The article considers the problems of R&D-quality costs management tools application in terms of entering new international markets. In the context of globalization of national economies, a key factor in the economic growth of any country is to ensure the sustainability and efficiency of innovation processes in enterprises. A necessary prerequisite for innovative activities of enterprises are R&D activities, for the conduct of which enterprises need certain resources, which ultimately identifies focus of research on R&D-quality costs management. The studied problem is widely discussed in Ukraine given the current geopolitical and socioeconomic transformation. The article considers the current specifics of the problems that arise in enterprises which apply various tools to manage the cost of R&D quality in terms of entering new international markets. The main tools, features and problems in the process of R&D-quality costs management tools application, the level of support for innovation by business entities and research are analyzed. Trend models based on indicators of Ukrainian enterprises performing R&D activities are built. Private R&D, Research and Development Activities; Research and Development Costs; COLINS-2021: 5th International Conference on Computational Linguistics and Intelligent Systems, April 22-23, 2021, Kharkiv, Ukraine 0000-0002-3301-3495 (T.Pihniak,); 0000-0002-7373-0472 (A.Selskyi); 0000-0002-8726-509X (I. Grybyk)
The current state of the global environment is undergoing continuous and dynamic changes, while the problem of depletion of material economic resources remains particularly relevant, forcing countries to apply non-standard innovative, and to some extent, radical solutions. The main focus of most countries remains on ensuring sustainable development, which in turn depends on maintaining constant growth in international markets for innovative products, goods, processes, and services. This indicates that the determining factor in the economic growth of any country is to maintain a consistently high level of innovation through research and development. In order to implement such state policy in the field of entrepreneurship as a driving force of innovation processes in a competitive environment, it is necessary to effectively manage available resources and costs of innovation.
The problem of applying cost management tools for research and development (which are the main component of innovation costs of economic entities) is especially important for Ukraine, which is determined by the adaptation to the requirements of the European Economic Area, the achievement of regulatory standards for its competitiveness innovative development of enterprises. Given these circumstances, Ukrainian enterprises should become highly efficient economic units that are able to ORCID: 0000-0003-2403-0784 (M.
Bublyk); 0000-0001-8799-5087 (V.Mykhailov); 0000-0002-1721-7703 (Y. Matseliukh);
2021 Copyright for this paper by its authors. ensure a stable high level of economic growth through the development and implementation of innovative products by choosing economically effective cost management tools that will maximize the economic results of research and development and turn them to extremely profitable and successful developments.
The purpose of this work is to analyze the features and problems of enterprises using cost management tools for research and development in terms of entering new international markets and select those tools that will maximize the economic and technological results of scientific developments and research for enterprises, industries and countries.
In the context of global transformations of the world economy, the tendency to actualize the
problems of application and development of effective cost management tools is inherent in research
and publications, both for countries with economies in transition and for developed countries. The
main tools for managing R&D-quality costs are reflected in the works of many foreign scientists [
The value of cost management tools for research and development is revealed through the systematization of methods for estimating these costs, the calculation of performance indicators of this type of costs. Krush and Pashkov [33] divided the costs of R&D into internal and external for the company. The cost structuring mechanism is one of the methods of managing the efficiency of development and research costs. The process of structuring goes in search of the optimal ratio of component costs, which allows the company to achieve maximum financial results. Cost management aims to ensure control over the redistribution of enterprise resources intended for research and development, according to international standards.
The essence of the tools for managing the costs of enterprises for research and development is to constantly monitor the amount and structure of costs and ways to influence them. Cost management aims to reduce inefficient costs and prevent the impact of cost reduction on the deterioration of the quality of scientific and technical developments, underproduction of competitive innovative products, which is the result of development and research. Modern mechanisms for managing the cost of research and development are designed to achieve the planned level of competitiveness of enterprises in market conditions. The change in the cost structure caused by innovative processes will ensure greater cost efficiency of enterprises that actively participate in R&D [57].
A. Bin and others [
The method proposed by M. Shahsi-Niyai, Torabi and Iranmanesh [48] is used in conditions of uncertainty of the enterprise budget and uncertain availability of resources required for the research project. This model is to identify the problem of organizing the project with the lowest costs in a crisis situation and the urgent need for savings, reducing all types of losses on the accumulation of resources. It is based on the ranking of scientific developments by the ratio of their costs and economic benefits as a result of implementation and adoption of R&D ultimate results (e.g. new product or process).
