Research and Development Expenditures Worldwide and Product Failures

The world, according to Battelle, a nonprofit research organization, spent about $1.6 trillion on research and development in 2014.

Each year, Battelle and R&D Magazine report on their “annual forecast of global research and development funding, which is a public service for use by policymakers, corporate research leaders, researchers, educators, and economists.”

They claim that research and innovation “contribute in the short and long terms to prosperity and competitiveness, as well as to the resolution of society’s greatest challenges in areas like health, energy, and security.”

But not all of those expenditures translate into “prosperity,” since approximately 40% of those products and services fail in the marketplace.

So the question becomes: What are the reasons for product failures, and what key things can be done to reduce the rate of failure? If the rate of failure can be reduced, then that waste can be reduced with those resources being used elsewhere. Failure reduction will also increase the productivity of research and development.

Product Failure Rates

About 60% of products succeed which means about 40% fail.