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An R&D company is a company that makes its money through the research and development of new ideas and products in any field. Such companies aim to both increase the overall body of human knowledge and to develop methods of using and capitalizing on such knowledge. Many companies engage in research and development work, as new and improved products and ideas are essential in business. An R&D company will, for this reason, usually pour a great many resources into the production of new products, allowing the company to compete with the many other companies that are almost certainly doing the same thing. Research and development work is unique in business because it puts immediate profits aside and focuses in improving the company and insuring future profits.
While a company is seldom strictly an R&D company, many companies have R&D departments that work to improve existing products and come up with new products and ideas. Not only businesses are involved in R&D work, though; universities and governments devote large amounts of money and manpower to the pursuit and application of knowledge. They do this for several different reasons, from searching for cures to diseases and disorders to developing new, more effective weapon systems.
Many believe that it is risky to invest in an R&D company because of the amount of money that is spent on trying to form new products and ideas compared to the amount that is earned on existing products. Sometimes, R&D companies simply don't succeed in making any kind of breakthrough that leads to a truly profitable idea. On the other hand, research and development work has led to some major advancements that have made companies and investors quite wealthy. Without those willing to risk their money on the ideas and plans of R&D companies, many of the technological breakthroughs people enjoy on a daily basis would likely be nonexistent.
One of the biggest industries that utilizes research and development work is the pharmaceutical industry. Any pharmaceutical R&D company is likely to be constantly seeking new ways to treat any of the millions of ailments that people suffer from on a daily basis. Some companies work to find better ways to deal with the common cold, while others search for the cures to many different types of cancer. New breakthroughs can lead to new drugs, and new drugs lead to more money for the company, especially when they are for use against common ailments.