The study, High variation in R&D expenditure by Australian firms, released in March 2007, examined longitudinal data from 353 R&D Tax Concession registrants who had a more than ten years history of continuous research and development (R&D) expenditure.
The study found that:
- most firms dramatically vary the amount they spend on R&D from year to year irrespective of firm size, industry and on R&D intensity
- 75 percent of the firms examined have moderate to highly variable patterns of R&D expenditure over time
- small and medium enterprises (SMEs) and large firms had similar levels of variation in R&D expenditure and only a quarter of each grouping had stable R&D expenditure
- while industry sectors showed appreciable differences, none were predominately composed of firms with stable R&D expenditure
- variation was also observed in the R&D intensity of firms and in the number of R&D employees
- nine factors were identified as contributing to this variability including cash flow and profits, customer needs, investment in plant and equipment, and the number and timing of R&D projects.