What Is Research and Development (R&D)?
Also known as research and technical or technological development (RTD), R&D is all about engaging in activities to innovate. By doing that, an organization presents new products and services to market or enhances its existing offering.
Research and development objectives? Typically the primary stage in the product life cycle, R&D aims to gain companies a competitive edge and generate long-term profit. R&D may lead to entirely new product discoveries and associated patents, copyrights, and trademarks.
R&D departments are generally well-funded, with capital risk, lack of immediate payoff, and uncertain ROI weighed up against estimated risk-adjusted returns. Greater R&D investment equates to increased capital risk, meaning some businesses choose to outsource R&D functions.
The role of research and development? Without R&D entrepreneurship or an effective strategy, a business may become obsolete, unless it uses other methods such as M&A to survive.
Who’s investing in research and development? Tech companies are among the top R&D investors, with pharmaceuticals and semiconductors also high up the rankings.
Examples of research and development activities include Netguru’s R&D project with Roboteam and Alphabet’s Waymo self-driving cars.
Why is Research and Development important?
R&D solutions differentiate businesses from the competition, yielding critical technologies from which new products, services, and models spawn.
Technology progresses quickly, and if organizations are to keep up, R&D is key. With R&D, the chances of building successful products and services increase. It can also enhance employee productivity and boost profits.
Research and development companies or departments devise innovative products, services, and solutions that dominate the market and are tricky to imitate.
A modern R&D division connects technical teams with marketing, sales, and customer service. That way, challenges and opportunities are fully understood.
An effective research and development team defines the right business opportunity and performs rapid tests to validate business value assumptions.
Then, successive solution prototypes and usability testing realize that value by identifying user habits, problems, and expectations, as well as anticipating demands and trends.
Types of Research & Development
There are several types of R&D. First up, there’s the model where engineers undertake extensive research to develop new products and services with no real objective in mind.
That falls under basic research, whereby the aim is to grasp fuller fundamental knowledge of a subject, process, or technology, as opposed to a specific application.
The second type of R&D? Industrial scientists or researchers carry out applied research to support the development of future products and/or enhance existing product and service offerings – there’s a specific target in mind.
Basic research is time-consuming. Applied R&D is more expensive, meticulous, and complex.
Business incubators and accelerators are types of R&D, whereby companies invest in startups in the hope they’ll come up with usable innovations.
Mergers and acquisitions (M&As) and partnerships are also varieties of R&D, with corporations making the most of each other’s expertise and skills.
Who spends the most on R&D?
Based on yearly reports, Amazon is the top R&D spender, forking out $42.74 billion in 2020. Calling it ‘technology and content’ the multinational behemoth spent more than in 2019 ($35.93 billion), with 2,244 patents granted – most of which in technologies like AI, machine learning, and computer vision.
Number two? Alphabet, at $27.57 billion. The multinational conglomerate formed in 2015 via a restructuring of Google, becoming the parent company of the search engine and several former subsidiaries. R&D expenditure has more than doubled since 2016.
Coming in third is Huawei, with R&D investment in 2020 totaling $22.04 billion. The year 2020 saw 2,761 patents granted, an increase of 14% compared to 2019. Huawei R&D employees amount to around 105,000 – more than half the total workforce.
The list goes on as follows in billions:
- Microsoft: $19.27
- Apple: $18.75
- Samsung: $18.75
- Facebook: $18.45
The remainder of the top 10: Volkswagen, Intel, Roche, and Johnson & Johnson.
Why to hire Netguru R&D Consultants?
At Netguru, R&D is multipurpose, and the benefits are meaningful:
- Developing new skills
- Steering strategic direction
- Innovation consulting
To maximize success, we have four types research and development services:
- R&D Design Sprint
- Proof of Concept (POC)
- Rapid Prototyping
We start with a problem, then implement effective solutions, rather than “attractive” solutions that merely offer technological advancements but aren’t actually fit for purpose.
We also embrace agile development principles and record and distribute lessons learned.
Our R&D experts are world-class professionals, including Innovation Consultants, Design Consultants, R&D Experts, Engineers, and Developers who are open source contributors with over 220 repositories on GitHub.
We invest in developing new technologies and testing R&D solutions, offering a first-rate and expert service to clients.