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opment. The first curve shows the magnitude of the industry as it moves through the three stages of R&D, expansion, and finally maturation. The second curve shows, in the first stage, the need for public (private and/or government) investment and actually a negative return on the investment. In the second stage the return becomes positive, and finally, in the third stage—i.e., in the sustainable growth mode—an endowment has been created. For most university and NGO research, reliance for funding (75–85 percent) is on the federal sector. The trend in these institutions was to use any discretionary R&D funds to provide seed funding for research leading to the development of a new proposal. More recently, however, the tendency is for more specific commercialization goals for any IR&D expenditures.

Finally, companies, however, rarely succeed or fail for minor or trivial reasons. The causes are usually substantial and are often self-evident, at least to an outsider. Typical reasons for failure generally include one or more key factors, i.e., that the enterprise was over-borrowed, its management was weak, the enterprise was involved in switching markets, governing or enabling laws changed, a major competitor expanded its business, or the enterprise never reinvested any of its earnings.


The Council for Entrepreneurial Development,1996. The Entrepreneur's Guide to Starting and Growing a Business in the Research Triangle.Research Triangle Park, N.C.

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