Eligibility must be assessed on an activity level, rather than project level. Within a software project, there is likely to be some activities that qualify as a core R&D activity, some that qualify as a supporting R&D activity, and some activities that are not eligible.
InsightIQ considered its activities against the definitions of core and supporting R&D activities.
It self-assessed that the development of a new data model and machine learning algorithms underlying new demand forecast functionality to optimise pricing and other retail functions met the requirements to be a core R&D activity because:
- There was no current knowledge that could be found in the literature, open-source code repositories, ML/AI libraries and other publicly available sources that could be leveraged to achieve the desired outcome.
- It could only determine the outcome through a systematic progression of work that is based on the principles of an established science, in this case the fields of software engineering and data science.
- It plans to generate new knowledge about the design of the data models to record data from several proprietary and publicly available sources and then process, store and access it within specific time and performance metrics. Further, new learnings will be gained in design of the ML algorithms and weightings assigned to the key variables to forecast demand over a set period of time to a high degree of accuracy.
InsightIQ assessed that other aspects of the development including project management, obtaining data to use in the experiment, and the development of a working front-end to evaluate results could be registered as supporting R&D activities. These tasks were all within the skills and experience of the company, however, they were directly related to the core R&D activity and the experiments could not be carried out without them.
Additional activities carried out during the project such as marketing activities, commercial discussions with major customers and more routine development tasks such as the development of the graphical user interface did not meet the definitions of core or supporting R&D activities and were thus not included.