Research and development
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Research and development (R&D or R+D; also known in Europe as research and technological development or RTD)[1] is the set of innovative activities undertaken by corporations or governments in developing new services or products, and improving existing ones.[2][3] Research and development constitutes the first stage of development of a potential new service or the production process.
R&D activities differ from institution to institution, with two primary models
Background
New product design and development is often a crucial factor in the survival of a company. In a global industrial landscape that is changing fast, firms must continually revise their design and range of products. This is necessary as well due to the fierce competition and the evolving preferences of consumers. Without an R&D program, a firm must rely on
A system driven by marketing is one that puts the customer needs first, and produces goods that are known to sell.[8] Market research is carried out, which establishes the needs of consumers and the potential niche market of a new product. If the development is technology driven, R&D is directed toward developing products to meet the unmet needs.[citation needed]
In general, research and development activities are conducted by specialized units or centers belonging to a company, or can be
In the United States, a typical ratio of research and development for an industrial company is about 3.5% of revenues; this measure is called "
Generally such firms prosper only in markets whose customers have extreme high technology needs, like certain prescription drugs or special chemicals,
On a technical level, high tech organizations explore ways to re-purpose and repackage advanced technologies as a way of amortizing the high overhead.[citation needed] They often reuse advanced manufacturing processes, expensive safety certifications, specialized embedded software, computer-aided design software, electronic designs and mechanical subsystems.[citation needed]
Research from 2000 has shown that firms with a persistent R&D strategy outperform those with an irregular or no R&D investment program.[12]
Business R&D
Research and development are very difficult to manage, since the defining feature of research is that the researchers do not know in advance exactly how to accomplish the desired result. As a result, "higher R&D spending does not guarantee more creativity, higher profit or a greater market share".
Benefit by sector
In general, it has been found that there is a positive correlation between the research and development and firm productivity across all sectors, but that this positive correlation is much stronger in high-tech firms than in low-tech firms.[16][17] In research done by Francesco Crespi and Cristiano Antonelli, high-tech firms were found to have "virtuous" Matthew effects while low-tech firms experienced "vicious" Matthew effects, meaning that high-tech firms were awarded subsidies on merit while low-tech firms most often were given subsidies based on name recognition, even if not put to good use.[18] While the strength of the correlation between R&D spending and productivity in low-tech industries is less than in high-tech industries, studies have been done showing non-trivial carryover effects to other parts of the marketplace by low-tech R&D.[19]
Risks
Business R&D is risky for at least two reasons. The first source of risks comes from R&D nature, where R&D project could fail without residual values. The second source of risks comes from takeover risks, which means R&D is appealing to bidders because they could gain technologies from acquisition targets.[20] Therefore, firms may gain R&D profit that co-moves with takeover waves, causing risks to the company which engages in R&D activity.[21]
Global
Global R&D management is the discipline of designing and leading R&D processes globally, across cultural and lingual settings, and the transfer of knowledge across international corporate networks.[22]
Government expenditures
United States
Former President Barack Obama requested $147.696 billion for research and development in FY2012, 21% of which was destined to fund basic research.[24] According to National Science Foundation in U.S., in 2015, R&D expenditures performed by federal government and local governments are 54 and 0.6 billions of dollars.[25] The federal research and development budget for fiscal year 2020 was $156 billion, 41.4% of which was for the Department of Defense (DOD).[26] DOD's total research, development, test, and evaluation budget was roughly $108.5 billion.[27]
European Union
Europe is lagging behind in R&D investments from the past two decades. The target of 3% of gross domestic product (GDP) was meant to be reached by 2020, but the current amount is below this target. This also causes a digital divide among countries since only a few EU Member States have R&D spending.[28]
Research and innovation in Europe are financially supported by the programme
A notable example is the European environmental research and innovation policy, based on the Europe 2020 strategy which will run from 2014 to 2020,[30] a multidisciplinary effort to provide safe, economically feasible, environmentally sound and socially acceptable solutions along the entire value chain of human activities.[31]
Firms that have embraced advanced digital technology devote a greater proportion of their investment efforts to R&D. Firms who engaged in digitisation during the pandemic report spending a big portion of their expenditure in 2020 on software, data, IT infrastructure, and website operations.[32][33] A 2021/2022 survey found that one in every seven enterprises in the Central, Eastern and South Eastern regions (14%) may be classed as active innovators — that is, firms that spent heavily in research and development and developed a new product, process, or service — however this figure is lower than the EU average of 18%. In 2022, 67% of enterprises in the same region deployed at least one sophisticated digital technology, and 69% EU firms did the same.[34]
As of 2023, European enterprises account for 18% of the world's top 2 500 R&D corporations, but just 10% of new entrants, compared to 45% in the United States and 32% in China.[35]
Worldwide
In 2015, research and development constituted an average 2.2% of the
By 2018, research and development constituted an average 1.79% of the
Country | R&D as percentage of GDP |
---|---|
Israel | 5.44
|
Korea | 4.81
|
Sweden | 3.53
|
Belgium | 3.48
|
United States | 3.45
|
Japan | 3.26
|
Austria | 3.20
|
Switzerland | 3.15
|
Germany | 3.14
|
Denmark | 2.96
|
Finland | 2.94
|
Iceland | 2.47
|
China | 2.40
|
France | 2.35
|
Netherlands | 2.29
|
Norway | 2.28
|
Slovenia | 2.15
|
Czechia | 1.99
|
Singapore | 1.89
|
Australia | 1.83
|
See also
- Basic research
- Demonstration
- Industrial laboratory
- Innovation
- List of business and finance abbreviations
- List of companies by research and development spending
- List of countries by research and development spending
- Neglected tropical disease research and development
- Prototype
- Science of science policy
- Science policy
- Technological revolution
- Technology life cycle
References
- ^ "Policy for research and technological development | Fact Sheets on the European Union | European Parliament". 31 March 2023.
