Commercial R&D, of which industrial catalysis is one branch, is typically a high-risk investment with a deferred payoff. It is mistaken to view it as a cost. And, as with other high-risk investments, returns can be extremely attractive. The value-creating potential for investment in industrial catalysis depends on two basic factors: technical opportunity and commercial opportunity. When both are aligned prospects are excellent. Three cases are discussed; olefin polymerization, where both types of opportunity coincided, fluid cracking where the commercial opportunities are real, but technical opportunities are limited, and selective catalytic reduction, which is rich in technical opportunities, but the market opportunity in the U.S. has so far been problematic. The financial tools for evaluating R&D investments have evolved well beyond basic discounted cash flow models. Better tools have been developed to value intellectual capital, including the quantitative assessment of the value added by R&D. The dissection of the elements of risk, and the application of real options theory are new features of the R&D landscape. Financing vehicles have also changed with a surge of venture capital and private equity funds. The analyst's toolbox has been enhanced by electronic spreadsheets, on-line databases, Monte Carlo software, the Internet, and the ubiquitous personal computer. (C) 2004 Published by Elsevier B.V.