R&D applications open for advancing cyber-resilient energy systems

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$25 million of research has been funded by The Energy Department (DOE) into investigating innovative approaches to strengthen and secure the nation’s critical energy infrastructure. As energy cyber-security is a national priority, the Energy Delivery Systems (CEDS) program is now seeking R&D applications.

The Energy Secretary strongly believes that Energy cyber-security demands an increase in advancement technologies in order to facilitate more secure and resilient systems for America’s future prosperity, vitality and energy independence. It is believed that programs such as CEDS have the best chance to pursue innovative cyber-security solutions to cyber threats facing the nation.

The Funding Opportunity Announcement builds on DOE’s efforts with the private sector towards improving the security of the nation’s critical energy infrastructure and reducing the risk of a cyber incidents that could disrupt energy delivery.

The five important areas that the selected programs will promote industry advancement in are:

  • Redesign for cyber-resilient architecture – electric and oil and natural gas (ONG) subsectors
  • Cyber-security for the ONG environment
  • Cyber secure communications
  • Cyber secure cloud-based technologies in the operation technology (OT) environment
  • Innovative technologies that enhance cyber-security in the energy sector

The due date for submitting an application is June 18, 2018 and submission must conclude in a demonstration of a developed technology at a relevant end-user site to validate a clear path to industry acceptance. Refer here for more information on the FOA.

With its expertise and experience in the R&D Tax credit, Swanson Reed can help you find out how your company could benefit from R&D Tax Credits. To find out more, please contact a Swanson Reed R&D Specialist today.

Swanson Reed also regularly hosts free webinars and provides free IRS CE credits as well as CPE credits for CPA’s.  For more information please visit us at www.swansonreed.com/webinars or contact your usual Swanson Reed representative.

Improving Safety for Autonomous Cars

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Tech companies are banding together to improve the safety of autonomous vehicles. The Autonomous Vehicle Coalition was announced this week and includes companies like Cisco, Esri and Econolite. The group will work with national government, industry and academic partners to responsibly integrate autonomous vehicles with roads and communities.

Last month’s fatal Uber crash became the first autonomous vehicle accident to kill a pedestrian. Also in the headlines was the Tesla crash that resulted in the death of the driver after hitting a highway barrier. Despite these incidents, which were heavily covered by the media, the proportion of crashes caused by driverless vehicles will likely be lower than those by human drivers once the technology is widely adopted. Most accidents are results of human error. Around 5.7 million car crashes occur in the US every year, with approximately 37,000 drivers and passengers and 6,000 pedestrians killed.

The Massachusetts Institute of Technology is conducting tests to find out how drivers use autonomous cars, for instance, whether they keep their hands over the wheel and whether they pay attention to the car’s audio and visual warnings. Professor of Philosophy, Nicholas Evans from the University of Massachusetts, will be studying risk-reward scenarios for driverless vehicles such as cars that decrease the number of deaths for drivers, but may increase the risk to pedestrians.

While car crashes will still happen of course, formulas such as the Safe Distance formula will improve safety by ensuring that cars do not follow too closely behind the car in front, which is a common cause of crashes by human drivers. In fact, in a US National Highway Traffic Safety Administration report, Autopilot was found to reduce accidents by 40 percent.

Research and development towards improving driverless vehicles and infrastructure will help to save lives. Other benefits of this technology could include an increase in ride-sharing services, which will in turn reduce traffic, the need for as many car park spaces and pollution. Furthermore, many autonomous cars will likely run on renewable energy or electricity rather than gas. Companies working on developing driverless cars are eligible for the R&D tax credit. Read more about the credit here.

Genetically Engineered Salmon As A Sustainable Fishing Solution

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Open-ocean fishing is an unsustainable practice and has destroyed ecosystems and reduced fish populations over many years. Combined with climate change and disease, populations are falling drastically. According to Science journal, by the mid 21st century, the earth will have run out of open-ocean fish.

