Application of factor analysis for service R&D classification: A case study on the Korean ICT industry

摘要

This paper introduces an application of factor analysis for classifying and illuminating the nature of distinct dimensions of service research and development (R&D) which are difficult to examine due to the unique characteristics of services. The application is based upon the concept that firms would benefit from clarifying R&D and R&D-like activities to assist their R&D decision. Using principal component analysis (PCA) of factor analysis, a number of possibly correlated R&D activities is transformed into a smaller number of uncorrelated activities called principal components, and firms can identify the patterns of service R&D, express their similarities and differences, and develop its R&D portfolio. A case example for service R&D in the Korean ICT industry is provided.