The open source production model is a model where the source materials for the end products are available to the public.

In the case of software, where this term is mostly heard, it means that the source code of the software is available for others to view – this has been used in many cases to help with further development or debugging of software. Some open source software that you may have heard of, that you may even use, include Mozilla Firefox, OpenOffice, Linux and Drupal.

There is also open source electronics hardware, robotics, food & beverage products, and fields in both the medical and science industries.

The medical and science industries are slightly different than the other industries listed. Open Source proposals in the pharmaceutical industry have lead to the formation of the Tropical Disease Initiative, whose purpose is to discover new drugs that work against tropical diseases such as Malaria or Tuberculosis. In the science industry, open source initiatives have resulted in the creation of the Science Commons – a project that works to speed the translation of data into discovery, and increase the value of research.

How would this affect applying for SR&ED?

What you have to remember, if you are using open source technology is that when claiming for SR&ED, the work you are claiming must be for developing new or improving existing products, processes or services, where you have gone beyond the existing technological baseline. After you have completed the work, you know more about the technology than was previously generally accepted as the baseline of knowledge.

With many companies taking advantage of open source materials, it means that innovation can happen more quickly than it had in the past, and that smaller companies can do the innovative work – not just the large corporations, as it had been in the past.

An example of where work done on open source materials that could be applicable for the SR&ED program include the creation of new algorithms, methods or processes for open source software. If you are building on top of open source software with other widely known technology, this would not be eligible for the SR&ED program.

Whether what you are doing in regards to open source materials is in face eligible or not for the SR&ED program depends on exactly what you are doing with the open source materials. The best way to discover whether what you are doing is eligible for the SR&ED program is to contact an expert in the program.

What were some of the findings?

• The majority of firms in Canada (77.1%) focus on already existing products – how to promote them, how to improve them, how to expand sales on them.
• Approximately two-thirds of Canadian companies have done some sort of innovative work between 2007 and 2009, including product innovation, process innovation, organizational innovation and marketing innovation.
• The three largest obstacles and impediments to innovation are: uncertainty and risk, lack of skills and internal financing.
• The three largest obstacles to working in a global market are: distance to producers, trade tariffs, and identifying potential suppliers.

Full results of the survey can be found here.

One of the most recent videos posted is of a talk given by Frans Johansson, and in this presentation, he speaks about innovative ideas – how to develop them, how they often seem obvious after they’ve been developed, and how good innovation needs a lot of perseverance.

Watch the video below, or click through to it on the 99 Percent website.

In the past year, Bombardier Aerospace introduced their much anticipated line of CSeries jets.  Magellan Aerospace and Pratt & Whitney Canada invested big time in their Montreal and Winnipeg operations.

According to the AIAC (Aerospace Industries Association of Canada), based in Ottawa, the aerospace sector directly employed 82,000 Canadians in 2007.  This is a significant increase from the 79,000 employees working in the industry just a year prior.  Aerospace revenue increased by half a billion to $22.7B.

Aircraft parts, components, and planes, jets, etc. account for 55% of  the overall revenues for the aerospace sector, the majority of which is generated by exports, especially to the US and European countries. Military sales increased by $5 billion last year, a rise of 18% from 2006.

Helping to fuel the exponential growth of the aerospace sector (no pun intended) is the increase in commercial air travel. The Current Market Outlook for 2007-2008, released by Boeing, predicted that air passenger travel will increase 5% per year, and cargo travel by 5.8%. The forecast extends these numbers for the next two decades.

Quote for April 22nd, 2009:

“The modern airplane creates a new geographical dimension. A navigable ocean of air blankets the whole surface of the globe. There are no distant places any longer: the world is small, and the world is one.”
- Wendell Willkie

During the Leaders’ english debate on October the 3rd, one issue that was broached was the federal SRED (Scientific Research and Experimental Development) business incentive program. Under the existing federal SR&ED program, non-profitable corporations with large revenues may receive research and development tax credits that cannot be applied.  Liberal leader Stephane Dion and Bloc Québécois leader Gilles Duceppe both proposed that these tax credits be partially refundable.

“A Liberal Government will encourage all companies to innovate, even if their innovation does not lead to immediate profitability, by making the SR&ED Tax Credit partially refundable. This change is vital at a time when many companies are struggling to become or stay profitable.  Every company that puts money into R&D should be rewarded for innovating.” [ Source ]

Large corporations can sometimes receive millions of dollars in tax credits through the SR&ED program.  I think that this measure, if implemented, will increase the cashflows of these large corporations drastically!