Business Enterprise Research and Development (BERD) Survey 2022

Capital expenditure. Capital expenditures are payments by a business for assets that usually have a useful life of more than 1 year, like buildings, equipment, or software. The value of assets acquired or improved through capital expenditures is recorded on a company's balance sheet. Expenditures for long-lived assets used in a company's R&D operations are not included in its R&D expense, but any depreciation recorded for those assets would be included in its R&D expense. Data are collected in the BERD Survey for capital expenditures for R&D operations for land acquisition, structures, equipment, capitalized software, and other items.

Core-based statistical area (CBSA). A CBSA is a U.S. geographic area that consists of one or more counties (or equivalents) anchored by an urban center of at least 10,000 people plus adjacent counties that are socioeconomically tied to the urban center by commuting. CBSAs are defined by OMB in the Executive Office of the President.

Employment, total and R&D. Involves the number of people employed by R&D-performing or R&D-funding companies in all locations, both foreign and domestic, during the pay period that included 12 March of the survey year. (The date 12 March is what most employers use when paying first-quarter employment taxes to IRS.) R&D employees are those who provide direct support to R&D, such as researchers, R&D managers, technicians, clerical staff, and others assigned to R&D groups. Those not included are employees who provide indirect support to R&D, such as corporate personnel, security guards, and cafeteria workers. In addition to providing head counts of total and R&D employees, the BERD Survey also produces estimates of FTE domestic R&D employment. This is the number of persons employed who were assigned full time to R&D, plus a prorated number of employees who worked on R&D only part of the time.

Employment, leased and temporary. The number of people who work for R&D-performing or R&D-funding companies but who are not considered employees of the reporting company. These workers perform tasks similar to the reporting companies' own employees but are technically employed by another company (such as a temp or staffing agency or a consulting firm) or are independent on-site consultants.

Expense and R&D expense. Involves money spent or costs incurred in an organization's efforts to generate revenue, representing the cost of doing business. Expenses may be in the form of actual cash payments (such as wages and salaries), a computed expired portion of an asset (depreciation), or an amount taken out of earnings (such as bad debts). Expenses are summarized and charged in the income statement as deductions from the income before assessing income tax. Whereas all expenses are costs, not all costs are expenses (e.g., costs incurred in acquisition of income-generating assets-see the definition of capital expenditure above). R&D expense is the cost of R&D funded by the company itself and performed within the respondent company's facilities, both foreign and domestic, or performed by others outside of the company under contract, subcontract, grant, or other funding arrangement.

R&D and business R&D.R&D is planned, creative work aimed at discovering new knowledge or devising new applications of available knowledge. This includes (1) activities aimed at acquiring new knowledge or understanding without specific immediate commercial applications or uses (basic research), (2) activities aimed at solving a specific problem or meeting a specific commercial objective (applied research), and (3) systematic use of research and practical experience and resulting in additional knowledge, which is directed to producing new or improved goods, services, or processes (development). R&D includes both direct costs, such as salaries of researchers, and administrative and overhead costs clearly associated with the company's R&D. However, R&D does not include expenditures for routine product testing, quality control, and technical services unless they are an integral part of an R&D project. R&D also does not include market research; efficiency surveys or management studies; literary, artistic, or historical projects, such as films, music, or books and other publications; and prospecting or exploration for natural resources.

R&D, artificial intelligence (AI). AI is a branch of computer science and engineering devoted to making machines intelligent. Intelligence is that quality that enables an entity to perceive, analyze, determine response, and act appropriately in its environment.

Systems with AI perform functions including, but not limited to, speech recognition, machine vision, or machine learning:

• Speech recognition transforms human speech into a format useful for computer applications (e.g., a digital assistant).
• Machine vision uses sensors and software that allow images to be used as an input for computer applications (e.g., systems that sort or inspect objects or support navigation in mobile equipment).
• Machine learning uses statistical software and data to "learn" and make better predictions without reprogramming (e.g., recommender systems for websites, or sales and demand forecasting).

AI technologies also include virtual agents, deep learning platforms, decision management systems, biometrics, text analytics, and natural language generation and processing.

R&D, biotechnology. Biotechnology is the application of science and technology (S&T) to living organisms, as well as parts, products, and models thereof, to alter living or nonliving materials for the production of knowledge, goods, and services. The following list provides examples of areas of biotechnology in which R&D may be performed.

• DNA or RNA: genomics; pharmacogenomics; gene probes; genetic engineering; DNA or RNA sequencing, synthesis, or amplification; gene expression profiling; and use of antisense technology, large-scale DNA synthesis, genome editing and gene editing, and gene drive
• Proteins and other molecules: sequencing, synthesis, or engineering of proteins and peptides (including large-molecule hormones); improved delivery methods for large molecule drugs; proteomics; protein isolation and purification; signaling; and identification of cell receptors
• Cell and tissue culture and engineering: cell or tissue culture, tissue engineering (including tissue scaffolds and biomedical engineering), cellular fusion, vaccine or immune stimulants, embryo manipulation, marker-assisted breeding technologies, and metabolic engineering
• Process biotechnology techniques: fermentation using bioreactors, biorefining, bioprocessing, bioleaching, biopulping, biobleaching, biodesulfurization, bioremediation, biosensing, biofiltration and phytoremediation, and molecular aquaculture
• Gene and RNA vectors: gene therapy and viral vectors
• Bioinformatics: construction of databases on genomes, protein sequences, and modeling complex biological processes, including systems biology
• Nanobiotechnology: application of the tools and processes of nano- or microfabrication to build devices for studying biosystems and applications in, for example, drug delivery or diagnostics

