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1 Directorate-General for Innovation and Research Directorate-General for Higher Education and Employability MINISTRY OF HIGHER EDUCATION AND RESEARCH Sub-directorate for Information Systems and Statistical Studies Statistical Studies Unit Please read carefully. The following shorter version of the annual survey goes beyond the scope of the part of R&D fulfilling eligibility criteria for CIR (or Crédit Impôt Recherche, i.e. Research Tax Credit) in your business enterprise, it concerns your business enterprise's R&D as a whole. Please refer to the definitions below. The following survey addresses all business enterprises located in France, including overseas departments and collectivities which carry out research and experimental development work (R&D) for their own account or on behalf of a third party. 0. General Company nformation: - The relevant period is your business enterprise's fiscal year. If your fiscal year does not end on December 31 st, please indicate the total employee headcount at the end of your fiscal year. - Please state the name(s) of your shareholders/parent company. For instance, write 'German AG' instead of 'French Holding'. If your business enterprise belongs to natural persons, please write 'natural persons'. Please read carefully The following shorter version of the annual survey concerns your business enterprise, not its parent company. 1. Research and Experimental Development (R&D) Activities: R&D comprises creative work undertaken on a systematic basis (requiring a minimum amount of organisation and resources) in order to increase the stock of knowledge, develop new processes and products or improve existing ones. Where does R&D start and end? Creative potential resulting from scientific and technical methods is the most general criterion for distinguishing R&D from R&D-related activities (see Frascati Manual, OECD, 2002): if the primary objective is to make further technical improvements on the product or process, then the work comes within the definition of R&D. If, on the other hand, the product, process or approach is substantially 'set' and the primary objective is to develop markets, to do pre-production planning or to get a production or control system working smoothly, the work is no longer R&D. The following activities theoretically count as R&D: - Studying, building and testing stages of prototypes: a prototype's aim is to experimentally demonstrate research hypotheses, clear up any technical and scientific doubts or uncertainties whether or not the prototype looks like the industrial finished product does not matter. As soon as a prototype has been satisfactorily tested and any necessary modifications made, one reaches the borderline between R&D and other activities. - The construction and operation of a pilot plant should be included into R&D as long as its main purposes are to obtain experience and compile engineering and other data that will be valuable when testing hypotheses, writing new product formulae or establishing new finished product specifications, designing special equipment and structures required for a new process, writing out operating instructions or manuals on the process. If, however, as soon as this experimental phase is over, a pilot plant switches to operating as a normal commercial production unit, the activity can no longer be considered R&D. The following activities should be excluded when measuring R&D: - Trial production and tooling-up development: once a prototype has been satisfactorily tested and any necessary modifications made, costs related to trial manufacturing should not be counted as R&D, since the primary objective is to start up and organise the production process. In the same way, development costs associated with the tooling-up required for mass production (manufacturing and tool testing) should not be counted as R&D. - Pre-trial plans and drawings: before trial production starts, it is often necessary to design and duplicate detailed design drawings and assembly instructions.
2 - Costs associated with studies on evolutions in fashion and style. - Reviewing a computer application for updating or adaptation purposes. - Mining and oil-related activities: prospecting for natural resources is not included into the R&D field (which, however, includes work aiming to develop innovative prospecting methods). - Activities relating to patents and licences: all overhead and legal costs and activities associated with industrial property (including any clearance search). - Market research. The following activities should be counted as R&D after examination on a case-by-case basis: - Costly pilot plants and prototypes: they are often built from existing materials or using known technology and are very expensive. Only activities relating to new subsystems and configurations should be considered as R&D. - Standardisation activities carried out by researchers, engineers or high-level laboratory technicians and consisting in creating new standards requiring a specific level of reflection are R&D. However, maintaining national standards, improving secondary standards, controling and analysing materials, components, products, processes, etc. (when such stages are standard practice) should not be counted as R&D. Activities conducted by a business enterprise to adapt a product to prevailing standards will be counted as R&D as long as they entail actual technical changes R&D performing unit (laboratory/research centre): If research is your business enterprise's main area of activity or if your entire business enterprise specializes in R&D, answer 'yes' to question 1.1. Also answer 'yes' if research is not your business enterprise's main area of activity (they produce goods or services, etc.), yet one of its departments mainly