The authors evaluate European Research and Development against a background of unevenly rising R&D gross spending, development in strategic technologies, the dominance of four fields of technological change, technological convergence, and Europe's comparative weakness in R&D faced with Japan and the United States. They are optimistic about total future funding for R&D, although increasing attention will be paid to its efficiency. Most striking however, are the authors' warning signals that basic research is likely to continue to decline in Europe as frontier technological research (in the medium term) and applications-oriented work (even shorter term) become the focus of attention, particularly by corporations. The reasons for this are explored, and in their prescriptions the authors urge European Public Sector R&D to harness a Private Sector R&D trend by directing its efforts towards collaborative applications of technology into "quality of life and environment fields", namely new environmental, health and education markets. It will have competitive advantages as well as life-enhancing effects.