Page 5: Challenges and benefits of R&D
The challenges of a typical R&D process include:
- large costs – of people, time and equipment
- long timescales – for example in the pharmaceutical industry it can take as long as 10-20 years to complete full testing
- high risk – difficulties in anticipating changing market and consumer needs over the duration of R&D projects, which leads to uncertain outcomes.
ARM meets these challenges and reduces the potential risk of its projects by:
- working with lead partners to understand what is technically possible
- listening to what its customers and their customers are asking for
- managing timescales by adjusting the team size and ensuring the right skills are in place in order to deliver on time.
Challenges to R&D at ARM are mainly technical or economic. Moore’s Law describes the shrinking process of technology. Moore's Law is named after Intel co-founder Gordon E. Moore and predicts that the number of transistors on an integrated circuit (and therefore its performance and capability) will double approximately every two years. The law is used in the semiconductor industry to guide long-term planning and to set targets for research and development.
However, it is not possible to shrink things forever and the smaller technology gets, the more complex microchips become. As technology becomes more complex, ARM requires more people to carry out the work. As chips get more complex, the skills required for the work are more intricate.
This human element becomes a real challenge for ARM due to the specialist nature of the work teamed with a global skills shortage. It also brings challenges of communication between stakeholders because of the mix of geography, culture and time zones within which ARM operates.
Ongoing need for skills
ARM has a continual challenge in recruiting skilled people. It has ongoing recruitment and offers internships each year to attract the best skills. It has employed around 400-500 people in the last year. ARM provides an exciting, collaborative and team-based environment.
Training for new graduates involves rotation across several projects to develop skills rapidly. Although needing very high levels of skills to enter the business, once in the organisation, ARM people are highly employable.
ARM’s approach to R&D delivers significant competitive advantage. Its unique, world-leading products and technology enhance the business’ reputation and ongoing research generates opportunities which keep its product pipeline strong. ARM’s business model enables the business to gain the potential to earn future income over many years from licensing its intellectual property.