The main objectives of this study were to examine the nature of the basic-applied research continuum, to evaluate projected costs and benefits of the research continuum for a specific example, namely, the development of multiple disease resistant potato cultivars, and to examine the changing roles and interactions between public research institutions and private industry. Given the existing budgetary constraints and the increasing demands for accountability that research administrators and policy makers face, it seems necessary for decision makers to give adequate consideration to the existing interdependency of basic and applied research in determining the most appropriate levels of research to fund. The establishment of of an adequate balance of both basic and applied research is important in any attempts to maximize the returns from the research continuum while at the same time developing and maintaining new biotechnologies. The projected rate of return for potato disease resistant research was calculated at 34 percent which falls within the range given by similar studies. With the advent of the new biotechnologies such as genetic engineering, and the increased competition for the limited research dollars, there has been an evolving new relationship between universities and private industry in which universities are seeking more private funding and industry demanding more control of technologies developed through their funding. Separate but interdependent roles of both private companies and universities seems necessary for the achievement of desirable and a adequate maintenance of the research continuum. / M.S.