The United States' ability to compete in many international markets has been based on competitive advantage in high-technology products. Until recently, these industries had a favorable trade balance but in 1987, it slipped to deficit of $0.6 billion. Management of research and development programs is one of the most important elements in remaining competitive. Therefore, this research study of 291 high-technology firms was undertaken to determine if: (1) a positive relationship exists between the amount of investment in research and development (R&D) and a firms success in sales, net income, or market share, (2) excessive investment in R&D would decrease profitability, (3) there exists a "critical mass" of R&D spending for a firm to remain competitive. The results of this study indicates that while R&D is an important factor in high-technology industries, it is not the driving force in the success of a firm. Successful management requires a more systemic approach which considers many factors including research and development. There was no evidence found that excessive investment decreases profits and no indication that a "critical mass" of R&D was required for a high-technology firm. This study found lag times from R&D investment to the time of impact on sales, net income and market share. The lag times did not have significant correlations in most cases but appeared to be in agreement with the opinions of industry experts surveyed in field interviews. It was also found that the leading high-technology firms budget R&D by a percent of sales or prior years budget method. This approach may be very detrimental to effective management of research programs since it may reduce funding for at a time when it should be increased in order to develop new products and technologies. The results indicate that start-up firms can compete effectively with mature firms. Leading start-up companies generally spend more as a percent of sales on R&D than mature firms but appear to be as effective in managing their research effort. The results of this study has implications for stakeholders of high-technology industries in understanding some important elements in the management of successful R&D programs.
| Identifer | oai:union.ndltd.org:pdx.edu/oai:pdxscholar.library.pdx.edu:open_access_etds-2398 |
| Date | 01 January 1989 |
| Creators | Farrimond, George F., Jr. |
| Publisher | PDXScholar |
| Source Sets | Portland State University |
| Detected Language | English |
| Type | text |
| Format | application/pdf |
| Source | Dissertations and Theses |
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