Research And Development - R&D


DEFINITION of '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.

BREAKING DOWN 'Research And Development - R&D'

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.

  1. Research And Development (R&D) ...

    Any expenses associated with the research and development of ...
  2. Proprietary Technology

    A process, tool, system or similar item that is the property ...
  3. Intangible Asset

    An asset that is not physical in nature. Corporate intellectual ...
  4. Development Stage

    A company that is in a preliminary or early state of its corporate ...
  5. Patent

    A government license that gives the holder exclusive rights to ...
  6. Pure Play

    A publicly traded company that is focused on only one industry ...
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