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National Science Foundation
Definitions of Research and Development.
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Introduction
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International Organizations
   bullet OECD – Frascati Manual
   bullet United Nations Statistical Division – System of National Accounts
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Definitions of Research and Development:
An Annotated Compilation of Official Sources

International Organizations

A. OECD – Frascati Manual

Description:
The Frascati Manual [3] includes definitions of basic concepts, data collection guidelines, and classifications for compiling R&D statistics in OECD member countries. Chapter 2 covers basic definitions. The text below is from sections 2.1 and 2.2, paragraphs 63–66.


Definition (as appears in the original source):
2.1 Research and experimental development (R&D)

63. Research and experimental development (R&D) comprise creative work undertaken on a systematic basis in order to increase the stock of knowledge, including knowledge of man, culture and society, and the use of this stock of knowledge to devise new applications.

64. The term R&D coves three activities: basic research, applied research, and experimental development (described in detail in Chapter 4). Basic research is experimental or theoretical work undertaken primarily to acquire new knowledge of the underlying foundation of phenomena and observable facts, without any particular application or use in view. Applied research is also original investigation undertaken in order to acquire new knowledge. It is, however, directed primarily towards a specific practical aim or objective. Experimental development is systematic work, drawing on existing knowledge gained from research and/or practical experience, that is directed to producing new materials, products or devices, to installing new processes, systems and services, or to improving substantially those already produced or installed.

2.2 Activities to be excluded from R&D

65. For survey purposes, R&D must be distinguished from a wide range of related activities with a scientific and technological base. These other activities are very closely linked to R&D both through flows of information and in terms of operations, institutions and personnel, but they should, as far as possible, be excluded when measuring R&D.

66. These activities [are]:

  • education and training (Section 2.2.1);
  • other related scientific and technological activities (Section 2.2.2);
  • other industrial activities (Section 2.2.3);
  • administration and other supporting activities (Section 2.2.4).


B. United Nations Statistical Division – System of National Accounts

Description:
The 1993 System of National Accounts is a conceptual framework that sets the international statistical standard for the measurement of the market economy,  published jointly by several international organizations.[4] Paragraph 6.142 (chapter VI, section G), addresses research and development;[5] full text can be found at http://unstats.un.org/unsd/sna1993/toctop.asp.


Definition (as appears in the original source):
Research and development by a market producer is an activity undertaken for the purpose of discovering or developing new products, including improved versions or qualities of existing products, or discovering or developing new or more efficient processes of production. Research and development is not an ancillary activity, and a separate establishment should be distinguished for it, when possible. The research and development undertaken by market producers on their own behalf should, in principle, be valued on the basis of the estimated basic prices that would be paid if the research were sub-contracted commercially, but is likely to have to be valued on the basis of the total production costs, in practice. Research and development undertaken by specialized commercial research laboratories or institutes is valued by receipts from sales, contracts, commissions, fees, etc. in the usual way. Research and development undertaken by government units, universities, non-profit research institutes, etc. is non-market production and is valued on the basis of the total costs incurred. The activity of research and development is different from teaching and is classified separately in ISIC [International Standard Industrial Classification]. In principle, the two activities ought to be distinguished from each other when undertaken within a university or other institute of higher education, although there may be considerable practical difficulties when the same staff divide their time between both activities. There may also be interaction between teaching and research which makes it difficult to separate them, even conceptually, in some cases.
[3] Organisation for Economic Co-operation and Development, Frascati Manual: Proposed Standard Practice for Surveys on Research and Experimental Development (Paris, 2002).

[4] Commission of the European Communities (CEC), International Monetary Fund, Organisation for Economic Co-operation and Development, United Nations, and World Bank. 1993. System of National Accounts 1993, Brussels/Luxembourg, New York, Paris, Washington, DC.

[5] See also chapter 6, section H.

 

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