What is R&D?
Research and development – R&D – is the process by which a company works to obtain new knowledge that it might use to create new technology, products, services, or systems that it will either use or sell
- Basic Research
Basic research aims to give a company a better knowledge and understanding of a specific problem and how to tackle it. It provides the first steps in developing a strategy and finding a solution.
This type will provide you with the wide knowledge necessary to understand the Big Picture of one or several recognized practical problems within your organization. It is the first necessary step allowing you to find solutions and resolve these issues. It can also enable you to ensure a continuous lookout of the market trends and eventually to take advantage of it.
- Applied Research
Applied research is about the investigation work necessary in acquiring new knowledge to create commercially marketable products and services. This type of research can provide to your company methods to address specific customer and industry needs/requirements. It is therefore the second step in the process allowing you to find solutions and resolve any issue you may have observed and also on how to take advantage of any detected trend.
- Development Research
Development is when findings of the research are utilized for the production of specific products including materials, systems, and methods. Design and development of prototypes and processes are also part of this area. A vital differentiation at this point is between development and engineering or manufacturing. Development is research that generates requisite knowledge and designs for production and converts these into prototypes. Engineering is the utilization of these plans and research to produce commercial products
These three types presented above are different stages of R&D activities implemented as a linear system of investigation. They all contribute in their way to find an innovation to commercialize or to bring in your organization
Sounds Expensive? – is there any government help towards R&D?
Yes, there is
The government provides various schemes for the support and promotion of R&D
The graph shows how other countries are funding R&D.
By the following schemes, the government of India aims to promote and support R&D.
- The Council of Scientific and Industrial Research(CSIR) provides CSIR Research Grants by which people working in Private sector research labs are eligible for the grant that awards stipends up to Rs.30,000 per month as research to a sme or a laboratory.
- The Department of Science and Technology provides Global Innovation and Technology Alliance To facilitate collaborative activities between countries, GITA offers soft loans and grants for joint R&D efforts to the Indian applicant.INR 1.50 Crores grant available to the Indian company for joint co-development of collaborative. Industrial R&D and innovation project with duration up to 2 years.
- The Department of Electronics and Information Technology provides SIP-EIT. According to this program financial assistance up to Rs. 15 lakhs per invention or 50% of the costs required in filing and processing the patent applications.
- The Department of Electronics and Information Technology provides an R&D funding scheme according to which Grants-in-aid are available from DeitY for undertaking research projects relevant to electronics and IT. The amount may vary depending on your research.
- The DeitY also provides a Multiplier grant scheme according to which the government will provide financial support up to twice that provided by the industry for the project. Indian companies that create a consortium with academic partners are eligible to apply.
- The Department of Biotechnology offers a Contact research scheme, which aims to foster collaboration between academia and industry by enabling the validation of biotechnology academic research that has commercialization potential. It aims to do this by funding projects that involve participants from academia and the contract research and manufacturing industry. The scheme supports 100% of the project costs and is given over 5 instalments.
- The Department of Biotechnology offers Industry Innovation Programme on Medical Electronics. It aims to offer a mix of loans and grants not exceeding Rs 100 Lakhs for the early stages of research and development at Indian companies. All the companies that have Indian promoters holding 51% of the company’s share are eligible to apply.
India’s gross expenditure in R&D has tripled between 2008 & 2018
- The Gross expenditure on R&D (GERD) in the country has been consistently increasing over the years and has nearly tripled from Rs. 39,437.77 crore in 2007- 08 to Rs. 1,13,825.03 crore in 2017-18.
- India’s per capita R&D expenditure has increased to PPP $ 47.2 in 2017-18 from PPP $ 29.2 in 2007-08.
- India spent 0.7% of its GDP on R&D in 2017-18, while the same among other developing BRICS countries were Brazil 1.3%, Russian Federation 1.1%, China 2.1% and South Africa 0.8%.
