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Research and development - Coggle Diagram
Research and development
8.1 WHAT IS RESEARCH AND DEVELOPMENT?
R&D
is a systematic and creative process to create new knowledge, develop new or improved products/processes, helping firms innovate, stay competitive, and grow despite risks and high costs.
Stages of R&D
Basic research: Development of scientific knowledge that is applicable to a wide range of uses.
Applied research:Application of scientific knowledge to the solution of a specific problem / Development of a new product or process.
Product development: Identification of relevant consumers - Tailoring product/process to consumers’ needs.
Patents and Consequences
Basic research:Difficult to protect, often spills over (publications/staff movement) - Done mainly by universities/public labs.
Applied research - Product development: Can be protected by patents - Whoever comes first wins - Competitor behavior important - Leads to patent race
R&D systematically uses scientific knowledge to improve life, create new knowledge, and connect different fields.
8.2 R&D MANAGEMENT AND THE INDUSTRIAL CONTEXT
8.6 ALLOCATION OF FUNDS TO R&D
Setting the R&D budget
expenditure by competitors
company’s long-term growth objectives
the need for stability
distortions introduced by large projects
Inter-firm comparisons
R&D spending differs across industries but is often similar within one.
Firms can estimate competitors’ R&D budgets and resources.
Analyzing rivals’ spending helps balance efficiency and competitiveness.
8.5 WHICH BUSINESS TO SUPPORT AND HOW?
8.7. EVALUATING R&D PROJECT
Necessity of Evaluation
High dropout rates and limited resources
Killing a project causes anxiety
Evaluation criteria and methods
Criteria variation
Varies considerably from industry to industry
Rely on judgement, experience and expertise
Managers use rules of thumbs or heuristics
Use of "smell test"
Formal methods
Quantitative weighted checklist or Scoring model
Specially adapted software
Screening methods categories (Cooper, 2001)
Benefit Measurement Models
Subjected assessments by experienced managers
Models provide a comparative value
Economics Models
Most popular selection tool
Limitations:
inherent short-term bias
limited accurate future financial data
Portfolio Selection Models
Consider entire set of projects
Aim to "fit" with business strategy
Attemp to balance the product portfolio
Example
