2. Higher education and basic research

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On average, one-third of R&D carried out by the higher education sector in OECD countries is funded through multi-purpose general university funds from government.

OECD countries spent 0.4% of GDP on higher education R&D (HERD) in 2015. However, expenditure in Denmark, Switzerland, and Sweden reached more than twice this amount. Between 2005 and 2015, this share increased in most countries but decreased markedly in Hungary and Israel.

Higher education institutions (HEIs) and government research organisations are responsible for over three-quarters of basic research on average. However, the share is lower in Korea at 43%, with businesses accounting for 56%. Most basic research is typically performed by HEIs, though government leads in the Czech Republic (53%), Hungary (44%), the Russian Federation (76%) and Mexico (52%), and is responsible for over 40% of basic research in China.

Government funds 70% of HERD on average, often through general university funds, which HEIs have discretion to use for R&D or other activities. HEIs may also use their own funds (e.g. from tuition revenues) or receive transfers from collaborating HEIs to pay for R&D; this is notable in Turkey (46% of HERD) and Japan (44%). In the Slovak Republic, 56% of HERD is funded from abroad, mainly by the EU.

Business funding of R&D performed by HEIs provides one indication of R&D collaboration between these two sectors. The share is greatest in China and the Russian Federation, where businesses (including state-owned enterprises) fund around 30% of HERD. In contrast, the OECD average is 6%. Businesses may also support HERD indirectly by paying to use HEI R&D facilities, buying R&D results or investing in spinoff companies.

Definitions

The higher education sector comprises all universities, colleges of technology and other institutions providing formal tertiary education programmes, whatever their source of finance or legal status, and all research institutes, centres, experimental stations and clinics whose R&D activities fall under the direct control of tertiary education institutions.

Public general university funds (GUF) refer to the R&D funding share from the general grant that universities receive from the central (federal) ministry of education or corresponding provincial (state) or local (municipal) authorities in support of their overall research/teaching activities.

Basic research is the component of R&D – alongside applied research and experimental development – comprising experimental or theoretical work undertaken primarily to acquire new knowledge of the underlying foundations of phenomena and observable facts, without any particular application or use in view.

Measurability

The higher education sector is identified separately in R&D statistics because of the important role played by universities and related institutions in performing R&D and training researchers through doctoral and other research degrees. Measurements of HERD rely on dedicated institutional surveys in most OECD countries, often complemented by administrative data sources.

There can be challenges in deriving comparable measures of sources of funding for higher education due to the wide diversity of R&D funding arrangements across countries that shape the type of data HEIs can draw upon for reporting on their R&D activities. Public general university funds are presented as government support for R&D, although they could also be perceived as internal university resources, since universities have a degree of discretion over whether to use such funds for R&D.