Research and development is part of the innovation process. research and development (R&D) is the generation and application of scientific knowledge to create a product or develop a new production process which can increase the firm's productive efficiency. For example, it may involve a team of employees at a confectionery company researching into a new flavour of sweet and then trying out different versions until they have one they and the customers are happy with.
In some sectors, such as the car industry, pharmaceuticals and energy, research and development can take many years and be very expensive. Glaxo calculates that on average a new pharmaceutical take 10 to 15 years and cost £500 million on average to develop.
However, research and development is often very risky. This is because you may never end up with an idea that is actually viable . Even if you do manage to launch a product, you may find that you do not have very long to recover the costs of development. (Surridge&Gillespie 2009:145)
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