With research or ” blindly” – how to implement new products?

As many as 56 percent of medium and large companies in Poland implemented new products during the year. However, few of them know that they are carrying out R&D activities in this way and therefore qualify for tax credits and EU subsidies for R&D, why?

In the report we prepared together with Grant Thornton, 500 randomly selected large and medium-sized manufacturing and service companies in Poland were surveyed. It was checked whether the companies in question had announced the launch of a new product or service on their websites over the past year. It turns out that as many as 56 percent of the surveyed companies expanded their offerings in this way. These are very positive results! This means that the development of new products is almost a permanent feature of the activities of domestic medium-sized and large companies.

With research or ” blindly” – how to implement new products?

implementing new products - Edisonda

When implementing new products, it is easy to fall into the trap of cognitive errors. Expanding an offer requires effort, money, marketing, good timing, and luck – getting all these factors right is an extremely difficult art and in practice often fails. How can you reduce the risk of a failed product? A key, often overlooked issue is to know the motivations of potential customers.

– It is difficult to ‘design in a vacuum’ and create something that is supposed to be suitable for everyone. It is good practice to select a specific audience and understand their needs thoroughly during detailed research. This is where interviews, observation, or the recently popular ethnographic methods (following customers to learn about their behaviour and habits) come to the rescue – explains Hubert Turaj.

As the report shows, still few Polish companies are aware that they can settle the so-called R&D tax credit on the costs incurred for work on new products, including research. In 2017, only 565 companies took advantage of it. On the scale of the entire Polish economy, this is a really small number (compared to, for example, 15,000 medium and large non-financial and non-commercial companies).

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Meanwhile, almost every company that implements a new product – to a greater or lesser extent – usually carries out research and development activities. And now, in order to get tax credits, it is not necessary to develop new, complex technologies created by outstanding scientists. Tax credits can be obtained, for example, for research on prototypes.

– In the most classical sense, such research makes it possible to verify the concept of a product or service at a very early stage of its existence, therefore saving costs and time that could have been wasted if the team had to wait with verification until the final version of the product or service was created, adds Maciek Płonka.

From 2018, it is possible to deduct up to 100 percent of the costs incurred during production, research, and product launch. It is sufficient that the company actually works on product innovations and does so in an organised manner. And this applies to the majority of medium and large Polish companies, especially manufacturing companies. They can then deduct costs incurred, for example, on the salaries of employees working in this area or on their working tools.

Want to find out what the process could look like in your organisation?