Framework for an Industry-based R&D Satellite Account

This paper introduces a proposed framework for estimating an Industry-based R&D Satellite Account (IRDSA). The IRDSA builds on the preliminary Research and Development Satellite Account (R&DSA) released in September 2006, and provides industry and commodity detail. It adapts the U.S. input-output (I-O) accounts to present a consistent and systematic framework to assess the role of R&D in the economy at both an industry and commodity level.

Inclusion of R&D in the industry accounts provides the framework for examining differences among industries’ investments in R&D and the impact of these investments on GDP by industry. It shows the sources of R&D output, R&D industry value added (gross output minus intermediate inputs), and R&D final uses. It allows a detailed look at the composition of R&D funding and performance across industries and the development of improved R&D deflators. In the longer term, the framework can be used as a basis for incorporating R&D into the core national economic accounts.