it is adviced to spend less on these research so that cash outflow would also be reduced , however , if the economy recovers, sales might be damaged .
There are arguments on both sides of this issue. Read any business magazine/website like Harvard Business or Business Week and there are many articles on the subject. The common is wisdom, however, is to not stop product development during a recession. You may not be able to do big projects but you should keep momentum. From a personal perspective, it isn’t healthy emotionally for you and your co-workers to stand still. It creates a depressing atmosphere where creativity will wilt and die. Try to choose smart projects that you can afford to implement.
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"If the economy recovers." That’s a big if. Companies would all love to get a big jump on the competition as soon as the economy picks up, but in a prolonged recession it just isn’t feesible to spend as much on research as you would during normal economic times or even a brief economic downturn. If a recession is prolonged, customers will tend to stay away no matter how much research is put in. Therefore, a company may have to wait a long time before they see any benefits of their extra spending on product development and research. If they have to wait too long, they could go bankrupt.
References :
Taken a few economics classes.
There are arguments on both sides of this issue. Read any business magazine/website like Harvard Business or Business Week and there are many articles on the subject. The common is wisdom, however, is to not stop product development during a recession. You may not be able to do big projects but you should keep momentum. From a personal perspective, it isn’t healthy emotionally for you and your co-workers to stand still. It creates a depressing atmosphere where creativity will wilt and die. Try to choose smart projects that you can afford to implement.
References :