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.

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-15: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden, and the United Kingdom.

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

Federally funded research and development center (FFRDC): R&D-performing organizations that are exclusively or substantially financed by the federal government either to meet a particular R&D objective 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 (FDI): Ownership or control of 10% or more of the voting securities (or equivalent) of a business located outside the home country.

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

G-8 countries: G-7 countries plus Russia.

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 (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.

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

Multinational corporation (MNC): 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.

Public-private partnership: Collaboration between private or commercial organizations and at least one public or nonprofit organization such as a university, research institute, or government laboratory. Examples include cooperative research and development agreements (CRADAs), industry-university alliances, and science parks.

R&D: Research and development, 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.

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

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.

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.

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.

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