R&D Intensity: An empirical analysis of its relation to the structure of the manufacturing sector in OECD countries

The R&D Intensity indicator (RI) is widely used by analysts and policy-makers as a proxy of a country’s commitment to research and development (R&D), for international comparisons, and for goal setting. However, many researchers believe that this indicator reflects not only R&D commitment but also the industrial structure in which R&D was carried out. It is believed that calculating a separate RI for each industrial class will reveal a more representative indication of the focus of a country in that particular class. In this study, the disaggregated R&D Intensity was named ‘Class-RI’. Validation-type analyses were conducted on Class-RI to find out whether it is associated with a logical economic output indicator such as the Value Added to production. The study demonstrated the effectiveness of the disaggregated indicator and revealed partially promising results that can support its use in future research.