Research And Development (R&D)
Investigative activities that a business chooses to conduct with the intention of making a discovery that can either lead to the development of new products or procedures, or to improvement of existing products or procedures. Research and development is one of the means by which business can experience future growth by developing new products or processes to improve and expand their operations. Investopedia Says:
While R&D is often thought of as synonymous with high-tech firms that are on the cutting edge of new technology, many established consumer goods companies spend large sums of money on improving old products. For example, Gillette spends quite a bit on R&D each year in ongoing attempts to design a more effective shaver.
On average, most companies spend only a small percentage of their revenue on R&D (usually under 5%). However, pharmaceuticals, software and semiconductor companies tend to spend quite a bit more. Related Terms:
Capital Allocation
Development Stage
Finding And Development - F&D
Intangible Asset
Patent
Price-To-Innovation-Adjusted Earnings
Proprietary Technology
Pure Play
Stock And Warrant Off-Balance Sheet R&D - SWORD |