Is development research?

I'm a Msc student, and my project is to develop a novel software tool for use in neurosurgery.

There is a current tool that is considered the standard of care for the procedure, but it has low rates of clinical adoption (~45%) due to archaic technical limitations. We propose that we can develop a new system, exploiting advances in available computational power and state-of-the-art image processing algorithms, that could improve the rate of adoption for these systems.

My question: Does development qualify as research? Or does research begin after development? My intuition tells me the latter.

For example, a hypothesis I could have would be "We propose that we can develop a novel system that overcomes technical limitations of traditional systems". However, this seems to be a weak hypothesis to me. Could we ever say that it is theoretically not possible to do that?

However, if research begins after development, we could propose that "our tool has increased usability compared to traditional systems". This seems much stronger to me: we can test whether our tool leads to significant improvements in different measures of usability.

I am unsure which path is more suitable to present in a formal research proposal, after all, at the stage of the proposal, we have not developed anything.

Maybe I'm not even formulating the initial hypothesis correctly.

I've looked at other dissertations in the field, and have noticed that some do not even attempt to structure the dissertation around a hypothesis, but rather say things like: "The goal of this thesis is the development of such techniques utilizing prominent HARDI data models", "This thesis presents the development of a 96-well plate culture system that allows 4-color, flow cytometry based high throughput screening of defined, serum-free hESC differentiation conditions". It seems that they just present the outcome of development, rather than test some constructed hypothesis.

I ask because my courses and committee seem to desire a formal hypothesis and I am hesitant to provide something weak.