There’s no question that Canadians recognize the importance of innovation; it’s why we’ve gone to such great lengths to be on the forefront in this area. But do you have to be a James Gosling, Sandford Fleming, or Mark Tilden to be recognized for you efforts?
The acclaim received for these kinds of accomplishments may be highly coveted, but how does one get to the point where they realize their stroke of genius amidst all the iterations and failed attempts?
The answer may include things like:
While these are pillars in any innovator’s journey, not having the capital to persist may be the only limiting factor. For this reason, one thing that all individuals who operate is the area of innovation should know is where to get the money to ensure their journey is steadfast and your goals are realized.
There are many options when it comes to finding capital; but it always comes at a price. Perhaps in the form of shared equity, or high interest rates.
So, let’s look at one example that doesn’t involve either.
For decades, the Canadian Government has done their part to foster innovation here at home by rewarding companies who have attempted to be innovative through the Scientific Research and Experimental Development Program (SR&ED).
This incentive program pays out nearly $4 billion every year to companies that are likely no different than yours. From sole-proprietors to privately held corporations and publicly-traded companies, there is an opportunity for any company operating in Canada to file an SR&ED submission for the innovative work they’ve done. The only exception to this is non-taxable companies, like non-profits and charities.
If you’ve met Canada Revenue Agency’s (CRA) requirements, as approximately 20,000 companies do each year, you’ll find that a considerable portion of the expenditures related to innovation will be refunded. And, get ready for it… if you’re a privately held company with a small business status, you get your refund in cash from CRA.
Eligible companies are legally entitled to receive a refund of as much as:
I keep mentioning the word “innovative,” but I’m not entirely sure what innovation means. All I know is that businesses must innovate to survive. It’s is critical to your business’ long-term success, especially in these times of changing customer expectations, rapid advances in technology, and digital disruption.
When it comes to the SR&ED program, there are only 3 criteria that determine one’s eligibility.
You’re trying to achieve a commercial initiative and somewhere along the way you realize that you don’t have the technological knowledge-base to overcome a problem you’re presented with. Beyond this, you can’t find out the answer – it’s either unknown, or no one is willing to share it with you.
Through a systematic approach, including various iterations and other forms of experimentation, you try to reduce or eliminate that technological uncertainty.
Whether your commercial objective is achieved or not, you learned something through your systematic approach, which in the context of the SR&ED program, constitutes a technological advancement. Remember this: the resultant knowledge that is generated through a systematic investigation is considered technological advancement.
Your company is entitled to a cash refund if you encountered a technological problem during a commercial project that you tried to overcome because it resulted in you expanding your company’s knowledge-base in that area of technology through your Research and Development efforts.
Visit thinkSRED to learn more about innovation and capitalizing on the SR&ED program.
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