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Total Categories: 7
Research and development (R&D) is primarily focused on generating immediate profit for corporations.
Answer: False
R&D fundamentally differs from most corporate activities because its primary intention is not to generate immediate profit; instead, it involves a higher degree of risk and an uncertain return on investment.
A market-driven R&D system focuses on developing products that meet previously unmet needs by leveraging existing technological capabilities.
Answer: False
A market-driven R&D system prioritizes customer needs and produces goods known to sell based on market research. Conversely, a technology-driven R&D approach focuses on developing products that meet previously unmet needs by leveraging technological capabilities.
Business R&D is risky primarily due to the potential for projects to fail entirely, yielding no residual value.
Answer: True
One of the two primary reasons business R&D is risky is the potential for projects to fail entirely without yielding any residual value.
The management of research and development is inherently challenging because researchers often do not know the exact methods to achieve the desired result in advance.
Answer: True
The management of R&D is inherently challenging because a defining feature of research is that researchers do not know in advance the exact methods required to achieve the desired result, introducing significant uncertainty.
R&D is considered the riskiest area for financial investment because the development of an invention is guaranteed, but its market realization is uncertain.
Answer: False
Research is considered the riskiest area for financial investment because both the development of an invention and its successful market realization carry significant uncertainty, including the potential for the invention to be unprofitable or fail to reach the market.
What is the primary objective of an R&D department?
Answer: To develop new services or products, marking the initial stage of development.
The primary objective of an R&D department is to develop new services or products, marking the initial stage in the development of a potential new service or production process.
Which of the following is a key characteristic that distinguishes R&D from most other corporate activities?
Answer: It is not primarily intended to generate immediate profit and involves high risk.
R&D fundamentally differs from most corporate activities because it is not primarily intended to generate immediate profit and typically involves a higher degree of inherent risk and an uncertain return on investment.
What is the primary focus of a market-driven R&D system?
Answer: Prioritizing customer needs and producing goods known to sell based on market research.
A market-driven R&D system prioritizes customer needs, producing goods that are known to sell based on market research that identifies consumer demands and potential niche markets.
Who typically conducts research and development activities for companies?
Answer: Specialized units within the company, or outsourced to external entities like universities.
Research and development activities are generally conducted by specialized units or centers within a company, or they can be outsourced to external entities such as contract research organizations, universities, or state agencies.
In a commercial setting, what is the usual orientation of 'research and development' activities?
Answer: Future-oriented, longer-term activities in science or technology directed toward desired commercial outcomes.
In a commercial setting, 'research and development' typically refers to future-oriented, longer-term activities in science or technology, specifically directed toward desired commercial outcomes with broad forecasts of potential yield.
Why is the management of research and development inherently challenging?
Answer: Because researchers do not know in advance the exact methods to achieve the desired result, introducing significant uncertainty.
The management of R&D is inherently challenging because a defining feature of research is that researchers do not know in advance the exact methods required to achieve the desired result, thereby introducing significant uncertainty into the process.
What makes research the riskiest area for financial investment?
Answer: The significant uncertainty in both invention development and successful market realization, including potential unprofitability.
Research is considered the riskiest area for financial investment because both the development of an invention and its successful market realization carry significant uncertainty, including the potential for the invention to be unprofitable or fail to reach the market.
What are the two primary sources of risk for business R&D activities?
Answer: Project failure without residual value and takeover risks.
Business R&D is risky for two main reasons: first, R&D projects can fail entirely without yielding any residual value; and second, there are takeover risks, as a company's R&D assets can make it an attractive acquisition target for other firms.
Bank ratios are considered a reliable measure of R&D activity within an industry because they are continuously maintained and publicly available.
Answer: True
Bank ratios are indeed considered a reliable measure of R&D activity within an industry, as they are continuously maintained, publicly available, and reflect associated risks.
In the United States, 'R&D intensity' for a typical industrial company is approximately 7% of its revenues.
Answer: False
In the United States, a typical R&D intensity for an industrial company is approximately 3.5% of its revenues, not 7%.
Pharmaceutical companies like Merck & Co. and Novartis are known for having exceptionally low R&D intensity compared to other industries.
Answer: False
Pharmaceutical companies such as Merck & Co. (14.1%) and Novartis (15.1%) are noted for exhibiting exceptionally high R&D intensity, not low, compared to other industries.
Companies that spend over 15% of their revenues on R&D are often perceived as credit risks due to the unusual nature of such high spending ratios.
Answer: True
Companies that spend over 15% of their revenues on R&D are often perceived as credit risks because their high spending ratios are unusual and indicate a greater level of uncertainty in their business operations.
