Why Open R&D Center and Where?

Qubit Labs
Qubit Labs Team

What is an R&D Center?

Although there is an opinion that the R&D Center is a term related to big companies and enterprises, this is not entirely true. Actually, startups and small and medium-sized businesses also take advantage of building R&D centers. However, before moving further on the topic, let’s see what R&D stands for.

The R&D center is an office that focuses on delivering computer programming services. It is usually located in an offshoring or nearshoring country. In general, R&D stands for research and development. However, when it comes to IT and business, it is more about investigating while aiming to create a unique product or service or improve those that already exist.

R&D center enables companies to establish their company’s department in any country they find prospective for their business development. Such an offshore office allows for scaling the services and products and reaching new markets while working in a favorable business climate. Many vendors, like Qubit Labs, help establish development hubs because your team will consist of several people responsible for their specific tasks, and you will need to take care of the office and other management-related tasks. With a vendor, the accountability for the mentioned processes lies in it.

One of the notable features of an R&D center is that you can change your team’s size at any time. Also, despite being located in different countries, offshore development centers report directly to the head office because, in fact, they are the same company. Although the vendor takes care of recruitment, office management, and accounting, the programmers’ team works independently of it, being controlled by the head office. Now, as we have explained what R&D means, let’s take a look at some of its advantages.

Benefits of Building an R&D Center

As we have already mentioned, you don’t have to be a large corporation to leverage R&D centers to become recognized and competitive in the market. Actually, it is believed that in the modern IT world, you can’t go without investing in the R&D center if you want to stay one step ahead of technological progress. It is an integral component of innovation and a key factor in developing up-to-date solutions. When it comes to the question “What does R&D mean in business,” one can’t fully address it without doing a quick recap of the values it brings to the company. Thus, here are a couple of its uses.

Higher incomes over the course of time

This point comes straight from the question, “What does R&D stand for in business?” because these are the research and development that help companies develop ground-breaking products and services or updated solutions for existing projects. Further, it comes down to winning the customers’ loyalty and interest by presenting innovative developments before the competitors do. If the audience considers your services and products forward-looking, be confident your revenue will increase after a while.

Collaboration

Having a skilled developer team is great, but having two of them is superb. When combining knowledge, expertise, cultural peculiarities, and different points of view with shared values and an understanding of the ultimate goal, the head office and the R&D center can come up with ideas that will impress the market. As they say, “action is in interaction,” so access to the pool of talents will make your services and products excel.

Innovative marketing strategies

As we already know what R&D stands for, it is crucial to understand how your offshore development center can enter the market and raise brand awareness. By standing out among similar companies, you can attract investors or get public funding by receiving industry-specific grants. Moreover, when you have a recognizable brand and office, you will draw professional developers’ attention.

Spending cuts

If your head office is located in the US or, say, Western Europe, you will have to pay the developers multiple times higher salaries than those from Eastern Europe or Asia. In addition to the two basic concepts R&D stands for, it also implies transferring your projects to a country with lower salaries and operational costs. Also, with such an office, you can plan the budget and have transparency at each cooperation level.

Top Locations to Open R&D Center and Set Up Your Team

Even the leading tech companies don’t mind saving costs on their software development because they understand what R&D means in business and how it can optimize their projects financially. However, it is not only about the location but also about finding specialists whose skills and experience will match your company’s needs and expectations. Besides, even if the workforce in a certain country is much cheaper than in another one, keep in mind the travel time and accessibility. Sometimes, it is more effective to have a meeting in person rather than via video chat, so check whether you can easily travel to the chosen location. Also, consider tax policies and political implications. Let’s elaborate on the most popular destinations for outsourcing R&D centers to facilitate your decision.

 

Poland

In 2024, Poland will be one of the most prominent locations to open an R&D center. The country has a large talent pool because thousands of talented specialists graduate from local universities each year. The salaries in Poland are much lower than in neighboring Germany and Lithuania.

Ukraine

Ukrainian developers are considered among the most skilled and experienced specialists in the world. All thanks to their deep knowledge in AI, big data, blockchain, and emerging trends. Moreover, this country has one of the most innovative economies, and many international companies have established their R&D centers there.

 

India

India is one of the sought-after software development services providers mainly for its low salaries, compared to American ones, and enormous human resources capacity. Its labor market is full of relatively competent and tech-savvy specialists who know English and demand reasonable salaries.

 

USA

Any person who understands what R&D stands for in business would say that the US is the country in which you have to be ready to spend big sums of money on your software development. Although there are top-notch professionals who have vast experience in the area, often, huge competition and too high prices are the reasons why local R&D centers often never achieve set goals.

