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this post was submitted on 22 Dec 2024
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Isn't it the lack of R&D that kills companies? It's possible to have too much R&D, but that pretty much only applies to startups.
What do you mean by "companies"? Tech companies? There's way more than that. Restaurants, insurance, real estate, farming, radio stations, schools, book publishing, auto parts dealer, grocery stores, nursing and medical home care, and on and on. What are they R&Ding that would drive them to bankruptcy?
I get the sense OP meant tech companies but didn't say that. That drastically changes their argument/question. It's still quite the claim. Massive amounts of R&D $ is fine so long as there's a way to get it back.
A big mismatch in R&D$ in and profit out is a problem that could lead to bankruptcy. But the $ spent on R&D isn't the root cause, the next "why" is the poor financial management and poor market research that led the company to make bad R&D investments.
It's what they're not R&Ding that would cause them to not be competitive and thus go bankrupt:
Pretty much every company needs to innovate or they'll get outcompeted, that's the way market economies work. The only companies that don't need to innovate are monopolies, and we generally oppose those because stagnation isn't good.
If we're going to call those R&D (which I have a difficult time calling marketing that but fine for sake of moving discussion further), we loop back to cause of bankruptcy. If a restaurant goes bankrupt from sinking too much $ into developing new recipes, or an insurance company on too much marketing, that's not a cost of R&D problem, that's a mismanagement problem.
So to OPs question of how to make R&D affordable, the answer is to not make stupid investments in excessive R&D that is poorly understood for how likely it is to return the investment. Study the market, identify and mitigate the risks, manage a budget, don't get caught up in the VC tech bubble mindset of "innovate or die" because that is a catchphrase and not an actual business management technique.
Are we getting off track? I think so. My initial point to OP was 1) I don't believe most bankruptcies are caused by R&D investments. And if I'm wrong on that point and it really is as OP says 2) some really stupid business people need to learn not to take so many big risks that they can't survive when the risks materialize.