Research and development

R&D" can also mean a video game mod. See Research and Development (Half-Life 2: Episode Two) for more information.

Research and development (R&D or R+D) is the work that companies, rich people like Alfred Lee Loomis, or governments do to create new services or products. It is the first step in making something new, whether it is a product or a way to make things better.

Even though R&D looks different for different businesses, the main job of an R&D team is to develop new products and services. They try to answer questions, solve problems, and come up with new ideas.

Unlike most things a company does, R&D does not aim to make money right away. It is risky and it is not always clear if the work will pay off. But R&D is very important because it helps companies create new products that can help them get more customers and grow bigger in the market. R&D&I includes R&D and also focuses on turning ideas into real innovations.

Background

Creating new products is very important for a company to stay successful, especially when there is a lot of competition. Companies need to keep updating what they offer to meet what customers want. Without special programs for new ideas, a company might have to work with other companies or buy others to get new innovations.

In business, "research and development" means working on new projects that can take a long time. These projects use science and technology to try to create things that will be useful and can make money. Some technology companies spend a lot more on research and development than others. Spending more than 15% on research and development is unusual and shows a company is very focused on new technology.

Doing research and development helps companies grow and become more profitable. Studies show that companies that keep investing in new ideas do better than those that don’t. It can be hard to measure exactly how much research and development helps because new ideas can spread and change over time. Some ways to measure it include looking at how much money is spent, how many new ideas are shared, or looking at financial records.

Business R&D

Benefit by sector

Studies show that spending on research and development helps companies grow, especially in high-tech industries. In these industries, extra support often goes to companies that deserve it. Even in lower-tech industries, research and development can help companies learn new things and improve.

Risks

Managing research and development can be tricky because it's hard to know exactly how things will turn out. Sometimes, even a lot of money spent on research doesn't lead to new ideas, better profits, or a bigger share of the market. There are also risks if other companies try to take over a business that is doing research and development. One way to lower these risks is to buy licenses that already include useful knowledge, but this works best when combined with a company's own research efforts.

Global

Global R&D management is about organizing research and development across different countries and cultures. There are several ways companies handle research worldwide. Some keep all their research in one country, while others spread out their labs to serve different markets. A more modern approach connects research centers all around the world, allowing knowledge to flow in many directions.

Government expenditures

Further information: Public research and development

United States

See also: Federally funded research and development centers

Former President Barack Obama asked for money for research and development in FY2012. In 2015, the government spent money on R&D. By 2020, the budget for R&D was big, with much going to the Department of Defense (DOD). In 2023, the U.S. spent a lot on R&D.

• .jpg)

  The Jet Propulsion Laboratory, California

Learning Research and Development Center, Pittsburg

• .jpg)

  Mercedes Benz Research Development North America

National Museum of the U.S. Air Force-Research and Development Gallery

Israel

See also: Science and technology in Israel

Israel spends a lot on R&D compared to other countries. It started building research in the 1970s and 1980s. Laws and programs helped businesses invest in R&D. Israel became known for its technology and startups, called Silicon Wadi and Start-up Nation. In 2023, it was a top place for startups.

• .jpg)

  Microsoft Israel R&D Center

[General Motors](/wiki/General_Motors) R&D, Israel

[Technion](/wiki/Technion_–_Israel_Institute_of_Technology), Computer Science faculty

[Weizmann Institute](/wiki/Weizmann_Institute_of_Science), koffler accelerator

Israeli StemRad astronaut anti radiation suit, picture by [NASA](/wiki/NASA)

South Korea

South Korea spends a lot on R&D. In 2023, experts suggested it focus on new discoveries and keep its research strong.

European Union

Europe aimed to spend a certain amount on R&D by 2020 but did not reach this goal. The Horizon 2020 program supports research and innovation.

One example is European environmental research and innovation policy, part of the Europe 2020 strategy. It aims to find safe solutions for human activities.

Companies using advanced technology spend more on R&D. In 2022, many businesses in Europe used advanced digital technology.

In 2024, the electronics sector leads in R&D spending.

Secop R&D Center in Gleisdorf Austria

IBM Germany Research & Development

Worldwide

In 2015, R&D was a part of the world's economy. Countries agreed to increase research by 2030, but tracking progress has been hard.

Developing countries

Research and development (R&D) spending helps rich countries, but it might not work the same for poorer countries. These countries can sometimes do better by focusing on new ideas and building up their resources instead of spending a lot on R&D.

Studies show that for poorer countries, the benefits of R&D can change a lot. Some poor countries that spend less on R&D can still create new and useful ideas. For example, a study from 2013 found that Bangladesh, a poorer country, had a good chance of creating something new when they focused on innovation. In contrast, Malaysia, a more developed country, had a smaller chance of creating something new when they spent more on R&D. This means that sometimes, poorer countries can get more value from new ideas than richer countries that spend a lot on R&D.