3 INSTITUTIONAL CLASSIFICATION

3.3. Sectors

3.3.1. Reasons for sectoring

156. To facilitate the collection of data, the description of institutional flows of R&D funds and the analysis and interpretation of R&D data, the statistical unit(s) classified should be grouped by sectors of the economy, following as closely as possible standard classifications of economic activities. This offers a number of important practical advantages:

–Different questionnaires and survey methods can be used for each sector to take into account the different “mixes” of activities, the different accounting systems or the different response possibilities of the organisations.

–When measuring expenditure, the sectoral approach offers the most reliable way of building up national aggregates.

–Sectoring offers a framework for analysing the flows of funds between R&D- funding and R&D-performing entities.

–Since each sector has its own characteristics and its own kinds of R&D, this classification throws some light on differences in the level and direction of R&D.

–Insofar as the sectors are defined on the basis of a standard classification, it may be possible to relate R&D to other statistical series. This may facilitate an understanding of the role of R&D in economic development and the formulation of science policy.

–The institutions of the various sectors are sensitive to different government policy initiatives.

3.3.2. Choice of sectors

157.The System of National Accounts (SNA) (UN, 1968) stated that “in any national accounting system transactors are necessarily grouped... but they need not be grouped in the same way in all parts of the system and, indeed, it is not desirable that they should be”. The SNA distinguishes between the following sectors: non-financial corporations; financial corporations; general government; non-profit institutions serving households; and households.

158.The following definitions of sectors for R&D surveys are largely based on the SNA 93 (CEC et al., 1994), with the difference that higher education has been established as a separate sector and households have, by convention, been merged with the private non-profit (PNP) sector. Here, as in the SNA, non-profit institutions (NPIs) have been distributed among sectors. For a more detailed discussion of the relationships between SNA sectors and the sectors proposed below for R&D surveys, see Annex 3.