Abstract
This article focuses on indicators of company level R&D investment in view of business management. As usual, R&D investment decision making is based on previous amounts spent ratio of R&D investment to sales, and political intention. In addition, few companies implement quantitative pre-evaluation of R&D investment because measurement of performance itself and economic contribution is very difficult. Moreover, it is made more and more difficult by the change in circumstances in R&D activities, such as emergence of technology fields based on science, product lifecycle shortage, concurrent engineering, and so on. Particularly, treatment of expanding multi- (or pan-) purpose research activities, like basic and exploratory research or software development, affects the evaluation of R&D investment. Therefore contribution of R&D output to profit should be considered. The author recommends two indicators based on this idea for R&D investment management. They are; ratio of R&D investment that indirectly contributes to profit to R&D investment that directly contributes to profit; and OVI (Overall Value Index).
