Research and development

Research and development (R&D) is investigative efforts conducted in order to discover new knowledge that can be applied to practical applications. Organizations may engage in R&D in order to improve their existing products and services, or to develop entirely new ones. By doing so, they can expand their markets and increase sales. Governments do so in order to expand general knowledge, meet the goals of society, or develop new military applications.

The amount of R&D spending is usually a relatively low proportion of the total expenditures by any of the preceding organizations. The amount spent tends to concentrate in certain industries. For example, R&D spending is high in the technology industry, and low in the shipping industry.

A common outcome of R&D is that the discoverer of new knowledge applies for and is granted a patent. The patent gives the patent holder certain rights in regard to the use of the new knowledge until the expiration date of the patent.