Household name Encyclopedia Britannica, in print since it was first published in Scotland in 1768, announced earlier in March its plans to end physical print publications and focus on expanding its online and digital application presence. Their website features an ad for an iPad app under a banner promoting its “FINAL Print Edition,” a great metaphor for the transition media is undergoing.
The massive 32-volume print edition sold for $1400 as compared to an online subscription cost of around $70 per year – and the company has now launched a bevy of apps at low ($1.99-$4.99) monthly costs.
One of the reasons behind the transition is the demand for immediate and customizable information from end users, people with growing tech savvy using a host of electronic devices to access information with academic to professional to recreational motivation. This transition into a “new age” where consumers demand immediate and interactive content is being supported from a government standpoint with incentives programs like the OIDMTC and other provincial Digital Media Tax Credit programs.
Let’s look at the hypothetical Encyclopedia Britannica iPad 3 app: the product is content-based and cultural with the primary motivation to educate and inform (and in some cases entertain), with an individual end user in mind. The ideal app features a combination of text, image and sound and is interactive in that the user controls the flow of information. This is aligned with an ideal product for the OIDMTC. Add in 90% development in Ontario and a similar product is eligible to claim 40% of labour and marketing and distribution costs.
The best part of the credit is the portion dedicated to marketing and distribution – up to an incredibly generous $100,000. The M&D portion extends 24 months prior to product launch date and 12 months following and can be used to flesh out your budget in a number of key ways.
This kind of app is only an example of the types of products eligible under the term Interactive Digital Media – we can help sift through eligibility requirements to identify how to maximize incentive programs for your company. Send us a note to let us know what other OIDMTC information you would like to see on the blog.
The Globe and Mail recently addressed the fact that in recent years, the relative impact of self-employment across Canada has been waning. Self-employment has always been an important feature of the Canadian economy; the OECD lists Canada as one of the highest concentrations of entrepreneurs within a working population. However in recent years, the ratio of self-employed persons to those working for someone else has dropped back.
Statistics Canada’s Labour Force Survey (ratio of self-employment to those employed by someone else):
- 13.8 per 100 in 1976
- 21.0 per 100 in 1998
- 18.2 per 100 in 2011
What might be some of the causes for this recent decrease?
Some obvious contributors may be the decline of self-employment due to (1) the retirement of baby boomers, and (2) business failures caused by the last recession. If this is the case, then it is even more paramount for the Canadian government to support new business startups. How can we effectively create new startups to displace the ones that have disappeared?
One of the issues that deters entrepreneurship is the current gap that exists between innovation and commercialization. Our best ideas are often acquired by US-backed firms because we may not be effectively funding business commercialization. Private venture capital is lacking in Canada, so without a doubt, the largest contributor to startup commercialization in Canada is the Scientific Research and Experimental Development (SR&ED) program. The SR&ED program provides refundable tax credits to start-up companies, for expenses that have already been incurred. However, it often takes 1-2 years for companies to see these refunds! This is definitely an area that requires improvement if we to remove the commercialization gap. It should be noted that innovative companies such as the North Innovation Fund have recently begun to offer SR&ED financing on unfiled SR&ED claims.
Changes to the SR&ED program are rumoured in the next federal budget. It goes without saying that the SR&ED program is critical to the survival of many small starts-up. Reducing or removing SR&ED will further decrease the likelihood that these startups will be able to commercialize their innovations, and create new jobs. Instead of cutting back funding to startups, we need to invest in startups, and encourage entrepreneurship in Canada in order to create future employment.
Li-ion Motors Corporation has announced that they will make plans for additional collaboration with Canadian firm Lithium Electric Vehicle Corporation (LEVC) to take advantage of Canada’s Scientific Research and Experimental Development (SR&ED) program. Li-ion’s fully electric vehicles (the Inizio and the Wave), along with their battery-management and electric propulsion technologies, are technological advancements over the traditional fuel-powered vehicles.
The Canadian SR&ED program has made it possible for Li-ion to work with LEVC in order to maintain its world-wide edge in electric propulsion system. This is because the Canadian SR&ED program is the most R&D-friendly program worldwide. Through this collaboration, Li-ion aims to bring their products to market with full certification.
Although much criticism has been heaped onto the SR&ED program as of late, especially after the Jenkins Report, the Li-ion case is an example of how the SR&ED program is effective at encouraging research and development in Canada, while keeping jobs within Canada.
ComScore, the go-to internet marketing research company, recently released an annual report on Canada’s digital trends, highlighting the influence of digital media in Canada’s marketplace.
“Technological innovations in digital device hardware and software have enabled a rapid increase in consumers’ digital consumption habits, marking an exciting time for the digital media industry and depicting an even more influential year ahead.”
According to the report, Canada is leading the world in online engagement. This makes Canada an extreme fertile landscape for digital media development and tech firms. Social media is still on the rise, as well as online video viewing and Smartphone infiltration.
The exponential growth of technology is headed towards interactivity integration, like The Bay’s pilot virtual greeter at the Eaton Centre location which speaks to shoppers who approach the projected digital image, prompted by sensors on the ceiling. Canada is making efforts to support tech growth in the right directions, including refunding interactive technology product development (see Digital Media Tax Credits).
If your company is engaged in developing an interactive technology product, we invite you to contact us to learn more about incentives like the Ontario Interactive Digital Media Tax Credit, and other sources of government refunds.
Read the full comScore report here.
During a speech today at the Creative Economy Summit, the Minister of State for Science and Technology, Gary Goodyear, announced that Canada will continue to make key investments in science and technology.
“Through our government’s science and technology strategy, we are keeping our economy strong, creating high-quality jobs and ensuring Canada is a premier destination for the world’s top researchers. By supporting innovation, we are not only encouraging cutting-edge research but also bringing promising creative ideas to the marketplace.” (Gary Goodyear)
In regards to SR&ED, the federal government is currently studying the recommendations of the Jenkins report, and while they do not necessarily subscribe to all of the recommendations, they agree with the need to address the challenges present in business-related R&D. Gary outlined the achievements of Canada’s science and technology strategy, which is aimed at attracting and retaining the world’s brightest researchers, increasing R&D investment, and commercializing promising research.
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