An index of R&D productivity: To estimate R&D contribution for profit

Some indexes of R&D productivity have existed such as sales vs. R&D expense, operating income vs. R&D expense, and they are used for relative evaluation among competitors etc. Though top managements would like to know the contribution of R&D expense to sales and profit in a company, the above indexes are not satisfied for them. It is a issue to how R&D expense contributes sales and profit by using appropriate indexes. This paper presents an index of R&D productivity to use the R&D contribution for profit. At first, contribution profit is calculated and then, the contribution profit is divided to two parts, one is R&D, M contribution and the other is Non-R&D, M contribution. Finally, technology development/product development/research contribution becomes clear. As a result, contribution of R&D for profit is represented as an index of R&D productivity. It is important to compare current index with the past index of R&D productivity.