A study by Dirk Zeller and Daniel Pauly published in the Marine Policy journal has found that previous underreporting combined with more recent and accurate data collection has falsely illustrated that catches have been stable over the past two decades. With the help of 400 global assistants, Pauly and Zeller worked backwards to estimate the landings of fisheries. They argue that yearly improvements in reporting techniques have concealed the fact that landings, or catches, have actually decreased by an estimated 1.2 million tons per year in this timeframe. While this is an estimate based on reconstruction, according to the United Nations Food and Agriculture Organisation, around 90 percent of fisheries worldwide have reached their sustainable limits.

Genetically engineered salmon may be a partial solution to this issue. Scientists Choy Hew and Garth Fletcher began working on an antifreeze protein in 1992 to help salmon adapt to icy waters when farmed in offshore cages. In the process, they also managed to genetically engineer a salmon that grew almost twice as fast with less food than a normal salmon.

These fish by AquaBounty are now available in Canada and are scheduled to be sold in US grocery stores in 2019. Eric Hallerman, professor of marine biology at Virginia Tech said that “in 20 of 25 years, we’re all going to be eating genetically modified animal products.”

For those who are unsure about genetically modified food, the scientific panel who reviewed AquaBounty’s FDA application confirmed that this salmon is just as safe as conventional Atlantic salmon, and is no different in terms of nutrition or chemical composition.

Innovations like being able to grow fish in half the time and the salmon requiring less energy and food to produce could have huge implications on addressing the issue of global food security. Research and development processes are vital when it comes to discovering ways of mass-producing sustainable, economical and environmentally friendly seafood. AquaBounty would be eligible for government research and development tax credits for their gene technology. Companies who generate new knowledge and solve problems can claim eligible related expenditure back on tax. To find out more about the credit, contact Swanson Reed R&D Tax Advisors.

US Falls Out of Top 10 Most Innovative Countries

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The US has been dropped from the top 10 most innovative countries for the first time since the Bloomberg Innovation Index began six years ago.

Now ranked 11th, education was cited as the primary reason for the fall. STEM fields are considered the most important in terms of innovation but the number of new science and engineering graduates has dipped, with a low proportion of STEM majors among the US workforce. Value-added manufacturing also dipped from the previous year.

Robert Atkinson, President of the Information Technology and Innovation Foundation in Washington DC stated, “I see no evidence to suggest that this trend will not continue. Other nations have responded with smart, well-funded innovation policies like better R&D tax incentives, more government funding for research, more funding for technology commercialization initiatives.”

South Korea ranked first for the fifth year in a row, with valuable companies like Samsung Electronics Co. It ranked first in patent activity and second in R&D intensity as well as manufacturing added-value. Despite these top scores, it ranked just 21st in productivity.

Sweden came in second place. Singapore jumped from sixth to third place, largely due to ranking first in the tertiary-efficiency category. China moved from 21st to 19th with an increasing number of science and engineering graduates and with companies like Huawai Technologies Co gaining an increasing number of patents. France rose two spots to ninth and Ireland moved up three spots to 13th.

The Bloomberg Innovation Index ranks the countries using seven factors:

  • R&D expenditure as a percentage of GDP;
  • Productivity showing GDP and GNI per employed person;
  • Concentration of high-tech public companies;
  • Manufacturing added-value;
  • Tertiary efficiency;
  • Patent activity per million population;
  • Researcher concentration per million population.

How Does the GOP Bill Affect the R&D Tax Credit?

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In last-minute changes to the Senate bill, the GOP unintentionally reinstated the corporate Alternative Minimum Tax (AMT) at the same rate as the corporate income tax rate of 20 percent. The AMT eliminates most deductions in order to prevent the wealthy from artificially reducing their tax bill; corporations pay whichever is higher out of the two rates. This change to the bill would have resulted in many more businesses paying the AMT and losing tax breaks such as the R&D Tax Credit. While the Senate argued the need to preserve the corporate AMT to pay for other tax cuts, the House repealed it.

