Applied Research

Applied research, as defined by the OECD's Frascati Manual, is an original investigation undertaken to acquire new knowledge, directed primarily towards a specific, practical aim or objective. It serves as the crucial bridge between basic research (pursuit of knowledge for its own sake) and experimental development (creating new products/processes). In enterprise risk management, applied research is a proactive tool to mitigate risks of technological obsolescence and market shifts. By generating novel technologies protectable as patents or trade secrets, it helps companies build a competitive moat and reduces the risk of being outmaneuvered by competitors. Its outcomes are typically prototypes, new methodologies, or systems that form the foundation for commercialization.

Enterprises can integrate applied research into ERM through these steps: 1. **Risk-Driven Agenda Setting:** Identify technological vulnerabilities based on risk analysis of market trends, regulatory changes, or supply chain weaknesses. For example, to mitigate carbon tax risks, a company can set a research goal to develop low-carbon manufacturing processes. 2. **Execution with IP Protection:** During the research phase, implement a trade secret management system aligned with Taiwan's Trade Secrets Act and ISO 27001 controls. This involves classifying and controlling access to critical data, designs, and know-how to prevent IP leakage. 3. **Validation and IP Strategy:** Upon completion, evaluate the commercial viability through a Proof of Concept (PoC) or Minimum Viable Product (MVP). Based on the outcome, decide on an IP strategy, such as patent filing or maintaining it as a trade secret, thereby converting R&D output into tangible intellectual capital. This approach has helped firms reduce supply chain risks by over 20% and secure key patents.

Taiwanese enterprises face three primary challenges: 1. **Resource Constraints & Short-Termism:** Many SMEs have limited R&D budgets and face pressure for immediate returns, making it difficult to invest in long-term research. The solution is to leverage government R&D grants and form strategic alliances with universities or research institutes like ITRI to share costs and risks. 2. **Academia-Industry Gap (The 'Valley of Death'):** A disconnect often exists between academic research and industry needs, hindering technology transfer. To overcome this, companies should establish dedicated technology manager roles to scout for promising academic innovations and create internal PoC funds to accelerate evaluation. 3. **Inadequate Trade Secret Protection:** A lack of awareness and robust processes for protecting trade secrets during the R&D phase leads to a high risk of IP leakage. The remedy is to implement a comprehensive management framework based on Taiwan's Trade Secrets Act and ISO 27001, starting with employee training and reinforced NDAs.

Winners Consulting specializes in applied research for Taiwan enterprises, delivering compliant management systems within 90 days. Free consultation: https://winners.com.tw/contact