Introduction

We often hear the abbreviations P&D (Product Development) and R&D (Research & Development). Governments provide various R&D supports aimed at these activities. On television, the importance of R&D is emphasized daily. Alongside R&D, we also frequently see terms like “inventing” or “world’s first.” Then there are concepts like patents and utility models.

As a result, there is widespread confusion. People who actually know what R&D means hesitate to call their work R&D. Those who don’t know what it means call everything they do R&D. Those who fail to obtain patents from their R&D efforts feel embarrassed, while those who patent trivial or unprotectable features live in a fantasy. Most people mistakenly believe that a patent is by itself a sign of innovation. The issue is quite tangled.

In essence, the meanings given to P&D and R&D in the industry are inaccurate, and the “patent” or “invention” labels attached to them are often misplaced. On top of this, due to companies’ interpretations, marketing strategies, and their desire to obtain government support, many R&D projects and P&D projects are mixed together. Worse still, the same confusion exists among the experts, referees, and auditors who distribute government support.

First, let’s define P&D and R&D, then examine their use, how they should be distinguished, and how they fit within the framework of product development activities.

P&D (Product Development)

As the name suggests, the primary goal of product development is to create a product. It is often claimed that P&D only covers incremental improvements on an existing product—for example, designing the facelifted 2018 version of an existing construction machine. By this logic, designing an entirely new type of construction machine is labeled R&D, not P&D. But this is not correct.

Under P&D, the following activities can all be carried out:

  • Developing a new product
  • Making design modifications on an existing product
  • Making substantial changes on an existing product
  • Adapting an existing product for use in a different field

R&D (Research & Development)

The main goal of R&D is to conduct research in a defined or undefined direction, perform experiments/tests, analyze the results, and adapt those results to provide solutions in a particular field.

  • In the defined direction case, R&D is often carried out to solve a problem or eliminate a deficiency discovered during a product development process. The deficiency might be one that the company itself experiences, or one it observes in other companies’ products.
  • In the undefined direction case, R&D is not conducted to solve a known problem. Instead, experiments are run with different methods and techniques, and later it is examined where the results could be applied. This means R&D can be done without a product development project requesting it or even realizing it needs it yet. In reality, there is already a problem, but the product developers haven’t perceived it, assume it can’t be solved, or don’t yet see a commercial need.

So while these kinds of R&D activities seem independent of product development, in reality they still sit within a hidden “product development framework.”

Key Differences Between R&D and P&D

  • R&D: Aims to develop technology, knowledge, or a product component.
  • P&D: Aims to deliver a commercial end product.

Therefore, they should not be confused. They differ clearly. The confusion arises because most product development activities include a certain percentage of R&D. In other words, R&D is an inseparable part of product development.

Product Development Processes

From these definitions, we can see that:

  • P&D = Product Development.
  • R&D = a sub-process within product development.

Thus, product development processes can be summarized as:

  1. Defining target product features (technical and commercial)
  2. Preparing product technical documentation
  3. Planning product development activities across teams
  4. Implementing work packages and running tests (R&D is a sub-process here)
  5. Integration of work
  6. Full system testing
  7. Installation, maintenance, and support

These processes are cyclical—loops occur both across and within steps. If someone claims “we finished it, that’s it” in product development, it’s safe to assume they’re only pretending to do product development.

Is This R&D?

  • If a local watch manufacturer tries to produce an atomic clock (assuming no knowledge or experience in this area), this is R&D. The fact that other firms produce atomic clocks does not make the company’s efforts any less R&D.
  • If the same firm redesigns the hand of its existing mechanical watch, that’s P&D.
  • If it decides to make even a simple electronic watch instead of a mechanical one, that again involves R&D, because it lacks prior experience in this area. Only part of that project (the watch case, straps, etc.) may be routine engineering.
  • If a fruit juice manufacturer suddenly decides to design a mechanical watch with a new hand shape, this requires R&D—even if the design change seems simple—because the firm has no competence in this domain.

Thus, R&D is a relative concept: what counts as R&D for one company may be routine engineering job for another.

About Patents

Unless it’s a direct 1:1 copy, you can generally patent almost any process or product. What matters is whether you can answer “yes” to the question: “Is this R&D, and does no other company in the world doing this yet?” If yes, then your patent has real value.

If your answer is “Well, company Y in country X is doing something similar”, you might still get a patent, but protection will be weak. Patent statistics rise in quantity, but fall in quality. Although many patents are filed every year, few provide real innovation because their quality is poor.

Measuring Project Value

Keeping the above in mind, four main criteria should be considered in evaluating a project’s value:

  1. The added value of the product created through P&D
  2. The protectability of patents resulting from R&D
  3. The added value of inventions created through R&D
  4. The infrastructural contribution of P&D/R&D to the company and its impact on the future

A project may deliver on all four criteria, or just one—and even that can be sufficient. Some R&D leads to inventions, but not all. Some produce patents, but not all need to. A product may not have immediate commercial value, but its infrastructural contribution to the company and future work can be highly valuable.

Conclusion

Instead of getting overly stuck on terms like P&D, R&D, or patents, what companies really need to focus on is product development itself.

Firms that build a product development culture will naturally integrate more R&D into their processes as they grow and compete internationally. As they succeed, their cash surpluses will fund pure R&D projects and allow them to make 5–10–20 year competitive plans.