Definition 1.
Spending on the development of new products (or even new knowledge), or on improving products already being made. R&D costs vary widely by industry; semiconductor firms, biotechnology companies and other businesses whose products are rapidly evolving tend to have high R&D expenses. Some other industries, such as retailing, traditionally spend little on R&D. And some industries, such as newspaper publishers, probably need to spend more. By and large, companies that engage in substantial R&D are more likely to hit profit home runs than companies who skimp in this area. Intel, the enormously profitable firm that makes the brains of most personal computers, spends huge sums on R&D.
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