R&D, domestic. R&D performed in the 50 U.S. states and the District of Columbia. Adjusted domestic R&D is calculated in tables designed to enable comparisons between U.S. BERD Survey statistics and those of other nations. There are three types of tables corresponding to the three principal measures of domestic R&D in the BERD Survey-that is, R&D paid for by the respondent company and others outside of the company and performed by the respondent company, R&D paid for and performed by the respondent company, and R&D paid for by others and performed by the company. In each table, an internationally comparable adjusted domestic R&D estimate is calculated by subtracting depreciation relating to R&D operations, which is included in U.S. BERD Survey domestic R&D, and adding capital expenditures relating to R&D operations, which is excluded from U.S. BERD Survey domestic R&D. Also shown in each table are the differences between the U.S. BERD Survey estimates in this report and the adjusted internationally comparable estimates for domestic R&D.

R&D intensity, or R&D-to-sales ratio.R&D intensity is a ratio, expressed as a percentage, calculated by dividing the cost of R&D by sales. The ratio serves as an indicator of the relative incidence of R&D among groups of companies, primarily among industries and company size classifications. In this report, R&D intensity ratios are calculated in various ways, depending on the measure of R&D (R&D paid for by the respondent company, paid for by others outside of the company, or both) and whether the respondent company performs and funds or only performs R&D.

R&D, nanotechnology. The understanding of processes and phenomena and the application of S&T to organisms and to organic and inorganic materials-as well as parts, products, and models thereof-at the nanometer scale (but not exclusively below 100 nanometers) in one or more dimensions, where the onset of size-dependent phenomena usually enables novel applications. These applications utilize the properties of nanoscale material that differ from the properties of individual atoms, molecules, and bulk matter for the production of knowledge, goods, and services, like improved materials, devices, and systems that exploit these new properties. The following list provides examples of areas of nanotechnology in which R&D may be performed.

• Nanomaterial: material with any external dimension in the nanoscale or having internal structure or surface structure in the nanoscale
• Nanoelectronics: field of S&T concerned with the development and production of functional electronic devices with nanoscale components
• Nanophotonics: branch of photonics concerned with interaction of photons with nanomaterials aiming to design optical or optoelectronic components
• Nanomedicine: medical application of nanotechnology (e.g., medical application of nanomaterials and biological devices, nanoelectronics biosensors, and possible future applications of molecular nanotechnology, such as biological machines)
• Nanomagnetics: the study of the magnetic response of nanomaterials to an applied magnetic field and their applications
• Nanomechanics: a branch of nanoscience studying fundamental mechanical (elastic, thermal, and kinetic) properties of physical systems at the nanometer scale
• Nanofiltration: a membrane filtration process used for the softening of water and the removal of organic matter; includes nanomembranes
• Nanotools: multicomponent tools and devices used for manipulation, nanolithography, and nanofabrication
• Nanoinstruments or nanodevices: multicomponent instruments or devices used for observation, analysis, or control of matter at the nanometer scale
• Nanomanufacturing: intentional synthesis generation of control of nanomaterials, or fabrication steps in the nanoscale, for commercial purposes

R&D paid for by others, worldwide and domestic.The cost of R&D funded by others outside of the company, including the U.S. federal government, and performed within the respondent company's facilities, both foreign and domestic.

R&D paid for by the company and others, worldwide and domestic. The cost of R&D funded by the company or by others outside of the company and performed within the respondent company's facilities, both foreign and domestic, or performed by others outside of the company under contract, subcontract, grant, or other funding arrangement.

R&D performed by the company, worldwide and domestic. The cost of R&D performed within the respondent company's facilities, both foreign and domestic, funded by the company itself or by others outside of the company.

R&D performed by the company and others, worldwide and domestic. The cost of R&D performed within the respondent company's facilities, both foreign and domestic, or performed by others outside of the company under contract, subcontract, grant, or other funding arrangement.

R&D performed by others, worldwide and domestic. The cost of R&D funded by the company or by others outside of the company and performed by others outside of the company under contract, subcontract, grant, or other funding arrangement.

R&D, software and Internet. R&D activity in software and Internet applications refers only to activities that have an element of uncertainty and that are intended to close knowledge gaps and meet scientific and technological needs. This item is reported in this survey regardless of the eventual user (internal or external). R&D activity in software includes software development or improvement activities that expand scientific or technological knowledge and construction of new theories and algorithms in the field of computer science. R&D activity in software excludes software development that does not depend on a scientific or technological advance, such as supporting or adapting existing systems, adding functionality to existing application programs, routine debugging of existing systems and software, creating new software based on known methods and applications, converting or translating existing software and software languages, and adapting a product to a specific client, unless knowledge that significantly improved the base program was added in that process.

Sales, worldwide and domestic. Dollar values for goods sold or services rendered by R&D-performing or R&D-funding companies located in the 50 U.S. states and the District of Columbia to customers outside the company, including the U.S. federal government, foreign customers, and the company's foreign subsidiaries. Included are revenues from a company's foreign operations and subsidiaries and from discontinued operations. If a respondent company is owned by a foreign parent company, sales to the parent company and to affiliates not owned by the respondent companies are included. Excluded are intracompany transfers, returns, allowances, and freight charges, as well as excise, sales, and other revenue-based taxes.

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