AbstractThe paper conducts a critical review of the problems faced by middle to first‐line managers in managing R&D in Canadian government laboratories. The data come from the published literature, interviews with R&D managers, and information obtained from government employees undergoing training as R&D managers.The problems are numerous and serious. They arise from a multiplicity of causes related to underfunding and bureaucratic management practices that do not allow for the special nature of R&D. Hiring freezes, staff reductions, travel restrictions and reductions in training budgets are all consequences of underfunding, resulting in an aging workforce and technological obsolescence. Bureaucratic administration rules set by central agencies constrain the freedom of R&D managers to manage effectively, and limit low‐level participation in policy‐making and planning. The result is that too many management posts are filled by under‐achieving scientists and engineers, with resultant consequences for originality and efficiency.The authors believe that the only cure is to undertake proper funding, recognise the special operational needs of R&D management, and select managers for managerial ability in addition to technical com