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

Applied research: The objective of applied research is to gain 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.

Asia-10: Includes China, India, Indonesia, Japan, Malaysia, Philippines, Singapore, South Korea, Taiwan, and Thailand.

Basic research: The objective of basic research is to gain more comprehensive knowledge or understanding of the subject under study without specific applications in mind. Although basic research may not have specific applications as its goal, it can be directed in fields of present or potential interest. This is often the case with basic research performed by industry or mission-driven federal agencies.

Development: Development is the 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.

EU-25: Includes the EU-15 countries Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, and the United Kingdom. In 2004 the EU expanded to 25 members with the addition of 10 more countries: Cyprus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia.

EU-27: Bulgaria and Romania joined the EU-25 (see definition above) in January 2007, for a total of 27 EU member countries.

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

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

G-7: The group of seven industrialized nations: Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States.

Gross domestic product (GDP): 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.

Knowledge-intensive economies: Economies with a large number of industries that incorporate science, engineering, and technology into their products and services.

Multinational corporation (MNC): A parent company and its foreign affiliates.

R&D: According to the Organisation for Economic Co-operation and Development, 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 the use of this stock of knowledge to devise new applications" (OECD 2002, p. 30).

R&D intensity: Measure of R&D expenditures relative to size, production, or other characteristic of a country or R&D-performing sector. Examples include company-funded R&D to net sales ratio, R&D to GDP ratio, and R&D per employee.

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

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