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In starting to pursue my goal of “Exploring Innovation”, the first government program I wanted to learn more about was SREDs. In Canada, the SR&ED (Scientific Research and Experimental Development) program is consistently mentioned in conjunction with innovation. Understanding that “a little knowledge is a dangerous thing”, I attended the CPA’s SRED  symposium in Toronto in February for a more in-depth and intensive exposure to the world of SREDs.

The symposium was very focused on the details, intricacies and challenges of successfully filing SRED applications with Revenue Canada as opposed to the goals, and impact of the program from a policy perspective (which I was primarily interested in).

I was very surprised by a few things that I had not heard before (and am unsure if these are accurate – any experts out there, please feel free to enlighten me!) Statistics Canada uses SRED credits to determine the amount of innovation spending in Canada. This shocked me. The bureaucratic difficulties in applying for these credits are such that an ecosytem of accountants and consultants has developed whose primary focus is navigating this challenging and often lengthy process. Thus many companies don’t bother with applying, or their innovations may not exactly fit the narrow criteria needed for a successful claim.

One thing Revenue Canada/CRA focuses on is the “hypothesis” and how well documented it is before the research even begins. Hypothesis. While used in scientific and academic circles, it is a word rarely used outside these fields. The small business people in the breakout sessions I attended all found this to be a very frustrating issue as they are always trying to creatively SOLVE PROBLEMS. Rarely if ever (unless trying to apply for SREDs after unsuccessful experiences), do they use the word “HYPOTHESIS”. Yet that one word and process seems to be a key factor in determining success. (Court cases have determined that this word does not have to be used, yet all CRA speakers wanted to see the hypothesis stated.)

The larger multinational companies participating on panels consistently said that when they have a big project involving R&D that they want to pursue, they shop other locations than Canada. “The SRED program is good, but…” When compared to what other countries are offering in terms of incentives, all else being equal, Canada is increasing unlikely to win out. Not the news we as Canadians want to hear. There is tremendous competition out there in terms of incentives for an entity that is flexible as to location. Canada is perceived to be a high cost and lower incentive jurisdiction.

The timing and nature of incentives is also critical to companies. Many need direct versus indirect incentives. Small start-up companies especially need cash incentives versus non-transferable tax credits.

Listening to the discussions of the SRED filing process I was reminded of Hernando de Soto’s The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else. This book discusses reasons why some countries are consistently more prosperous than others. The two key factors (simplified) are first whether favorable property rights (including intellectual property) exist and second the lack of excessive bureaucracy for doing business. From the symposium and other discussions I’ve had with SRED users, the SRED process seems to my dismay to fit into the “excessive bureaucracy” category.

On “tinkering” or “unplanned SR&ED”, CRA will not recognize that as eligible. Thus strategies to incentivize independent research, like Google’s “20 percent time” or 3M’s “15 percent time” could never lead to successful SRED claims (and thus not be counted as innovation in Canada). This does not make sense to me.

This conference was a starting point. I have much more to learn while Exploring Innovation. My intent is that this blog will initially be a spot to share what I learn, frame my thoughts on the innovation and R&D world (especially but not exclusively) in Canada and ideally figure out ways to increase the success and impact of innovation and/or R&D spending.

 

 

I love to read. Unfortunately, I always seem to have more reading material than time to read it! And everyday something new attracts my attention. So while I have been reading about innovation, I have also been thinking about innovations in reading.

There are two innovations that I use that I greatly appreciate. My Kindle and my iPod. I have been listening to books for some time. I started with books on tape, then graduated to CDs. Now that I have a little gadget to run the sound from the iPod through the speakers of my car, I listen through my iPod. I dislike headphones on my ears or earbuds in them so the iPod hadn’t really appealed to me. Plus I most frequently listen to books when I am in the car and anything on or in your ears there is not safe. In fact, after receiving it as a gift, my iPod sat unused until I came across that little car accessory. I had long been using Audible to download books but I had always burned the books to CDs and then listened to the CDs while driving. The iPod is significantly easier. Audible has a great selection of books and commuting has become substantially less boring. With this innovation, I can “read” during times that would not otherwise have been available for reading! It does however have its drawbacks. I tend to read non-fiction and when I come across an interesting point, I like to make notes. Very difficult to do, if not impossible, while driving. Thus I have learned that if a book is great on audio like Peter Drucker’s Innovation and Entrepreneurship, I need a hard copy as well. Especially useful (though not yet available for that book)  is a Kindle version so I can go back and search for the salient points I wanted to note and remember.

I LOVE my Kindle! The ability to search is a key feature that I find indispensable. Close behind are the variety of note making features. If you like to fold down page corners on a physical book (guilty!) then you can bookmark pages. If you write on pages, you can type notes. If you use a highlighting pen, you can highlight text. I find myself now doing all of these. And going back to review those notes is so simple. (Of course finding turned down pages isn’t very difficult!  🙂 ) While these innovative features are very important, perhaps the most important to me is the convenience and the weight (or lack thereof). When travelling I used to carry at least 3 books with me. No more. Now I have 60 (and counting) with less weight than one book! I am very happy with Amazon’s latest innovation!

These innovations have made it easier and more fun for me to read – about innovation, creativity, Space and a myriad of my other interests. What innovations for reading do you most appreciate?

When I decided to create this blog, I chose the name because it accurately reflected what I am doing and because it hints at my strong interest in Space and exploration. “Exploring Innovation” felt exactly right and there was no problem with choosing this name on WordPress. So I was (oddly) surprised when I later typed the phrase into Google and got 11,600 hits (and over a million without the quotation marks)! So much for originality!   :s

Ah, well. This is but a small example of the vast volume of ideas out there. One may think one’s idea  is original and soon discover that it has been thought of by a great many other people. What differs is the execution. It is not usually the ideas themselves which are unusual but rather it is what one does with that idea that makes it unique to those of us taking action.

Or not. Most ideas die an early death. Napoleon Hill once wrote: “The time to nurse an idea is at the time of its birth. Every minute it lives gives it a better chance of living and surviving.”  That is the challenge – to keep that baby alive so it will survive, thrive and develop to its fullest.

What do you do to nurture your ideas? What are the best examples you know of for insuring an idea moves beyond its infancy to become more than an idea? So it grows into an innovation, invention or an actual product or service? What are the steps necessary to give it form and bring it to life? Do the steps differ for scientists, entrepreneurs and social innovators?

These are things I have been thinking about a lot recently. To help me make sense of these thoughts, clarify them and put them to work,  I have decided to start this blog.  I am exploring innovation and I am curious to see where it leads me!