Target |
Target 9.b: Support domestic technology development, research and innovation in developing countries, including by ensuring a conducive policy environment for, inter alia, industrial diversification and value addition to commodities
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Definition and concepts |
Definitions:
The proportion of medium-high and high-tech industry (MHT hereafter) value added in total value added of manufacturing (MVA hereafter) is a ratio value between the value added of MHT industry and MVA.
Concepts:
The value added of an industry (industry value added) is a survey concept that refers to the given industry’s net output derived from the difference of gross output and intermediate consumption. Manufacturing sector is defined according to the International Standard Industrial Classification of all Economic Activities (ISIC) Revision 3 (1990) or Revision 4 (2008). It refers to industries belonging to Section D in ISIC Revision 3 or Section C in ISIC Revision 4.
Technology classification is based on research and development (R&D) expenditure relative to value added (R&D intensity hereafter). Data for R&D intensity are presented in a report published by the OECD (OECD, 2003; Galindo-Rueda and Verger, 2016, for ISIC Revision 3 and 4 respectively), which also proposes a taxonomy for industry groups with different ranges of R&D expenditure relative to their gross value added. MHT industries have traditionally been defined exclusively to manufacturing industries. However, there have been recent efforts (Galindo-Rueda and Verger, 2016) to extend the definition to non-manufacturing industries as well. Nevertheless, medium-high and high technology sectors are primarily represented by manufacturing industries.
The following table includes the classification of MHT industries by ISIC Rev. 3 and ISIC Rev. 4.
ISIC Rev.4
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Description
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ISIC Rev.3
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Description
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20
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Manufacture of chemicals and chemical products
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24
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Manufacture of chemicals and chemical products
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21
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Manufacture of basic pharmaceutical products and pharmaceutical preparations
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29
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Manufacture of machinery and equipment n.e.c.
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252
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Manufacture of weapons and ammunition
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30
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Manufacture of office, accounting and computing machinery
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26
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Manufacture of computer, electronic and optical products
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31
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Manufacture of electrical machinery and apparatus n.e.c.
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27
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Manufacture of electrical equipment
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32
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Manufacture of radio, television and communication equipment and apparatus
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28
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Manufacture of machinery and equipment n.e.c.
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33
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Manufacture of medical, precision and optical instruments, watches and clocks
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29
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Manufacture of motor vehicles, trailers and semi-trailers
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34
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Manufacture of motor vehicles, trailers and semi-trailers
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30*
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Manufacture of other transport equipment
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35**
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Manufacture of other transport equipment
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325
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Manufacture of medical and dental instruments and supplies
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* Excluding 301 (Building of ships and boats)
** Excluding 351 (Building and repairing of ships and boats)
MVA is the value added of manufacturing industry, which is Section C of ISIC Rev.4 or Section D of ISIC Rev.3.
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Comment and limitations |
Value added by economic activity should be reported at least at 3-digit ISIC for compiling MHT values. However, if the 3-digit data is not available, the indicator is calculated exclusively using 2-digit data. In addition, the indicator is reported in the ISIC revision provided by the countries, and this may affect comparability between countries reporting data according to different ISIC revisions.
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