Research and Development (R&D)
Definition
Research and development creates new knowledge and uses it for new or improved solutions.
Research and development includes systematic creative work to expand knowledge and use it for new applications. Basic research, applied research, and experimental development have different focuses.
Simply explained
First, it is investigated why something works. Afterwards, a new useful object or process can emerge from it.
Why it matters in practice
The term helps to distinguish genuine development uncertainty from routine adaptation of existing solutions.
Example from business
Hypothetical example: A company tests a new measurement method whose technical feasibility is initially unclear.
Limits and pitfalls
- Not every product change is research. Routine configuration and ordinary maintenance can be different activities.
Origin & history
The OECD describes the delimitation for research statistics in the Frascati Manual.
Use in mid-sized companies
- Document the research question, uncertainties, experiments, and results of a development project.
Frequently asked questions
Does every AI implementation count as R&D?
No, merely using an existing tool is not automatically research and development.
Sources
- Frascati Manual 2015 · OECD: Frascati Manual 2015
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