R&D spending as a share of GDP: how to read it

What goes into the numerator

“GERD is total intramural expenditure on R&D performed in the national territory during a specific reference period.”

Frascati Manual 2015, §4.7

• Money spent on R&D done in the country – current costs plus gross fixed capital expenditure, whatever the source of funds (§4.10).
• R&D done in the country with foreign money is included; R&D that the country pays for abroad is not (§4.8).
• Only work that is R&D under the manual's five criteria – see Is it R&D? A five-question test.

Who spends it

GERD is the sum of spending in the performing sectors, each with its own abbreviation: BERD for business enterprises, GOVERD for government, HERD for higher education and PNPERD for private non-profit institutions. Looking at the parts often says more than the total – for example, how much of a country's R&D is done by firms. The sectors are explained on the Frascati Manual page.

Poland, 2020–2025

Three ways to misread it

• Nominal is not real. The figures above are in current prices; growth in złoty is not the same as growth after inflation.
• A ratio moves with both parts. The share can fall when R&D spending falls, but also when GDP grows faster than R&D spending.
• It measures spending, not results. GERD counts the money that goes into R&D. What that money produces – publications, patents, new products – is measured with other indicators, some of them described in the other manuals of the Frascati Family.

Not the same as the state budget for R&D

Two other indicators look at public support from the other side: GBARD shows what the state plans to spend on R&D from the budget (chapter 12), and GTARD measures the cost of R&D tax relief (chapter 13). Neither is the same as GERD.