Should R&D be banned during recession


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Should R&D be banned during recession

  1. 1.  Submitted To  Submitted ByMr. Harsh Arsh Koul
  2. 2.  Deflation or Recession is a persistent decrease in the level of consumer prices or a persistent increase in the purchasing power of money because of a reduction in available currency and credit. It is a situation in which prices and money incomes are falling, accompanied by an increase in the value of the monetary unit. Deflation happens when too less money chases too much goods.
  3. 3.  The subprime mortgage crisis led to the collapse of the United States housing bubble. Falling housing- related assets contributed to a global financial crisis, even as oil and food prices soared. The crisis led to the failure or collapse of many of the United States largest financial institutions: Bear Stearns, Fannie Mae, Freddie Mac, Lehman Brothers and AIG, as well as a crisis in the automobile industry. The government responded with an unprecedented $700 billion bank bailout and $787 billion fiscal stimulus package. The National Bureau of Economic Research declared the end of this recession over a year after the end date.
  4. 4.  Fall in Durable consumer goods demand Freeze on new recruitments Job cuts and pay cuts Unsold houses (Foreclosures) Bankruptcies Stock market slide and falling investor confidence Decrease in business investment. 4
  5. 5.  According to Organization for Economic Co- operation and Development "creative work undertaken on a systematic basis in order to increase the stock of knowledge, including knowledge of man, culture and society, and the use of this stock of knowledge to devise new applications".
  6. 6.  Research and Development should not be stopped during recession , as in the long run it increases the shareholders value It all depends on the stage where research and development is working. If we are working on the new product then it can help you to come out of recession but if it is a usual one then we should stop it.
  7. 7.  Spending cuts are not how a company can get out of recession. Increasing investment in Research and Development is important to develop innovative products More generally, the researchers found, with all else equal, in recessions the higher the firms market share, the more an increase in R&D spending increases its profits
  8. 8.  In recessions, firms are pressed to control costs to maintain liquidity; thus, R&D programs, which may have limited ability to increase short-term cash flow, receive close scrutiny. However, if a firm cuts its R&D spending in recessions, it risks losing its long-term technological advantage.
  9. 9.  Hyatt Corp Burger King: 1953 IHOP Corp LexisNexis is a research hub for the law, media FedEx Corp. began operations on April 17, 1973 Microsoft Corp. -1975 General Motors: 1908
  10. 10.  Wikipedia Foundation Inc. was born during the recent post-9/11 recession. Established in January 2001, the online encyclopedia had more than 100,000 entries by 2003 GE (General Electric Co.) was established in 1876 by famed American inventor Thomas Edison HP (Hewlett-Packard Development Company LP) was inauspiciously born in a Palo Alto garage at the end of the Great Depression