$40 Million Manufacturing Plant to be Built in Tennessee

Both national and international businesses are looking to build new manufacturing plants in the US, and Tennessee is likely to benefit. Last year, foreign companies like Volkswagen, Gestamp and Yangeng expanded to Tennessee and more are expected to move here in 2017.

Rockline Industries, a Wisconsin-based company, plan to open a $40 million, 435,000-square-foot manufacturing plant in Morristown that will begin operations in 2018. The consumer products manufacturer will form a new subsidiary, Iatric Manufacturing Solutions, to specialize in FDA-regulated wet wipes, a product that has been in high demand in recent years.

“Manufacturing is one of Tennessee’s top industries, employing over 333,000 Tennesseans, and I am grateful that Rockline will expand this growing sector by creating 250 new jobs in Hamblen County” said Bob Rolfe, Commissioner of Tennessee Department of Economic and Community Development, “The pipeline in Tennessee right now for new projects is probably as grand as it has ever been.”

In a 2016 report by Brookings, Tennessee ranked first in the US for growth in advanced industry jobs, growing by 4.6% p.a. from 2013 to 2015 (the national average was 2.46%). Advanced industry companies include sectors like manufacturing and technology and are defined as those that spend over $450 per worker per annum on R&D, and employ at least 20% of their workforce in STEM jobs.

Governor Bill Haslam stated that, “Our goal has been to make Tennessee the number one location in the Southeast for high-quality jobs, and this recognition by Brookings shows we’re making tremendous progress by adding highly-skilled jobs faster than any other state in the country.” Tennessee’s goal is to create 25,000 new jobs this year, 4000 more than last year.

Did you know that up to 80% of manufacturers do not realize that they may be eligible for the R&D tax credit, a credit worth around $10 billion per annum? If you are unsure about whether you qualify, contact Swanson Reed R&D Tax Advisors for an obligation-free assessment.

Alaskan Oil Field Discovery Comes Just In Time

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New Oil Field To Help Boost Alaskan Economy

A vast oil field has been discovered in the northern section of Alaska and could play a big role in increasing Alaska’s energy production industry.

Caelus Energy made the discovery about 300 miles north of the Arctic Circle and believes it could extract somewhere between 6 to 10 billion barrels of oil from the area.

“The discovery could be really exciting for the State of Alaska. It has the size and scale to play a meaningful role in sustaining the Alaskan oil business over the next three or four decades. Fiscal stability going forward is critical for a project of this magnitude,” said Jim Musselman, Caelus CEO.

The plan is to build an $800 millon 125-mile pipeline to connect with existing pipelines in other parts of Alaska.

The discovery has come just in time for the Alaskan oil industry. Without it, Alaska could be nearing a total collapse of its oil industry and economy if it doesn’t come up with a solution to prevent the continuing decline of its production efforts.

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If you are a U.S. company conducting R&D and are interested in claiming the R&D tax credit, please contact a Swanson Reed specialist.

3D printing shows potential to create wearable electronics

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Researchers at the Missouri University of Science and Technology (S&T) have started the project of creating stretchable electronics that can be elongated, compressed, or twisted to fit practically any surface.

Integrating the wide variety of materials needed to make such an electronic device with such components is proving to be challenging and researchers at Missouri S&T have decided to tackle this challenge using 3D printing, also known as additive manufacturing. Additive manufacturing has the benefit that it can easily change from one material to the another and integrate all the different materials together in one print.This process allows manufacturers to print highly conductive materials onto an elastomer surface layer by layer to create a stretchable electronic device.

At Missouri S&T, researchers are experimenting with a 3D printing approach called ‘direct aerosol printing’. The process involves spraying a conductive material and integrating with a stretchable substrate to develop sensors that can be placed on skin. A working prototype has been created of a stretchable electronic device that can adhere to the face. This project is still in the early phases, however it is believed the technology has a lot of potential, particularly in the biomedical engineering space, because of the soft and conformable nature of the device.

One of the most significant benefits of these electronics is that they can be completely wearable, and can form to any kind of motion, for example, being mounted on the face and detect any small motion from your face. Stretchable electronics could also be developed and installed in shoes and used to measure pressure and weights, the possible applications are extensive.