The project portfolio decision-making method involves allocating a limited set of resources for
research and development in such a way as to balance risk and reward [
The state's support for innovation processes in enterprises is to provide them with resources, provide tax and personal benefits, which allows them to optimize the cost of research and development. There is a significant positive correlation between the intensity of research and development and the number of enterprises engaged in R&D activities. Creating a corporate network of such enterprises will help increase the efficiency of R&D [56].
Erdogan and Yamaltdinova [15] investigated the impact of R&D expenditures on the financial performance of Turkish firms in 2008-2017. It is established that the increase in R&D expenditures was a consequence of the increase in return on assets and equity. With this dependency, firms can change the share of R&D costs by purchasing additional assets.
Henriksen and Traynor [18] proposed a method for estimating R&D costs using scoring models for cost analysis. To manage the costs of research and development used a cost function that combines 2 factors - the value and cost of resources. The problem that arises in the process of applying this method is the reduction of scientific return and the return from the implementation of the program of scientific research and development (programmatic return).
Erdal and Geser [14] found a direct relationship between foreign direct investment on the level of R&D expenditure, the number of patents and the intensity of research and development on the example of 10 developing countries in Asia. R&D expenditure management under such conditions is possible by applying the method of cointegration and dynamic least squares. As foreign direct investment increased for the host country, R&D spending was reduced.
The cost management tool according to Limanley [36] is the influence on the determinants of enterprise costs for research and development. The problem with this method is that it can be effectively applied to the developer rather than at the planning stage. If the method is used by a large enterprise, then another problem of applying the method is the existence of a direct dependence of the market share of the enterprise on the level of R & D costs.
Afha and Lopez [
The problems that arise in the application of the tool for managing R & D costs, which is to reduce the time from research to market entry of innovative products while maintaining a constant level of costs by dividing research into discrete stages, which can be performed sequentially or in parallel, are low level of automation, access to information and insufficient level of staffing [17]. Karahan [20] proposed a tool for managing R&D costs, which is the integrated development of innovative products or processes that are complementary to each other. The problem which arises in the application of this method is the insufficient level of technical equipment.
The volumetric data analysis model was used to assess the efficiency and cost management of
R&D enterprises in ASEAN countries. A significant obstacle to the effective application of the
method is the problem of lack of effective new technologies [
For countries with low technical efficiency, the tool for managing R&D costs is the reduction of
research staff, the maintenance and salary of which is a significant share of R&D costs [
Gerashchenko [16] developed a mechanism for managing R&D costs by assessing the technical parameters of input resources and outputs, which avoids the cost of unpromising and inefficient research and development. Other analyzed tools for managing R&D costs are cooperation with venture firms, the creation and maintenance of research technology parks.
Chukhrai and others [
Change management is the process of finding and solving problems [37, 43]. Managing change
means moving from a problem state to a problem state. Three types of actions are involved in this
process: transformation, reduction and application [
However, the problems of applying cost management tools for research and development in terms of entering new international markets remain insufficiently studied.
Based on a study of the features and problems of application of tools to reduce the cost of development and research used in developed countries, it is established that they are all based on state support for innovation processes [21]. In particular, the United States does not include R&D expenditures related to trade and operating activities to the amount of taxable income. In the United Kingdom, R&D costs are deducted from the cost of products (services). In France, an effective tool was to provide a tax credit for the increase in development and research costs.
In addition to these tools to reduce the cost of development and research, it was found that for a long time a fairly effective mechanism were depreciation and tax benefits, which allowed to cover from 10 to 20% of total R&D costs in the United States. As a result of this mechanism, companies in the United States have focused their resources on conducting research and development with a rapid return on capital [83].
There are 4 groups of international standards of the World Intellectual Property Organization, which also include methods for evaluating research and development, estimating the cost of research and management methods. WIPO has developed 52 normative documents that contain requirements for standardization of research and development, of which 50 are actual standards related to the processes of design and implementation of development, creation of industrial (design) model, and 2 annexes to these standards. These standards include requirements for the preparation of documentation for the processing of information on the use of industrial property of enterprises, the preparation and execution of patent information and patent documents, the creation and registration of documentation on trademarks [55].
