R&D, also called research and experimental development, comprises creative work undertaken on a systematic basis to increase the stock of knowledge—including knowledge of man, culture, and society—and its use to devise new applications.
Research is defined as systematic study directed toward fuller scientific knowledge or understanding of the subject studied. Research is classified as either basic or applied according to the objectives of the sponsoring agency.
Basic research is defined as systematic study directed toward fuller knowledge or understanding of the fundamental aspects of phenomena and of observable facts without specific applications towards processes or products in mind.
Applied research is defined as systematic study to gain knowledge or understanding necessary to determine the means by which a recognized and specific need may be met.
Development is defined as systematic applications of knowledge or understanding directed toward the production of useful materials, devices, and systems or methods, including design, development and improvement of prototypes and new processes to meet specific requirements.
Transformative research is defined as research driven by ideas that have the potential to radically change our understanding of an important existing scientific or engineering concept or leading to the creation of a new paradigm or field of science or engineering. Such research is also characterized by its challenge to current understanding or its pathway to new frontiers.
S&T and R&D are often used interchangeably, but they have very different meanings in the context of the Federal government. The Office of Management and Budget (OMB) defines R&D to include basic research, applied research, and development, which is the one overarching and official definition of R&D used by all Federal agencies. The term R&D is not fully inclusive of all S&T activities funded or performed by Federal agencies. The magnitude of civilian agency S&T activities is hard to determine, because they are not officially labeled as S&T. Specific activities that are widely believed to be R&D are instead S&T activities that fall outside the set of activities officially designated as R&D.