Present day research and development is a core part of the modern business world. Major decisions in firms are made based on research and development.
Research and development are of great importance in business as the level of competition, production processes and methods are rapidly increasing. It is of special importance in the field of marketing where companies watch competitors and customers closely in order to keep pace with modern trends and analyze the needs, demands and desires of their customers.
Unfortunately, research and development are very difficult to manage, since the defining feature of the research is that the researchers do not know in advance exactly how to accomplish the desired result. As a result, higher R&D spending does not guarantee “more creativity, higher profit or a greater market share”.
Research is also the riskiest financing area because both the development of an invention and its successful realization carries uncertainty factors including the profitability of the invention. One way of reducing the uncertainty of researching know-hows is to obtain already researched know-hows.