As a result of complaints by several industries, including renewable energy and Silicon Valley’s tech companies, the final GOP bill eliminated the AMT. CEO’s argued that the change would result in less investment in research and development and the building of new plants. 

While the R&D tax credit will not be affected by the AMT, there will be a change in terms of R&D deductions, which were previously available immediately, in a single year. Companies must now write off their R&D investments over a period of five years or more.

Starting from January 1st, 2018, the corporate tax rate fell to 21 percent, the largest one-time rate cut in US history. This will total around $1 trillion in tax cuts over the next decade. The GOP has maintained that the bill will encourage strong economic growth, however many economists believe this growth will be short lived.

EverlyWell Home Testing Kits Could Transform Healthcare

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Securing a groundbreaking $1 million line of credit on Shark Tank for 5% equity in the company, EverlyWell home health testing kits may well transform the healthcare industry as we know it. CEO and Founder Julia Cheek came up with the idea after receiving thousands of dollars in unexpected lab bills after a diagnosis for chronic fatigue months earlier. Deciding this was not good enough, she left her corporate job and formed EverlyWell. The business aims to make medical testing more accessible to consumers by providing testing kits with a simple, one-off price tag.

A range of tests are available, from food sensitivity, women’s health and fertility, sleep and stress to the very popular STD test for men and women. The kits have helped thousands of people to improve their quality of life. One customer took the abnormal results she received using EverlyWell’s Vitamin D test to her doctor, who subsequently discovered that she had Thyroid cancer. She is now in remission.

The company are continually expanding their selection of tests. Recently, EverlyWell joined with DNA company Helix so that customers can learn the impact of DNA on their weight, DHA levels and metabolism. Further down the track, the company plan to sell their kits in retailers, in addition to their online store, to make the tests even more accessible.

The improvement of existing processes and products can have a profound effect on established industries. Cheek herself has stated that, “This is a really great time for female entrepreneurs. I think that women developing ideas and creating products from their personal experiences is powerful– we represent a large majority of the purchasing power in the country.”

EverlyWell has developed its own technology platform, genomic panels and are continually working on various features and new tests. These types of activities generally qualify for research and development tax credits where innovative businesses can receive a refund of up to 14% for eligible expenditure. Sound good? For further information, please contact a Swanson Reed R&D Specialist today or try our free online eligibility test to see whether you qualify.

ViaGen’s Cloning Service For Beloved Pets

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Remember Dolly the sheep, the first successful mammal cloned by Scottish scientists in 1996?

Twenty years later and the technology has evolved to cloning our favourite furry companions. ViaGen have been successfully cloning livestock for over 15 years – sheep, horses, pigs and cows – and two years ago, extended the service to cats and dogs.

How does the process work? Four small skin samples are taken from the pet and millions of cells are then cultivated from the cells, containing the pet’s full DNA for cloning. A cloned embryo is implanted into the surrogate mother chosen to carry the pup.

The resulting animal is like a genetic twin of the original, except born on a different date. It will have the original pet’s characteristics including its intelligence and temperament. However, as with human twins, the pet’s personalities will differ – while genetically identical, they will not be exact replicas of the original pet.

This groundbreaking technology has been used to clone pets for people who want to keep their beloved pet in their lives for longer, since cats and dogs have a much shorter lifespan than humans. It has also been suggested that cloning police and other service dogs with ideal characteristics could create some very successful working dogs.

While cloning your dog currently costs $50,000 ($25,000 for cats) and there is a three month waiting list, ViaGen aim to further develop the technology to allow more people to clone their pets at a lower price.

ViaGen are an innovative Texan company undertaking research and development to create new knowledge on a global scale. The company is thus eligible for a rebate on its R&D expenditure. Companies in any industry who are developing new products may be eligible for the R&D Tax Credit. Complete our quick eligibility test to see whether you can take advantage of this credit to lower your company’s tax bill.

