Intangible Assets Measuring and Enhancing Their Contribution to Corporate Value and Economic Growth (2009) / Chapter Skim
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5 Intangibles and Government Measurement
5 Intangibles and Government Measurement
Pages 60-84
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From page 60... ...
Earlier in the day, Brent Moulton provided details about BEA's R&D satellite account.
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From page 61... ...
If spillovers (the residual unexplained portion of growth) from R&D are, as research suggests, at least as large as the direct returns, this means that R&D may account for one-sixth of total factor productivity growth.1 Landefeld cautioned that, while substantial progress in measurement has been made and preliminary results indicate an influential role for R&D in the economy, a number of questions are unanswered about these statistics and much remains unmeasured.
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From page 62... ...
Scientific R&D 201 Research suggests that scientific 201 R&D yields relatively long (16) lasting returns and is capital spending.
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From page 63... ...
Because companies are not typically required to repatriate profits, they may attempt to minimize their operation's taxable income and assets in high-tax countries; one way to accom plish this is to transfer intangible assets to operations in lower tax locales, such as Ireland or Switzerland. The incentive is to transfer the right to collect revenues from assets yielding royalties overseas.
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From page 64... ...
BEA will continue to move toward integrating the new version of the International Accounting Standards which, in accordance with the 2008 Revision of the System of National Accounts (SNA) , the United States and all other countries are recommended to follow.
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From page 65... ...
. That committee offered practical guidance on expanding data sharing, or data synchronization, between the statistical agencies (mainly BLS, the Census Bureau, and BEA)
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From page 66... ...
Landefeld also reflected on various ideas for expanding the measurement of intangibles, identifying candidates for an innovation account. For spending on scientific and engineering R&D, these involve further study of product and process innovation, developing more timely data and more frequent indicators, and collecting data on royalty and licensing fee receipts (as well as expenditures)
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From page 67... ...
He began by identifying several conceptual challenges to improving measurement of R&D -- challenges that are substantial but probably still simpler than those that will arise for some other categories of intangibles. Among these challenges are defining the unit of economic output, estimating R&D output price indexes, measuring depreciation and obsolescence, and dealing with the issue of the public good aspects of some R&D.
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From page 68... ...
The solid line shows an aggregate output price index constructed for 13 R&D-intensive industries and reflects falling prices of key inputs to R&D, most notably computers. This is what was used to deflate the figures in the 2007 satellite account update.
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From page 69... ...
INTANGIBLES AND GOVERNMENT MEASUREMENT 140.0 120.0 100.0 Index, 2000 = 100 80.0 60.0 Aggregate output price index 40.0 Input price index 20.0 0.0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 FIGURE 5-1 R&D price indexes. SOURCE: Workshop presentation by Brent Moulton.
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From page 70... ...
Current dollar investment figures are then deflated (using an output price index constructed for 13 R&D intensive industries, described above) to produce measures of real investment.
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From page 71... ...
Business R & D 250.0 200.0 Billion $ 150.0 10 0.0 50.0 0.0 1959 1964 1969 1974 1979 1984 1989 1994 1999 2004 FIGURE 5-2 Addition to GDP from incorporating R&D as investment. SOURCE: Workshop presentation by Brent Moulton.
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From page 72... ...
The indirect effects derive from the creation of a stock of R&D capital for these sectors, which affects associated estimates for consumption of fixed capital and net returns. The medium-shaded area in the figure represents business R&D; the light shaded area is government R&D investment; and the thin dark-shaded area between the two is nonprofit R&D.
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From page 73... ...
More timely indicators need to be developed, so that they can be used for quarterly GDP estimates. In terms of long-term expanded measures of intangibles, BEA will be working to produce a framework for a satellite account that includes social science R&D, human capital, business models, and firm-specific R&D.
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From page 74... ...
; • continuing a new state government agency R&D survey, for which data collections were conducted for 2006 and 2007 and will be conducted periodically in the future; • expanding the research facilities survey of academic and biomedical facilities to include, among other things, expanded data collection on cyberinfrastructure; • developing a nonprofit R&D survey, which is in the very early planning stage; • exploring innovation data collection possibilities from very small firms (1-4 employees) ; • continuing work on the R&D satellite account -- the joint work with BEA discussed by Landefeld; • linking NSF's business R&D data with BEA data on foreign direct invest ment; this will include U.S.
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From page 75... ...
The Survey Redesign Process Jankowski stepped through what NSF does when it embarks on a survey redesign. Perhaps most importantly, the agency seeks extensive input from the data user community that establishes a prioritization of activities.
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From page 76... ...
Because the survey content covers a range of topical areas and requires data from multiple parts of the company, NSF/SRS has structured it into the following separate sections: • financial measures of R&D activities (R&D expense in accounting terms) , • financial measures of R&D funded by others (not classified as R&D in accounting definitions but is R&D performance)
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From page 77... ...
In some cases, there seems to be considerable expansion of what is being counted as R&D in the annual reports beyond the more narrow definitions of R&D as defined by the Financial Accounting Standards Board (FASB) and definitions used in the NSF/Census Bureau survey.
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From page 78... ...
Following the guidance of their industry panel and that of OMB, respondents receive a guarantee of confidentiality, and the survey is man datory. During calendar year 2009, NSF/SRS will evaluate survey operations and analyze the pilot data that are returned so that, by January 2010, the questionnaire
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From page 79... ...
By December 2010, the Census Bureau plans to deliver the 2009 survey data to NSF, in time for production of the Science and Engineering Indicators: 0. Jankowski reported that future plans call for possibly adding new/rotating modules to the survey -- for example, for other innovation categories and for key industries and industry segments, such as financial services and pharmaceuticals.
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From page 80... ...
; • federal agency sponsor and S&E field; • amount expended on research equipment, by S&E field; • amount passed through to subrecipients or received as a subrecipient; and • non-S&E field. Recently, NSF brought together data users for a survey redesign workshop.
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From page 81... ...
5.4. ADVISORY COMMITTEE ON MEASURING INNOVATION IN THE 21ST CENTURY Cynthia Glassman spoke about a focused government effort directly relevant to the workshop topic: a major initiative to develop a comprehensive set of mea sures of innovation in the economy by the secretary of commerce's Advisory Committee on Measuring Innovation in the 21st Century.5 The advisory committee was established in September 2006 in response to Secretary Carlos Gutierrez's concern that measures of innovation for the economy were inadequate.
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From page 82... ...
In laying out key themes and guiding principles for measuring innovation, the committee recommended that measures be practical and relevant and that input required for their construction should impose a minimal burden on institu tions and businesses. It also became evident that not all the measures could be quantitative and that there were some qualitative issues that justified some atten tion and were relevant.
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From page 83... ...
Other recommendations for the government were to better leverage existing data and linkages, including synchronization among the statistical agencies. Glassman noted that most data synchronization efforts will require legislation beyond that specified in the Confidential Information Protec tion and Statistical Efficiency Act of 2002.7 The committee also recommended increasing access to data to facilitate more robust cutting-edge research, including fostering the work of data tagging.
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From page 84... ...
Thus far, measures of innovation have emphasized R&D, patents, intellectual property, and other inputs -- all very important -- but the committee recommended going further to focus on innovation output and how that affects the economy. The committee also recommended that researchers work to identify gaps in innovation data and how they might be filled, analyzing relationships between innovation activities and collaboration, innovation performance, and firm performance.
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