Research and development (R&D) refers to a wide range of activities by businesses, governments and academic institutions designed to gather knowledge and test new ideas. This often leads to the development of new products or new ways of doing things. R&D generally has three main activities. These are: basic research, applied research and development. Basic research is aimed at getting new knowledge with no immediate use or purpose in mind. Applied research is just the opposite. It is research for a definite purpose or product. Development has more to do with adding features to a product. Often, development is a process of eliminating all but the best idea to arrive at the best solution. Basic and applied research costs are often written off as expenses while the costs of development are added to the cost of the product. R&D often results in owning intellectual property such as patents. In Europe, R&D is called research and technical/technological development (RTD).
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