Characteristics of research

An answer to the questions of whether and how much companies should invest to support research is much more difficult than is indicated by the few arguments mentioned above. In defense of in-house research, management may point to the relatively low cost of these activities. In fact, on average only a small share of the total research and development expenditure is devoted to research (see Figure 1). It is interesting to observe that this share has developed very differently in advanced industrial nations. It is stable and low in the U.S. until 1985, but after this year when data are collected differently it starts to reach higher levels and fluctuates considerably.