Research and Development (R&D)

Research and development (R&D) include activities that companies undertake to innovate and introduce new products and services. It is often the first stage in the development process. 

KEY TAKEAWAYS

  • R&D represents the activities companies undertake to innovate and introduce new products and services or to improve their existing offerings.

  • R&D allows a company to stay ahead of its competition.

  • Companies in different sectors and industries conduct R&D—pharmaceuticals, semiconductors, and technology companies generally spend the most

Understanding Research and Development (R&D)

The term R&D is widely linked to innovation both in the corporate and government world or the public and private sectors. R&D allows a company to stay ahead of its competition. Without an R&D program, a company may not survive on its own and may have to rely on other ways to innovate, such as engaging in  (M&A) or partnerships. Through R&D, companies can design new products and improve their existing offerings.