Business research and development is crucial for companies to stay competitive and bring new products to the market. It is especially important for pharmaceutical and technology companies, and funding can come from government or private groups. Innovation is necessary for survival in industries such as automobiles and computers.
Business research and development (R&D) refers to the process of developing and testing new products that may eventually be placed on the market. This process is especially important for pharmaceutical companies, technology companies, and some types of industrial companies, but it has implications for many other types of businesses. Those who are able to keep customers happy in the marketplace with new innovations and new ideas often find that they have an advantage over the competition.
The importance of business research and development is hard to overstate. Even during times when the economy is going through, companies understand that a good research and development strategy is vital to the continued success of the operation. While it may seem easy to cut back on business research and development when sales slow, some CEOs believe this is the best time to spend more. New products mean new opportunities and more customers.
The innovation process is especially crucial in the pharmaceutical field, where research and business development are responsible for producing new drugs to fight cancer, heart disease and other diseases that threaten the life or health of individuals. Millions of dollars could be spent on this research until a suitable drug is created. If found, the patent could last approximately 20 years, after which generics can be produced. The companies that make these generics have an advantage because all the research and development has been done by other people. Thus, the branded company has more incentive for additional research and development, as it ends up losing market share and has to introduce new products.
This not only applies to pharmaceutical companies, but also to many industrial companies. Had Henry Ford stopped his innovation with the Model T, there is very little chance that his company would have survived the present day. As the competition continues to make cars that are faster, more reliable and more comfortable, others must follow suit or risk being left behind.
Although automobile companies, as an example, self-fund most of their research and business development, there may be other sources of money available to some industries. Research and development funding can be provided by a government or private groups. For example, a government might offer grants to research cancer drugs, cars running on alternative fuels, and cheaper ways to explore outer space. In each case, while there may be a benefit to the company, the government may also feel that there is a benefit to society at large.
Tech companies also invest heavily in research and development. Take, for example, the constant tug-of-war between the two major computer and software giants, Microsoft and Apple. Both must continually offer customers new products, more stable platforms and faster computing speeds. To do this, you need to research new software and new hardware to power the software.
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