REPORT OF 2008 OECD SOFTWARE SURVEY Working Party

REPORT OF 2008 OECD SOFTWARE SURVEY Working Party on National Accounts Paris, 14 -16 October 2008 Jiemin GUO

Introduction • 2001 OECD task force for implementation of SNA 93 treating software as fixed asset. • Two previous software surveys • 2002 survey – result reported to OECD WPNA 2002 • 2004 small follow-up survey – result reported to OECD WPNA 2004 • 2007 OECD task force on R&D and Other Intellectual Property Products • The 2008 software survey: for the handbook with updated information

2008 OECD Software Survey • Scope: OECD countries and accession countries (35) • 20 countries responded – 19 OECD Members – Israel

Basic approach (1) - Purchased software • 15 out of 20 countries use a combination of supply -side and demand-side data. • Most adopt confrontation and balancing process. • Some rely more on the supply-side data and just use the proportions from the survey estimates to allocate the supply-side aggregate to using industries and sectors, • others, such as the Netherlands, place more reliance on the demand-side data. • Countries had different views on the quality of the survey data. Some countries had concerns, but others thought they were of satisfactory quality.

Basic approach (2) - Own account software • Six countries indicated that they also use surveys to obtain estimates of own account software GFCF. • Three of them also use a macro method to derive estimates • The others rely solely on the survey estimates.

Basic approach (3) • The remaining 5 of the 20 countries use the supply-side approach only for purchased software and the macro approach only for own account software.

Supply-side approach • Countries were asked to provide details for the 7 steps for estimating software prescribed in the Handbook. • There is considerable variation in country practices and the relative magnitude of the adjustments. – Avoiding double counting – Excluding maintenance from software supply – Exclusion of household consumption. • Identifying imports of software is a major problem for many countries.

Macro approach to the estimation of own account software • Most countries use employment of software professionals, but the coverage varies • There is also considerable variation in the assumed proportions of the time spent by these people, ranges from 12. 5% to 50%. • The mark-up for non-labour costs varies a great deal, from 50% to 120% of labour costs.

SNA 2008 recommendation on software licences • Most countries reported that no data collected. • It appears that it will be difficult to implement in practice, and it is something the TF needs to address. • Possible solutions: – Add questions to surveys on length of software licences – Ask software publishers for length of software licences for business software

R&D and software • Only a few countries report having estimates of software R&D. – Only 8 countries answered. – 6 countries conducted R&D Survey. – 4 countries reported that R&D is included in the estimates of software GFCF. • Probably not much thought has been given to inclusion of software R&D by other countries.

Software price indices • US (BEA) has established software price indices for different components • A number of countries use the same approach as the BEA or use the adjusted BEA price index for packaged software. • Most of the others use various PPIs, CPIs or wage rates.

Software service lives • Most countries do not use different service lives for packaged and own account/customised software. • Overall, the service lives used vary between 3 and 8 years.