R&D budget during recession

In general one of the first thing that is done during recession period is to cut R&d. Note the capital R and small d in R&d, this is to say that the research (R) is budget is impacted more than the development (d) budget. Most of the companies do this no matter what the industry experts say. The main reason given by the company to come up to this decision is that they don’t have any other option. Unfortunately, these decisions are taken in a hurry as most often management does not have the time to get into the detail. Cutting R&d budget may be the logical thing to do but has to be done with care keeping in mind the overall impact internally as well as the subsequent impact the company will have because of not doing enough R&d. If the revenues have decreased drastically than obviously to survive in market the expense and R&d budgets have to be cut. The sequence of R&d budget cuts could be- long term R&d investments (3 to 5 years), mid term R&d investments (2 to 3 years) and then short term R&d investments (1 to 2 years).