New-Product Research and Development: The Sequestered Stage of the Capital Structure

New product RD it is itself a three-stage process. It begins with the idea prospecting that leads to working prototypes. Next, comes productization—the conversion of working prototypes into products that can be manufactured with a reasonable prospect of being profitable. Finally, firms produce pre-launch inventories. This process often involves high-risk, not only due to the large amounts of time and capital investment, but also because of the...