By: Eng. Mohamed El-Baz
Did you know that “Facebook” spent approximately $18.5 billion on its R&D strategy in 2020? And that “Apple” spent around $22 billion on the same in 2021?
So, what exactly is this “Research and Development” (R&D)? And why do top companies invest such huge amounts in it?
Understanding Research & Development
R&D is a process designed to help organizations improve their products and create innovative solutions that enhance their competitive edge and long-term growth potential. How does this happen? Through:
- Driving Innovation: By exploring effective solutions for current challenges and developing products that help businesses keep up with future changes.
- Being at the Top of Competition: Businesses that innovate first distinguish themselves early on from their competitors.
- Boosting Company Reputation: Just like “Apple”, which, thanks to its effective investment in R&D, has become a leader in the tech industry.
- Expansion: R&D isn’t just about developing new products or solutions, but also about enabling businesses to explore their potential for expansion into new markets.
- Enhancing Customer Experience: An effective R&D strategy focuses on understanding current and future customer needs, and developing solutions that align with these needs to increase satisfaction.
But how Can You Benefit from These Advantages?
You must first develop a comprehensive R&D strategy. In my view, this can be done through the following 10 key steps:
- Analyze your Products and Services performance: and Identify current or future challenges you might face… that will help you determine what needs to be developed and prioritize your research efforts.
- Set Clear Objectives: And define what your business aims to achieve through R&D investment, whether it’s improving product efficiency, creating new solutions, or exploring new markets.
- Develop a Budget and Identify Required Resources: to ensure R&D team will achieve the desired objectives efficiently.
- Design a Work Plan: to outline the R&D team’s priorities, tasks, and responsibilities.
- Conduct Basic Research: to explore new ideas that may not have immediate commercial applications but could potentially turn into products in the future.
- Conduct Applied Research: In this phase, try to explore how to turn your new ideas into effective solutions.
- Develop Usable or Marketable Products and Solutions: Using the results from your applied research.
- Testing Phase: Test the developed products in real-world scenarios to analyze their performance and effectiveness.
- Prepare for Failure: Your tests might reveal that some products or solutions aren’t feasible, so always ensure that your analysis and idea development processes are efficient and aligned with current or future customer needs.
- Protect your innovations: If your R&D strategy leads to new innovations, ensure to protect them, by patents and intellectual property.
Potential Challenges
Now, after understanding how to develop an effective R&D strategy, it’s important to recognize the challenges that may arise, like:
- Lack of Funding: Effective R&D strategies require substantial initial investment, as their results may not be visible for a long time.
- Lack of Skilled Talent: for your R&D team… this can impact the outcomes’ quality.
- Difficulty in Turning Ideas into Reality: Not all ideas may be easily translated into practical applications.
By recognizing and addressing these challenges, you can better implement and sustain a successful R&D strategy in your business.
About the author:
Engineer Mohamed El-Baz has more than 25 years of experience in entrepreneurship. He founded 15 companies in various field, such as training and education, software development, healthy food chains, real estate development, and stock exchange. He is the Chairman and CEO of several companies, including Healthy & Tasty, and E3mel Business Academy.
El-Baz is a member of the Entrepreneurship Society at King Saud University 2020. He was awarded an MBA from the Australian Institute of Business in 2013. He wrote a number of books, including “Successful Projects Ideas” and “A Guide to Establishing Small and Medium Enterprises.”
