Research is an investigation or experiment aimed at the discovery and interpretation of facts, revision of accepted theories or laws in the light of new facts, or practical application of such new or revised theories or laws. Development is the act of putting new information, research, or ideas into practice.
Research and development (R&D;) is critical to growth at both the company and national economy levels. One business saying goes, “If you are not growing, you are dying.” One way a firm can grow is through finding or creating new products. When many firms in a country engage in research and development, the overall economy is likely to grow. One measure of research and development used by development economists is the number of patents issued within a country each year. In some industries, stock market analysts use the amount or percentage of sales that a company spends on research and development as an indicator of likely future growth.
There are two basic types of research: basic and applied. Basic research is directed toward a generalized goal. Applied research directs the results of basic research towards the needs of a specific firm or industry, with the goal of developing new or modified products or processes. In addition to carrying out basic and applied research, an research and development staff may also be asked to evaluate the efficiency and cost of production using different technologies.
In the United States, the federal government funds a considerable portion of basic research. The National Institutes of Health (NIH), U.S. Department of Agriculture (USDA), and National Science Foundation (NSF) and other agencies oversee the allocation of funds for research. Competition for funds is intense, and federal allocation decisions significantly influence the direction of basic research. Federal funds are also often used to finance specific industry research. For example, the federal government supports research and development efforts for the creation of alternative vehicles, subsidizing efforts by the major automobile manufacturers.
See also economic growth.
Further reading
Gaither, Norman, and Greg Frazier. Operational Management, 9th ed. Cincinnati, Ohio: South-Western Publishing, 2002.