R&D project termination in high-tech industries

Based on extensive data on 51 R and D projects in high-tech companies, a discriminant analysis produced 16 factors which discriminated the decision to continue or terminate a project in the development phase. The most important discriminating variables were found to be the strategic (the extent to which the project conformed to corporate, economic, and marketing objectives) parameters of the high-technology research environment. Specifically, high rates of product turnover, high market share, and small size were found to lead to continuations, whereas infancy stage product life cycle and innovative versus aligned strategy led to terminations. In contrast to high-tech firms, `non-high-tech´ projects were found to have greater potential for continuation where product turnover was low and projects had limited focused end uses offering sizable profit margins.