Expenditure on research and development (R&D) is a key indicator of government and private sector efforts to obtain competitive advantage in science and technology.
Research and development expenditure (% of GDP)
Estimates of the resources allocated to R&D are affected by national characteristics such as the periodicity and coverage of national R&D surveys across institutional sectors and industries; and the use of different sampling and estimation methods. R&D typically involves a few large performers, hence R&D surveys use various techniques to maintain up-to-date registers of known performers, while attempting to identify new or occasional performers. 

R&D totals from SNA accounts may differ from these estimates, due in part to the different treatments of software R&D in the totals.
Gross domestic expenditures on research and development (R&D), expressed as a percent of GDP. They include both capital and current expenditures in the four main sectors: Business enterprise, Government, Higher education and Private non-profit. R&D covers basic research, applied research, and experimental development.
The gross domestic expenditure on R&D indicator consists of the total expenditure (current and capital) on R&D by all resident companies, research institutes, university and government laboratories, etc. It excludes R&D expenditures financed by domestic firms but performed abroad. 

The OECD's Frascati Manual defines research and experimental development as "creative work undertaken on a systemic 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." R&D covers basic research, applied research, and experimental development.

(1) Basic research - 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

(2) Applied research - 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.

(3) Experimental development - 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.

The fields of science and technology used to classify R&D according to the Revised Fields of Science and Technology Classification are:
1. Natural sciences;
2. Engineering and technology;
3. Medical and health sciences;
4. Agricultural sciences;
5. Social sciences;
6. Humanities and the arts.

The data are obtained through statistical surveys which are regularly conducted at national level covering R&D performing entities in the private and public sectors.