Internationally, the OECD describes R&D as “creative work undertaken on a systematic basis….to increase the stock of knowledge, including….man, culture and society, and….to devise new applications.” R&D may also include enhancements to existing products or services right up until any activity ceases to be experimental.
It may be of interest to understand something of the size of our national R&D sector. In Australia a reliable source of R&D data may be found in the Australian Bureau of Statistics year book, the 2012 edition of which issued last week. This analysis captures gross expenditure by business, government, higher education and private, with particular focus on business R&D.
Ten years ago Australian R&D spending was less than $14billion (business <$7billion) whereas in 2012 activity is generally thought to have exceeded $35billion (business >$21billion). Manufacturing and mining companies are by far the biggest spenders, with financial and scientific services each coming next but with only about half the spending of the first two.
Technically, expenditure in the R&D sector falls into one of four categories: namely, pure basic research, strategic basic research, applied research or experimental development. Eundo assists clients to navigate their way through these technicalities and then will identify, collate and quantify eligible expenditure so that a compliant and robust R&D tax incentive is claimed.