High-tech companies with significant R&D often achieve gross profit margins between 60% and 90% of revenues, partly because manufacturing costs are a small fraction of the product price.
Answer: True
High-tech companies with significant R&D often achieve gross profit margins ranging from 60% to 90% of revenues. These high margins are necessary because many R&D projects fail, and manufacturing costs may only account for about 10% of the product price.
Research from 2000 indicated that firms with an irregular R&D investment program consistently outperform those with a persistent R&D strategy.
Answer: False
Research from 2000 indicated the opposite: firms that maintain a persistent R&D strategy consistently outperform those with an irregular or non-existent R&D investment program.
A positive correlation between R&D and firm productivity is observed across all sectors, but it is weaker in high-tech firms compared to low-tech firms.
Answer: False
While a positive correlation between R&D and firm productivity is observed across all sectors, this correlation is considerably stronger in high-tech firms compared to low-tech firms.
Takeover risks can cause R&D profit to fluctuate in alignment with takeover waves, adding financial risk for companies engaged in R&D.
Answer: True
Takeover risks can indeed cause R&D profit to fluctuate in alignment with takeover waves, thereby introducing additional financial risks for companies actively engaged in R&D activities.
Which of the following is NOT a common metric used to gauge the level of R&D activity within an industry?
Answer: Daily stock market fluctuations.
Common measures used to express the state of an industry's R&D activity include budgets allocated to R&D, the number of patents granted, and rates of peer-reviewed publications. Daily stock market fluctuations are not a direct metric for R&D activity.
What does 'R&D intensity' represent in the United States?
Answer: The proportion of a company's revenues dedicated to research and development.
In the United States, 'R&D intensity' is a measure that represents the proportion of a company's revenues dedicated to research and development.
Which type of company is noted for having exceptionally high R&D intensity, often spending around 7% of revenues?
Answer: High technology companies, such as computer manufacturers.
High technology companies, such as computer manufacturers, often exhibit high R&D intensity, spending around 7% of revenues, with some pharmaceutical and biotech companies spending even more.
How are companies that spend over 15% of their revenues on R&D often perceived in terms of financial risk?
Answer: As credit risks due to unusual spending ratios and uncertainty.
Companies that spend over 15% of their revenues on R&D are often perceived as credit risks because their high spending ratios are unusual and indicate a greater level of uncertainty in their business operations.
What are the typical gross profit margins for high-tech companies with high R&D, and why are they so high?
Answer: 60-90% of revenues, necessary because many R&D projects fail and manufacturing costs are low.
High-tech companies with significant R&D often achieve gross profit margins ranging from 60% to 90% of revenues. These high margins are necessary because many individual R&D projects do not yield an exploitable product, and manufacturing costs may only account for about 10% of the product price.
According to research from 2000, how do firms with a consistent R&D strategy perform compared to those with an irregular program?
Answer: They consistently outperform, demonstrating the value of sustained investment.
Research conducted in 2000 indicated that firms maintaining a persistent R&D strategy consistently outperform those with an irregular or non-existent R&D investment program.
Since the 1960s, direct federal funding for R&D in the United States has increased, while private business funding has waned.
Answer: False
Since the 1960s, the funding landscape for R&D in the United States has seen a shift where private businesses provide an increasing share of funding, while direct federal funding has concurrently waned.
The U.S. federal R&D budget for fiscal year 2020 was $156 billion, with the Department of Defense receiving less than 20% of this allocation.
Answer: False
The U.S. federal R&D budget for fiscal year 2020 was $156 billion, with 41.4% of this budget allocated to the Department of Defense, which is significantly more than 20%.
The Department of Defense's total budget for research, development, test, and evaluation (RDT&E) in fiscal year 2020 was approximately $108.5 billion.
Answer: True
The Department of Defense's total budget for research, development, test, and evaluation (RDT&E) in fiscal year 2020 was approximately $108.5 billion.
How has the funding landscape for R&D in the United States evolved since the 1960s?
Answer: Private businesses have provided an increasing share of funding, while direct federal funding has waned.
Since the 1960s, the funding for research and development in the United States has seen a shift, with private businesses providing an increasing share of the funding, while direct federal funding has concurrently waned.
What portion of the U.S. federal R&D budget for fiscal year 2020 was allocated to the Department of Defense (DOD)?
Answer: 41.4%
The U.S. federal research and development budget for fiscal year 2020 was $156 billion, with 41.4% of this budget allocated to the Department of Defense (DOD).
