Chapter 4: Research and Development: Funds and Technology Linkages


Affiliate: A company or business enterprise located in one country but owned or controlled (10% or more of voting securities or equivalent) by a parent company in another country; may be either incorporated or unincorporated.

Applied research: Research aimed at gaining the knowledge or understanding to meet a specific, recognized need; in industry, applied research includes investigations to discover new scientific knowledge that has specific commercial objectives with respect to products, processes, or services.

Basic research: Research aimed at gaining more comprehensive knowledge or understanding of the subject under study without specific applications in mind.

Development: Systematic use of the knowledge or understanding gained from research directed toward the production of useful materials, devices, systems, or methods, including the design and development of prototypes and processes.

Federally funded research and development center: R&D-performing organizations exclusively or substantially financed by the federal government either to meet a particular R&D objectives or, in some instances, to provide major facilities at universities for research and associated training purposes; each FFRDC is administered either by an industrial firm, a university, or a nonprofit institution.

Foreign affiliate: Company located overseas but owned by a U.S. parent.

Foreign direct investment: Ownership or control of 10% or more of the voting securities (or equivalent) of a business located outside the home country.

General university fund (GUF): block grants provided by all levels of government in Europe, Canada, and Japan to the academic sector that can be used to support departmental R&D programs that are not separately budgeted; the U.S. federal government does not provide research support through a GUF equivalent.

Gross domestic product: Market value of goods and services produced within a country.

Intellectual property: Intangible property that is the result of creativity; the most common forms of intellectual property include patents, copyrights, trademarks, and trade secrets.

Majority-owned affiliate: Company owned or controlled by more than 50% of the voting securities (or equivalent) by its parent company.

Multinational corporation: A parent company and its foreign affiliates.

National income and product accounts: Economic accounts that display the value and composition of national output and the distribution of incomes generated in its production.

Parent company of a multinational corporation: Company that owns or controls at least 10% of the voting securities (or equivalent) of a foreign affiliate.

Public-private partnership: Type of industrial technology linkage involving at least one public or nonprofit organization such as a university, research institute, or government laboratory; such a partnership may engage in technology codevelopment or cooperative R&D, technology transfer, technology assistance, joint or grant funding, or public procurement and may take the form of a cooperative agreement, grant or procurement programs, professional or student internship or exchange, technology-based business incubator, or research and science parks.

R&D: According to the Organisation for Economic Co-operation and Development, creative work "undertaken on a systematic basis 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."

R&D employees: Scientists and engineers who perform R&D functions.

R&D plant expenditures: Acquisition of, construction of, major repairs to, or alterations in structures, works, equipment, facilities, or land for use in R&D activities.

Research and experimental expenditures: Experimental or laboratory costs aimed at the development or improvement of a product (defined to include any pilot model, process, formula, or technique) in connection with a taxpayer's business.

Technology alliance: Type of industrial technology linkage aimed at codevelopment of new products or capabilities through R&D collaboration.

Technology transfer: Exchange or sharing of knowledge, skills, processes, or technologies across different organizations.

U.S. affiliate: Company located in the United States but owned by a foreign parent.

Value-added: Sales minus the cost of materials.

National Science Board.