The economics of industrial R & D

The relationship between research and commercial operation is examined in terms of production using a simple Cobb-Douglas production function, where output is expressed in terms of inputs of labour, capital and‘technical progress’. The model was tested in a single company environment by multiple regression analysis of output as the dependent variable on various measures of research, labour and capital. The results of the regression analysis are in full agreement with the model as outlined and the assumption that output is dependent simultaneously on labour, capital and the cumulative research investment.     

R & D and the company's requirements

Numerous models have been put forward in the literature for the selection and evaluation of projects, many of which are based on optimizing the return on investment by the company in R & D projects. This is a noble aim but in practice the financial data available are often of dubious accuracy and so many other factors are involved in actually adopting a portfolio of selected projects that project selection often becomes a theoretical exercise. It is suggested that the selection of projects is in essence the adoption of a strategy which is within the policy and long-term aims of the company and also within the policy and scientific development of the R & D part of the company. Such a strategy is usually sub-optimum for both the company and the R & D division, as it is a compromise between a desire for high pay-back investments by the company and the maintenance of a scientifically balanced R & D involving some long-term, unknown return, investments. A method is currently being experimented with by Unilever Research which illustrates where conflicts arise between the policy of the main company and that of research, and assists management in arriving at a strategy which most closely fulfils the needs of both policies. Both the concept of the method and its practical use are described in this paper.     

The management of Army R & D projects

This study of the accuracy of cost and duration estimates for British defence R & D projects is based on an analysis of the records of 29 Army projects, initiated since 1960. The results are generally similar to American defence studies with which they are compared. The reasons for schedule slippages and cost escalations are examined and it is suggested that performance could be improved by more thorough project feasibility and definition studies and by a stronger project management organization.     

The information requirements of R & D management

This brief survey describes the role of R & D in industry, with particular respect to some of the requirements which its management has in order to fulfil its function effectively, more particularly in the field of information, bearing in mind that the product of R&D is yet more information, and that a very broad approach to the problems is required.     

Ten years of R & D Management-some major themes: the role of communication in R & D

Fifteen papers on the role of interpersonal communication in R & D appearing in the first ten volumes of R & D Management are reviewed. The conclusions reached by the various contributors on three major themes are compared. The themes are: the relation of communication to performance, the effect of physical separation on communication rate, and the role of communication stars in information transfer. A clear division of opinion emerges on the extent to which managers can impose or create effective communication patterns as distinct from merely being able to stimulate those that already exist. Differences in experimental approach and the existence of methodological gaps prevent any judgment being made between the two viewpoints based only on the evidence in the papers under review.     

Interaction between management and R & D: chemical industry in Europe

The paper summarizes the results of interviews, primarily with the R & D manager, in 43 chemical companies in France, Germany, Italy, the Netherlands, Switzerland, and the U.K. covering questions concerned with the background and attitude of various levels of management and their interaction with R & D. The results are presented in quantitative and qualitative terms, and differences between various categories of chemical industry and between various national practices are discussed.     

Assessment of profiles in R & D: a tool for analysis and development of R & D potential

A study sponsored by the State Committee for Science and Technical Progress of Bulgaria aimed at providing a theoretically sound and easy to apply method for the needs of R & D management on government, organization and team levels, to be used in assessing and managing both present and future R & D potential.
The method draws inferences about R & D potential from the accumulated experience and performance of the researchers, analysed along research topics. A specific 'man-topic unit of analysis helps identify individual researchers, teams and projects' profiles and also helps translate the specific characteristics of R & D work and the requirements for R & D internal effectiveness into the language of R & D management.     

Industrial R & D and the British economic problem

Britain's poor industrial and economic performance over at least the past fifteen years is closely related to a national pattern of R & D activities that—by comparison with our main competitors—has been insufficient in volume, heavily concentrated in sectors of relatively minor industrial significance, and inadequately coupled to the problems and possibilities of production and the market. Reversing what in the 1970s was a strongly downward trend in British R & D and other innovative activities will require, amongst other things, more professionalism and skills in British engineering and management, and deliberate long-term strategies in industry and government to develop products, processes and markets that enable British industry to compete on the basis of quality and skills rather than low wages.     

The use of ranking formulae in R & D projects

Abstract . Numerous ranking formulae have been proposed in the literature for use in the evaluation and selection of R& D projects, but their rate of adoption has been relatively slow. This situation appears to be changing in the U.K. and a considerable amount of effort is being expended to improve the methods of obtaining estimates for the variables which appear in the formulae. This paper argues that the most commonly quoted formulae do not adequately represent the practical situation and are likely to introduce bias into the system as well as tending to make estimating more difficult. A modified ranking index derived from a decision tree type of analysis is suggested as a more useful estimate of the worth of a project, but it is concluded that any such formulae will always have serious limitations because they must inevitably ignore important characteristics of the research process.     

The learning curve, R & D management, and marketing strategies for new products

This paper represents a review of the learning phenomenon which is useful in evaluating the potential of new industrial products. The learning curve in quantitative form provides a means for forecasting costs and prices in many industrial situations. While there are many metho-dological problems to be solved in any specific new project evaluation, the utilization of the learning curve should lead to improved estimates of costs, revenues, and profits. The important role of R & D management in connection with the learning curve is discussed. The interrelationships involving R & D, the learning curve, and marketing strategies are examined.     

A Kantian Analysis of Pricing and R & D

Review of Industrial Organization - Can cooperation offer an innovative alternative to competition among firms? This design problem is analyzed in the context of Kantian cooperation among firms in...     

The quality of subjective probabilities of technical success in R & D

Employing various measures for the quality of subjective probabilities of technical success in R & D a detailed analysis of 4 data sets taken from different R & D organizations shows that the probability assessments roughly specify the populations to which R & D projects belong, but are extremely unreliable indicators of the eventual outcome of individual activities. Unintentional errors and conscious biases are identified as accounting for the unsatisfactory quality of subjective probabilities in R & D. Finally, some measures are suggested which might improve the quality of the probability assessments.