performs R&D while using its own resources (e.g., a research laboratory) Industry segment benefiting from R&D work: Please state in full letters which type of research is carried out. Describe research activities in your business enterprise, using a few keywords. Do not hesitate to go into details, especially when generic terms come up (i.e. engineering, biotechnology, electronics, computing, etc.). For instance, you might write: 'automotive engineering', 'medical equipment manufacturing', 'electronic and telematic systems', 'satellite telecommunications technologies', 'textile machines design', 'wastewater and various releases filtering system', 'biotechnology for agriculture', 'biotechnology, drug development', 'treatment of plastics and chemical wastes', 'image synthesis', 'operation and maintenance tooling of water facilities', etc Geographic department where R&D is conducted: the geographic code is the one used as a reference for a French department. If your business enterprise carries out R&D work in several departments, mention the one carrying out the most R&D work first. 2. Technological innovations and patents resulting from your business enterprise's R&D activity: This section focuses on innovations and patents resulting from your business enterprise's R&D work, whether or not an innovation/a patent is achieved/filed by your business enterprise or by another business within your parent company Innovation Technological innovation in terms of products/services: from a technological perpective, R&D enables to improve an existing product or to create a new one. If your business enterprise has a parent company, your business's research may be used by another business within it, with a view to innovation. About technological innovation in terms of processes: same as mentioned above, except the focus is on production processes implemented within your business enterprise or its parent company Patents One shall count the number of patents filed by your business enterprise or parent company during your fiscal year and directly resulting from R&D work carried out by your business enterprise. There can be several patent applications for one single patent (e.g. to the INPI or National Industrial Property Institute or the United States Patent and Trademark Office, etc.). In case of several applications, count only one. 3. R&D personnel in charge of R&D work in your business enterprise: Personnel performing R&D work (whether or not employed by your business enterprise. R&D personnel include the following: - R&D researchers and engineers, i.e. professionals engaged in the conception or creation of new knowledge, products, processes, methods and systems and in the management of the projects concerned. The category also includes PhD students including beneficiaries of Cifre industrial 2
3 agreements for training through research managed by the French National Research and Technology Association) and high-level personnel in charge of teams of researchers. - Other R&D personnel include technicians providing technical support to researchers, workers as well as secreterial and clerical staff specifically assigned to R&D work. Counting R&D personnel: Headcount (HC): each natural person (NP) present on site on December 31 st (or at the end of the fiscal year) and participating to R&D work counts as 1, whether working exclusively for your business enterprise or not, (including personnel not having worked full-time or having devoted only some of their time to R&D activities). Full Time Equivalent (FTE) means in proportion to the time devoted to R&D activities. Examples: - 2 researchers working full-time for one year: 2 x 1,00 2,00 FTEs and 2 NPs - 5 researchers working part-time for one year: 5 x 0,50 2,50 FTEs and 5 NPs -15 researchers working quarter-time for four months: 15 x 0,25 x 4/12 1,25 FTEs and 15 NPs Someone devoting less than 10 % of their time to R&D work during a year should not be taken into consideration. If the R&D activity is concentrated on specific time periods e.g., performing only R&D work for one month: do take them into account. 4. Intramural R&D Expenditure: Patent acquisition shall be counted neither as intramural nor as external R&D expenditures. 4.1 Current and capital expenditures Intramural R&D expenditures correspond to in-house work. They therefore also include R&D work performed in-house on behalf of a third party (other business enterprise, ). They can be divided into the following categories: Wages and social security contributions: staff wages, salaries, taxes and social security contributions related to R&D activities (including employees' and employers' social security contributions) in proportion to their R&D activity. Labour costs corresponding to employees not considered as R&D personnel (e.g. security and maintenance personnel) shall not be mentioned under this section and shall be counted as other current costs Other current expenditures include other non-capital expenditures (exclusive of tax) related to the performance of intramural R&D work. Under this category fall small tools and instruments (except for software purchases, see below), raw materials, consumables as well as overhead costs and expenditure incurred over services, including fees related to testing and studies or to labour costs for outsourced personnel (comptes 621 and 622 of 'Frais de recherche et de développement' du PCG Plan Comptable Général, i.e. generally accepted accounting principles). They do not include depreciation/amortisation, i.e. provisions or imputed costs associated with capital wear and tear Capital expenditures: depending on the chart of accounts, they correspond to new assets fixed in the current year for R&D purposes excl. depreciation/amortisation. They include the following: - land purchases, costs incurred by construction