Research, Development & Innovation (DP IB Business Management)

Competitiveness

• R&D drives innovation to achieve a competitive edge - or first mover advantage
  

• Allows businesses to stay ahead of rivals and be better able to adapt to changing market demands

• IT giant IBM has shifted its focus from hardware to high-quality, high-impact innovation in new technologies
  
  

• R&D has led to market leadership in hybrid cloud computing, AI and quantum computing

Market Expansion

• R&D supports exploration of new markets and opportunities
  
  

• Developing new products or adapting existing ones can appeal to different market segments

• Johnson & Johnson, owner of brands such as Neutrogena and Listerine spent £11.87 billion on R&D in 2022
  

• R&D into new therapies and AI technologies has led to significant growth in China and Japan 

Improved profits

• R&D can lead to the discovery of  efficient processes
  
  

• Process improvement and development of sustainable materials can reduce production costs
  
  

• Innovative products can be sold at a premium price

• R&D - both publicly-funded and conducted by individual manufacturers - has reduced the cost of producing solar panels by almost 99% over the last 40 years
  

• Panels are now produced in greater quantities and are higher quality due to improved processes in larger factories

Intellectual Property

• R&D often leads to the creation of intellectual property such as patents, trademarks, and copyrights
  

• These protections create barriers to entry for competitors

• Apple invested over £23 billion in R&D and included over £1.84 trillion in intangible assets in its balance sheet in 2022
  
  

• These include almost 80,000 patents which protect products from being copied by rivals

Staff Recruitment & Retention

• Innovative businesses are attractive to highly-skilled professionals 
  

• Employing top industry talent can improve business competitiveness

• Innovative brand Lego Group invites application for its highly sought-after roles by explaining why working for them is more than just fun

  • 'It’s exciting, inspiring, and filled with creativity. It’ll spark your imagination every day'

JustOne Africa's Water Filter

• This gravity-operated water filter is distributed by the charity across Kenya

• The filter kit provides up to 20 litres of clean water in about 30 minutes

• Developed from technology used in kidney dialysis machines, it removes all harmful bacteria and pollutants

• This improves health and reduces instances of preventable disease

• In turn, levels of school attendance are improved, helping to improve Kenya's long-term economic development

Armco's Carbon Capture Technology

• Armco, one of the world's largest energy and chemicals companies, is developing carbon capture technologies that draw out CO₂ emissions at source or directly from the air

• These emissions are then transported away, stored deep underground or turned into useful products

• The International Monetary Fund emphasises the importance of this technology for tackling climate change

• Copyright grants the creator of an original work exclusive rights to its use and distribution for a limited time

• It applies to creative, intellectual and artistic works including books, song lyrics, paintings and film scripts

• Protection begins when a piece of work is created

  • It does not need to be formally registered

  • The © symbol may be applied to the work

  • Permission needs to be sought from the copyright holder to use the work 

• In 2001 Dyson successfully sued Hoover for infringement of their bagless dual cyclone vacuum design
  

• In 2021 M&S agreed to settle its legal action against Aldi for copying the design of its Colin the Caterpillar cake 

• Patents give a business or inventor exclusive rights to make, use and sell an invention for a specified period

• A detailed description including drawings/diagrams is filed with the government patent office
  

• Patents provide inventors with a legal monopoly for a limited time

  • This allows them to control the use of their inventions and potentially profit from them

• In 2022 Converse won a patent case against fashion designer Steve Madden's similar Winnona Sneaker design

• Apple and Samsung have been suing and counter suing each other since April 2011 regarding patents for smartphone technology with billions of dollars of damages claimed and awarded between them

• A trademark is a distinctive sign or symbol that is used to distinguish between brands
  

  • Trademarks include words, names, logos, symbols, slogans and even colours or sounds

  • The ® symbol may indicate a trademark

  • Infringement of trademark rights can lead to legal action or the payment of damages
     

• Registering a trademark grants its owner exclusive rights to use that mark for a specific time period 

  • Helps prevent customer confusion and builds brand identity

  • Can be valuable intangible asset 

• In 2017 Adidas reached an out of court settlement with clothing retailer Forever 21 after claiming its logo design copied its three-stripe trademark 
  
  

• Louis Vuitton DAK, a fried chicken restaurant in South Korea lost a trademark battle with luxury fashion brand Louis Vuitton due to its named branding being similar to the designer's trademark