However, several challenges must be addressed before stretchable electronics become widely used as components in consumer electronics, medical devices and other fields. All the materials needed to make each stretchable electronic device needs to be printable, which means developing ink and printable materials that have all the necessary properties for each type of electronic device. In addition, there are also integration challenges, such as varying temperature requirements among different materials. It is also important to ensure that the stretchable electronics and the malleable surfaces they’re built upon perform and age well together.

One of the biggest research focuses right now is to develop an effective, long-lasting stretchable battery, as the energy device is a very critical component in order for stretchable electronics to be realistic.

Following the perfection of the technology, the products will also need to be scaled-up. 3D printing does make that process more streamlined as it can be easily moved to any location, however there are still a lot of unknown factors. The device itself will also need to be low-cost to create, and eventually biodegradable. Despite these hurdles, researchers are optimistic that stretchable electronics, made using 3D printing, will become more commonplace going forward.

If your company is using 3D printing, you may be eligible for the federal R&D Tax Credit.  Contact a Swanson Reed specialist to see if you qualify.

Toyota makes generous research donation

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Toyota has donated its Erlanger Kentucky engineering and research facility to become an innovative educational center serving the region.

One of the buildings at the Erlanger headquarters is now being donated to the Ignite Institute at Roebling Innovation Center, name after famed engineer John A. Roebling. The donated facility is a 183,000-square-foot Quality and Production Engineering Laboratory and will serve as a science, technology, engineering, art and math education center.

Toyota hopes that this enduring gift will inspire the next generation of local workers to be creative, engaged, highly skilled, tech-savvy and work-ready problem solvers.Toyota’s goal through the donation of its research facility is to create a lasting positive impact by helping to prepare students for the next generation of jobs, and they encourage other large companies and businesses to do the same.

The school will allow a capacity of 1,000 students from grades 9-12, with the first class expected to take place in the 2019 school year. Through Toyota’s generous donation, Boone County Kentucky will be able to offer it’s students the best education in research, development and innovation. The entire school will be based on a project-based learning and real industry-case methodology, which aims to empower students and offer them the opportunity of a lifetime throughout their schooling and also after they graduate.

Following the donation, the Kentucky Government announced a $6.8 million construction of research facilities grant to further develop the facility to suit the requirements and environment of 9th-12th grade schooling. This partnership between Toyota and local education of Kentucky serves as proof that the state is on track to become the nation’s unparalleled hub of engineering and manufacturing excellence.

To find out whether your company is eligible for a state research credit for construction of research facilities  Contact a Swanson Reed specialist.

U.S. Universities Spending More on Research and Development

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U.S. universities are spending more and more on R&D these days. In 2015 alone, colleges and universities spent a combined $68.8 billion on research and development with the top 20 colleges accounting for 30% of that.

To discover the universities spending the most in research and development, 24/7 Wall St. assessed R&D expenditure by university for the 2015 fiscal year with data from the National Science Foundation. Of the 1,871 major colleges and universities reviewed, 10 schools spent more than $1 billion on R&D.

Top 10 Universities for R&D Expenditure

  1. Johns Hopkins University in Baltimore, Maryland
    • Annual R&D spend: $2.31 billion
  2. University of Michigan
    • Annual R&D spend: $1.37 billion
  3. University of Washington
    • Annual R&D spend: $1.18 billion
  4. University of California, San Francisco
    • Annual R&D spend: $1.13 billion
  5. University of California, San Diego
    • Annual R&D spend: $1.10 billion
  6. University of Wisconsin – Madison
    • Annual R&D spend: $1.07 billion
  7. Duke University in Raleigh, North Carolina
    • Annual R&D spend: $1.04 billion
  8. Stanford University in Stanford, California
    • Annual R&D spend: $1.02 billion
  9. University of California, Los Angeles
    • Annual R&D spend: $1.02 billion
  10. Harvard University in Cambridge, Massachusetts
    • Annual R&D spend: $1.01 billion

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If your company is conducting R&D through a local university or college, you may be eligible for a higher R&D tax credit rate. Contact a Swanson Reed specialist to find out more information.