In accordance with international and national standards for the evaluation of innovation and technological projects, including research and development, there are 4 methods of evaluation revenue, market, cost and combined [32]. Evaluation of innovation and technological projects includes methods and tools that take into account various parameters of innovation activities of enterprises, including such a category as costs. It is in this direction - the analysis and evaluation of the costs of innovation projects, which in turn include the cost of research and development, using the cost method of evaluation.
Features of the application of cost management tools are given in Table 1.
Table 2 lists the advantages and disadvantages of tools and methods for managing R&D costs.
In 2015 in Ukraine, the amount of expenditures on research carried out by organizations at their own expense amounted to 12224.9 million UAH, including labor costs - 5483.0 million UAH, material costs - 2472.0 million UAH , capital costs - 340.8 million UAH, of which the cost of purchasing equipment - 285.5 million UAH.
In 2018 the total amount of expenditures for research in Ukraine at the own expense of organizations amounted to 16773.7 million UAH, including labor costs - 8553.0 million UAH, other current expenses - 7456.3 million UAH, capital expenditures - 764 , UAH 4 million, of which the cost of purchasing equipment - UAH 588.0 million (State Statistics Service, 2020a).
The dynamics of costs for research and development for the period from 2010 to 2019 is described by the linear equation y = 1001.9x + 6061.5. From the graph we can conclude that the volume of R&D expenditures increased throughout the study period and according to the trend, the positive growth dynamics is projected to continue. The coefficient of determination is R^2=0.8714, which indicates the presence of a close relationship and the continuation of the upward trend in future periods. With the help of the trend line the forecast for the next 3 periods is made. With the help of the trend line the forecast for the next 3 periods is made. The graph shows that, given the current trend, the total cost of research and development will increase in each of these three forecast periods. 25000 20000 1no5000 i l l i m 1AH0000 U 5000 0 y = 1001,9x + 6061,5
R² = 0,8714 16773,717254,6
The next step in analyzing the costs of Ukrainian enterprises in R & D is to study the dynamics of the share of components of the costs of enterprises in R&D. For this purpose, the share of components of R&D expenditures of Ukrainian enterprises for the period 2010-2019 is calculated. The results are given in table 4.
To better reflect the dynamics of relative indicators, it is advisable to give the dynamics of the share of R&D expenditure by their components graphically (Fig.2).
70 60 40
% 30 20 10 0
59,824055785,488560799 53,558085146,371146245 54,499115463,331635872,225139963 5053,566625627,8842575705,785850062 y = 0,5854x + 51,923
R² = 0,4064 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Years basic research applied research scientific and technical (experimental) developments Линейная (scientific and technical (experimental) developments)
Based on the graph data, we can conclude that the connection between the constructed trend line and the actual data on the dynamics of scientific and technical experimental developments, which were and remain the main and most significant element of R&D costs of Ukrainian enterprises. The value of the coefficient of determination R² = 0.4064 indicates that there is a low probability that this indicator will show positive growth dynamics in the next 3 years for which the forecast is made, it also indicates the existence of external factors that cause deviations from the trend line. Based on the time series of the share of scientific and technical (experimental) costs as part of the total costs of enterprises in the research and development, a trend line is constructed, which is described by the linear equation y = 0.5854x + 51.923. It is obvious that the basis and prerequisite for the implementation and development of research and development in enterprises of all industries in Ukraine is the growth of all components of the cost of research. The basis for scientific and technical experimental development is basic and applied research, in addition, all elements of research and development of enterprises are interconnected and complementary. It is the indicators of expenditures of Ukrainian enterprises on applied and basic research that did not have a clear pattern during the study period. This in turn led to their reduction and insufficient funding to maintain the regulatory and target level for enterprises, which resulted in uncertainty about the cost of the main element of research and development of enterprises - the cost of experimental development and the inability to accurately predict their future situation. periods.
Industrial enterprises are the largest centers of research and development among all business entities, and the most active users of the results of their own and external developments. Table 5 shows the dynamics of costs of industrial enterprises in the R&D for the period 2010-2019.
To clearly demonstrate the change in R&D costs during the study period, it is advisable to display this time series graphically (Fig. 3).
