What is R&D? How Does the Research and Development Process Work?

Today, competition is not only about strong capital or large markets; what truly makes the difference is companies that invest in knowledge and innovation. This is exactly where R&D comes into play. This process, in which new ideas are brought to life, technologies are born, and the future is shaped, enhances both the growth of businesses and the global competitiveness of nations. In this article, we will explore what R&D is, how it operates, and the opportunities it offers through R&D centers.

What is R&D?

Research and development refers to all systematic work carried out to produce new knowledge, design new products, or improve existing ones. R&D, which has many benefits, primarily provides companies with the opportunity to stand out in the market. Developing innovative products and services is the key to staying one step ahead in competition. In addition, by making existing products more qualitative and efficient, it reduces costs and thereby increases customer satisfaction. Beyond its contribution to companies, R&D also strengthens the economy, creates new job areas, generates employment, and enhances the global competitiveness of a country. In short, R&D can be defined as an investment area that adds value both to businesses and society.

The concept of R&D, often confused with innovation, is actually quite different from innovation. R&D is the part of the work that produces knowledge and technology, while innovation transforms this knowledge into products and services that touch our lives. If we imagine R&D as the ideas born inside a laboratory, we can think of innovation as those ideas materializing in the market and meeting with users. The path to true success lies in the collaboration of these two concepts. In other words, without R&D, innovation is incomplete; without innovation, R&D remains unfinished. That is why successful companies manage both together, thereby designing the future and adding value to the present.

How does the R&D process work?

The R&D process generally progresses in specific stages, and while details may vary for each company or project, it essentially goes through similar phases. Below is the typical flow of R&D:

Identifying the need/problem

The process begins with a need or a problem that requires a solution. At this stage, the area where innovation will be made and the problem to be solved are determined. Market demands, technological breakthroughs, or customer feedback gain importance here. In addition, existing solutions, similar products, or processes are analyzed.

Idea generation and screening

After defining the problem, the process moves to the idea stage. Generating multiple alternative ideas at this stage is a good method. Brainstorming, benchmarking, and gathering opinions from employees or stakeholders are among the approaches that can be used. Once ideas are collected, they are evaluated. At this stage, decisions are made on which ideas will not continue and which ones will move forward. The technical, economic, and market feasibility of the ideas must be considered during this screening stage.

Concept development and preliminary design

At this stage, a “concept” is created based on the selected ideas. Questions such as what kind of product/service it will be, its main functions, how it will look from the user’s perspective, and what features it will have are answered. Prototype or model designs are drawn; visualization, mock-ups, or digital simulations can be carried out.

Technological, technical, and economic feasibility study

Once the concept is mature, the technical feasibility and economic sustainability of this idea are examined. Cost estimation, resource planning, technological infrastructure requirements, production processes, and material supply are analyzed. If the risks are too high, alternative strategies are considered.

Experimental development, prototype, and testing phase

If the technical infrastructure is ready and it looks economically viable, a prototype or pilot production is carried out. Various tests are applied to this sample model: functionality, safety, durability, compliance with environmental conditions, quality, etc. Errors are detected and improvements are made. This stage can be iterative — test → feedback → revision → re-test.

Improvement and final product development

Based on the results obtained after prototype testing, the final version of the product or process is developed. Factors such as design aesthetics and ergonomics are also addressed; preparations for mass production are made. Production planning, quality control methods, supply chain arrangements, and production cost optimization are of great importance at this stage.

Commercialization and market launch

Once the product or process successfully passes the tests, it is introduced to the market. At this stage, issues such as branding, packaging, marketing, sales channels, distribution, certification, and necessary legal approvals are handled. In addition, the product’s licensing or protection of intellectual property rights is also considered.

Monitoring, feedback, and continuous improvement

The process does not end after the product enters the market. Revisions are made to the product or process based on user feedback, quality complaints, and usage experience. New versions and updates are released. Moreover, performance monitoring is conducted in terms of criteria such as cost, efficiency, and customer satisfaction.

Establishment and requirements of R&D centers

Within the scope of Law No. 5746 on Supporting Research, Development, and Design Activities, a unit within a company that systematically, sustainably, and technologically conducts “research and development/innovation/design” activities is defined as an R&D center. These centers must have the capacity to develop products, processes, or services, produce technological innovations, and work with scientific methods. To obtain “R&D center” status under the law, the conditions recognized by the Ministry of Industry and Technology must be met, and stages such as application, inspection, and evaluation must be completed.

Requirements for establishing an R&D center

For a company to qualify as an R&D center in Turkey, the following requirements must be met:

Personnel requirements
At least 15 Full-Time Equivalent (FTE) R&D staff must be employed.
R&D staff must consist of researchers and technicians; researchers must have at least a bachelor’s degree, while technicians must graduate from technical, science, health, or design departments of vocational high schools/colleges.
Additionally, there must be “support personnel,” but the number of support staff must not exceed a certain proportion of the total personnel.

Physical facilities and infrastructure
The center must be organized as a separate unit within the company. It must be located within a single campus or physical location.
Physical control mechanisms must be in place, and it must be possible to verify that personnel are indeed working in the center.

Activity requirements
R&D (and/or design) projects must be carried out. In other words, the center must have a project portfolio. Projects must have defined subjects, duration, budget, and personnel requirements.
R&D activities must be carried out domestically.

Institutional and organizational competence
The applicant company must have R&D management, technological assets, and the capacity to manage knowledge/project resources.
Intellectual property, technological capabilities, and accumulated R&D experience must exist.

Application and inspection process
An official application must be made to the Ministry of Industry and Technology with the necessary documents.
Applications are reviewed by the Evaluation and Inspection Commission, and compliance with the requirements is checked.

Advantages of establishing an R&D center

Obtaining R&D center status offers many advantages, providing companies with both financial and operational benefits. The main advantages in Turkey are as follows:

Tax incentives

Expenses incurred for R&D activities can be deducted when determining corporate income. This “R&D deduction” provides companies with significant financial benefits. In addition, a large portion of the income tax withholding applied to the salaries of R&D and support staff may be exempted or supported by the state. This not only reduces companies’ financial burdens but also encourages the employment of qualified personnel.

Employer’s share of social security premium support

The employer’s share of social security premiums for R&D and design staff can be covered by the state. This support reduces companies’ personnel costs while making it easier to employ more researchers and engineers.

Tax and other exemptions

Various exemptions, such as stamp duty exemptions, are provided for R&D centers. In addition, customs duty exemptions are applied for equipment imported from abroad for research and experimental purposes. These exemptions provide companies with significant advantages, especially in acquiring high-cost technological equipment.

Financial and operational flexibility/cost advantage

Thanks to incentives, R&D costs decrease, and resources can be used more efficiently. In addition, after the completion of certain projects, amortization advantages may also come into play. For example, some projects may be subject to amortization for a certain period after completion. This accelerates companies’ return on investment and makes it easier to allocate resources for new projects.

Attracting a qualified workforce and corporate prestige

Being an R&D center makes a company an attractive destination for universities and research institutions to collaborate with. This facilitates attracting qualified researchers to work within the company and also enhances the company’s prestige in the sector. The title of the R&D center is an official indication of the importance given to innovation and technology.

Increased competitiveness and innovation capacity

R&D centers enhance companies’ capacity to produce technological innovations. Opportunities for developing new products, processes, or services increase, while opportunities for participating in international projects, obtaining patents, and technology transfer also emerge. In this way, companies gain a competitive advantage not only in the local market but also globally.

 

Sources: 1, 2.

 

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