There are four key differences to be aware of.
1. Some R&D performed in a state is purchased for use in other states. BEA is estimating where the R&D is used as a productive asset. R&D can be performed in one state and used in another. This leads to differences from NSF’s performance based measures, particularly for states with technology intensive manufacturing.
2. For government and non-profit institutions serving households (NPISH) R&D investment, the increase in GDP is equal to the consumption of fixed capital. This is because government and NPISH expenditures on intangibles are already accounted for in the national income and product accounts (NIPAs) as consumption. Treating them as capital only adds to GDP the measure of depreciation for these newly recognized capital assets. As a result, BEA’s impacts will have less annual variability than performance-based measures.
3. R&D that is used to produce own-account software is already accounted for in BEA's accounts as investment. BEA subtracts that overlap from R&D investment. Performance-based measures would show those expenditures as R&D.
4. BEA makes adjustments to R&D investment to account for exports and imports of R&D services.