Methods for assessing institutional capacity for research and development (R&D) are examined. The paucity of research data on the topic is noted. Some general conclusions are drawn: (1) There is no set formula or checklist to provide an accurate assessment of institutional R&D capacity. (2) False negatives are more serious than false positives, so the selection criteria should be lenient to the point of flexibility, consistently favoring applicants or existing centers when there is some chance of success. (3) Leadership is significant, and the selection of a young scientist (35 to 45) with a history of successful contributions and favorable relationships with other people will help ensure a center's creativity. (4) The consortium form of research organization should be rejected under rare circumstances. A research firm is necessary for a concerted attack on a narrow goal, as R&D should be defined. (5) The current economy is favorable to organized research, due to a tight labor market and the scarcity of research funds for projects. (Author/LBH)