How to Develop a Research and Development Strategy?

What is Research and Development?

Research and Development (R&D) is a systematic investigation that can bring advancements to the company’s existing product line. It does this by launching a new product line or making enhancements to the one that already exists. Nowadays, various industries and areas apply Research and Development (R&D). Usually, the industries with the highest amount of R&D investment include semiconductors, software, technology, and medicines. Businesses in industries with a high share of intangible assets usually invest significantly in R&D. For many teams and organizations, research and development (R&D) is a crucial activity because it helps in learning and organizational growth. Teams can experiment and find more efficient ways to achieve company objectives, including raising overall revenue or improving customer satisfaction through research & development. It helps businesses to create new goods or processes and helps in performing work efficiently....

Objectives of Research and Development

To mobilize funds from various funding bodies for organizing FDP/Seminar/Workshop etc. To obtain an extensive number of patents through research in all of the various fields and recently developing areas of engineering. To arrange funds from well-known funding agencies, each department takes an interest in presenting their proposal regularly. To encourage academic faculty as well as students to submit their work to recommended journals. To motivate students to display their work in famous exhibitions. To sign Memorandums of Understanding (MOUs) with industries and institutes for projects and training. To sponsor academic members to participate in conferences, seminars, workshops, etc. To undertake studies that can support human resource development, as they are capable of implementing major roles in society. To establish faculty and student training schools in the summer and winter. To delegate the institutes as resource persons and jurors to faculty members for conducting R&D-related seminars, conferences, workshops, and project expos. To employ criteria for ensuring high-quality research....

Advantages of Research and Development

1. Enhanced Employee Motivation: Research and Development may encourage a commitment to the duties of the team and serve as motivation for the employees. Generally, employee productivity and happiness at work could increase if they are interested in the potential new feature or product that they are developing. A team that promotes innovation can also find that its employees feel free to express and experiment with their ideas. A team that communicates openly may develop new ideas faster and provide more customer-beneficial goods and services....

Disadvantages of Research and Development

1. Price: The implementation of large-scale Research and Development programs can sometimes be expensive. Due to this reason, the risk of investing in this kind of activity increases. It is also possible that small businesses do not have access to the resources that are required to conduct the essential R&D that could improve their operations....

Why is Research and Development Important?

1. Innovation: The level of advancement for a particular business is mostly determined by the inventions that come from research and development.  R&D leads to new products being launched in the market, which can help businesses make more profits. R&D helps businesses develop innovative technology. This has emerged as one of the most crucial strategies for success in today’s competitive environment....

Who Handles Research and Development?

Research and Development is often managed internally by a company’s internal department, but it can also be outsourced to a university or a specialist. Large international businesses may perform all three, with some of the outsourced work taking place in another country so that businesses can make use of both talent and local market knowledge. Small business owners who have an innovative product idea but lack the design or technical resources necessary to develop and test solutions can consider outsourcing research and development for better results....

Types of Research and Development

There are three types of Research and Development, which are as follows:...

Example of Research and Development

During COVID-19, pharmaceutical companies were testing a new drug, which can be an example of Research and Development (R&D). The process started with first researching the drug to see whether the drug is effective and safe for the general public. During the research trials, the drug was found effective and safe, the company developed a plan to mass-produce and market the drug. In this way, the vaccine was introduced in the market....

Research and Development Accounting

When it comes to Research and Development, there are no guarantees and it’s very difficult to earn a return immediately. In some cases, a business will invest a significant sum of money in search of a better process, material, or medication and never get a return on that investment. R&D is a business expense rather than an asset in this sense. As a result, general accounting standards and practices require that the majority (but not all) costs related to Research and Development be charged to expense as incurred. However, by making use of federal tax benefits and deductions intended to support Research and Development (R&D), businesses may reduce some of the effects of this practice....

Difference Between Research and Development and Applied Research

Basis Research and Development Applied Research Objective The objective of Basic Research is to develop a deeper, more comprehensive understanding of the underlying principles behind an idea or phenomenon. In most cases, R&D starts with this understanding. These activities furnish a basis for information without specific implications for products, regulations, or operational procedures. The actions performed to acquire knowledge with a particular objective in mind are called Applied Research. The activities may include determining and developing new products, policies, or operational processes Nature Basic Research takes time, but it is not as in complex as Applied Research. Applied research is detailed and complex in nature. It also requires more time and funds....

Types of Activities under Research and Development

There are three types of Research and Development activity, which are as follows:...

Research and Development in Business

Businesses can apply different organizational structures to implement various R&D plans, and they will approach R&D in different ways. The application of research and development leads to significant differences among businesses internally,  it has an impact on the project as a whole. Some companies will outsource their R&D because they lack the resources to conduct it internally, depending on others to promote innovation.  Some companies have departments entirely devoted to Research and Development, while others decide to contract out their R&D....

How to Develop a Research and Development Strategy?

Companies that perform comprehensive research and development assessments are better able to formulate effective R&D strategies. It includes analyzing market trends, observing prospective growth regions, and assessing how well new goods and services could reach unexplored markets or customers. Businesses should also think about how well they can execute innovation now and, if needed, explore strategies to improve this capability....

List of Research and Development Spending by Companies

S No. List of Companies R & D Spend 1 Amazon $ 73.2 B 2 Alphabet $ 39.5 B 3 Meta $ 35.3 B 4 Apple $ 27.7 B 5 Microsoft $ 26.6 B 6 Nvidia $ 7.3 B 7 Broadcom $ 4.9 B 8 ASML $ 3.3 B 9 Tesla $ 3.1 B 10 Pepsico $ 0.8 B...

Frequently Asked Questions (FAQs)

1. How can R&D projects involve small businesses?...