Managers of research and development (R&D) departments in industrial organisations have to contend with the same problems that other managers face each day. There are, in addition, some unique problems that arise principally from the uncertainties of the results of their work. The investigation of these problems forms the basis of R&D management study.
R&D spending makes up 1-3% of the GNP of Western countries and, on average, a dollar spent on R&D is said to return twice as much as a dollar spent on physical plant. Despite the easily demonstrated importance of R&D, it is often rated as a second-class functional area in industry and business schools have failed to recognise R&D as a legitimate field of research and teaching.
The potential savings to society from improved methods of R&D management, particularly in the core areas of project selection and project control, are prodigious. Most new product and process ideas do not reach the marketplace and about 70% of R&D funds are spent on unsuccessful ideas. If 25% could have been shaved of the cost of doing R&D in the USA in 1989, it would have saved that economy $27 billion.
The pervading theme of the report is the need for R&D considerations to become an integral part of corporate strategic plans. The R&D director must take a place with top management in forming corporate strategy. The role of technology in the company should be established, the competitive position studied from a technological viewpoint, R&D objectives needed to support the business defined, and required resources identified. Once the R&D division understands corporate objectives, it can then complete a technological forecast and market analysis to create a R&D strategic plan.
This report reviews the main areas of interest in industrial R&D management, concentrating on problems which are unique to the R&D department using the most recent available literature for sources.