What Is Research and Development (R&D)? Research and development (R&D) is the series of activities that companies undertake to innovate. R&D is often the first stage in the development process that results in market research product development, and product testing.Key TakeawaysResearch and development represents the activities companies undertake to innovate and introduce new products and services or to improve their existing offerings.R&D allows a company to stay ahead of its competition by catering to new wants or needs in the market.Companies in different sectors and industries conduct R&D—pharmaceuticals, semiconductors, and technology companies generally spend the most.R&D is often a broad approach to exploratory advancement, while applied research is more geared towards researching a more narrow scope.The accounting for treatment for R&D costs can materially impact a company's income statement and balance sheet. Understanding Research and Development (R&D) The concept of researc...
