According to Statista, the term research and development (R&D) pertains to the activities that governments and corporations carry out to create new products or services or enhance existing ones. R&D encompasses both the work of engineers, who design specific new products and the research conducted by industrial scientists that may lead to future, unspecified products.
Apart from salaries, R&D necessitates considerable investment in materials and equipment, rendering it a costly undertaking. In 2022, global R&D spending amounted to a considerable 2.5 trillion U.S. dollars.
R&D facilities are a key requirement for any manufacturing unit. It helps bring innovation to the table by creating new and improved products, processes, and technologies. A good R&D setup can also increase your chances of winning a patent as well as improve brand value & customer loyalty.
However, setting up an R&D facility is only half the story. What you need to worry about next is how well this facility will perform in terms of cost-effectiveness. Here are some tips on how you can make sure that your new R&D center is doing its job right:
Determine Your R&D Goals
As you begin to plan for your R&D facility, it’s important to determine your specific goals and objectives for research and development. This can help guide your decisions around what types of facilities and equipment you will need to invest in to meet those goals.
For example, if one of your goals is “generate revenue from product sales,” then an appropriate investment might be a new production line that increases capacity or reduces costs (or both).
On the other hand, if another goal is “launch new products into existing markets,” then an appropriate investment might be additional laboratory space so scientists can run experiments on existing formulations before scaling up production.
The key thing here is that before investing in R&D facilities, set clear goals for what success looks like.
According to National Center for Science and Engineering Statistics, the year 2020 saw a 9.1% increase in research and development investment by businesses in the United States, which amounted to USD 538 billion. Out of this, USD 466 billion originated from the companies themselves, indicating an 8.7% rise from 2019. The remaining USD 71 billion was procured from external sources, signifying an 11.7% increase from the previous year.
Identify Necessary Resources
The first step in planning for a new R&D facility is identifying the resources needed to achieve your goals. This may include physical space, equipment, staff, and funding.
As you consider these factors, also think about how much space or equipment will be needed by each group of employees (e.g., scientists vs. engineers). You should also consider whether any specialized talent or software would be beneficial for achieving your R&D objectives.
In addition to considering what types of resources are necessary for achieving your goals and how much space/equipment each group needs at its location(s), you must prioritize which ones are most critical. This will help ensure that you don’t overcommit yourself financially before knowing whether there is enough demand from customers who want this type of product or service being developed by your company’s research team(s).
Plan For Flexibility and Scalability
R&D is, by nature, an iterative process, and your facility and equipment needs may evolve as your research progresses. Plan for flexibility and scalability in your R&D facilities to ensure that you can adapt to changing conditions over time.
How? Consider the following:
- How will you expand the number of experimental stations if experiments require more space?
- Will you need additional storage space for materials, parts, or supplies?
- Will new equipment be needed at some future point, such as when researchers need access to higher-end instrumentation or analytics tools?
Budget for Ongoing Maintenance and Upkeep
Once you have decided on the type of R&D facility and equipment that will best meet your needs, it’s time to budget for ongoing maintenance and upkeep. Budgeting for ongoing maintenance can be difficult because it’s not something most companies do well, or at all.
However, if you don’t plan and set aside money each year to cover these costs, then your R&D facility will eventually fall into disrepair.
To help ensure that this doesn’t happen, consider these tips when planning for ongoing maintenance:
- Set aside funds in advance so they’re readily available when needed. Don’t wait until something breaks before taking action.
- Determine which parts need replacing or repairing. Keep track of their lifespan so you know when replacement is necessary (for example, some parts last longer than others).
Consider the Need for Cleanroom Facilities
The type of research and development you plan to conduct will determine whether or not cleanrooms are necessary. Cleanrooms are used in many industries, including pharmaceuticals, medical devices, semiconductors, and aerospace defense. The food and beverage industry also uses cleanrooms for fermentation processes that require a sterile environment.
American Cleanroom Systems, a cleanroom manufacturer, states that cleanroom designs follow specific protocols in mind to minimize the risk of contamination from outside sources, such as dust particles or microbes entering through vents or doors. This requires a significant investment upfront but can save money in the long run by preventing costly recalls due to faulty products caused by contamination issues during production runs.
Plan for Regulatory Compliance
As you plan for your R&D facilities, it’s essential to keep in mind that there may be specific regulations and compliance requirements that you need to meet. For example, if your manufacturing company produces food products or pharmaceuticals, certain regulatory agencies oversee these industries. These regulators can help ensure that your products are safe for consumers and follow proper procedures during production.
Yahoo! Finance states that over the past few years, the life sciences and pharmaceutical industries have witnessed a rise in regulatory scrutiny while grappling with the need to address global healthcare emergencies. This push-and-pull dynamic between regulation and innovation is set to intensify further as data privacy and security concerns restrict the ability of various industries to leverage public cloud services.
Looking ahead, the advancement of new technologies will likely lead to a gradual increase in regulatory oversight for these industries.
We hope that this article has given you an idea of what to consider when investing in research and development facilities. Remember that these decisions should be made with the long-term vision of your company in mind.
By taking time to consider all aspects of your business, you can ensure that your R&D investment will pay off in the long run.