| Appendix 2:
Definitions
In this report, R&D refers to actual research
and development activities as well as R&D facilities. These definitions are
used by the Office of Management and Budget, the National Science Foundation,
and AAAS.
Research is systematic study directed
toward more complete scientific knowledge or understanding of the subject
studied. The federal government classifies research as either basic or
applied according to the objective of the sponsoring agency.
· In
basic research the objective
is to gain knowledge or understanding of phenomena without specific applications
in mind.
· In
applied research the objective
is to gain knowledge or understanding necessary for meeting a specific
need.
Development is the systematic use of the
knowledge or understanding gained from research directed toward the production
of materials; devices; systems; or methods, including design, development,
and improvement of prototypes and new processes. It excludes quality control,
routine product testing, and production.
R&D funding normally includes those personnel,
program supervision, and administrative support costs directly associated
with R&D activities. Laboratory equipment is also included. Defense
R&D also includes testing, evaluation, prototype development, and
other activities that precede actual production.
Funding for
R&D facilities (also known as R&D plant) includes construction,
repair, or alteration of physical plant (e.g.,
reactors, wind tunnels, particle accelerators, or laboratories) used in
the conduct of R&D (R&D facilities construction). It also includes
major capital equipment used for R&D.
The
allocation of agency budgets among basic research, applied research, and
development is not an exact procedure; a certain arbitrariness is inevitably
involved. The severe time pressures under which these figures are compiled
for OMB are also a problem. Nevertheless,
there is presumably some consistency within each agency’s estimates so
that the trends are meaningful.
The federal R&D funding data in this report are
presented in terms of budget authority.
Budget authority is the initial budget parameter for congressional action
on the President’s proposed budget. Other R&D data sources may express
R&D funding in terms of obligations or outlays.
There are also R&D data sources that obtain funding data from
funding recipients (companies,
universities) rather than from funding sources
(agencies).
Budget authority
is the legal authorization to expend funds.
Obligations represent orders placed, contracts
awarded, services received, and similar transactions during a given period,
regardless of when the funds were appropriated and when the future payment
of money is required.
Outlays represent checks issued and
cash payments made during a given period, regardless of when the funds
were appropriated or obligated. Some surveys refer to outlays as expenditures.
As an example, Congress may appropriate $100 million
to NASA in FY 2004 for an R&D laboratory. NASA may then issue contracts
to build the lab and sign $50 million of the contracts in FY 2004 and
$50 million in FY 2005. Upon completion of the lab in FY 2005, NASA may
then write checks to the contractors for a total of $100 million. Budget
authority would be $100 million in FY 2004; obligations would be split
$50 million each in FY 2004 and FY 2005; outlays would be $100 million
in FY 2005. In the federal budget process, there is normally a lag between
budget authority and outlays for large capital projects and research contracts;
budget authority and outlays usually occur in the same year for recurring
expenses such as staff salaries.
(Definitions
adapted from National Science Foundation, Federal
R&D Funding by Budget Function: Fiscal Years 2003-2005, Arlington,
VA, 2004.)
| 
