R&D: types and efficiency factors
Good afternoon, dear readers. Many of you, in the course of your activity, asked yourself the need to build a business plan. It is extremely difficult for an untrained person to do this. To successfully create a business plan, it is important to clearly understand what requirements for the business plan must be met. In this article, we will not just disclose for you the requirements for a business plan, but we will do it using the example of the requirements set by the Ministry of Industry and Trade of Russia in 2021, including when applying for R&D subsidies.
Chapter II Project Description;
Chapter III Information about the project participants;
Chapter IV Product Description;
Chapter V Market Analysis and Marketing Strategy;
Chapter VI Organizational plan;
Chapter VII Description of research and development work;
Chapter VIII Production (Operation) Plan;
Chapter X Financing Plan;
Chapter XI Financial and Economic Assessment;
Chapter XII Project Risk Analysis.
If there are no sections in the business plan that correspond to the above, an explanatory note should be attached to the business plan with instructions on the sections in which to look for the required information, or justification of why information in the business the plan is not given.
It is recommended to include reference material in the business plan, including:
Videos with examples of self-calculation of a business plan (from the series "The transformation of Mr. Vasyuki into the capital of the Russian Federation and the MFC")
Series 12. Input of R&D objects (4. 1 min.)
- How are the characteristics of R&D objects entered in the Online Constructor of the E-planificator when creating a business plan?
- How can I enter costs expressed in a non-main (additional) currency into the Online Constructor? <
- How will the R&D objects entered into the E-planificator affect the forecast financial reporting of the project?
What concerns the objects of research, development and technological work
Non-depreciable and non-taxable assets are shown here, of which the most notable are:
- results of research and development (both completed and incomplete) subject to legal protection, but not drawn up in the manner prescribed by law, and also not subject to legal protection;
- the costs of conducting unfinished R&D, which, if you intend to obtain exclusive rights to intellectual property created as a result of these R&D, will be transferred after their registration in the manner prescribed by law to the category of intangible assets, and in case of failure, will be written off to current expenses;
- the costs of R&D that did not give a positive result or for other reasons are attributed to other expenses of the current period.
Entering characteristics of the R&D object
If a similar asset had a non-zero initial value (let's say you bought it), enter this value (including VAT) in the "Expenses on services and materials" field for the corresponding month.
In the "Salary" field, enter the total salary for the corresponding period of time for both piecework workers and the personnel who would be included in the staffing table in the main production.
The constructor assumes that the commissioning of the facility occurs in the period following the last period during which the facility incurred any costs indicated in the forms of this subsection.
If the result of R&D turns out to be an asset of the class "results of research and development", do not change the position of the switch "Costs will be attributed to:", if as a result of R&D an intangible asset is created, set the switch to position "intangible assets" however, as a result of R&D, any asset will not be created, set the switch to the "other expenses" position.
The life of an asset such as "research and development results" cannot exceed five years. For more information about the useful life of an intangible asset, see the Enter intangible assets, goodwill page (step 6..).
By default, R&D objects in the Designer are preset to a five-year service life, you can change this period.
When manufacturing products at the development stage, companies are faced with the need to conduct research and development work. To understand the principle of R&D, it is necessary to decipher the abbreviations R&D and R&D, as well as highlight the features of each process. In this article, we will consider aspects of the tasks and goals of scientific work, efficiency factors and examples of implemented projects.
What is R&D: definition and features
The term R&D stands for research and development work. This is a set of experiments, theoretical ideas, searches, production of standard samples, a set of measures aimed at producing a finished product according to specified standards.
The scale of R&D reflects the competitiveness of companies, and the cost of such services is an indicator of the innovative activity of the manufacturer. Thus, it is possible to calculate the competitiveness of a particular product at the development stage.
Often, scientific research is used in the manufacture of state order products. In this case, the activities are funded by the state, which implies strict adherence to the established plan, which consists of several stages. R&D is associated with the involvement of specialists in a particular field and the presence of strict time frames.
Researchers identify the following most common activities and types of services for effective R&D:
- Intellectual activity, experiments, theoretical searches (R&D);
- Works aimed at the development of design and technological documentation of a product sample (R&D);
- Other research activities, the task of which is to acquire new knowledge and skills in a specific area;
- Technological processes (TP).
The difference between research and development work from other activities in industry is the widespread use of modern technologies and developments.
Novelty is the hallmark of any R&D. The output is a product that has no analogues (it can be a new type of technology, products or services).
Factors in the creation and implementation of scientific developments
The amount of investment in R&D is determined by the chosen strategy of the enterprise in scientific research, as well as the scale of research activities. The efficiency of work is influenced by the process of carrying out and implementing modern developments.
Definition of R&D, or what does R&D reduction mean?