According to the graph, we can conclude that the coefficient of determination R² = 0.9225, which indicates a close relationship between the time series of costs of industrial enterprises of Ukraine in the GDR with a trend line based on these data, which is described by the linear equation y = 241.3x + 618.88, and a forecast for 3 future periods. That is, the cost of industrial enterprises in the GDR will increase in the next 3 years (2020-2022). The correlation coefficient between the time series of internal costs of enterprises in the GDR and total costs is 0.99891, which indicates a direct relationship between these indicators, which leads to the conclusion that the total cost of industrial enterprises in the GDR by 99.891% depends on the cost of internal research and development. The graph shows that the volume of total and internal expenditures of enterprises on R&D tended to increase during the analyzed period. 2039,5 2457,8 2169,8 3208,8 2918,9
The correlation coefficient between the time series of total and external R&D expenditures is calculated, the value of the coefficient is 0.66211, which indicates a slight impact on the total R&D expenditures. Throughout the study period, the share of internal expenditures in total R&D expenditures exceeded 75%.
Thus, in the process of entering companies in new international markets there were problems with the use of cost management tools such as:
1) the problem of organizing the project with the lowest costs in a crisis situation and the urgent need for savings, reduction of all types of costs and accumulation of resources;
2) complex interdependencies between research projects and available resources, which complicates the choice of tools to find the optimal point between the level of costs and the effectiveness of scientific development;
3) reduction of scientific return and return from the implementation of the program of scientific developments (programmatic return);
4) the problem of inefficiency of cost management by the method of influencing the determinants of costs in the enterprise, which does not carry out actual research and development;
A study of statistical data on R&D expenditures by Ukrainian enterprises showed that research and development in the last 10 years have been the most important element in ensuring innovative and economic development of enterprises, and in the next 3 years their steady growth is projected. The costs of enterprises for applied and fundamental research were a determining factor in the implementation of scientific and technical developments by enterprises. However, the insufficient level of funding for basic and applied research and development had a negative impact on experimental development. Thus, it is impossible to predict the dynamics of volumes and costs of experimental research in the next 3 years.
In contrast, during 2010-2019 there was a tendency to increase the total cost of research of industrial enterprises, which indicates the key role of Ukrainian industry in its innovative development strategy. The increase in total R&D expenditures at industrial enterprises was due to the growth of internal R&D expenditures of these enterprises, the share of internal expenditures in total R&D expenditures exceeded 75%.
The results of the study show that the cost of research and development is a key indicator that should be effectively managed in order to increase the volume of R & D and ensure higher rates of innovative development of enterprises.
Prospects for further research will be to identify ways to intensify and stimulate innovation in industry, as well as other sectors of the economy (services and agriculture) and methods of managing the costs of enterprises in R & D in terms of innovation development strategy.
[14] L. Erdal, İ. Göçer, The Effects of Foreign Direct Investment on R&D and Innovations: Panel Data Analysis for Developing Asian Countries, Procedia - Social and Behavioral Sciences 195 (2015) 749-758. doi:10.1016/j.sbspro.2015.06.469. [15] M. Erdogan, A. Yamaltdinova, A Panel Study of the Impact of R&D on Financial Performance: Evidence from an Emerging Market, Procedia Computer Science 158 (2019) 541-545. doi:10.1016/j.procs.2019.09.087. [16] І. Gerashchenko, ed. Educational and methodical manual on the subject "Innovative potential of the enterprise", NTU "KhPI", Kharkiv, 2017. [17] F. Giedziella, G. Walther, An Integrated Decision Support System Considering Interdependencies Between Time-to-Market and Market Diffusion under Competition, Procedia CIRP 51 (2016) 63-71. doi:10.1016/j.procir.2016.05.044 [18] A. P. Henriksen, A. J. Traynor, A Practical R&D Project-Selection Scoring Tool. IEEE
Transactions on Engineering Management, 46 (1999) 158-170. doi:10.1109/17.759144. [19] Y. Kalmykova, M. Sadagopan and L. Rosado, Circular economy – From review of theories and practices to development of implementation tools, Resources, Conservation and Recycling135 (2018) 190-201. doi:org/10.1016/j.resconrec.2017.10.034. [20] Ö. Karahan, Intensity of Business Enterprise R&D Expenditure and High-Tech Specification in European Manufacturing Sector. Procedia - Social and Behavioral Sciences 195 (2015) 806-813. doi:10.1016/j.sbspro.2015.06.180. [21] V. Kasyanov, Foreign experience in managing the innovation potential of the economy and the possibility of its use in Ukraine, 2011, URL: https://mmi.fem.sumdu.edu.ua/sites/default/files/mmi2011_4_2_200_204.pdf. [22] J. Kirchherr, D. Reike and M. Hekkert, Conceptualizing the circular economy: An analysis of 114 definitions. Resources, Conservation and Recycling 127 (2017) 221-232. doi:10.1016/j.resconrec.2017.09.005. [23] Y. Kis, L. Chyrun, T. Tsymbaliak, L. Chyrun, Development of System for Managers Relationship Management with Customers, volume 1020 of Lecture Notes in Computational Intelligence and Decision Making, Springer-Verlag, London, 2020, pp. 405-421. [24] D. Koshtura, M. Bublyk, Y. Matseliukh, D. Dosyn, L. Chyrun, O. Lozynska, I. Karpov, I.
