“Small opportunities often make big companies” In an almost divinatory way, Demosthenes, the Greek zealot, had philosophized about the importance of discreet but essential resources. Thus, in a way, he had prophesied that innovation through Research and Development (R&D) is a crucial phase in ensuring the health of a company. As such, more than two thousand years later, Gary Hamel would say, “It is the only protection against obsolescence. …] This is the only strategy to be more effective in a gloomy conjecture.” From this very pragmatic paradigm on the importance of good R&D project management, an implacable reality emerges: R&D is an essential strategy for a company to stand out in a competitive market, to ensure its future. In any case, it is an inexorable step forward for a company, guaranteeing its prosperity or failure.
“I believe in innovation and the way innovation is achieved is by funding research…” Bill Gates, a strong advocate of innovation support, has been campaigning for years for synergies between public actors and companies, with the idea to develop incentives, including tax incentives. And the figures speak for themselves, thanks to the introduction of this tax credit, the French research system ranks:
- 4th in the world for patent issuance
- 7th in the world for the writing of scientific publications
- 6th in the world in terms of R&D spending
Once put into context, these statistics reflect that France attaches great importance to the cost of research in innovation, despite the emergence of many competing countries, supporting their own national research efforts. But how does the French Research Tax Credit work in practice?
First of all, the primary objective of the Research Tax Credit is to support R&D activity and encourage investments that will strengthen the future activity of companies. In 36 years, this measure has been the flagship of French research at all stages.
In a nutshell, an R&D operation could be defined in four stages. First, a part of monitoring, in order to identify existing knowledge, then test and validate the work. And finally, to produce the results of the research. It is since this very sequenced process, that the Research Tax Credit establishes five criteria to be met to be eligible:
- BE SYSTEMATIC
- BE TRANSFERABLE AND/OR REPRODUCIBLE
Compliance with these five criteria results in full reimbursement of R&D expenditures. So the keyword to justify R&D activity in case of control is traceability. For example, the implementation of a follow-up of the time spent by the development team on the various research projects; as well as a follow-up of the work carried out throughout the life cycle of the R&D projects, is necessarily to be set up, in order to be able to meet the needs of compliance with the criteria.
In fact, the Reasearch Tax Credit appears to be an excellent tool to structure its R&D approach. Because based on a very strict methodology, the drafting of the technical file supports the capitalisation of knowledge and facilitates the illustration of the R&D activity.
“Innovation is not a flash of genius. It’s a difficult job. And this work should be organized as a regular activity of each unit of the company, and this, at each level of management“. This is how Peter Drucker, a management theorist, explained the importance of good organisation in innovation. Of course, aware of the issues raised, such as the daunting and highly time-consuming nature of the drafting of the technical file. And innovation sometimes precedes the scientific understanding needed to design new products and processes, which leads to a lengthening of the structuring process. Especially in the monitoring phase, where it is important to have access to an exhaustive list of existing solutions.
Analogically, the construction of an IT business repository specifically designed for R&D, to help manage and enhance technical data, for example, is still rare today. And because these services see their knowledge evolve by nature, which requires a specific approach. In order to ensure optimal quality in the service, it is, therefore, necessary to combine the capitalization of acquired knowledge, without restricting the creativity of engineers.
This is why Bassetti has developed TEEXMA®, a fully scalable and configurable software package that can fully meet the specific needs of research and development. In addition to assisting in the management of R&D projects (automatic drafting of documentation, monitoring of subcontractors, capitalisation of acquired knowledge, traceability of actions carried out, etc.) TEEXMA® supports the continuous improvement effort and assists in the traceability of R&D actions from A to Z. Our methodology is based on the real-time information of the work performed (i.e. hours spent on R&D) on all types of tasks.
From the early stages of the Research project to the operation of the test phases, all the tools are provided to support the structuring of R&D, and in this case, to be eligible for the Research Tax Credit. For more information: contact us
To conclude, Hegel, the German philosopher, pointed out that “Ideas that change the world walk by doves pace.” And it is, undoubtedly, thanks to this vision that tomorrow’s innovations are built by R&D today, encouraged by the sponsorship of the State developing measures such as the French Research Tax Credit.