BioVenture Forum in Oklahoma Encourages Entrepreneurship

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The Oklahoma Medical Research Foundation (OMRF) BioVenture Forum aims to facilitate interactions between international scientific teams and the biotechnology community, demonstrating scientific achievements from Oklahoma to potential investors. “When people think of Oklahoma, they think of oil and gas… We want them to see a biotech mecca here, as well,” said Manu Nair, OMRF’s Vice President of Technology Ventures. One of the companies showcased at the forum was Oklahoma-based Selexys Pharmaceuticals, which has turned out to be a great entrepreneurial success story for the state.

In November 2016, the largest life sciences agreement in the history of Oklahoma was signed. Selexys were acquired by Novartis, who are the second largest pharmaceutical company in the world, for $665 million. This was one of the top five mergers of US-based companies in the last quarter of the year.  Before the takeover, the start-up received investment funds from i2E (an Oklahoma-based small business) and the Oklahoma Life Sciences Fund, as well as around $12 million in grants.

Historically, venture capital has been in short supply in Oklahoma. Start-ups in Oklahoma are now being supported, thanks to the state’s model for developing venture capital. This includes both state and private funding from organizations like The Oklahoma Center for the Advancement of Science and Technology and i2E. While Oklahoma cannot compete with states like Massachusetts or New York, the cost of undertaking research there is lower, so investment funds can go further.

Former Selexys CEO, Scott Rollins, is now running another Oklahoma-based pharmaceutical company, Tetherex Pharmaceuticals, which aims to develop a treatment for Chrohn’s disease and cancer. Companies like this will benefit both Oklahoma and the global community for years to come.

There are many research activities that qualify pharmaceutical companies for the R&D Tax Credit. Contact a Swanson Reed specialist to learn more.

Oklahoma Company Turns Towards Innovation and R&D to Help Boost Business

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Oklahoma City-based oil-field manufacturer Kimray Inc. has begun an R&D project to upgrade its signature valves and other equipment to run on electricity instead of methane or compressed air.

“It’s just going to evolve. I hope we don’t ever have a timeline to when it will be finished,” said Mark Anderson, Kimray’s product support manager. “As technology improves, the things we’re able to do it will just keep going.”

The new design will further reduce emissions and give operators more control of their equipment remotely which will decrease the need for travel. Remote operation is also less expensive and safer.

“If you’re in the energy industry any length of time, you’re going to have people talk about safety,” Anderson said. “The most dangerous thing we do is drive. It’s not the pressure. It’s not the work. It’s driving to and from locations. If we can keep people off the road to make changes and monitor leaks, it will also reduce our environmental impact. That’s a key thing to what we’re doing.”

Kimray is proof that innovation isn’t slowing down with the downturn of the oil and gas industry.

“The downturn actually helped us to know we were on the right track, heading in the right direction,” Anderson said. “It motivated us to get things done and speed things up.”

Many other oil and gas companies are following in Kimray’s footsteps and looking towards innovation and R&D to keep things afloat.

The Oklahoma R&D tax credit is available for those companies conducting R&D within the state. To find out if your company is eligible, please contact a Swanson Reed specialist for further information.

 

Maryland Ranked 1st for Innovation Environment

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Personal finance website, WalletHub, has ranked Maryland 1st in the country for its Innovation Environment.

The 12 Innovation Environment indicators were:

  • Share of technology companies
  • R&D spending per capita
  • Ratio of total R&D performed to state GDP
  • Invention patents per capita
  • Entrepreneurial activity
  • Tax-friendliness
  • Industry-cluster strength
  • Drone-friendly laws
  • Average Internet speed
  • Share of households with Internet access
  • Venture-capital funding per capita
  • Average annual federal small-business funding per GDP

Overall, Maryland was ranked the second most innovative state in the US with a ranking of 69.82 on a 100 point scale, just behind its neighbour, the District of Columbia with a ranking of 70.87.

Ranked 2nd overall in the Human Capital category, Maryland came 2nd for its share of science and engineering graduates. It placed 3rd for its share of STEM professionals and projected STEM-Job demand by 2020.

Other states that ranked well were Massachusetts, California and Colorado. Conversely, the least innovative states included West Virginia, Mississippi and Louisiana.

What Makes Maryland So Innovative?

Innovation is fostered by sustained investment in R&D, education and business creation and the development of a strong collaborative attitude. For instance, the University of Maryland plans to open an innovation center this summer to encourage entrepreneurial activities on campus and to encourage all of the University System of Maryland schools to work together.