Geekdom Facilitate Tech Solutions For Real-World Local Problems

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With the aim of embracing local talent to find solutions to bothersome community issues, tech co-working space Geekdom have partnered with San Antonio’s Office of Innovation to launch CivTechSA. This new program will provide students and startups with 16-week residencies to build innovative technologies to help solve the city’s infrastructure problems. At the end of the residency, the city will choose whether they want to purchase the product, allowing budding entrepreneurs to profit from their hard work.

The project is already surfacing some fantastic ideas. One solution includes an alert system to help with the city’s stray dog issue. It notifies users when dogs arrive in nearby animal shelters in case a perfect match comes up! Other ideas range from a sorting chute for recycling plants to improving public transportation services.

Geekdom Programs Director Dax Moreno stated that, “There’s a real hunger, I think, for the startups that are inside of the community to solve not only real world problems but problems that are happening today… People want to program and code, but they want to program and code with a purpose.”

As part of CivTechSA, community events will be hosted to foster entrepreneurial development and educational institutions will be encouraged to create new technology to help other students and the community. Geekdom may also host a ‘code-a-thon’ where entrepreneurs and programmers work together to build software solutions over just 48-72 hours.

San Francisco and other cities will also receive CivTechSA residencies to cultivate local talent and grow the startup ecosystem. Did you know that startups developing new technologies are able to claim up to 13.5% of their eligible research and development expenditure with the R&D tax credit. To learn more about this credit, contact Swanson Reed R&D Tax Consultants or take our online eligibility test to find out whether you qualify.

Are pharmaceutical industries investing too little into R&D?

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Alzheimer’s disease effects over five million Americans and while there are drugs that temporarily alleviate symptoms, there is currently no treatment available to slow down the progression of the disease.

While Drug Companies remain determined and invest billions each year to find an effective method of treatment, it is being argued that they are failing to devote enough resources and time into research and development. Currently 99% of Alzheimer clinical trials are inconclusive or failing, therefore the argument is being made whether drug companies are really exploring all their options.

The institute of New Economic Thinking issued a paper condemning drug makers for buying back company stock and paying dividends to shareholders, rather than spending their money on R&D. The institute urges the government to push aside these private companies and take a more active role in developing medicines.

However medical professors shot back and argued that this criticism was unfair as elbowing aside the private sector is dangerous. Without the hundreds of billions of dollars committed by private-sector researchers, it would be impossible to cure Alzheimer’s, cancers and various other diseases.

Currently the pharmaceutical industry invests a much higher percentage of revenues into R&D than most other sectors. On average the top 18 drug companies spent approximately 16% of proceeds on R&D from 2006-2015. This is a very significant percentage when comparing it to the automobile industry, which has strongly marketed itself as being extremely innovative and futuristic, particularly surrounding the hype of autonomous vehicles. However this sector only invested an average of 4% of its revenues into R&D, according to the consulting firm PwC.

Globally there are over 7,000 new treatments in development and 70% of these use completely new methods to treating illnesses. It is argued by health professors that it is naïve to think that firms will continue making these costly, risky investments if there is no chance of earning a return. Drug companies deliver enormous benefits to society; however they are not charities.

Private medical R&D is in fact showing to be crucial to American physical and financial health, as over 40% suffer from a chronic illness and these diseases account for 90% of total U.S. health care costs.

Medical and health professors fight back at critics accusing the pharmaceutical industry of neglecting R&D. They argue that if their statements are in fact true, then who deserves credit for the hundreds of newly developed treatments that improve people’s lives and lower health care costs each year?

R&D is and will continue to be crucial in the health care and specifically the pharmaceutical industry, and the significant ongoing investments into it to date are proof of this.

If you are conducting pharmaceutical experiments, you could be eligible for the R&D Tax Credit and receive up to 14% on your expenses. To find out more, please contact a Swanson Reed R&D Specialist today.

Swanson Reed regularly hosts free webinars and provides free IRS CE credits as well as CPE credits for CPA’s.  For more information please visit us