Your trusted adviser for R&D Tax Credits and R&D Grants
Why is internal innovation important in business and how does it all work?
Whilst internal innovation is an essential part of product creation, it’s not the be all and end all. Indeed it’s fantastic for bringing about new ideas and the discovery of new technologies, but it’s no alternative to collaborating with other outside organisations.
Mastering internal innovation and how it fits in with your company’s new R&D projects goes a long way towards success. Here we take a look.
Internal innovation, in simple terms, is when an organisation undergoes some form of change. In this context it would creating a new product or service perhaps, or making real adjustments to an existing one. It could also be sometime like a change in production processes to make them more efficient, or an exercise to reduce wasted materials. Whatever the change is, regardless of the size, internal innovation primarily takes place inside your organisation.
Internal innovation is the chance to shake things up a bit. To review technologies and ways and doing things that may have outstayed their welcome, giving rise to new and disruptive products and solutions.
Internal innovation is essentially about fostering a culture of creativity in the business, and working out where efficiencies can be made. It also seeks to make a business more sustainable and profitable against the competition.
However, the following are particularly worth focussing on:
Internal innovation won’t work if it isn’t communicated effectively to staff. People should feel free to give their views and put toward their ideas at every stage.
It won’t be possible to innovate well if higher level staff aren’t totally on board with it. It’s important to provide a strong, clear strategic narrative about the project and where it’s headed, so that everyone is ‘singing from the same hymn sheet’.
Managers and middle managers particularly need to be well trained in how to carry internal innovation well. They need to understand the concepts and approaches effectively enough to convey them to staff.
When you start a new innovative project it’s easy to get carried away and forget the most important people - your customers. If you’re looking to begin a significant new project, do your homework and research your market. What do your customers actually want from your brand and from your proposed product? Will it be marketable and set at a workable price point? Will you actually be able to get customer buy-in?
The point here is you need work backwards; find out what the problems and innovate to solve them. Don’t blindly create products that seek to solve a problem that doesn’t actually exist.
Say you’re a toy manufacturer. You manufacture and distribute a particular toy to a high standard, it’s good quality and sells well. Times are tough and you’re therefore preferring to stick to what you know. It’s your core competency after all, so why change it?
Of course, how averse your company is to risk depends on myriad factors. But don’t be afraid to innovate and branch out, or you may risk missing a lucrative opportunity.
Life is a constant juggling act, dividing up our time between urgent stuff versus things can that be done later. Companies have the same challenge, where time gets sucked up by day-to-day operational stuff and it’s hard to get on with strategic planning. After all, customers always have questions and issues, and there are always problems to be solved.
We’re not saying that urgent customer queries aren’t important - far from it - but they do tend to take away resources from internal innovation. Make sure your business gets the balance right.
Independent entrepreneurs are challenged with finding a problem that they can feasibly solve. They work through varies iterations of a product and then match the business model to the innovation. Corporate entrepreneurs also have this challenges, but additional they have an extra battle: To keep their innovation alive in a corporate environment that already has a finely tuned business model.
Business models are important of course, and they lend themselves strongly to “thinking inside the box”. That is to say that if an entrepreneur is developing something which is in the same vein as products the company already produces, then it’s going to be easier to gain support. However, if you’re looking to create something new and disruptive, there may be a fight for resources just as if you were a stand-alone entrepreneur. It tough, but in most cases it’s a battle well worth fighting.
The R&D Tax Credits scheme is something that so many companies haven’t heard of, even though it’s been around for nearly two decades. And it’s incredibly valuable.
Essentially, if an Ireland-based company has created a brand new product, service or process in the last couple of years, then this generation tax incentive is likely to apply.
Despite the substantial amount of innovative R&D that goes on across the country, even companies that have heard of R&D Tax Credits often miss out on the money they’re owed. This is for numerous reasons, including concerns around how to apply, and worries about submitting their application incorrectly.
R&D Tax Credits work by allowing companies to claim a sizeable percentage of their R&D expenditure back, either as a reduction in Corporation Tax or a lump sum credit. Eligible projects and expenses are many and varied and include staff wages, marketing, packaging, ingredients costs and many other overheads.
You can discover more about R&D Tax Credits, including how to make an application, by seeing our R&D Tax Credits page.
Claiming R&D Tax Credits isn’t straight-forward and there are numerous grey areas. But our team of R&D tax specialists and advisors can work alongside you in creating an outstanding quality, accurate claim that will withstand Revenue interrogation. Simply send us a message or call +353 1 566 2001 to see what you could claim and make a start on your application.
You could find you start 2021 thousands of euros better off.
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.
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info@myriadassociates.ie