Research and development (R&D) plays a crucial role in driving business growth. When businesses are able to innovate products and services, organisations can better serve existing customers and attract new ones.
Source: MinuteHack.com, 2016
Companies that successfully leverage R&D are given an advantage over their competitors. They can identify future problems that require solutions, and act as a catalyst to bring new products to market to grow the business at a faster rate.
The latest report by the Office of National Statistics on research and development in the UK shows some cause for concern, with spending only rising by 5 per cent year on year.
The ONS data shows that the UK is lagging behind competitor nations when it comes to product development investment, and failure to back R&D could result in the slowing of growth for British businesses.
In light of this research, we commissioned a YouGov study to explore how future fit the R&D departments of UK businesses are in 2016. The data was gathered from 700 business executives from variety of different industries including manufacturing, retail, finance and accounting, legal, IT and telecoms.
Why aren’t British businesses investing in R&D?
Since the financial crisis of 2008, economic turbulence has caused the purse strings of many businesses to tighten. For example the closure of Pfizer’s R&D centre in Kent in 2012, and the closure of the Cambridge centre in 2015 signalled a downturn in R&D spending within the pharmaceutical industry.
At the same time, the world’s top engineers within manufacturing are calling for a protection over R&D funding, calling on global governments to preserve education and Research and Development (R&D) spending across their respective countries. They have argued that by protecting this investment, engineers will be empowered to solve the world’s greatest challenges.
It is clear that senior decision makers are questioning the importance of research and development practices in both the private and public sectors. This is also reflected in our research which reveals that a fifth (20 per cent) of senior decision makers at large corporations believe that new products and services are held back due to an inability to secure senior buy-in.
This is troubling for future economic and business growth. It’s essential that research and development is made a core business strategy and not something that is left to the periphery, or a last ditch attempt to revolutionise the business.
Using technology to improve R&D
The results from the YouGov survey shows that there are three key areas where British companies can transform their businesses to improve research and development efficiencies.
First, the research revealed that British businesses are using outdated data collection models. The research shows that of the businesses surveyed, a large proportion are relying on customer/client meetings (50 per cent), outgoing calls (30 per cent) and feedback forms (28 per cent). Only a quarter (25 per cent) use digital customer relationship management for gathering data from customers to inform R&D processes.
It’s essential that those businesses that use traditional methods for informing product development have a complete feedback loop. If businesses do not automate and digitise feedback they run the risk of losing valuable information on how to better their products and services, or at worst they risk building a business strategy which is not accurately informed.
Embracing IT technologies
Second, British businesses need to improve the ways in which they use IT to bring their products to market quicker, and in turn demonstrating the importance of continual innovation.
According to the research, many British businesses don’t currently use IT software within the product development processes. Only a tenth believe IT software tools are accelerating the testing of new products “very effectively”, while nearly a quarter (22 per cent) characterize the use of these tools as not very or not at all effective.
Driving awareness of the benefits of this technology in accelerating the testing and delivery of new products and services is key to making research and development processes more efficient. Once applied this will reduce the cost and time taken for bringing new products to market, demonstrating a significant return on investment to c-suite decision makers.
Invest, invest, invest
Third, UK businesses need to put aside revenue to invest in research and development processes. Of the large businesses surveyed, almost a quarter (24 per cent) of them believe legal or legislative concerns are a major barrier to R&D, with 23 per cent agreeing that lack of financial investment impedes product development.
It’s important that the whole business is aligned on the importance of research and development investment to ensure a smooth approval and sign-off process.
Increasing awareness of technological innovation to support R&D
The study results are enlightening, as they reveal that using technology to support business innovation may not be top-of-mind for a large proportion of UK businesses. We have entered a super-connected world in which the majority of customer feedback exists digitally. It is essential that businesses capture and analyse this data, and quickly act on it in their development processes.
Technology platforms can help in two significant ways: first, by making customer data more easily available in the context of R&D decision-making, and second, by accelerating the development and delivery processes for new products and services.
Source: MinuteHack.com, 2016
Tags: Finance and Funding, Economy, Business Support , Organisational Performance