Scientific Research & Development Services
Description
Companies in this industry conduct research or apply research findings to develop new products or processes in a variety of fields, including life sciences, physical sciences, engineering, social sciences, and the humanities. Major companies include Argonne National Laboratory, Battelle Memorial Institute, and IQVIA (all based in the US), as well as AKKA Technologies (Belgium), Qinetiq Group (UK), and WuXi Apptec (China).
Global spending on research and development, a demand driver for scientific research services, is about $2.5 trillion. Global R&D investment has been growing steadily over the last several years, with the US leading the charge. Other top spending countries include EU, China, Japan, Germany, and South Korea, according to the National Center for Science and Engineering Statistics.
The US scientific research and development services industry includes about 19,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $160 billion.
COMPETITIVE LANDSCAPE
Demand is driven by government and commercial investment in science and technology. The profitability of individual companies depends on the discovery of potentially useful or marketable new products. Large companies can compete by employing scientists across several disciplines and taking advantage of economies of scale; they can also compete by managing government research operations. Small companies can compete by focusing on their expertise in a single specialty. The US industry is fragmented: the top 50 companies account for about 40% of revenue.
The prospect of patentable -- and potentially lucrative -- discoveries through research into scientific processes motivates new companies to join the industry. Companies often compete for research funding such as government grants or commercial contracts.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major services include three main categories: medical and health sciences (about 30% of industry revenue); engineering and technology (about 30%); and natural and exact sciences (about 20%). In addition, some companies in the industry generate revenue from government and private contributions, gifts, and grants. Companies are often affiliated with major research universities or use a line of research begun at a university. The industry also includes research divisions of major manufacturers such as Nestlé, Roche, DuPont, and IBM, as well as contract research organizations (CROs) that conduct research on behalf of manufacturers.
The goal of R&D is twofold: to develop new products and to expand scientific knowledge. Both of these goals have at their heart the need to create new products or processes that improve on or supplant existing technology. In some cases, research will change technology so completely that it changes the way the humans interact with the world (medicine, nuclear technology).
Leading fields of research include pharmaceuticals, medical care, computers, and electronics. Other fields of research range from agriculture, oceanography, and human genetics (life sciences) to industry, space, and defense (physical and engineering sciences) and from cellular and biomolecular processes (biotechnology) to education, economics, and psychology (social science and humanities).
Companies conduct basic research, applied research, or experimental development (R&D). In basic research, scientists develop theories and test hypotheses to answer central scientific questions. Such research is usually not conducted with an eye toward commercialization. It is sometimes called “pure” research. Applied research takes scientific knowledge and applies these concepts toward solving a practical problem using empirical methodologies. This research typically is commissioned by a client and intended to improve processes or technologies that benefit the human condition, such as crop production or new sources of energy. Experimental development is systematic work directed to producing new materials, devices, systems, and services. Companies may also provide research consulting or technical support services.
Global spending on research and development, a demand driver for scientific research services, is about $2.5 trillion. Global R&D investment has been growing steadily over the last several years, with the US leading the charge. Other top spending countries include EU, China, Japan, Germany, and South Korea, according to the National Center for Science and Engineering Statistics.
The US scientific research and development services industry includes about 19,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $160 billion.
COMPETITIVE LANDSCAPE
Demand is driven by government and commercial investment in science and technology. The profitability of individual companies depends on the discovery of potentially useful or marketable new products. Large companies can compete by employing scientists across several disciplines and taking advantage of economies of scale; they can also compete by managing government research operations. Small companies can compete by focusing on their expertise in a single specialty. The US industry is fragmented: the top 50 companies account for about 40% of revenue.
The prospect of patentable -- and potentially lucrative -- discoveries through research into scientific processes motivates new companies to join the industry. Companies often compete for research funding such as government grants or commercial contracts.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major services include three main categories: medical and health sciences (about 30% of industry revenue); engineering and technology (about 30%); and natural and exact sciences (about 20%). In addition, some companies in the industry generate revenue from government and private contributions, gifts, and grants. Companies are often affiliated with major research universities or use a line of research begun at a university. The industry also includes research divisions of major manufacturers such as Nestlé, Roche, DuPont, and IBM, as well as contract research organizations (CROs) that conduct research on behalf of manufacturers.
The goal of R&D is twofold: to develop new products and to expand scientific knowledge. Both of these goals have at their heart the need to create new products or processes that improve on or supplant existing technology. In some cases, research will change technology so completely that it changes the way the humans interact with the world (medicine, nuclear technology).
Leading fields of research include pharmaceuticals, medical care, computers, and electronics. Other fields of research range from agriculture, oceanography, and human genetics (life sciences) to industry, space, and defense (physical and engineering sciences) and from cellular and biomolecular processes (biotechnology) to education, economics, and psychology (social science and humanities).
Companies conduct basic research, applied research, or experimental development (R&D). In basic research, scientists develop theories and test hypotheses to answer central scientific questions. Such research is usually not conducted with an eye toward commercialization. It is sometimes called “pure” research. Applied research takes scientific knowledge and applies these concepts toward solving a practical problem using empirical methodologies. This research typically is commissioned by a client and intended to improve processes or technologies that benefit the human condition, such as crop production or new sources of energy. Experimental development is systematic work directed to producing new materials, devices, systems, and services. Companies may also provide research consulting or technical support services.
Table of Contents
- Industry Overview
- Quarterly Industry Update
- Business Challenges
- Business Trends
- Industry Opportunities
- Call Preparation Questions
- Financial Information
- Industry Forecast
- Web Links and Acronyms
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