Israel's initial research infrastructure during the 1970s and 1980s frequently focused on the defense industry.
Answer: True
During the 1970s and 1980s, Israel initially built its research infrastructure through various programs, frequently focusing on the defense industry.
The 1984 law in Israel for Encouragement of Research and Development in Industry aimed to reduce commercial sector investment in R&D.
Answer: False
The 1984 law for Encouragement of Research and Development in Industry in Israel aimed to encourage the commercial sector to invest in R&D and expanded R&D subsidies, not reduce investment.
The 'Yozma program' in Israel was a government-backed venture capital fund program that significantly boosted its high-tech ecosystem.
Answer: True
The 'Yozma program,' initiated in Israel in 1993, was a government-backed venture capital fund program that led to a doubling in value of Israel's 10 new venture capital funds within three years, significantly boosting its high-tech ecosystem.
In the late 1990s, Israel ranked first globally in terms of private equity as a share of its general economy.
Answer: False
In the late 1990s, Israel ranked second globally, surpassed only by the United States, in terms of private equity as a share of its general economy.
Israel's high-tech sector, known as Silicon Wadi, was ranked as the 4th leading startup ecosystem globally in 2023.
Answer: True
Israel's high-tech sector, known as Silicon Wadi, was indeed ranked as the 4th leading startup ecosystem in the world by Startup Genome in 2023.
How did Israel establish its initial research infrastructure during the 1970s and 1980s?
Answer: Through various programs, frequently focusing on the defense industry.
During the 1970s and 1980s, Israel initially built its research infrastructure through various programs, frequently focusing on the defense industry.
What was the impact of Israel's 1984 law for Encouragement of Research and Development in Industry?
Answer: It encouraged the commercial sector to invest in R&D and expanded R&D subsidies.
The 1984 law for Encouragement of Research and Development in Industry in Israel encouraged the commercial sector to invest in R&D within the country and empowered the Office of Chief Scientist to significantly expand R&D subsidies in the Israeli industrial sector.
What was the outcome of Israel's 'Yozma program' initiated in 1993?
Answer: It led to a doubling in value of Israel's 10 new venture capital funds within three years, boosting its high-tech ecosystem.
The 'Yozma program,' initiated in Israel in 1993, was a government-backed venture capital fund program that led to a doubling in value of Israel's 10 new venture capital funds within three years, significantly boosting its high-tech ecosystem.
How did Israel's private equity sector compare globally in the late 1990s?
Answer: It ranked second globally, surpassed only by the United States.
In the late 1990s, Israel ranked second globally, surpassed only by the United States, in terms of private equity as a share of its general economy.
What is Israel's high-tech sector known as, and how was it ranked by Startup Genome in 2023?
Answer: Silicon Wadi, ranked 4th leading startup ecosystem globally.
Israel's high-tech sector is known as Silicon Wadi, and in 2023, it was ranked as the 4th leading startup ecosystem in the world by Startup Genome.
Over the past two decades, Europe has consistently met its target of dedicating 3% of its GDP to R&D.
Answer: False
Over the past two decades, Europe has been observed to be lagging in R&D investments, failing to achieve its target of dedicating 3% of its Gross Domestic Product (GDP) to R&D by 2020.
The Horizon 2020 program is responsible for financially supporting research and innovation exclusively within European Union member states.
Answer: False
The Horizon 2020 program, which financially supports research and innovation in Europe, is designed to be open for participation from entities worldwide, not exclusively within EU member states.
Firms that adopted advanced digital technology dedicated a smaller proportion of their investment efforts to R&D compared to non-adopters.
Answer: False
Firms that adopted advanced digital technology dedicated a greater proportion of their investment efforts to R&D compared to non-adopters, especially during the pandemic.
In a 2021/2022 survey, 14% of enterprises in Central, Eastern, and South Eastern Europe were active innovators, which was higher than the EU average.
Answer: False
In a 2021/2022 survey, 14% of enterprises in Central, Eastern, and South Eastern Europe were classified as active innovators, which was lower than the EU average of 18%.
As of 2023, European enterprises account for 18% of the world's top 2,500 R&D corporations, and 45% of new entrants.
Answer: False
As of 2023, European enterprises account for 18% of the world's top 2,500 R&D corporations, but only 10% of new entrants, which is significantly lower than the 45% for the United States.
In 2024, the electronics sector led R&D investment in Europe, followed by textiles and digital.
Answer: True
As of 2024, the electronics sector led R&D investment in Europe, dedicating 28% of its total investment, followed by textiles (19%) and digital (18%).
