Creativity vs Innovation in R&D
“Creativity” and “innovation” are two words that frequently get pitched in brainstorming sessions or company mission statements. Without a doubt, these principles are highly esteemed in the modern workplace, but do leaders who use the expressions accurately know the difference between them?
The key disparity between creativity and innovation is the focus. Creativity is subjective – it is almost impossible to measure and is about releasing the possibilities of the mind to generate new ideas. Innovation, on the other hand, is completely measurable. Innovation is about implementing adjustments into moderately stable systems to make an idea practical. Thus, an organisation can use innovation to apply its creative assets to propose a suitable solution and acquire a return on its investment.
Therefore, to ensure companies remain competitive in a rapidly intensifying and accelerating technological market, businesses need to develop creativity and turn it quickly into innovation. However, it is an often overlooked fact that the expenditure incurred to bring these innovations to market is potentially available for a tax rebate.
To elaborate, the federal R&D tax credit is a frequently overlooked tax benefit, with companies often mistakenly believing they don’t qualify. The government lets you deduct the costs of research and experimentation to develop or improve a product, formula, invention, process or technique. While the R&D deduction is relatively simple for small businesses to take, doing additional calculations to claim the “innovation” or R&D tax credit can be more complex but rewarding for entrepreneurs. The credit reduces taxes dollar for dollar, and entrepreneurs can generate the biggest credit by ramping up research activities over time.
Overall, creativity is vital in today’s business world to stimulate new ideas. However, driving business ultimately derives from sifting creative ideas through an innovation process to initiate those ideas into action. Thus, stressing the importance of leveraging the data that surrounds people, organisations, products, and processes, to drive R&D and build new revenue streams and new commercial models. Indeed, creativity is the price of admission, but it’s innovation that pays the bills.
Creativity and innovation can create new opportunities for your business and allow for the creation of new products or solutions, via research and development. there were a host of tax breaks that Congress included in last December’s tax extenders legislation, the PATH Act. The new rules and regulations outlined in the PATH Act have made it easier for all types of businesses to profit from the R&D Tax Credit. Contact us today to see if you are eligible to claim the R&D Tax Relief.