Allocating R&D resources: A quantitative aid to management insight

The allocation of resources within an R&D organization does not often expli citly consider the allocation among basic research, applied research, and d evelopment. However, a misallocation among these phases of research can hav e adverse consequences, sometimes unexpected, over time. A method of modeli ng a firm's R&D operation has been developed that uses system dynamics meth odology and data from the firm's own experience. The model can give insight into the effects of changing allocations To phases, whether those changes are internally or externally driven. For example, increasing the share of R &D resources going to the final phase in order to accelerate the production of new commercial technologies may succeed in the short run but will event ually decrease that production in the long run.