms prefer in-house R&D to outsourcing
For years, R&D measures were used as a proxy for innovation
on the assumption that engagement in R&D would
automatically lead to the marketing of innovative products
and processes. Nowadays, it has been recognized that
the innovation process encompasses activities other than
R&D. The relationship between these two phenomena is
nevertheless still of great interest.
In the EU’s Community Innovation Survey, which is followed
by many countries worldwide, the harmonized questionnaire
asks about engagement in in-house and outsourced (or
external) R&D but also other activities related to innovation,
such as the acquisition of machinery, equipment and software
and the acquisition of other external knowledge.
Generally speaking, firms prefer in-house R&D to outsourcing,
the most notable exception being Cuba (Figure 2.7). In the
Republic of Korea, there is even a large gap between the share
of firms performing R&D internally (86%) and externally (15%).
This same phenomenon is to be found in Hong Kong (China):
84% and 17% respectively. On mainland China, almost twothirds
of firms perform in-house R&D (Box 2.2).
Overall, whereas, in 65% of high-income countries, more than
half of firms perform in-house R&D, this is observed in only
40% of low- and middle-income countries. It is interesting to
observe that not all firms active in innovation engage in R&D,
whatever the income status of the country. This supports the
argument that innovation is broader than R&D and that firms
may be innovators without actually being R&D performers.
Figure 2.7: Firms with in-house or external R&D among surveyed countries
Share of innovation-active firms (%)
R&D performers and contractors in high-income countries
100
90
80
70
60
50
40
30
20
10
0
86
15
Korea, Rep. of
84
59
Finland
China, Hong Kong
84
17
78
41
72
34
71
34
Norway
France
Belgium
Netherlands
Sweden
Croatia
69
27
68
33
67
33
63
34
61
30
59
32
58
26
57
21
57
41
Austria
Czech Rep.
Luxembourg
Ireland
Germany
Lithuania
Japan
Malta
Slovakia
Estonia
R&D performers and contractors in low- and middle-income countries
56
23
53
3
53
27
51
27
51
18
49
20
47
22
41
19
Italy
Denmark
Israel
Portugal
Cyprus
40
29
In-house R&D
39
4
38
20
37
21
Uruguay
Latvia
Spain
36
21
External R&D
34
20
19
18
5
Poland
New Zealand
Russia
Australia
100
90
In-house R&D
External R&D
80
70
60
50
40
30
20
10
0
76
28
72
19
69
17
63
22
Costa Rica
Argentina
Malaysia
China
Morocco
Uganda
Serbia
Indonesia
Source: UNESCO Institute for Statistics, September 2014
60
40
60
35
60
26
58
6
54
22
51
25
South Africa
Hungary
Ghana
50
24
49
31
44
41
Nigeria
Kenya
Mexico
43
14
42
7
El Salvador
Egypt
39
5
39
27
37
10
Tanzania
Romania
India
35
11
35
11
33
12
Ecuador
Turkey
Belarus
Ukraine
26
18
24
10
22
6
17
7
Colombia
Brazil
Bulgaria
14
7
11
5
Panama
Cuba
41
10
70