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Key Differences Between R&D and Innovation

The terms R&D and innovation are often (mistakenly) used interchangeably due to their interconnected nature. But despite their similarities, there are some striking differences between R&D and innovation. They are separate entities that work best when their distinctions are recognized and utilized in conjunction—like peanut butter and chocolate. Are they similar? Yes. Are they compatible? Oh, hell yes! But if Reese's ditched the delicious chocolatey coating in favor of doubling up on peanut butter, we'd all feel like a little something was missing. Today we will explore the roles of R&D and innovation in business.

What is R&D?

Research and development (R&D) is an initiative companies take on for the sake of innovation. R&D manifests differently from industry to industry, but the primary goal is to elaborate upon or improve existing products and services. The coordination of an R&D department is a competitive strategy. It helps companies remain forward-thinking and relevant in a fast-paced, constantly-evolving market. R&D is typically a specialized department within an organization where scientists develop new technologies for the business.


What Defines Innovation in a Company?

Here lies much of the confusion surrounding the differences between R&D and innovation. Like R&D, innovation initiatives aim to create value in one of two ways:

  1. Through the development of new products and services.
  2. Through the improvement of existing offerings. 

However, innovation programs address a few additional areas of opportunity. For example, they utilize crowdsourcing methodology to enhance company culture and support networking efforts. Some innovation programs may even focus on internal improvements, like streamlined business processes or the refinement of a company's business model.  


Differences Between R&D and Innovation

A great way to envision the differences between R&D and innovation is to consider the means through which they drive value creation. R&D initiatives use company resources to gain knowledge. That knowledge will then be put to use—helping businesses make more informed decisions regarding their strategies, technologies, and aspirations. Conversely, innovation programs look for ways to create market value or improve the processes through which that market value will be made.  

R&D vs. Innovation

The chart below was created to emphasize the differences between R&D and innovation. It's dedicated to all the visual learners out there that just read that last paragraph and said, "...huh?" 


Innovation Programs

  • Focuses on the intricacies of innovation (information gathering, patenting).
  • Typically uses internal resources.
  • Expert-driven research methods.
  • Technology-focused.
  • Centralized involvement of organization members.
  • Focuses on the big picture, encompassing all phases of innovation from employee engagement to prototype creation.
  • May draw resources from external sources through crowdsourcing or the innovation ecosystem. 
  • Values the distribution of knowledge—expert-level or not.
  • Decentralized approach that encourages the inclusion of all employees.


What Is the Relationship Between Research and Innovation?

Now that we've established the differences between R&D and innovation, let's examine their relationship with one another. Innovation programs help companies create a collaborative culture and strengthen valuable networking bonds. For example, they encourage intrapreneurship and emphasize external resources like academic-industry collaborations. These initiatives help project members cultivate ideas. Then, the R&D department provides the technical support and expertise needed to develop those ideas.

Is Innovation Part of Research and Development?

It's better to say that research and development is a part of innovation rather than the opposite. R&D is an integral part of the innovation process. It provides the foundation a company needs to support its innovation initiative. Although most innovation programs include exploratory research methods like crowd voting, R&D provides much of the cold, hard data required to make intelligent decisions regarding innovation. It supports innovation programs with the scientific and technological development capabilities that innovators need to execute their ideas.


R&D and Innovation: How to Get the Best Results

The best way to approach R&D and innovation is by looking at them as separate, collaborative entities that help one another succeed. Acknowledging the differences between R&D and innovation can help your company strategize the use of each one for the ultimate pursuit of value. Innovation programs support your goals from the ground up. They address critical stumbling blocks like the lack of employee engagement or siloed operations⁠ (two major open innovation challenges!) R&D focuses on technological requirements and scientific exploration, providing the necessary tools to make innovation actionable.

Congratulations! You've completed rready’s crash course: Differences Between R&D and Innovation 101. Now let's put that knowledge to good use and strategize your company's current innovation initiative. Contact one of our innovation experts or schedule a demo below to get started.
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