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Research and Development Services Information


Research and development (R & D) service providers perform original investigation or apply research findings to gain new knowledge; they use this knowledge to create new or improved technologies intended to provide a competitive advantage for the business or organization which has requested their services. Industrial R & D is specifically defined as the process of obtaining new knowledge that will eventually result in new or improved products, processes, systems, or services that will benefit the company's sales or growth.


research and development services selection guide

A general R & D process.

Image credit: Community for Advancing Discovery Research in Education


Research and development is similar to engineering but is a distinct process with unique goals. R & D creates knowledge, develops designs, and moves on to creating — and proving the feasibility of — prototypes and samples. Engineering, which follows R & D, converts these samples into marketable or economically feasible products or processes.


R & D may be defined as three separate sub-processes: basic research, applied research, and development. Each of these may be more or less prominently involved in the research and development process, depending upon the scope and type of project.


  • Basic research attempts to attain a fuller knowledge or understanding of the research subject. In an industrial sense, basic research is used to further knowledge about a subject without a specific commercial objective.
  • Applied research involves investigation aimed at discovering new knowledge related to a specific commercial objective involving products, processes, or services.
  • Development is the application of obtained research to the production of useful or commercially viable materials, products, devices, systems, or methods. This also includes the production of prototypes and sample processes.

Internal vs. External vs. Joint R & D


Research and development services from MotortrendResearch and development service providers are a form of external R & D, meaning they specialize in contracting with manufacturers and businesses to provide specialized research and development. This is in contrast to internal research and development which is performed in-house at a company laboratory or test facility. Joint R & D, a third type, is performed between various companies or organizations acting as a consortium to further a specific industry or technology.


The table below compares the advantages and disadvantages of these three types.


R & D type




Company is sole owner of technology; benefit of developing internal learning for future R & D.

Time and resources in setting up corporate labs; likelihood of having to hire out research talent to augment team.


Specialization and efficiency of R & D provider; little to no equipment cost; lower overall costs (esp. with nonprofits).

No in-house learning; possible dependence on the contractor; potential difficulties with technology transfer.


Low cost; wide variety of researchers; ease of information sharing and technology transfer.

Strict antitrust laws; each entity must take extra time and resources to apply findings to its own unique products or processes.


Project Considerations


Industrial research and development is typically performed as a part of a large project with specific technical or business goals, assigned personnel, and time and money constraints. Project managers must determine whether contracting a research and development house will contribute to their long-term investment and probability of success.


In many instances, unique technology required to undertake a project or produce a product is available on the marketplace, albeit for a price. For this reason, corporate management or project managers should perform a "make or buy" analysis when justifying the time and resources necessary for an R & D service, as opposed to simply finding and purchasing the technology. Four factors must be considered as part of this analysis:


  • Proprietariness: if the technology can be safeguarded as proprietary and eventually patented, its value to the company will be much higher and R & D resources can easily be justified.
  • Timing and growth rates: if market growth is slow, R & D is probably the best option for obtaining new technology. If market growth is faster, the R & D process will likely be too long and costly to benefit the company or project.
  • Risk: investing in any R & D work is inherently risky. Careful forecasting and monitoring must be performed to maximize decision-making accuracy.
  • Cost: R & D involves a substantial up-front investment and longer periods of negative cash flow than simply purchasing the rights to a technology. The project should be analyzed with this fact in mind.

The rewards associated with research and development work are very high, but the process itself is costly and risky. While many companies use R & D processes to stay ahead of and gain a commercial advantage over competitors, failed projects — like successful ones — consume large amounts of resources regardless of their success rates.




Dedicated R & D houses typically specialize in a certain type of engineering or industrial market. These can include:


  • Aerospace
  • Biomedical (BME)
  • Chemicals/materials
  • Electrical/electronic
  • Environmental
  • Geotechnical
  • General industrial
  • Mechanical
  • Nuclear
  • Petroleum

  • Software/systems

Specific R & D Services


In addition to specializing in niche markets, research and development service providers may also offer specific R & D services, some of which are described below.


CAD design

Computer aided design (CAD) uses computer systems to assist in creation and optimization of a product or process design.

 research and development services selection guide

Ergonomic design

Applies human needs theory and other principles to design devices and products to improve well-being and performance.

 research and development services selection guide

Industrial design

Broad group of service providers that develops or enhances product designs.

 research and development services selection guide

Materials research

The scientific study of the properties and applications of construction materials.

 research and development services selection guide


The development of conceptual representations to design, analyze, and predict responses of products or processes.


Packaging design

Design and creation of consumer and industrial packaging.

 research and development services selection guide

Process design

Development of new processes; optimization research.


Product design

Idea generation; concept development; prototyping and testing.

 research and development services selection guide

Scientific research

Also known as the “basic research” above.



The simulation of a product or process for testing or calibration purposes.


Software development

Creation of new software for the purpose of managing or aiding a process or procedure.

 research and development services selection guide

Systems design

Design of modules, devices, interfaces, and system data with regards to predetermined specifications.


Table image credits: Microspot | The Free Dictionary |  Whipsaw | ARL |

iPack | atiyayudeenpunya  | Hyphen Technologies



Research and development houses may comply with — or base their services on — one or many R & D standards. These documents may outline the entire R & D process, or pertain to a specific element of research and development work, such as budgeting, testing, or the use of live subjects. A few examples of these standards are listed below.


Service Provider Location

Research and development services from MedCityNewsUsers searching for R & D houses on IHS GlobalSpec may specify the service provider's location. Selecting a location close to the contracting company has several advantages, including reduced lag time, lower shipping costs, and potential ease of communication. Location is also important to consider when planning technology transfer as described above.




Gale Small Business Encyclopedia - Research and Development


Image credits:

Motortrend | MedCityNews


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