Week 6 Discussion relationship btwn R&D
What are the relationships between R&D spending, patents and economic performance?
R&D spending is an indicator of efforts being made towards innovation, technological advancements and finding of breakthrough ideas that can galvanize the whole economic system as well as the organization. Thus, R&D spending is one of the important cause of increasing number of patents being filed by the companies. It can be observed in the pharmaceutical industry that is heavily dependent on R&D work. Further, R&D spending acts as a precursor of improved economic performance. It happens due to chain of activities. For example, R&D spending helps in developing technological breakthrough that reduces cost of production and improves quality. It leads to increase in demand of the product. Thus, overall profitability of the firm improves. It leads to increased contribution in GDP of the economy. Thus, it is the R&D spending that improves the economic performance.