Objective This paper compares the expectations of the public with the policies driving government programs in research and development. Main Content Government and academia have simultaneously claimed the importance of funding basis research unrelated to applications, while ensuring that such basis research did somehow eventually benefit society through the application of the findings. Some agencies which traditionally funded basis research, are now being asked to also fund development projects leading to technology-based innovations. More importantly, they are increasingly asked to demonstrate evidence that the projects outputs are resulting in beneficial socioeconomic impacts. However, these same agencies have not integrated the new concepts and methods necessary to achieve this additional mission, so while the front-end funding is consumed in activity, there is little evidence of the expected beneficial impacts. The kernel of knowledge can be advanced through three successive states - each output from methods respectively called research, development and production. Results The analysis deconstructs the kernel of knowledge embodied in any innovation, by describing how knowledge transitions through three successive states - each output from methods respectively called research, development and production. The integration of the three methods is offered as a complete formula characterized as problem-driven innovation. Applying this orientation where appropriate, permits government programs to correctly align their logic models, to the expectations of political and public interests. Conclusion The adoption of the problem-driven model for technology-based innovations enables the generation of the intended social and economic benefits from development and procurement, while reinforcing the role for the traditional research and development programs.