Peleshchak, M. Maslak, O. Sachenko, Analysis of the demand for bicycle use in a smart city based on machine learning, in: CEUR Workshop Proceedings, volume 2631, 2020, pp. 172-183.
URL:http://ceur-ws.org/Vol-2631/paper13.pdf. [25] J.P. Kotter, Leading Change: Why Transformation Efforts Fail, Harvard Business School Press,
Brighton, Cambridge, MA, 1995. [26] J.P. Kotter, The Heart of Change: Rea-life Stories of How People Change their Organisations,
Harvard Business School Press, Cambridge, MA, 2002. [27] J.P. Kotter, Accelerate!, Harvard Business School Press, Cambridge, MA, 2012. [28] J.P. Kotter, L.A. Schlesinger, Choosing Strategies for Change, Harvard Business School Press,
Cambridge, MA, 2008. [29] J.P. Kotter, Leading Change: Why Transformation Efforts Fail, Harvard Business School Press,
Cambridge, MA, 2007. [30] J.P. Kotter, The Organization of the Future: A New Model for a Faster-Moving World, 2015.
URL:https://www.bbvaopenmind.com/wp-content/uploads/2015/02/BBVA-OpenMind-TheOrganization-of-the-Future-A-New-Model-for-a-Faster-Moving-World-business.pdf. [31] J. P. Kotter, Accelerate: Building Strategic Agility for a Faster-Moving World, Harvard Business
School Press, Cambridge, MA, 2014. [32] V. Kozyk, O. Mrykhina, O. Koleschuk, T. Mirkunova, Substantiation of methodical approaches to cost estimation of innovative technologies, Technology Audit and Production Reserves, 3(4(41) (2018) 25–33. doi:10.15587/2312-8372.2018.134980. [33] P. Krush & S.Pashkov, The essence and cost structure of an industrial enterprise, Modern problems of economy and entrepreneurship 21 (2018) 150-159. URL: http://sbkeip.kpi.ua/article/download/120046/132668 [34] P. Kutsyk, R. Lupak, V. Kutsyk, A. Protsykevych, State Policy of the Investment Processes Development on the Market of IT Services: Analytical and Strategic Aspects of Implementation in Ukraine, Economic Annals-XXI 182 (3-4) (2020) 64-76. doi:10.21003/ea.V182-08 [35] O. Kuzmin, M. Bublyk, A. Shakhno, O. Korolenko, H. Lashkun, Innovative development of human capital in the conditions of globalization, in: E3S Web Conf., volume 166, 2020, pp. 13011. DOI: https://doi.org/10.1051/e3sconf/202016613011 [36] Ö. Limanlı, Determinants of R&D Investment Decision in Turkey, Procedia - Social and
Behavioral Sciences 195 (2015) 759-767. doi:10.1016/j.sbspro.2015.06.471. [37] V. Lytvyn, V. Vysotska, O. Veres, I. Rishnyak, H. Rishnyak, The Risk Management Modelling in Multi Project Environment, in: Proceedings of the Int. Conf. on Computer Sciences and Information Technologies, CSIT 2017, Lvivska Polytechnic Publishing House, Lviv, 2017, pp. 32-35. [38] V. Lytvyn, A. Kowalska-Styczen, D. Peleshko, T. Rak, V. Voloshyn, J. R. Noennig, V.