- ISBN 9780850451634.
- ^ a b c Staff, Investopedia (2003-11-25). "Research And Development – R&D". Investopedia. Retrieved 2017-12-12.
- S2CID 216529963.
- ^ EUROPEAN COMMISSION https://ec.europa.eu/competition/state_aid/cases/220403/220403_758165_5_1.pdf
- ^ Expenses for university R&D&I increase moderately in Spain https://www.eurekalert.org/pub_releases/2021-07/ucid-efu072221.php
- Fundação Para a Ciência e Tecnologia https://www.fct.pt/dsi/idi/index.phtml.en
- ISSN 0017-8012. Retrieved 2019-02-06.
- ^ ChartsBin. "Research and Development Employees by Country". ChartsBin. Retrieved 2019-02-06.
- ISBN 9781498723459.
- ^ All figures UK R&D Scoreboard Archived 2005-10-27 at the Wayback Machine as of 2006[update].
- ISBN 9781473914452.
- ^ "Aerospace and Defense: Inventing and Selling the Next Generation" (PDF). Center for Strategic and International Studies. Center for Strategic and International Studies, International Security Program. December 5, 2009. p. 1. Retrieved 6 August 2017.
- ^ "Investor-partner business partner finder Business dictionary".
- ^ "Investor-partner business partner finder Business dictionary".
- S2CID 59130979.
- ^ Ortega-Argiles, Raquel; Piva, Mariacristina; Vivarelli, Marco (2011). "Productivity Gains from R&D Investment: Are High-Tech Sectors Still Ahead?". IZA Discussion Papers (5975). IZA: 1–22.
- ^ Crespi, Francesco; Antonelli, Cristiano (2011). "Matthew Effects and R&D Subsidies: Knowledge Cumulability in High-Tech and Low-Tech Industries". Working Papers (140). Università degli Studi Roma Tre: 1–24.
- .
- .
- hdl:10397/65000.
- ^ Chiesa, V. (2001). R&D Strategy and Organisation, Imperial College Press
- ^ Anderson, G.; Moris, F. (2023). "Federally Funded R&D Declines as a Share of GDP and Total R&D". National Science Foundation, National Center for Science and Engineering Statistics. Archived from the original on 3 October 2023.
NSF 23-339
- OCLC 1097445714.
- ^ "Research and Development: U.S. Trends and International Comparisons, National Science Foundation" (PDF).
- ^ "Federal Research and Development (R&D) Funding: FY2021". 17 December 2020. Retrieved 20 February 2021.
- ^ "RDT&E Programs (R-1)" (PDF). Office of the Undersecretary of Defense (Comptroller). February 2020. Retrieved 20 February 2021.
- ^ Bank, European Investment (2023-02-28). "Innovation overview 2023".
- ^ "European Commission – PRESS RELEASES – Press release – Horizon 2020 – the EU's new research and innovation programme". europa.eu.
- ^ "European Commission – PRESS RELEASES – Press release – Horizon 2020: Commission proposes €80 billion investment in research and innovation, to boost growth and jobs". europa.eu. Retrieved 2017-12-12.
- ^ "EUR-Lex – 02013R1291-20150704 – EN – EUR-Lex". eur-lex.europa.eu. Retrieved 2017-03-16.
- ISBN 978-92-861-5233-7.
- ^ "Press corner". European Commission – European Commission. Retrieved 2022-05-31.
- ISBN 978-92-861-5435-5.
- ISBN 978-92-861-5648-9.
- ^ "Research and development expenditure (% of GDP) | Data". data.worldbank.org. Retrieved 2017-12-12.
- ISBN 978-92-3-100450-6.
- ^ UNESCO Institute for Statistics, 9.5.1 Research and development expenditure as a proportion of GDP
Sources
- This article incorporates text from a free content work. Licensed under C-BY-SA 3.0 IGO. Text taken from UNESCO Science Report: the Race Against Time for Smarter Development., Schneegans, S., T. Straza and J. Lewis (eds), UNESCO.
External links
- Media related to Research and development at Wikimedia Commons