Glossary

Applied Research
Applied research is undertaken either to determine possible uses for the findings of basic research or to determine new ways of achieving some specific, predetermined objectives. As used in this survey, industrial applied research is investigation that may use findings of basic research toward discovering new scientific knowledge that has specific commercial objectives with respect to new products, services, processes, or methods.
Basic Research
Basic research analyzes properties, structures, and relationships toward formulating and testing hypotheses, theories, or laws. As used in this survey, industrial basic research is the pursuit of new scientific knowledge or understanding that does not have specific immediate commercial objectives, although it may be in fields of present or potential commercial interest.
Development
Development draws on research findings or other scientific knowledge for the purpose of producing new or significantly improving products, services, processes, or methods. As used in this survey, industrial development is the systematic use of the knowledge or understanding gained from research or practical experience directed toward the production or significant improvement of useful products, services, processes, or methods, including the design and development of prototypes, materials, devices, and systems.
Dimensions
Dimensions are the breakdowns (such as industry, company size, or state) by which the collected statistics are tallied.
Employment, FTE R&D Scientists and Engineers
Number of people domestically employed by R&D-performing companies who were engaged in scientific or engineering work at a level that required knowledge, gained formally or by experience, of engineering or the physical, biological, mathematical, statistical, or computer sciences equivalent to at least that acquired through completion of a 4-year college program with a major in one of those fields. The statistics show full-time-equivalent (FTE) employment of persons employed by the company during the January following the survey year who were assigned full time to R&D, plus a prorated number of employees who worked part time on R&D.
Employment, Total
Number of people domestically employed by R&D-performing companies in all activities during the pay period that includes the 12th of March, the date most employers use when paying first quarter employment taxes to the Internal Revenue Service.
Federally Funded R&D Centers (FFRDCs)
R&D-performing organizations administered by industrial, academic, or other institutions on a nonprofit basis, and exclusively or substantially financed by the federal government. For the statistics in this report, R&D expenditures of industry-administered FFRDCs were included with the federal R&D data of the industry classification of each of the administering firms. Beginning with 2001, statistics exclude data for FFRDCs.
Funds for R&D, Company and Other Non-Federal
The cost of R&D performed within the company and funded by the company itself or by other nonfederal sources; does not include the cost of R&D supported by the company but contracted to outside organizations such as research institutions, universities and colleges, nonprofit organizations, or—to avoid double-counting—other companies.
Funds for R&D, Federal
The cost of R&D performed within the company under federal R&D contracts or subcontracts and R&D portions of federal procurement contracts and subcontracts; does not include the cost of R&D supported by the federal government but contracted to outside organizations, such as research institutions, universities and colleges, nonprofit organizations, or other companies.
Funds for R&D, Total
The cost of R&D performed within the company in its own laboratories or in other company-owned or company-operated facilities, including expenses for wages and salaries, materials and supplies, property and other taxes, maintenance and repairs, depreciation, and an appropriate share of overhead; does not include capital expenditures or the cost of R&D contracted to outside organizations such as research institutions, universities and colleges, nonprofit organizations, or—to avoid double-counting—ther companies.
Funds per R&D Scientist or Engineer
All costs associated with the performance of industrial R&D (salaries, wages, and fringe benefits paid to R&D scientists and engineers; materials and supplies used for R&D; depreciation on capital equipment and facilities used for R&D; and any other R&D costs) divided by the number of R&D scientists and engineers employed. To obtain a per person cost of R&D for a given year, the total R&D expenditures of that year were divided by an approximation of the number of full-time-equivalent (FTE) scientists and engineers engaged in the performance of R&D for that year. For accuracy, this approximation was the mean of the numbers of such FTE R&D-performing scientists and engineers as reported in January for the year in question and the subsequent year. For example, the mean of the numbers of FTE R&D scientists and engineers in January 1998 and January 1999 was divided into total 1998 R&D expenditures for a total cost per R&D scientist or engineer in 1998.
Measures
Measures are the numeric variables (such as Total R&D Funding) for which statistics are collected.
Net Sales and Receipts
Dollar values for goods or services rendered by R&D-performing companies to customers outside the company—including the federal government—less such items as returns, allowances, freight, charges, and excise taxes. Domestic intracompany transfers and sales by foreign subsidiaries are excluded, but transfers to foreign subsidiaries and export sales to foreign companies are included.
R&D and Industrial R&D
R&D is the planned, systematic pursuit of new knowledge or understanding toward general application (basic research); the acquisition of knowledge or understanding to meet a specific, recognized need (applied research); or the application of knowledge or understanding toward the production or improvement of a product, service, process, or method (development). The survey covers industrial R&D performed by people trained—either formally or by experience—in engineering or in the physical, biological, mathematical, statistical, or computer sciences and employed by a publicly or privately owned firm engaged in for-profit activity in the United States. The following are specifically excluded:
  • quality control
  • routine product testing
  • market research
  • sales promotion
  • sales service
  • other nontechnological activities
  • routine technical services
  • research in the social sciences or psychology