1.1. HOW INFORMATION CAN BE USED

Some readers may want to take a cursory look at the information presented in this chapter and keep in mind how some of it may help them. In addition to having important implications for R&D management, this information has other possible uses as well. Some examples follow.

As a principal investigator (PI), if you are interested in being involved primarily in basic research, in what kind of an organization should you be seeking employment? If you're working in industry you should not be too surprised if you are required to focus your efforts on "products and profits." As shown in Figure 1.1, on the average, 60 percent R&D is focused on product development, 22 percent on applied research, and only about 18 percent R&D is devoted to basic research. Expenditures on R&D by source and performer are shown in Figure 1.2.

In this chapter, indeed in this book, we argue that, in a productive and effective research organization, a researcher should have a mix of activities including basic, applied, and product development research. Examples of successful organizations and results of studies conducted are provided to support this assertion. For a manager of an R&D organization interested in productivity and effectiveness, understanding this issue is crucial and has important managerial implications. If we are successful in persuading you to include basic research in your mix of activities, even if your organization focuses on product development, would you not use the information in this chapter to persuade corporate decision-makers to allow this flexibility?

Is there any R&D manager who has not been accused of being unresponsive to customer needs and of focusing on esoteric, nonproductive research activities? Throughout this book a strong case has been made for customer participation in needs assessment and in the innovation process. The issue is much broader.

Figure 1.1. Relative Distribution of U.S. R&D Expenditures by Source, Performer, and Character of R&D: 2006: (Source: Science and Engineering Indicators 2008, p. 4-15.)

Let us consider an R&D organization that works only on those research needs identified by the customer. Would such an organization not be working on yesterday's, or, at best, today's problems in a very narrow framework? Using this approach, during World War II, would researchers have been working on bigger and better binoculars to detect incoming airplanes rather than on developing radar?

We propose a two-tier model, which includes an economic index model and a portfolio model that should overcome some of these difficulties. Further, a systematic and a conceptual approach for prioritizing potential projects is presented. Depending on the organizational setting and the decision-makers involved, this approach provides a crucial mechanism for research project selection and effective decision-making. By being systematic, it also gives psychological comfort to the decision-makers.

Figure 1.2. The National R&D Effort: (Source: http://www.nsf.gov/statistics/seind04/c4/tt04-01.htm (table 4-1). [Science and Engineering Indicators, 2004.])

Oh yes, how about these mundane definitions! Anyone involved in research knows them, or should know them. Maybe so. Careful reading would show that there are some key points brought out that are not commonly appreciated. For example, what really differentiates basic research from applied research? Basic research is not inevitably unapplied. Differences lie elsewhere. If nothing else, these definitions may facilitate communication among the various actors involved in conducting and sponsoring research.