Performance measurement of research and development activities

Purpose – This paper aims to study the problem of designing a Performance Measurement System (PMS) for R&D. In particular, it aims at investigating the influence exerted by the type of activity being measured (i.e. Basic and Applied Research or New Product Development) on the design of the PMS constitutive elements. Design/methodology/approach – First, a literature review made it possible to build a theoretical model that identifies the constitutive elements of the PMS for R&D. Second, a survey involving 129 Italian firms (with a response rate of 33 per cent) was performed to unearth a number of similarities and differences between PMSs used in Research and New Product Development settings. Finally, a follow‐up multiple case study investigation made it possible to understand the reason underlying the dissimilarities which emerged from the survey. Findings – The analysis suggests that a specialisation of the performance measurement practices in research and development is pursued by the Italian firms in the sample, especially when a number of conditions are in place (e.g. high level of uncertainty in R&D, availability of resources, organisational separation between the research and development functions). Research limitations/implications – The empirical analyses reported here focus on R&D‐intensive firms, because they invest more heavily in R&D and hence are more interested in measuring its performance. The generalisability of these results to other empirical settings is discussed and represents a promising avenue for future research. Practical implications – The paper provides R&D managers with a number of criteria they should employ to design more effective PMSs for the R&D activities for which they are responsible. Moreover, it suggests that designing and using two different PMSs for research and new product development can be a valuable alternative but only under specific circumstances. Originality/value – The paper is one of the first contributions that empirically assess the differences in the approaches employed to measure performance of research and new product development activities.