International projects such as the Maryland International Incubator (MI2) have even greater potential. The MI2 aims to connect Maryland with global organisations, to produce successful joint ventures using world-class resources. This increases commercial activity and provides cultural learning opportunities for students.

Maryland R&D Tax Credits

Innovative businesses in any industry can apply for the Basic and Growth R&D tax credit in Maryland. To be eligible, the company must incur qualified research and development expenses as defined by section 41(b) of the Internal Revenue Code in Maryland. This could include software development or testing of new concepts or technology. The credit is refundable, allowing it to be reinvested into the business. The application deadline is September 15 of the following the tax year in which the expenses were incurred.

To find out whether your company is eligible to apply for the R&D tax credit, please contact Swanson Reed R&D Tax Specialists.

Uber’s self-driving cars are heading to Arizona

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Only one week after launching its self-driving pilot program in San Francisco, the birth place of Uber, the trial is moving to Phoenix, Arizona.

“Our cars departed for Arizona this morning by truck,” an Uber spokesperson said in a statement of the fleet of modified Volvo XC90 cars. “We’ll be expanding our self-driving pilot there in the next few weeks, and we’re excited to have the support of Governor Ducey.”

In 2015, Uber announced a partnership with the University of Arizona’s College of Optical science. The project focuses on research and development in the optics space for mapping and safety. Gov. Doug Ducey signed an executive order at the time, allowing the testing of the self-driving cars in the state.

The vehicles began testing in San Francisco, however after one week they were faced with backlash. The California Department of Motor Vehicles in partnership with the attorney general said the program has failed to obtain a permit to test self-driving cars. Uber in rebuttal, argued that the cars were exempt from a permit due to the presence of safety drivers in the car at all times. The presence of the driver meant the vehicles did not match the state’s description of an ‘autonomous vehicle’.

Given Uber’s existing relationship with Arizona, the cars will move testing to the state.

Alabama Succeeds in 2015 as a Top State for Investment

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In 2015, many companies found prominent investment opportunities in Sweet Home Alabama.

According to a recent report from Ernst & Young, Alabama ranked 5th among states for mobile capital investment with a total contribution of $5.3 billion. This precise type of investment refers to expenditures of funds for projects such as office buildings, factories, call centers, and distribution centers, often geographically distant from a company’s headquarters. Alabama is ranked 4th when this figure is calculated as a percentage of state GDP. This is a remarkable ascent as the 2015 investment figure is double the state’s corresponding averages for the 2010 to 2014 period.

Specifically, a large portion of Alabama’s investment comes from a few concentrated and well-funded fields, including automotive manufacturing and aerospace. The state’s Department of Commerce has expressed a strong interest in continuing to focus on these high-profile sectors to increase the number of “knowledge-based jobs in fields such as research and development (R&D) and engineering.” In this same vein, Google announced intentions to construct a $600 million data center in Jackson County.

Another significant apportionment of funds comes from international sources in the form of foreign direct investment (FDI). Almost half of capital investment in 2015 originated in 18 countries, including Germany, Canada, South Korea, France, and Japan. Germany led this prestigious pack of FDI nations, with growth primarily driven by Mercedes’ $1.3 billion expansion in Tuscaloosa, located in western Alabama.

Alabama’s impressive performance in the national and global economic spheres is similar to that of many other southern states. Texas and Louisiana were the top two states in Ernst & Young’s mobile capital investment ranking. Because southern states offer competitive operating costs and concrete logistical infrastructure, they draw many foreign companies looking to expand into North America. Other appealing elements include ascending workforce development levels and the presence of state and local tax incentives. Because of these factors, states like Alabama often serve as preeminent indicators and can forecast upcoming trends in the global marketplace.

The overall takeaway from the investment advantage Alabama holds, according to a principal at Ernst & Young, is that “states should continue to find their competitive edge to attract a wide variety of investment types and maintain a healthy economy.”

Companies like Google and Mercedes are expanding and innovating through investment in new, driven ideas. They are taking advantage of the opportunities Alabama provides, including various tax credits for R&D. These credits offer advantages to forward- thinking companies in the form of cash-saving benefits.

If you would like to know more about how R&D tax credits function and how they can profit your firm in particular, Swanson Reed’s professionals are available for constructive discussions. Contact us today if you would like to know if your company qualifies.