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BOX A-1 Definitions of R&D

Common definitions of basic research, applied research, and development are used by the Office of Management and Budget (OMB), the American Association for the Advancement of Science (AAAS), and NSF, the sources of data in this paper. NSF uses the same definitions in its survey of industry. They are also generally consistent with international definitions. The objective of basic research is to gain more comprehensive knowledge or understanding of the subject under study, without specific applications in mind. The objective of applied research is to gain knowledge or understanding to meet a specific recognized need. Development is the systematic use of the knowledge or understanding gained from research directed toward the production of useful materials, devices, systems, or methods.4

the percentages in 1997 were largely unchanged. As a group, agencies other than NIH and NSF spent 7.7 percent less on basic research in 1997 than in 1993 in real terms.

In short, although federally funded research does not appear to have suffered greatly from the decline in R&D that took place after 1992, the overall average downturn and the modest recovery since 1996 obscure the fact that research spending by some agencies has declined much more than others. Moreover, the agencies with declining of stagnant research budgets also turn out to be the primary funders of certain fields of research (Table A-2). In 1993, for example, DOD provided the majority of federal support of research in electrical engineering (82 percent), mechanical engineering (75 percent), materials engineering (73 percent), and computer science (57 percent). DOE provided the majority of funding for physics research (62 percent) and was the single largest supporter of chemical engineering (42 percent) and chemistry (29 percent). NASA provided the majority of funding for four other fields: aeronautical engineering (81 percent), astronautical engineering (79 percent), astronomy (76 percent), and atmospheric sciences (52 percent).


It was inevitable that R&D expenditures would be affected by the bipartisan consensus to reduce the budget deficit, and it is not very surprising that agency


For full definitions, see NSB (1998, pp. 4–9).

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