Research and Development Expenditures Worldwide

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 reports on their “annual forecast of global research and development funding, which is a public service for use by policy makers, 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.

Global R&D Forecast

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

George Castellion of SSC Associates and Stephen K. Markham of North Carolina State University discuss this in their paper: “Myths About New Product Failure Rates: New Product Failure Rates: Influence of Argumentum ad Populum and Self-Interest.”

As a result, our world wastes over $640 billion a year in resources on failed products. That $.64 trillion was spent on development, thus those who spent that did not get a return on their investment.

Even if we could do just a little better, the increase in productivity would result in billions of additional resources, which would significantly improve the world’s economy. I would suggest that improvement could conceivably add to the cycle of money passing through the economy. This would amount to close to half of the entire U.S. government budget. Such highly productive churn will have a measurable impact on improving society because successful products can enhance lives, create jobs and waste less — thus also helping the environment.

Imagine if we could use the same techniques that reduced airplane accidents to reduce the level of product failure! Those techniques and processes in terms of building insanely great products are discussed in this book.

In the same way Steve Jobs built a company (with a ton of help from many others) that changed the world, imagine if other companies and organizations can also do the things Apple does well, too. That shall also truly change the world, and help many more beyond those who purchase Apple’s products.

What Steve, Tim Cook, Phil Schilling, Jony Ive, and their teams did to build an insanely great company after Steve’s return in the late 90s, are detailed here too.

My studies have found that product failures tend to fall into six general areas. I will give you a high-level overview of the six essential keys to averting failure and enhancing the chances of product success. The Six Keys to Building Insanely Great Products — You won’t learn in MBA School

Product success is first based on building a company or organization that can be successful, then understanding the customer, innovation, a market strategy for the product and then the hard part — the implementation: marketing, sales, service, support and operations.

The combination of a company’s values/vision, processes, employees and systems/tools is what builds the company. One needs a strategy, information about the development and implementation of that strategy, plus a clear understanding of what their customers want to “do.”

The six keys to product success are:

• Strategy
• Process
• Information
• Customers
• Employees
• Systems and Tools

Or a good mnemonic is SPICES.

“Success is a side effect of doing the right things in the right time”

– Andre Hawit