Thursday, May 18, 2017

What is R&D according to OECD

In my previous post I wrote about my personal opinion what is R&D. In this post I'm going to analyze definition given by OECD, which might be argued to be a relevant authority for such topics. OECD produces for decades a document called Frascati Manual which is about collecting and reporting data about R&D. The latest version is from 2015 and that one is used as the basis for this post. The manual, in Chapter 2, describes what R&D is. Basically they say that the properties of R&D activity are (paragraph 2.7):
  1. novel,
  2. creative,
  3. uncertain,
  4. systematic, and
  5. transferable and/or reproducible.
and activity has to satisfy all those properties to be regarded as R&D activity.

Property of the novelty can be correlated with properties 1 and 2 given in the post with my opinion. The following citations are interesting or important from the manual:
  1. In the Business enterprise sector, the potential  novelty of R&D projects has to be assessed by comparison with the existing stock of knowledge in the industry. [paragraph 2.15]
  2. The R&D activity within the project must result in findings that are new to the business and not already in use in the industry. [paragraph 2.15]
Those two citations mean that if you do something that anyone already does, or that anyone can do in a relatively short period of time, than it's not a product of R&D activity.

The property of creativity, i.e. the results of activities are based on original, not obvious, concepts and hypotheses can be correlated with property 2 given in the post with my opinion. The following excerpt is interesting:
An R&D project requires the contribution of a researcher!
This means that whoever is doing R&D has to have trained researches  in stuff.

The property of uncertainty, i.e. it is uncertain about the final outcome, has a direct relation to the property 5 in the post. The difference is that OECD publication claims that there are multiple dimensions to this property:
For R&D in general, there is uncertainty about the costs, or time, needed to achieve the expected  results, as well as about whether its objectives can be achieved to any degree at all. [paragraph 2.18].
Furthermore, there is discrimination criteria between R&D and non-R&D activities:
Uncertainty is a key criterion when making a distinction between R&D prototyping (models used to test technical concepts and technologies with a high risk of failure, in terms of applicability) and non-R&D prototyping (preproduction units used to obtain technical or legal certifications). [paragraph 2.18]
So, the more certain you are that there will be some functionality in the final product, less it is R&D activity!

The systematic property of R&D, i.e. to be planned and budgeted, correlates with property 4 I gave in the previous post. This, also includes keeping records, not only planning.

The final property, i.e. to lead to results that could be possibly reproduced (transferable and/or reproducible) is most interesting and I didn't include it in the elaboration of my opinion. Namely, this requires that the results be published somewhere so that conclusions can be independently verified. Somehow, it seems to me that this is the least frequent property. If nothing else, because the scientific output of companies is very small. Someone can claim here that they are publishing somewhere else, why only scientific output? The point is that under the expression scientific output I"m referring on the way the results are published, not where they are published. In other words, scientific publication includes all the necessary information in order for someone else to test the results.

For the end, just let mi note that there is another important subdivision of R&D according to OECD publication (paragraph 2.9):

  1. basic research,
  2. applied research, and
  3. experimental development.

I'll write about those in some future post.

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