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Wednesday, June 30, 2010

Roles of Research Laboratories

In this post I put forth the logic behind the existence of research labs and some of their benefits that warrant the investment.

The lions share of non-academic R&D happens in research labs. These institutions, as part of private corporations or governments, conduct research in fields related to their sponsoring agency. For example, government research labs may have a focus on agriculture research or defence-related research. Private R&D labs usually focus on scientific work related to the products and services offered by their parent private corporation. However, most research labs are afforded a certain degree of freedom because their core task is looking beyond the current version of products and services of their parent institutions.

In many cases research labs create future products or services. For example, Bell Lab researchers invented the electronic transistor in 1960, the basic electronic component in all electronic and computer systems today. Pharmaceutical companies rely on their research labs to come up with new drugs on a continuous basis. Scientists in research labs create intellectual property - for example, papers, patents, experimental prototypes - as a means of enriching the intellectual assets and idea repository of their sponsoring organizations.

Research labs are the (sponsoring) organization's eyes and ears into research and development happening around the world. This is becoming more important because a large number of products and services incorporate open-source modules to push down product development costs and benefit from the quality control, rather than rely on building every product feature from the ground up. For example, modern TVs have the ability to display pictures and videos stored on a USB drive. Several leading TV manufacturers use open-source Linux instead of building proprietary and expensive systems of their own. Because of the open organizational nature of research labs, they are great conduits to engage this sort of "community driven" product development and adoption.

Labs working openly with external business partners (suppliers, clients) foster collaborations that may lead to improving suppliers' product offerings or boosting sales to clients. For example, BBN Technologies routinely works with government research labs in conducting research in defence- related work. Unsurprisingly, the US governmental agency DARPA (Defence Advanced Research Projects Agency) routinely sponsors BBN-lead projects.

One often overlooked function of research labs is to contribute to the social responsibility aspect of organizations, because research is seen as a activity that generally benefits society, at least for a couple of reasons. First, many of the technologies that have had a tremendous social impact were created in research labs, a great example being the Internet. Second, scientists employed in research labs embody a repository of human knowledge in their fields of speciality; when they participate in activities like publishing or teaching/mentoring students/interns, that knowledge is propagated in society. No wonder many governments confer tax benefits to organizations investing in R&D.

All in all, research labs are good value, but only if their biggest asset - the intellect they nurture - is utilized effectively. If an organization has disposable resources to spend on its future products and services then an internal research lab is certainly worth the investment.

What do you think? Post your comments below.


  1. I came across a blogpost in the WSJ about treating R&D as an investment instead of an expense in order to boost national GDP figures

    Sounds a little like accounting wizardry to boost GDP figures, but if R&D does produce new products and services for the future, and all the intangible benefits I have alluded to in the above post, then maybe there is some truth in saying that R&D is investment?

  2. Very nice and interesting blog. I like it and so much thanks for sharing this nice post with us and keep posting.
    Software Product Development