“All progress is born of inquiry. Doubt is often better than overconfidence, for it leads to inquiry, and inquiry leads to invention” is a famous Hudson Maxim in context of which the significance of research can well be understood. Increased amounts of research make progress possible. Research inculcates scientific and inductive thinking and it promotes the development of logical habits of thinking and organization.
Research provides the basis for nearly all government policies in our economic system. For instance, government’s budgets rest in part on an analysis of the needs and desires of the people and on the availability of revenues to meet these needs. The cost of needs has to be equated to probable revenues and this is a field where research is most needed. Through research we can devise alternative policies and can as well examine the consequences of each of these alternatives.
Decision-making may not be a part of research, but research certainly facilitates the decisions of the policy maker. Government has also to chalk out programs for dealing with all facets of the country’s existence and most of these will be related directly or indirectly to economic conditions. The plight of cultivators, the problems of big and small business and industry, working conditions, trade union activities, the problems of distribution, even the size and nature of defense services are matters requiring research. Thus, research is considered necessary with regard to the allocation of nation’s resources. Another area in government, where research is necessary, is collecting information on the economic and social structure of the nation.
Such information indicates what is happening in the economy and what changes are taking place. Collecting such statistical information is by no means a routine task, but it involves a variety of research problems.
These days nearly all governments maintain large staff of research technicians or experts to carry on this work. Thus, in the context of government, research as a tool to economic policy has three distinct phases of operation, viz.
- Investigation of economic structure through continual compilation of facts;
- Diagnosis of events that are taking place and the analysis of the forces underlying them; and
- The prognosis, i.e., the prediction of future developments.
Research has its special significance in solving various operational and planning problems of business and industry. Operations research and market research, along with motivational research, are considered crucial and their results assist, in more than one way, in taking business decisions. Market research is the investigation of the structure and development of a market for the purpose of formulating efficient policies for purchasing, production and sales. Operations research refers to the application of mathematical, logical and analytical techniques to the solution of business problems of cost minimization or of profit maximization or what can be termed as optimization problems. Motivational research of determining why people behave as they do is mainly concerned with market characteristics. All these are of great help to people in business and industry who are responsible for taking business decisions. Research with regard to demand and market factors has great utility in business. Research, thus, replaces intuitive business decisions by more logical and scientific decisions.