The R&D intensity of firms varies widely across sectors,2from being marginal (less than 5 percent) in the service sectors and in some heavy industries such as pulp and paper or oil, to more than 20 percent in the so-called high-tech sectors such as electronics, computer software or healthcare. Hence firms in the automobile, pharmaceutical and information technology sectors spend billions of their own money each year on hiring and training experts in order to develop proprietary scientific research and development.
Developing an innovative R&D capability supposes, on the one hand, the development of an R&D strategy, to define where and how much time to spend looking for opportunities, and on the other, to set up an R&D organization to define where to place resources and how to integrate them.
The R&D strategy must first be defined according to the environment, resources and purpose of the organization. It must in particular support the development of the core competencies of a firm. Indeed, to quote one of the most papers on management: “The real sources of advantage are to be found in management’s ability to consolidate corporate-wide technologies and production skills into competencies that empower individual businesses to adapt quickly to changing opportunities.”3