 

How do world-known Corporations Make Use of Opening R&D in Nearshore Countries?

As we have already tackled the question “What does R&D mean in business,” it won’t be hard to understand why tech giants spend their money and resources on research and development. Namely, in this way, they explore the market and determine what trends will b

e on top in the future. Thorough research enables them to stay ahead of their competitors and be the trendsetters themselves. It is not surprising that the US is the country with the highest R&D spendings in the world. As for the companies that are leading in the R&D expenditure in the world, Amazon is in the first place, having spent about $22,6 billion in 2018. The examples of global corporations that benefit from establishing R&D centers are the following:

  • Amazon
  • Google
  • Samsung
  • Intel Co
  • Microsoft
  • Apple
  • Oracle
  • Siemens
  • Cisco

Thus, if these top corporations see the prospects of having an R&D center, startups and small and medium-sized businesses can take their experiences into account and apply them when opening their own offices in foreign countries.

 

What Do You Need to Open an R&D Center?

How To Open R&D Center

Create a team of like-minded people

Cooperating with employees who can generate new ideas and listen to each team member to find perfect solutions is essential. You should engage your employees to think outside the box and not be afraid to share opinions that might differ from other people’s points of view. When addressing the question “What does R&D stand for in business,” it is crucial to clarify that it’s not only about research and development but also creativity and diversity.

 

Define your goals and set a plan

If a team clearly understands in what direction it has to move, it is easier for its members to come up with new products and services. Ensure the communication with your team is smooth, and there aren’t any unanswered questions. Give feedback on the results and guide the developers in the necessary direction.

 

Form a budget

Nobody likes an unexpected loss, so you must set a sum you are ready to spend on research and development. However, you still have to make the budget flexible in case the team comes up with a unique solution that must be immediately considered. A project manager who will keep the budget on track and monitor the team’s progress is also necessary.

 

Have regular meetings

Regarding innovations, you should understand that the team must be on the same wavelength. The developers shouldn’t be afraid to speak up about their ideas, so try to support communication and organize brainstorming sessions, so your team understands its efforts are valued.

 

Give your team independence

If you are afraid of mistakes, you shouldn’t be. Even the most experienced developers might do something that will have negative outcomes. However, the most outstanding ideas are made through trial and error. Take mistakes easy, and don’t try to control each step of the team. Trust your coworkers, and they will push their creative boundaries.

 

Why Should You Open an R&D Center in Eastern Europe?

Ukrainian, Polish, and Romanian intellectual assets are attractive to many world-known companies, making these countries competitive players in R&D centers. They have vast potential and impressive experience working with tech giants and receiving positive feedback regarding their products and services. Some of the most popular companies that have established their R&D centers in Eastern Europe include:

  • Google
  • Amazon
  • Microsoft
  • Apple
  • Samsung
  • Oracle
  • Reddit
  • Rakuten (Viber)
  • Netcracker

Eastern Europe boasts a large number of successful startups, among which are Grammarly, Preply, Petcube, Readdle, Talkable, Allset, and People.ai. These startups turned into recognized companies with high revenues thanks to the talent of local developers. You can easily find programmers who specialize in any technology because there are hundreds of thousands of professionals.

Another benefit of having a development hub in Eastern Europe is its simple tax system and economic level, which implies lower salaries for the developers. Also, local programmers have advanced levels of English and higher degrees, which makes foreign companies confident in their reliability and expertise. European developers’ mentality is similar to Western, so there won’t be any issues in communication, and you will easily find common ground.

Although the time difference between the US and Poland is 6 hours, it is not a constraint but an opportunity to look at the project from another perspective. It might be challenging to synchronize the processes, but the head office developers and the R&D center will still cooperate effectively despite time zones. If you want to visit your R&D office, there won’t be any transportation problems because the country has a well-developed infrastructure.

Therefore, we have explained what R&D stands for and defined the benefits, locations, and steps regarding opening a research and development center. As mentioned in the last part of this article, Eastern Europe is one of the best locations for setting up an R&D center because local developers and their attitude towards projects can bring outstanding innovations.

If you’re looking for a vendor to help you establish a development hub in Eastern Europe, Qubit Labs will be glad to help you. Feel free to contact us to schedule a consultation.

 

Related Articles:

Ukraine as Emerging R&D Center

How Can Startups Benefit From Offshore Development?

Remote Hiring Guide

What are the main advantages of IT outstaffing?

Why Outstaffing and Outsourcing in Ukraine?

Top Software Development Metrics To Increase The Projects’ Success

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