The incidence and nature of research and development (R&D)-related services provided for employers by English and Welsh colleges were examined. Data were collected through the following activities: (1) an initial survey that was returned by 96 colleges in England and 11 in Wales; (2) telephone interviews with those colleges that were currently providing applied R&D-related services; (3) site visits to selected colleges and companies; and (4) circulation of a "work in progress" report to all colleges with a request for additional examples. Of the 107 colleges that returned questionnaires, 50 were currently providing applied R&D services and an additional 17 colleges had definite plans to develop such services. Of the remaining colleges, 36% generally agreed that such activities could be relevant to the college mission. Key reasons for engaging in applied R&D included the commercial nature of the activity as a service to business and source of income for the college and the benefits that college staff members receive from participating in professional and research-related activities. The R&D services being provided assumed a wide range of forms including the following: research driven by developmental needs; advice and consultancy; audits and evaluations; demonstration projects; specific services; brokerage, support for product development; network creation and support; and support for business incubation. (Contains eight endnotes. The series introduction is appended.) (MN)