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This study modifies ScholefieldÂ¿s (1994) dynamic R&D resource allocation concept and discusses its relationship with business strategies. We substitute original measures with the degree of business leverage (DBL) and the degree of R&D leverage (DRDL). These two measures are more useful and objective than those of ScholefieldÂ¿s. In addition, DBL and DRDL can be combined with the concepts of product and technology lifecycle and technology adoption more firmly. Managers can use DBL and DRDL to help them make optimal R&D resource allocation and business strategy decisions.