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2.1. Research and experimental development (R&D)

63.

Research and experimental development (R&D) comprise creative work undertaken on a systematic basis in order 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.

64.The term R&D covers three activities: basic research, applied research and experimental development; these are described in detail in Chapter 4. Basic research is experimental or theoretical work undertaken primarily to acquire new knowledge of the underlying foundation of phenomena and observable facts, without any particular application or use in view. Applied research is also original investigation undertaken in order to acquire new knowledge. It is, however, directed primarily towards a specific practical aim or objective. Experimental development is systematic work, drawing on existing knowledge gained from research and/or practical experience, which is directed to producing new materials, products or devices, to installing new processes, systems and services, or to improving substantially those already produced or installed. R&D covers both formal R&D in R&D units and informal or occasional R&D in other units.

2.2.Activities to be excluded from R&D

65.For survey purposes, R&D must be distinguished from a wide range of related activities with a scientific and technological basis. These other activities are very closely linked to R&D both through flows of information and in terms of operations, institutions and personnel, but as far as possible, they should be excluded when measuring R&D.

66.These activities will be discussed here under four headings:

–Education and training (Section 2.2.1).

–Other related scientific and technological activities (Section 2.2.2).

–Other industrial activities (Section 2.2.3).

–Administration and other supporting activities (Section 2.2.4).

67. The practical definitions given here are intended solely to exclude these activities from R&D.

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2.2.1. Education and training

68. All education and training of personnel in the natural sciences, engineering, medicine, agriculture, the social sciences and the humanities in universities and special institutions of higher and post-secondary education should be excluded. However, research by students at the PhD level carried out at universities should be counted, whenever possible, as a part of R&D (see Section 2.3.2).

2.2.2. Other related scientific and technological activities

69. The following activities should be excluded from R&D except when carried out solely or primarily for the purposes of an R&D project (see Section 2.3.1 for examples).

Scientific and technical information services

70.The specialised activities of:

–	Collecting	}		– Scientific and technical personnel
–	Coding			–	Bibliographic services
–	Recording			–	Patent services
–	Classifying			– Scientific and technical information,
			by		extension and advisory services
–	Disseminating			–	Scientific conferences
–	Translating
–	Analysing
–	Evaluating

are to be excluded, except when conducted solely or primarily for the purpose of R&D support (e.g. the preparation of the original report of R&D findings should be included in R&D).

General purpose data collection

71. General purpose data collection is undertaken generally by government agencies to record natural, biological or social phenomena that are of general public interest or that only the government has the resources to record. Examples are routine topographical mapping; routine geological, hydrological, oceanographic and meteorological surveying; astronomical observations. Data collected solely or primarily as part of the R&D process are included in R&D (e.g. data on the paths and characteristics of particles in a nuclear reactor). The same reasoning applies to the processing and interpretation of the data. The social sciences, in particular, are very dependent on an accurate record of facts relating to society in the form of censuses, sample surveys, etc. When these are specially collected or processed for the purpose of scientific research, the cost should be attributed

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to research and should cover the planning, systematising, etc., of the data. However, data collected for other or general purposes, such as quarterly sampling of unemployment, should be excluded from R&D even if exploited for research. Market surveys should also be excluded.

Testing and standardisation

72. This concerns the maintenance of national standards, the calibration of secondary standards and routine testing and analysis of materials, components, products, processes, soils, atmosphere, etc.

Feasibility studies

73. Investigation of proposed engineering projects, using existing techniques to provide additional information before deciding on implementation, is not R&D. In the social sciences, feasibility studies are investigations of the socio-economic characteristics and implications of specific situations (e.g. a study of the viability of a petrochemical complex in a certain region). However, feasibility studies on research projects are part of R&D.

Specialised health care

74. This concerns routine investigation and normal application of specialised medical knowledge. There may, however, be an element of R&D in what is usually called “specialised health care”, when it is carried out, for example, in university hospitals (see Section 2.3.2).

Patent and licence work

75. This includes all administrative and legal work connected with patents and licences. However, patent work connected directly with R&D projects is R&D.

Policy-related studies

76. In this context, “policy” refers not only to national policy but also to policy at regional and local levels, as well as that of business enterprises in the pursuit of their economic activity. Policy-related studies cover a range of activities, such as the analysis and assessment of the existing programmes, policies and operations of government departments and other institutions; the work of units concerned with the continuing analysis and monitoring of external phenomena (e.g. defence and security analysis); and the work of legislative commissions of inquiry concerned with general government or departmental policy or operations.

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Routine software development

77. Software-related activities of a routine nature are not considered to be R&D. Such activities include work on system-specific or programme-specific advances which were publicly available prior to the commencement of the work. Technical problems that have been overcome in previous projects on the same operating systems and computer architecture are also excluded. Routine computer maintenance is not included in R&D (see Section 2.4.1 for a more detailed discussion of borderline problems between software development and R&D).

2.2.3. Other industrial activities

78. These can be considered under two, to some extent overlapping, headings.

Other innovation activities

79. In the Oslo Manual (OECD, 1997a), these are defined as all those scientific, technical, commercial and financial steps, other than R&D, necessary for the implementation of new or improved products or services and the commercial use of new or improved processes. These include acquisition of technology (embodied and disembodied), tooling up and industrial engineering, industrial design n.e.c., other capital acquisition, production start-up and marketing for new and improved products.

Production and related technical activities

80. This covers industrial preproduction and production and distribution of goods and services and the various allied technical services in the business enterprise sector and in the economy at large, together with allied activities using social science disciplines, such as market research.

2.2.4. Administration and other supporting activities

81.This category has two components.

Purely R&D-financing activities

82. The raising, management and distribution of R&D funds to performers by ministries, research agencies, foundations or charities is not R&D. This is in line with the instructions in the latest version of ISIC (UN, 1990).

Indirect supporting activities

83. This covers a number of activities which are not themselves R&D but which provide support for R&D. By convention, R&D personnel data cover R&D proper but exclude indirect supporting activities, whereas an allowance for

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