The advances in technology over the past couple of decades have been nothing short of miraculous: think of the world’s ever-increasing connectivity via the internet, the evolution of artificial intelligence to (arguably) less wondrous advances like the selfie stick. These advances have fostered an unparalleled era of creativity and outside-the-box thinking as businesses compete to dream up the next great innovation in their field.
For big business, research and development plays a crucial role in a company’s future. Ken Hardy – head of KPMG’s R&D Incentives practice – says it’s an essential component of Irish business. “R&D and innovation are the lifeblood of most Irish organisations – it has to be, given the small open economy we all operate in. It is essential that businesses continuously seek to develop and improve existing or new products, processes, systems, and services.”
Of course, sinking money into projects that may not pay off comes with its own risks, but if a company hopes to stay ahead of the competition, investing in R&D and innovation is essential for their future prosperity. “Many Irish companies successfully compete in the global economy because of the quality of the R&D they undertake,” says Hardy. “Also, it is almost certain that their competitors will be looking at new and innovative products they develop with a view to producing them cheaper, faster or better.”
Joe Madden, in-company R&D supports manager at Enterprise Ireland, also believes investing in this research is what allows Ireland to remain competitive globally, which will be a must against upcoming challenges like Brexit. “In simple terms, RDI enables us to make products and services that are better, cheaper or more novel than those in global markets. Thus, in order to export, our companies must innovate. In order to increase the intensity and sustainability of Ireland’s economic recovery and to prepare for market shocks such as those posed by Brexit, it is essential that in-company R&D capacity is strengthened by scaling up existing RDI activities in companies.”
Ever-evolving
Technology is an ever-evolving beast, with businesses and consumers alike always seeking the next advancement. Take virtual reality, for example, which was once considered a gimmick but is starting to break through thanks to affordable gear such as the Oculus Rift. Companies are starting to see the potential for VR as a tool outside of gaming experiences too; it can be used in therapy to help patients overcome phobias like fear of heights, or take school children on virtual field trips from the comfort of the classroom.
That’s just one example of an ever-shifting landscape, and companies keeping pace with these advances have also used tech to make the development process more adaptable.
“A simple example concerns a fundamental change in the way R&D projects are managed,” says Ken Hardy. “Traditionally, R&D was delivered using the ‘waterfall model’ – this approach was linear in nature involving sequential steps. Waterfall has been superseded, for many, by the ‘agile methodology’. Originally pioneered for software development, agile allows requirements and solutions to evolve from an iterative development process, which allows for early delivery of potential solution and rapid change to be facilitated on the fly.”
Ireland is considered one of the top countries in the world for business – we were even crowned first in Forbes' annual 'best country for business' rankings in 2013 – and the Government recognises the benefits of fostering this image. This includes offering attractive incentives for research activities, such as the R&D tax credit, which is calculated at 25 per cent of a company's qualifying expenditure to reduce corporation tax. There's also the Knowledge Development Box, a CT relief applying to income from patents, computer programmes and certain intellectual properties for smaller companies. If a company qualifies for the KDB, it may be entitled to a deduction equal to 50 per cent of its qualifying profits.
While they may lack the resources of larger companies, SMEs would also be wise to invest in this process too; after all, Amazon and Google started life in their founder’s garages, and only grew due to the innovations they offered. Hardy finds the power of a strong concept is often the hidden weapon of these smaller businesses. “In my experience, many SMEs and start-ups are born out of a clever idea. That idea is then researched, a new or improved product or process is developed, and a market opportunity is identified.”
Food production
Tech innovations have led to major developments in sectors such as food production. Dr Lance O’Brien, head of strategy and international relations at Teagasc says: “The last decade has seen consistent and considerable public and private investment in science, technology and innovation directed at ensuring the continuation of a steady flow of new technology into farming and food. New technologies (ICT, nanotechnologies, biotechnology, etc) will become increasingly important. The focus in future must be on enhancing the innovative capacity of the sector. This means supporting the development of new ways to generate wealth, reduce input costs, add value, strengthen sustainability and resilience, and develop new competitive and comparative advantages.
“Over the last 10 years, the various fields of the life sciences and molecular biology have developed a range of new techniques which are potential game-changers for the agri-food sector,” says Dr O’Brien.
“Ireland is at the forefront in the development and deployment of genome-based selection. Selection of elite animals as candidate parents of the next generation is no longer just based on the observed performance of the animal, but also takes into account unique DNA or genomic characteristics.”