1. Research and Development (R&D) is defined as creative work undertaken on a systematic basis 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.

2. R&D activities may be aimed at achieving either specific or general objectives. R&D is always aimed at new findings, based on original concepts (and their interpretation) or hypotheses. It is largely uncertain about its final outcome (or at least about the quantity of time and resources needed to achieve it), it is planned for and budgeted (even when carried out by individuals), and it is aimed at producing results that could be either freely transferred or traded in a marketplace.

3. R&D covers 3 types of activity:

i. Basic Research – refers to 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.

ii. Applied Research – refers to original investigation undertaken in order to acquire new knowledge.

iii. Experimental Development – refers to systematic work, drawing on knowledge gained from research and practical experience and producing additional knowledge, which is directed to producing new products or processes or to improving existing products or processes.

4. If the primary objective of the work is to conduct research on something relevant to the entity or make improvements to products or processes, then the work falls under the definition of R&D. On the other hand, if the product, process or approach is substantially set and the primary objective is to develop markets, do pre-production planning or get a production or control system working smoothly, then the work is no longer R&D.

5. This is a list of activities to be excluded from R&D. However, should the activities below be undertaken as part of an R&D process, they should be included as R&D:

i. All education and training of personnel in universities and special institutions of higher and post-secondary education.

ii. Scientific and technical information services such as collecting, coding, recording, classifying, dissemination, translating, analyzing and evaluating by scientific and technical personnel, bibliographic services, patent statistics, scientific and technical information, extension and advisory services and scientific conferences.

iii. Scientific and technical information services such as collecting, coding, recording, classifying, dissemination, translating, analyzing and evaluating by scientific and technical personnel, bibliographic services, patent statistics, scientific and technical information, extension and advisory services and scientific conferences.

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

v. Feasibility studies, including the investigation of proposed engineering projects, using existing techniques to provide additional information before deciding on implementation. 

vi. Specialised health care concerning routine investigation and normal application of specialised medical knowledge. 

vii. Patent and license work, including all administrative and legal work connected with patents and licenses. 

viii. Policy–related studies cover a range of activities, such as the analysis and assessment of the existing programmes, policies and operations of government departments; the work of units concerned with the continuing analysis and monitoring of external phenomena (e.g. defense and security analysis); and the work of legislative commissions of inquiry with general government or departmental policy or operations. 

ix. Routine software development: software-related activities of a routine nature are not considered to be R&D. Technical problems that have been overcome in previous projects on the same operating systems and computer architecture are also excluded. This also includes routine computer maintenance.

6. The link between the Business R&D and Innovation data is that R&D is just one out of the eight activities that an enterprise can conduct in order to be considered as Innovative. The eight types of innovative activities are the following:

i. Research and experimental development (R&D) activities.

ii. Engineering, design and other creative work activities.

iii. Marketing and brand equity activities.

iv. Intellectual Property related activities.

v. Employee training activities.

vi. Software development and database activities.

vii. Activities related to the acquisition or lease of tangible assets.

viii. Innovation management activities. 

7. R&D employment includes all persons engaged directly in R&D on a full-time or part-time basis, whether employed by the statistical unit or external contributors fully integrated into the statistical unit’s R&D activities, as well as those providing direct services for the R&D activities. Not included in R&D employment, and correspondingly as R&D expenditure, are:

i. Persons performing less than 0.1 FTE of R&D activity i.e. less than 20 working days in a year; and 

ii. Persons providing indirect support and ancillary services i.e. maintenance, administrative and security staff.

8. R&D is classified under four main sectors:

i. Government Sector (GOV) – includes all Government Ministries and Departments, offices and other bodies which furnish, but normally do not sell to the community, those services, other than higher education, which cannot otherwise be conveniently and economically provided, as well as those that administer the state and the economic and social policy of the community.

ii. Business Enterprise Sector (BES)- includes all firms, organisations and institutions whose primary activity is the market production of goods and services (other than higher education) for sale to the general public at economically significant prices.

iii. Higher Education Sector (HES) – includes all universities, colleges of technology and other institutions of post-secondary education, whatever their source of finance or legal status.

iv. Private Non-Profit Sector (PNP) – includes non-market, private non-profit institutions serving households and private individuals or households. This sector is not captured as it is considered to be negligible.

9. Private Non-Profit Sector (PNP) – includes non-market, private non-profit institutions serving households and private individuals or households. This sector is not captured as it is considered to be negligible.

10. The data contained in this news release have been drawn up in line with the Frascati Manual (2015 edition) and Regulation (EU) 2019/2152 of the European Parliament and of the Council on European business statistics. The definitions of the fields of science and technology and their sub-fields are available online.

11. All data in this release should be considered as provisional and therefore subject to revision. 

12. More information relating to this news release may be accessed at:

      Statistical Concepts
      Metadata (GOV and HES)
      Metadata (BES) 
      Eurostat statistical database

13. Any quotations from this news release are to be cited and/or referenced.

14. A detailed news release calendar is available online.