What Is Research and Development?

Research and development (R&D) is the set of systematic activities undertaken to increase the stock of knowledge and to use that knowledge to devise new applications, products, processes, and services. It spans a continuum from the pursuit of new scientific understanding with no immediate commercial application to the engineering activities that convert proven concepts into marketable offerings. Governments, universities, and corporations all conduct R&D, and the level of investment a nation directs toward it is widely regarded as a leading indicator of long-term technological and economic competitiveness.

The definition used by most national statistical agencies and international bodies follows the Frascati Manual, published by the Organisation for Economic Co-operation and Development (OECD), which classifies R&D activities into three categories: basic research, applied research, and experimental development.

Basic and Applied Research

Basic research is experimental or theoretical work undertaken primarily to acquire new knowledge of underlying phenomena and observable facts, without any particular application or use in view. It produces the foundational science that applied work later builds on, from the quantum mechanics underlying semiconductor devices to the statistical theory behind machine learning algorithms. Applied research is also original investigation, but it is directed toward a definite practical aim. It transforms basic findings into demonstrated principles that could, with further development, serve a specific use. The boundary between the two is not sharp: a single laboratory program may produce both fundamental insights and immediately applicable results. The OECD Frascati Manual 2015 provides the definitions that most national R&D statistics are built on.

Experimental Development and Translational Research

Experimental development is systematic work drawing on knowledge gained from research and practical experience, directed toward producing new or substantially improved materials, devices, products, processes, systems, or services. It is the stage closest to commercial deployment and typically accounts for the largest share of corporate R&D spending. Translational research bridges the gap between scientific discovery and practical application, a concept that originated in biomedical science (where it describes moving findings from bench to bedside) but has been adopted across engineering and technology fields. Translational programs deliberately create organizational and funding structures to accelerate the movement of a result from a research setting into a real-world system.

Technology Readiness Levels

Technology readiness levels (TRLs) are a metric system for characterizing the maturity of a technology along the path from basic scientific observation to a fully operational deployed system. Originally developed by NASA in the 1970s, the scale runs from TRL 1 (basic principles observed) through TRL 9 (actual system proven in operational environment). TRLs give program managers a common vocabulary for assessing risk and making gate decisions about whether a technology is mature enough to incorporate into a larger system. The NASA TRL definitions have been adapted by the European Commission, the U.S. Department of Defense, and many industrial organizations, though specific scale definitions vary by organization.

R&D Funding and Investment

R&D funding comes from four principal sources: government agencies (through grants, contracts, and direct laboratory operations), industry (through internal budgets and co-funded partnerships), academic institutions (through endowments and overhead on sponsored projects), and private foundations. The ratio of public to private funding varies by sector and country. Defense and national security research is predominantly government-funded in most nations; pharmaceutical and software development is predominantly industry-funded. Total global R&D expenditure exceeded 2.6 trillion USD in 2022, with the United States, China, and the European Union collectively accounting for the majority, according to OECD Main Science and Technology Indicators.

Applications

Research and development has applications across a wide range of sectors, including:

• Pharmaceutical discovery and clinical development of new therapies
• Semiconductor design and advanced materials synthesis
• Renewable energy technology, including photovoltaics and battery chemistry
• Defense systems, from sensors to autonomous platforms
• Software platforms and artificial intelligence algorithms