What trend has been observed in R&D investments within the European Union over the past two decades?
Answer: Europe has been lagging, failing to achieve its target of dedicating 3% of its GDP to R&D by 2020.
Over the past two decades, Europe has been observed to be lagging in R&D investments, failing to achieve its target of dedicating 3% of its Gross Domestic Product (GDP) to R&D by 2020.
Which program is responsible for financially supporting research and innovation across Europe?
Answer: The Horizon 2020 program.
Research and innovation in Europe receive financial support from the Horizon 2020 program, which is designed to be open for participation from entities worldwide.
How did the adoption of advanced digital technology influence R&D investment among EU firms?
Answer: Firms that adopted advanced digital technology dedicated a greater proportion of their investment efforts to R&D.
Firms that adopted advanced digital technology dedicated a greater proportion of their investment efforts to R&D, particularly during the pandemic, where significant expenditure was reported on software, data, and IT infrastructure.
In a 2021/2022 survey, what percentage of enterprises in Central, Eastern, and South Eastern Europe were identified as active innovators, and how did this compare to the EU average?
Answer: 14%, which was lower than the EU average of 18%.
A 2021/2022 survey found that 14% of enterprises in Central, Eastern, and South Eastern Europe were classified as active innovators, which was lower than the EU average of 18%.
As of 2023, what share of the world's top 2,500 R&D corporations are European enterprises, and what percentage do they represent among new entrants?
Answer: 18% of corporations, 10% of new entrants.
As of 2023, European enterprises account for 18% of the world's top 2,500 R&D corporations, but they represent only 10% of new entrants, which is significantly lower than the 45% for the United States and 32% for China.
Which sector led in R&D investment in Europe as of 2024?
Answer: Electronics
As of 2024, the electronics sector led in R&D investment in Europe, dedicating 28% of its total investment.
In 2022, South Korea was the world leader in R&D spending as a percentage of GDP.
Answer: False
In 2022, Israel was the world leader in R&D spending as a percentage of GDP, dedicating 6.02% of its GDP, while South Korea's was 4.81%.
According to the UNESCO Institute for Statistics, global R&D expenditure as a percentage of GDP increased from 2.2% in 2015 to 1.79% in 2018.
Answer: False
According to the UNESCO Institute for Statistics, global R&D expenditure as a percentage of GDP decreased from 2.2% in 2015 to 1.79% in 2018.
Despite a commitment in 2015 to monitor R&D progress for Sustainable Development Goals, data reporting on domestic R&D investment declined between 2015 and 2018.
Answer: True
Despite the 2015 commitment to monitor R&D progress for Sustainable Development Goals, the number of countries reporting data on domestic R&D investment and researchers declined between 2015 and 2018.
According to the provided table, the United States had a higher R&D spending as a percentage of GDP than Sweden.
Answer: False
According to the table, the United States' R&D spending was 3.45% of its GDP, while Sweden's was 3.53%, indicating Sweden had a slightly higher percentage.
Which country held the top position globally for R&D spending as a percentage of GDP in 2022?
Answer: Israel
In 2022, Israel was the world leader in R&D spending as a percentage of GDP, dedicating 6.02% of its Gross Domestic Product to these activities.
According to the UNESCO Institute for Statistics, what was the global average R&D expenditure as a percentage of GDP in 2018?
Answer: 1.79%
According to the UNESCO Institute for Statistics, global R&D expenditure constituted an average of 1.79% of the global GDP in 2018.
Based on the provided table, which country had the highest R&D spending as a percentage of GDP?
Answer: Israel
Based on the table 'Top countries by R&D spending,' Israel had the highest R&D spending as a percentage of GDP, recorded at 5.44%.
What was China's R&D spending as a percentage of GDP, according to the provided table?
Answer: 2.40%
According to the provided table, China spent 2.40% of its GDP on R&D.
The acronym R&D&I signifies Research and Development, with the added 'I' emphasizing the importance of initial ideation over market introduction.
Answer: False
The acronym R&D&I represents Research and Development with Innovation, emphasizing that the process includes not only the creation of new ideas but also their successful implementation and market introduction.
High-tech organizations with substantial R&D investments typically succeed in markets where customers have minimal technology needs, allowing for broader appeal.
Answer: False
High-tech organizations with substantial R&D investments typically succeed in markets where customers have extremely high technology needs, not minimal, justifying the high risk and potential for high gross margins.
Increased R&D spending automatically guarantees greater creativity, higher profit, and a larger market share.