India as a country can expect a huge rise in R&D development because of the ample opportunities. The SME’s should take advantage of such a scenario, the following graph shows that the total number of patents in our country has doubled in the last decade.
According to the World Bank’s enterprise Survey information, it was discovered that 46% of Indian SME’s attempted inner R&D rather than outside help. This is for the most part because of the astounding expense of outside R&D. The organizations are just ready to take a shot at inward R&D to settle a current issue.
R&D is not only reserved for big corporations
There is a misconception that R&D is the domain of big corporations in the high tech and pharmaceutical sectors. There are a lot of examples of SMEs that have been amazingly innovative. Steve Jobs and Steve Wozniak were nothing than a big corporation when they came up with the first Macintosh. Amul started when farmers of Kaira went on strike against the Polson unfair trade practices and started delivering products in the area by themselves. Havells started with Qimat Rai Gupta dropped out of school and founded an electric trading operation in the electric wholesale market of Old Delhi and started with manufacturing rewireable switches and changeover switches. When VKC Hawai came into the market, its first sale was a production of 600 pairs per month. Asian paints came up with crackproof, elasticity, and waterproof paints as a result of R&D by using compounds like Rust-Oleum Mathys Murfill Waterproofing Coating. It is formulated with select elastomeric and resilient acrylic polymers and reinforcing polyester fibres. You can, and have to find alternatives and creative ideas to guarantee your company’s innovation capabilities.
R&D is not just mere innovation or creation of new products, new technologies
It concerns research for a specific vulnerability of an SME, a particular area of their working where they might be lacking and should work on that and get some necessary changes in motion to work. All of this can be a significant action for their SME to grow, be better than others. That’s what a business should aim to do. Researching and Developing new ways to push and grow forward. SMEs of India is very essential for our country, it provides 45% employment, provides export service of about 50%, the total list of items which come in this category is about 6500. When during these covid times the PPE kits, masks, and rapid testing kits came from China were all faulty, the SME’s of India saw this as an opportunity and started producing their equipment. According to the stats India is producing a total of 2 Lakh N-95 masks and 2 Lakh PPE kits per day respectively and the numbers will sooner be hitting 4 lakh per day. This is how an opportunity can be converted into a profit.
Advantages of R&D
Implementing and managing R&D activities within your business offers tremendous advantages for your company. Overall, it allows you to create an environment within your organization favourable to questioning your processes and products, encouraging, therefore, your company’s flexibility and its ability to integrate new concepts and processes. Some other main advantages include the following ones:
- Patents: It can help you gain sustainable competitive advantages and position your company in an extremely comfortable situation within your market and therefore benefit from long term profits.
- Costs: if you are driving your R&D activities to reduce manufacturing costs and improve your processes it can provide you with less costly processes to manufacture your product and therefore provide them at more competing prices to your customers or increase your profit margin.
- Financing: when you are looking to raise funds your R&D activities are a good theme to prove your company’s vision to your potential investors. Investors are looking to invest in companies having a proactive approach to manage their business; your investment in R&D will prove to them you are one of them.
- Recruitment: top talents are also attracted to innovative companies doing exciting things. With successful R&D activities, qualified candidates will be excited to join your company
Research and development is an exact path to accomplish every one of the objectives for an SME. They have hidden cleverness and flexibility inferable from their dynamic nature and quickness to endure a few difficulties. R&D activities are essential by essence as they embody the overall process leading to innovation. And as you know, innovation is key today to beat the competition. Knowing these facts you should start wondering how you can bring R&D activities within your company and what strategy to implement. If SMEs somehow happened to consolidate these characteristics with action-oriented R&D projects and government support, the rewarding result would surely contribute to India’s economy.
The market is full of people trying to make it big in the game. And since there is a ton of competition out there you better want yourself to be ahead of others. That is why research and read as much as you can. We at insellers, have been doing a lot of research and carrying out the implementation with our clients. We tell you the not so often talked about inspiring reverie to real stories of SMEs and startups, to inspire the Entrepreneur in you. All you have to do is Log in for more.