work or the purchase of buildings (including significant improvements, alterations or renovations); - device and equipment purchases (heavy machinery or equipment used for R&D work); - purchases of capitalised softwares; - research and development capitalised costs with respect to International Accounting Standard 38 on R&D costs related to intangible assets, included as part of compte 203 'Frais de recherche et de développement' du PCG Plan Comptable Général, i.e. generally accepted accounting principles, excl. of capitalised personnel costs Research types: - Basic research aims to analyse properties, structures, physical and natural phenomena with a view to organise facts derived from this analysis into general laws, via explanatory charts and interpretative theories. Such work is conducted either out of sheer interest in science or with a view to contributing to bringing theoretical solutions to technical problems. - Applied research activities aim at distinguishing possible applications for the results within a particular fundamental research area or at finding new solutions that will make it possible to achieve a predetermined goal. This implies taking existing knowledge into account and extending it in order to solve particular problems. Applied research results in a proving model of a product, process or method. Applied research gives operational form to ideas and can result in patenting. 3
4 - Experimental development is work drawing on knowledge gained from research and/or practical experience, which is directed to gathering all information required for technical decision-making to produce new materials, products and devices, to installing processes, systems and services, using pilot plants and prototypes, or to improving them substantially. 5. Extramural R&D Expenditure: Sub-contracted and joint R&D work outside of your business enterprise. They include expenditure excl. of tax for R&D programs performed partially or entirely by a third party for your business enterprise, excluding ordering supplies or straightforward service delivery related to R&D work both performed by your business enterprise and counted as intramural expenditure. Extramural R&D expenditure benefiting technical centres within professional organisations shall exclude any lump sum payments to them. Patent acquisition shall be counted neither as intramural nor as external R&D expenditures. 6. External Resources devoted to R&D in 2011: They include funding received in the form of contracts, subsidies or advance payments on specific R&D programs as well as government incentives (except for tax incentives promoting innovation such as the CIR, Crédit d'impôt recherche, or Research Tax Credit and funding for the Jeunes Entreprises Innovantes or JIE i.e., Young Innovative Companies). Resources such as self-financing and CIR (Research Tax Credit) shall not appear under this section. ANR Cifre Cortechs Feder ERDF FUI ISI PCRD FP PMII Association nationale de la recherche The French National Research Agency Convention industrielle de formation par la recherche Industrial Agreements For Training Through Research Convention de formation par la recherche des techniciens supérieurs Research Agreements For High-Level Technicians Fonds européen de développement régional European Regional Development Fund Fonds unique interministériel Single French Interministerial Fund Dedicated to Competitiveness Clusters Innovation stratégique industrielle Strategic Industrial Innovation Support Programme Programme cadre R&D Framework Programme Programmes mobilisateurs pour l innovation industrielle Mobilising Programmes for Industrial Innovation 7. Refund on Advances (Oseo, Industry Ministry, territorial authorities) 8. Key Specific R&D Areas: The section focuses on six key R&D areas. You are required to specify the share (in percentage) of intramural R&D expenditure corresponding to R&D activities in your business enterprise. Key research areas are: software development, especially computer simulation for research purposes; biotechnology, which the OECD defines as the application of S&T to living organisms as well as parts, products and models thereof, to alter living or non-living materials for the production of knowledge, goods and services. The (indicative, not exhaustive) list-based definition of biotechnology-related R&D is: genomics, gene probes, DNA sequencing/synthesis/amplification, genetic engineering, protein/peptide sequencing/synthesis, proteomics, hormones and growth factors, cell receptors, cell and tissue culture and engineering (hybridisation, immune stimulants and vaccine, embryo manipulation...), process biotechnologies (bioreactors, fermentation, bioprocessing...), gene therapy, etc. nanotechnology: nanotechnology is the set of technologies that enables the manipulation, study or exploitation of very small (typically less than 100 nanometres) structures and systems; care of the environment comprises the protection of ambient air and climate, water protection, waste management, protection of soil and groundwater, noise and vibration abatement, protection of species and habitats and radiation protection. It does not include activities relating to natural resources management. 4
5 new materials that shall be taken into consideration may be new from a market's perspective or from your business enterprise's perspective; social sciences and humanities such as economy, management, work organisation, marketing modeling, etc. Total may not equal 100 %: it may be inferior to 100 % if your business enterprise is only partly involved, superior to 100 % if R&D activities simultaneously fall into several of these research areas, or equal to 0 % if your business enterprise does not conduct any R&D in the above-mentioned areas. 5
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