Research and development work (R&D) or R&D (Research and Development * (Eng.)) is a complex of activities / services that includes both research, experiments, search, research, and the production of prototypes and small-scale product samples (prototypes or test samples), prior to the launch of a new product / service or technology / system into industrial production. R&D (Research and Development) expenditure is an important indicator of the innovative activity of a company or enterprise. However, R&D expenditures are recognized whether or not they are positive.
To carry out R&D, it is required to allocate budgets (financing) for R&D, as well as the availability of highly qualified personnel whose tasks include the implementation of the R&D complex. R&D activities should be carried out in accordance with a clear action plan, broken down into stages.
Very often R&D works and services (Scientific Research and Development Works) are accompanied by the following types of work:
What is the main difference between R&D and other activities?
The main difference between research and development (R&D) and related activities at the enterprise is the presence of an element of novelty in the development. In this case, we are talking specifically about the creation (development) of a new type of technology, products, services, etc.
R&D can reduce the costs of enterprises after the introduction of innovations, increase the rate of circulation of capital, bring a new product or service to the market, reducing risks, etc. ...
A bit of history about R&D and attitudes towards it
Until recently, R&D was seen as one of the areas of activity of commercial organizations. However, since the mid-90s of the last century, R&D has become an independent type of business. A large number of companies appeared that carried out research and development work for various economic entities (including the state). In Russia, such organizations include numerous research institutes, design bureaus, research departments of universities, etc.
Specifics of R&D Management
R&D management is decision-making in a constantly changing environment, continuous review of the R&D program and reassessment of it as a whole and its component parts. It is natural for the head of the R&D sphere that any of his actions are surrounded by uncertainties of both internal and external order. At any time, an unforeseen technical problem may arise, the need to reallocate resources, new assessments of market opportunities. Therefore, any R&D planning and management system must be flexible enough, and the dynamism of the situation requires more managerial attention than any field of activity.
Every project should start with a clear goal setting. Since the ultimate success is determined by the market, then the goals should also be determined by the market need. First of all, this is the market segment and its interrelated characteristics (size, acceptable price, requirements for technical efficiency and time of product launch). The product, in turn, must be defined by its effectiveness, price and date of appearance. All these characteristics are interdependent, and, therefore, a certain iterative procedure is required to refine the goal.
Special attention should be paid to what technical level of the product is most likely to be required by a given market segment. Parameter redundancy is likely to increase R&D and production costs, as well as development time, and hence reduce profitability (Chapter 5).
At the stage of the initial definition of the project, it is essential to focus more on the market need and the degree of its satisfaction than on decisions regarding the type of the final product (it should be borne in mind that in the development process there will be alternative solutions). The sequence of decisions should be as follows: - what should be achieved; - how to translate it into a practical plane; - which of the alternatives are the most promising.
Only after an exhaustive search and selection of the most attractive project concept should you turn your attention to the technical details and specification of the work program. The definition of the project should be concise and should not limit the freedom of the team to find new solutions. At the same time, it should contain clearly formulated goals, guidelines for technical, cost parameters and development duration.
R&D Portfolio Planning
An R&D portfolio can contain a variety of projects: large and small, close to completion and in the early stages. Each of the projects requires the allocation of scarce resources. Some projects will be terminated in the process of implementation, their component parts will vary in number and resource requirements, etc. Thus, the process of planning and adjusting R&D plans is continuous. The number of projects in a portfolio depends on two factors: the size of the projects and the overall R&D budget. The structure of a portfolio depends on the manageability of the portfolio by management and the firm's R&D policy.
A portfolio of mostly large projects is more risky than a portfolio of small projects. As the number of projects grows, the likelihood of successful completion of at least some of them increases. In addition, small projects are easier to "match" to each other in the process of R&D on available private resources (for example, pilot production capacity). However, small projects tend to have modest profitability potential, resulting in many products with limited prospects on the market. It is unlikely that this will correspond to the marketing policy of the company.
The ultimate success of any project depends equally on technical and market merit, and on the quality of project management. Good governance is a critical resource for most firms and should not be scattered across many projects. Projects are broken down into phases, and the art of management is scheduling their launch over time to ensure the efficiency of the entire portfolio. Table 10. shows a comparison of cash flows of two options for launching projects: parallel and sequential. In this case, sequential implementation provides the following advantages: - management efforts at each time point are spent on one project; - any delay in project A does not require reallocation of resources within the portfolio; - a new product A starts production two years earlier, its life cycle increases, and the commercial and financial effects associated with an earlier entry to the market; - project B can start on a more advanced scientific and technical basis using updated market information; - the balance of cash flows in the 3rd and 4th years is leveled.
Cash flows of the two portfolio options (in conventional units)