Answer: False
Increased R&D spending does not automatically guarantee greater creativity, higher profit, or a larger market share, primarily due to the inherent uncertainty and risk associated with research outcomes.
Entrepreneurs can reduce R&D uncertainties by acquiring a franchise license, which includes proven operational knowledge.
Answer: True
Entrepreneurs can indeed reduce some of the uncertainties associated with R&D projects by acquiring a license for a franchise, as this includes necessary operational knowledge and a proven business model.
Francesco Crespi and Cristiano Antonelli found that low-tech firms experienced 'virtuous' Matthew effects, receiving R&D subsidies based on merit.
Answer: False
Francesco Crespi and Cristiano Antonelli found that low-tech firms often experienced 'vicious' Matthew effects, receiving subsidies more frequently due to name recognition rather than effective utilization, while high-tech firms experienced 'virtuous' effects based on merit.
R&D in low-tech industries has been shown to have non-trivial carryover effects that benefit other parts of the marketplace.
Answer: True
Studies have shown that R&D in low-tech industries can indeed have non-trivial carryover effects that benefit other parts of the marketplace, contributing to broader economic spillovers.
Global R&D management focuses solely on designing R&D processes within a single national corporate network.
Answer: False
Global R&D management is dedicated to designing and leading R&D processes on an international scale, encompassing diverse cultural and linguistic environments, and facilitating knowledge transfer across multinational corporate networks, not solely within a single national network.
If a firm lacks an internal R&D program, it must rely on strategic alliances and acquisitions to access innovations from other organizations.
Answer: True
If a firm does not possess an internal R&D program, it must rely on strategic alliances, acquisitions, and various external networks to tap into innovations developed by other organizations.
Why is R&D considered crucial for companies seeking to expand their market share?
Answer: It enables the introduction of new products and services, attracting more customers.
R&D is crucial for companies because it enables them to acquire larger shares of the market through the introduction of novel products and services, which can attract more customers and provide a significant competitive advantage.
What does the acronym R&D&I emphasize in the context of innovation?
Answer: Research and Development with innovation, including successful implementation and market introduction.
The acronym R&D&I represents Research and Development with Innovation, emphasizing that the process includes not only the creation of new ideas and products but also their successful implementation and introduction to the market.
What is a critical role new product design and development plays in a company's long-term viability?
Answer: It is often a crucial factor in a company's survival, requiring continuous updates to adapt to competition.
New product design and development is often a crucial factor in a company's survival, as firms must continually update their product designs and ranges to adapt to fierce competition and changing consumer preferences.
If a firm does not have an internal R&D program, what alternative strategies can it use to access innovations?
Answer: Utilize strategic alliances, acquisitions, and various networks to tap into innovations developed by other organizations.
If a firm does not possess an internal R&D program, it must rely on strategic alliances, acquisitions, and various external networks to tap into innovations developed by other organizations.
In which type of market do high-tech organizations with substantial R&D investments typically succeed?
Answer: Markets where customers have extremely high technology needs, justifying high risk and potential for high gross margins.
High-tech organizations with substantial R&D investments typically succeed in markets where customers have extremely high technology needs, as these needs justify the high risk of failure and the potential for high gross margins.
How can entrepreneurs reduce some of the uncertainties associated with R&D projects?
Answer: By acquiring a license for a franchise, which includes proven operational knowledge.
Entrepreneurs can reduce some of the uncertainties associated with R&D projects by acquiring a license for a franchise, which means the necessary operational knowledge and a proven business model are already incorporated into the license agreement.
According to Francesco Crespi and Cristiano Antonelli, what kind of 'Matthew effects' did high-tech firms experience regarding R&D subsidies?
Answer: 'Virtuous' Matthew effects, awarded subsidies based on merit and successful outcomes.
Francesco Crespi and Cristiano Antonelli found that high-tech firms experienced 'virtuous' Matthew effects, meaning they were awarded R&D subsidies based on their merit and successful outcomes.
What significant impact has R&D in low-tech industries been shown to have, despite a weaker direct correlation with productivity?
Answer: It can have non-trivial carryover effects that benefit other parts of the marketplace.
Despite a less pronounced direct correlation with productivity, studies have shown that R&D in low-tech industries can have non-trivial carryover effects that benefit other parts of the marketplace, contributing to broader economic spillovers.
What technical approach do high-tech organizations use to offset the substantial overhead costs of advanced technologies?
Answer: They frequently explore methods to re-purpose and repackage these technologies.
To amortize the high overhead associated with advanced technologies, high-tech organizations frequently explore methods to re-purpose and repackage these technologies, reusing various components and processes.