Handbook on Deriving Capital Measures of IPPs Charles Aspden, OECD

Introduction Recognition of R&D as a fixed asset is one of the major changes in the new SNA OECD and EU task forces created to promote its implementation quickly, efficiently, and accurately , while achieving international comparability New OECD handbook to provide guidance on compiling estimates of intellectual property products (IPP)

OECD R&D TF Objective Complete handbook on deriving capital measures of intellectual property products by the end of 2008, encompasses: Software and databases R&D Mineral exploration and evaluation Literary and artistic originals

Composition of TF US (chair Brent Moulton plus 5 others) Canada (1) France (2) Germany (4) Israel (2) Korea (2) Netherlands (1) Switzerland (1) UK (1) OECD (2) Australia and New Zealand partial members

Five sub groups SG A: R&D service lives (Soli Peleg) SG B: R&D output price indices (Denis Fixler) SG C: R&D GFCF boundary (Dirk van den Bergen) SG D: R&D international trade (Francisco Moris) SG E: Software (Charles Aspden) 5-9 people in each SG Each SG has its own work plan

Meetings and communications in 2008 First meeting in Geneva, 24-25 April Second meeting Paris-Washington, 21-22 July Third meeting Paris-Washington-Winnipeg, 16-17 October SGs communicate by email.

SG A: R&D service lives Activities Overview of existing methods Econometric Patent renewal Possibility of using enterprise surveys – i.e. asking the head of R&D for the firm’s expectations Possibility of seeking expert opinions, e.g. experts in venture capital companies Israel, Germany and UK have undertaken pilot surveys. The results are encouraging, but more refinement of survey methods is needed.

SG B: R&D output price indices Activities Considered a proposal for a pseudo output price index at the meeting in July. Will consider refinements to the proposal this week.

SG C: R&D GFCF boundary Activities Clarifying where asset boundary for R&D should be drawn in concept, i.e. what’s in and what’s out. Testing to what extent basic R&D performed by government and academia results in economic benefits to the owners Investigation of available data to implement (1) conditional on (2) Socio-economic objectives appears to provide the best means to make the discrimination Also considered double counting

SG D: R&D international trade Activities Defining R&D exports and imports: identifying the transactors and transactions; identifying data sources for them Developing guidelines for source data and capitalization SITS (source data for services in BPM6 and EBOPS) Analysis of draft BPM6 and development of proposals for revised MSITS and EBOPS R&D surveys, i.e. funding and extramural expenditures Combining data from different sources

SG E: Software Activities Identify changes to SNA Identify changes to classifications and document relationships between old and new. Conduct a survey to identify methodological advances since 2003 Amend recommendations accordingly

Other IPPs Mining exploration and evaluation – based on ABS paper presented to Canberra II Group in 2007 Entertainment, literary and artistic originals based on EU TF report in 2003

Next steps Conclude remaining outstanding issues at this week’s meeting Surveys on service lives and use of innovation survey data Practicalities of using socio-economic objective data to identify R&D GFCF by non-market producers Further consideration of trade data and MNCs Review the draft Handbook Finalise draft Handbook