Updated last 26.03.2021
Research and development (R&D) refers to the activities, which a business carries out, to improve its products and processes or to develop new ones. R&D results in the occurrence of innovations, which form the basis of the development of competitiveness and improvement of people’s quality of life.
R&D difference from the business operations, which are undertaken by a company. The research and/or development of new services and products are usually not performed to ensure short-term profit. Companies, investing in R&D, are focused on their profit and development in the long term.
The most striking examples of the results of R&D nowadays are in the IT area, but an increasing number of companies in the traditional industries and sectors now see the long-term benefits of investing in research and development activities.
Five reasons to invest in research and development activities
If you continuously strive to improve your products or services, offered to your clients, you will enjoy a competitive advantage on the market, where you are operating. You are able to develop brand new products or services, which would ensure a larger market share.
New cash flows and higher profits
The innovations that you manage to implement, may generate new cash flows and higher profits.
Reducing the operating expense
If your R&D is focused on the optimization of specific business processes, the improved efficiency will result in the reduction of specific operating expenditures.
You can attract investors more easily, thus stimulating the growth of your business.
Profit from the protection of the intellectual property
When meeting the requirements of the legal framework, innovations as a result of R&D may be considered intellectual property products, which you can protect and from which you can profit in the long-term, through licensing.
|Important to know |
Intellectual property management is key to the improvement of the competitiveness of every company. Тhe intellectual property rights are the most valuable assets, which you can own, but it is important to know that you will need time, resources and certain knowledge to understand and obtain the most appropriate form of protection. You can see, which are the different Forms of protection of the R&D in the business and the programmes for financing the R&D in business.