What is R & D?

R & D refers to research and development and more specifically the creation of original work leading to the development of new products or applications. For most companies, R &D is an essential element of their reason for being in business and is essential to their survival. With the many advances in technology and the constant demands for new products and services, companies need to engage in R &D in order to be competitive in the market. In order to begin an R & D project, the company first engages in market research to determine the needs of the general population or those facets of the community with which the community deals most of time.

Companies usually have R&D teams, whose purpose is to develop new products or in the case of technology computer programs and systems applications. In the acronym R & D, research refers to the experimental research related to the new product and development refers to how the new products will be marketed, sold and used. In Canada, the National Research Council is at the forefront of R & D activities to help develop products that will support the needs of all Canadians. Some areas of R & D that the NRC is involved with include Bioinformatics. Fuel Cells, Protenics and more. The Department of National Defence is another government agency involved in R &D in the areas of sensors and information systems, combat systems and human systems.

Canada has an R & D tax incentive for businesses getting involved in areas of research and development and is not limited to large corporations. Any size business can submit a claim for this R & D tax incentive. If you engage in scientific R & D you can be eligible for 100% deduction on all the eligible costs of the program, which includes the equipment you need. This R & D deduction is in the form of a tax investment credit that will help offset the amount of federal tax you have to pay. Many provinces also have tax incentives for R & D. For example, Ontario offers extra R & D tax incentives in the form of a 20% refundable tax credit for research carried out in Ontario universities and a 10% refundable Innovation Tax Credit for small businesses getting involved in R & D. There are billions of dollars spent every year in every province of Canada each year for R & D projects. It is one of the reason that Canada is leading the world in innovative R & D.