Your trusted adviser for R&D Tax Credits and R&D Grants
Innovation in Ireland is essential for business survival - but it's a hard road with no guarantees. Check out our guest blog for partners Economy Standard to see the common mistakes that lead to innovation failure.
As seen on Economy Standard.
There’s no getting around it, innovation in Ireland is essential for business survival, especially when performing against the rest of the EU.
Research and development is certainly something to be embraced as exciting new projects take shape. But even with the best laid plans, innovation doesn’t always thrive. There can be many stumbling blocks, with some more easy to spot coming than others.
Here we’ll address the main ways innovation can go awry.
Innovation by its nature means taking a financial - and often reputational - risk. Budgets easily overrun and failure is a real possibility.
However, the only way to move forward and break new ground is by making mistakes. Employees should therefore be strongly encouraged to bring their ideas to the table without the worry of reprisals. Any policies, procedures and structures that are too strict will stifle creativity; and that’s the enemy of innovation.
It’s always hoped that an innovative project will be a total success and bring positive company results. However, leaving this success down to luck rather than judgement isn’t a great strategy.
R&D should be planned for - methodical, predictable. It’s not something that happens by accident. The project should also bring about a real financial difference long term, not just be a random flash in the pan. Short term quick wins may be appealing but treating innovation as a box ticking exercise won’t ingrain any kind of innovative culture in your company longer term.
Only innovative projects that are properly managed will be efficient and sustainable. Only then will real, longer term success be achieved rather than work that’s more fragmented.
Speed and timing are crucial when it comes to innovation. Go for something explosive and disruptive and you may find it fizzles out quickly. But small, less powerful innovative activities may not have the desired impact, potentially leaving your brand behind.
It’s therefore worth pitching your innovations somewhere half way. In other words, think of both your short and long term goals. This means your portfolio will be better balanced, helping your company achieve the progressive results it needs whilst also advancing towards the more disruptive stuff.
Again, being methodical in your approach to hitting milestones can help you build your brand, as well as putting innovative working front and centre.
An “if it ain’t broke don’t fix it” attitude can seriously kill off innovation. With staff engrossed in their day-to-day work it’s easy to let time pass and innovative projects fall by the wayside. It can also be particularly challenging where there are staff members who have been well established in their role for some time and may be wary of change.
The key is to get your employees fired up from day one of their employment and weave innovation into their job descriptions. It needs to be in black and white. Otherwise there’s a distinct risk of innovation being “above my pay grade” or “not my job”, which will once again stifle innovative culture completely.
As part of weaving innovation into company culture, you need by-in from the top down. Management teams should be able to communicate why innovative projects are beneficial, outlining what is expected to be achieved and how. Effective innovation governance is also essential.
It’s also worth using incentives to motivate individuals and build a positive view of innovation in general. Encourage collaboration, both internal and external, in order to increase knowledge and scale up the organisation’s capabilities.
You need to actually be tackling real problems that real customers need solving in order for your innovation to be successful. It’s very easy to get carried away with the designing and testing of the next exciting breakthrough in your field. But without engaging with your customers how will you know what’s going to be useful and/or appealing to them at the end of it all?
At every stage of an innovative R&D project, customer feedback is crucial in preventing failure. User testing, panels, surveys and customer trials are all excellent ways of harvesting real user data and using it to gauge what’s likely to work. It will also enable you to ascertain your target audience, the price point for your new product or service and more.
Offered by Revenue since the early 2000s, R&D Tax Credits are a lucrative tax relief designed to encourage companies in Ireland to innovate. As much as 25% of eligible R&D costs can be reclaimed as a Corporation Tax rebate, in addition to the standard 12.5% already on offer. So in effect, as much as 37.5% of qualifying R&D expenditure can be refunded by the Irish government - cash that can be ploughed back into innovative work.
However, despite the scheme having been around for many years, too many companies in Ireland are missing out on the R&D tax award that’s rightfully theirs. Some simply don’t know the scheme exists, or believe their work or their company is eligible. Others think it’s only for large-scale projects or techie/science firms. This just isn’t true.
By working with a specialist R&D tax consultancy, you can not only find out very quickly if your company is eligible for R&D Tax Credits, but a claim can also be made on your behalf. It will be maximised too, leaving no cash on the table - and no risk of hot water with Revenue. You may be able to access R&D grants too.
With all innovative R&D projects come challenges and learning curves and there are no guarantees. Money and reputation are being put on the line; but the rewards, when done properly, can be substantial. The key to success lies in the structure, framework and planning of your project, and by finding it well through a combination of R&D grants, tax credits and other sources.
At 12.5%, it’s a well-known fact that corporation tax in Ireland is one of the lowest in the world. But there are also plenty of tax reliefs and incentives, especially for those who wish to invest in research and innovation.
In a bid to establish themselves as a “global innovation leader, Irish government spending on R&D has reached record levels. But which industries are making the most out of this investment?
Starting a successful business is scary - but you’re not alone. To help you financially along the way, there’s a massive range of grants, loans, tax breaks and other funding available.
Please contact us to discuss how working with Myriad Associates can maximise and secure R&D funding opportunities for your business.
Contact us
info@myriadassociates.ie