A survey of Irish businesses by KPMG and RedC published ahead of Budget 2017 has found that the majority (70%) of Irish businesses believe Ireland is innovation friendly with 80% of businesses engaged in innovative activity.
Despite the majority (57%) of Irish businesses not being aware of the recently introduced Knowledge Development Box ("KDB"), the tax relief, which incentivises innovation, is considered attractive by 58% of businesses.
The findings are contained in KPMG's Innovation Monitor report which annually assesses the attitudes of over 200 Irish businesses to innovation in Ireland and reveals that for many companies across Ireland, innovation remains a strategic priority. This year's report had a particular focus on the Knowledge Development Box, introduced in Budget 2016 to provide an attractive tax rate for income generated from commercialising R&D activities and intellectual property.
Commenting on the findings, Damien Flanagan, Director at KPMG said: "At a time when businesses face rapid change and disruption, nurturing innovation has never been more important. While 70% of the businesses who participated in our research consider Ireland to be innovation friendly, only one third believe that there is effective interaction between the various funding regimes, non-finance supports, collaborative opportunities, access to key talent and so on. The most significant influence on their decision to innovate is the availability of funding while access to qualified in-house personnel and the availability of the R&D tax credit is also very important."
Flanagan noted that while the majority of companies surveyed did not know about the KDB's existence prior to this survey, once it had been explained to them, the majority viewed it as attractive. "We know from our research that 60 percent of companies with patents or copyrighted software (the type of assets which qualify for the KDB) intend to or are already generating income from these assets. These are the companies that the KDB is designed for - it would be a shame if they missed out on claiming the KDB because of a lack of awareness," added Flanagan.
In addition, the report highlights areas where businesses believe there is room to improve, including:
Commenting on the report, Julie Sinnamon, CEO of Enterprise Ireland said: "It is heartening to see from the research conducted that four out of five Irish businesses are engaged in innovative activity in some shape or form. The findings also highlight that a strong appetite exists to strengthen Ireland's innovation ecosystem and the KBD is an attractive incentive, encouraging growth particularly in the area of R&D. Supporting innovation and innovative companies to scale internationally is a key element of Enterprise Ireland's role and we welcome and encourage Irish companies particularly those in early stage to consider the supports on offer through Enterprise Ireland's competitive funding initiatives."
For more information, contact:
Communications Manager, KPMG Ireland
email@example.com; (01)700 4728
About KPMG in Ireland
KPMG in Ireland employs 2,400 people across its audit, tax and advisory services from offices in Dublin, Belfast, Cork and Galway. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services.
About Innovation Monitor
The survey was conducted by RedC Research on behalf of KPMG. The survey was confined to businesses with at least 10 employees and quotas were placed on company size to ensure a nationally representative sample. Interviews were conducted with the Finance Director, Tax Director or a similar individual/partner in the company. Businesses from the following sectors were represented: Medical devices; pharmaceutical, chemical and biotechnology; engineering & mechanical, electrical, industrial products; electronics; agribusiness (food and drink, meat processing); ICT; financial services and renewable energy.