Vysotska, L. Nykolyshyn, H. Pryshchepa, Aviation Aircraft Planning System Project Development, in: Advances in Intelligent Systems and Computing IV, volume 1080, Springer, Cham, 2018, pp. 315-348. [39] V. Lytvyn, V. Vysotska, L. Chyrun, L. Chyrun, Distance Learning Method for Modern Youth Promotion and Involvement in Independent Scientific Researches, in: Proceedings of the IEEE First Int. Conf. on Data Stream Mining & Processing, DSMP 2016, pp. 269-274. [40] Y. Matseliukh, V. Vysotska, M. Bublyk, Intelligent system of visual simulation of passenger flows, in: CEUR Workshop Proceedings, volume 2604, 2020, pp. 906-916. URL: http://ceurws.org/Vol-2604/paper60.pdf [41] M.O. Medykovskyy, M.S. Pasyeka, N.M. Pasyeka, O.B. Turchyn, Scientific research of life cycle perfomance of information technology, in: Proceedings of the Int. Conf. on Computer Sciences and Information Technologies, CSIT 2017, Lvivska Polytechnic Publishing House, Lviv, 2017, pp.425-428. [42] L. Podlesna, M. Bublyk, I. Grybyk, Y. Matseliukh, Y. Burov, P. Kravets, O. Lozynska, I.
Karpov, I. Peleshchak, R. Peleshchak, Optimization model of the buses number on the route based on queueing theory in a smart city, in: CEUR Workshop Proceedings, volume 2631, 2020, pp. 502-515. URL: http://ceur-ws.org/Vol-2631/paper37.pdf. [43] I. Rishnyak, O. Veres, V. Lytvyn, M. Bublyk, I. Karpov, V. Vysotska, V. Panasyuk, Implementation models application for IT project risk management, in: CEUR Workshop Proceedings, volume 2805, 2020, pp. 102-117. URL: http://ceur-ws.org/Vol2805/paper.pdf [44] S. Sachenko, O. Chereshnyuk, V. Panasyuk, A. Banasik, I. Golyash, Fuzzy-multiple Approach in Choosing the Optimal Term for Implementing the Innovative Project, in: Proceedings of the Int. conf. on Intelligent Data Acquisition and Advanced Computing Systems: Technology and Applications, 2017, pp. 533-537. [45] S. Sachenko, S. Rippa, Y. Krupka, Pre-Conditions of Ontological Approaches Application for Knowledge Management in Accounting , in: Proceedings of the Int. Workshop on Аntelligent Data Acquisition and Advanced Computing Systems: Technology and Applications, 2009, pp. 605-608. [46] N. Shakhovska, V. Vysotska, L. Chyrun, Features of E-Learning Realization Using Virtual Research Laboratory, in: Proceedings of the Int. Conf. on Computer Sciences and Information Technologies, CSIT 2016, Lvivska Polytechnic Publishing House, Lviv, 2016, pp. 143–148. [47] N. Shakhovska, V. Vysotska, L. Chyrun, Intelligent Systems Design of Distance Learning Realization for Modern Youth Promotion and Involvement in Independent Scientific Researches, in: Advances in Intelligent Systems and Computing, volume 512, Springer International Publishing AG, 2017, pp. 175–198. [48] M. Shakhsi-Niaei, S.A. Torabi, and S.H. Iranmanesh, A comprehensive framework for project selection problem under uncertainty and real-world constraints, Computers & Industrial Engineering 61 (2011) 226-237. doi:10.1016/j.cie.2011.03.015 [49] O. Soprun, M. Bublyk, Y. Matseliukh, V. Andrunyk, L. Chyrun, I. Dyyak, A. Yakovlev, M.
Emmerich, O. Osolinsky, A. Sachenko, Forecasting temperatures of a synchronous motor with permanent magnets using machine learning, in: CEUR Workshop Proceedings, volume 2631, 2020, pp. 95-120. URL: http://ceur-ws.org/Vol-2631/paper8.pdf. [50] State Statistics Service, ukrastat.gov.ua, Expenditures for research and development by type of work for 2010-2019, 2020. URL:http://ukrstat.gov.ua/operativ/operativ2017/ni/vvndr_vr/ vvndr_vr_u.htm.