3 ms·

> if a private company is going to r&d for the benefits of their shareholders What if the R&D is open-sourced? Or what if the R&D would be for a product genui

> if a private company is going to r&d for the benefits of their shareholders What if the R&D is open-sourced? Or what if the R&D would be for a product genuinely beneficial to people? Think a new drug, or infrastructure like Google Maps, etc.

iancmceachern 3y ago
The people who make a living doing the work need to be paid somehow.
lnxg33k1 3y ago
Those are good points imho, I think If they make a profit with it, then they can also pay for it, its useful for society and society appreciate it with the money they give to it, no reason to pay for it with taxes
- Murskautuminen 3y ago
  Some products also only make money after a long time of R&D. If you are a startup focused on such a product, R&D tax benefits are critical to keep you alive during your long development time that will require multiple rounds of investment before you can even think of making a profit. For example, a new drug can take 10~16 years to get to the market, and this is intended by government regulations (there is often no way around it). One has to show the drug is safe and works against the intended disease, before one can sell a drug. However, before you can even start this clinical work in humans, you must discover the drug first and optimize it through laboratory and animal testing. Only after that can you enter the clinical stage to test it in humans. Clinical stages are typically divided into phase 1/2/3 and each stage requires more time and money. After you complete all that, you can finally ask for approval to sell your drug at a profit from the government (US Food and Drug Administration (FDA)/ EU European medicine agency (EMA)). This trajectory can typically be divided as follows: Drug Discovery (early lab testing) 2-4 years, $2-15M Preclinical Drug Development (advanced lab/animal testing) 2~3 years, $10-15M Clinical Stage 1 (First in human studies) 1~2 years $15~30M Clinical Stage 2 (medium-sized human study), 2~3 years, $40~60M Clinical Stage 3 (large, longer term human study), 2~4 years $100~300M. Total: 9~16 years of research & development with a cost of $167~420M. Then finally you can sell the drug for a profit. If you are a startup focused solely on such development, you have no way (or very limited ways) to make money/profit in those 9-16 R&D years. In such a case, R&D tax benefits are really useful.

iancmceachern 3y ago

The people who make a living doing the work need to be paid somehow.

lnxg33k1 3y ago

Those are good points imho, I think If they make a profit with it, then they can also pay for it, its useful for society and society appreciate it with the money they give to it, no reason to pay for it with taxes

Murskautuminen 3y ago
Some products also only make money after a long time of R&D. If you are a startup focused on such a product, R&D tax benefits are critical to keep you alive during your long development time that will require multiple rounds of investment before you can even think of making a profit. For example, a new drug can take 10~16 years to get to the market, and this is intended by government regulations (there is often no way around it). One has to show the drug is safe and works against the intended disease, before one can sell a drug. However, before you can even start this clinical work in humans, you must discover the drug first and optimize it through laboratory and animal testing. Only after that can you enter the clinical stage to test it in humans. Clinical stages are typically divided into phase 1/2/3 and each stage requires more time and money. After you complete all that, you can finally ask for approval to sell your drug at a profit from the government (US Food and Drug Administration (FDA)/ EU European medicine agency (EMA)). This trajectory can typically be divided as follows: Drug Discovery (early lab testing) 2-4 years, $2-15M Preclinical Drug Development (advanced lab/animal testing) 2~3 years, $10-15M Clinical Stage 1 (First in human studies) 1~2 years $15~30M Clinical Stage 2 (medium-sized human study), 2~3 years, $40~60M Clinical Stage 3 (large, longer term human study), 2~4 years $100~300M. Total: 9~16 years of research & development with a cost of $167~420M. Then finally you can sell the drug for a profit. If you are a startup focused solely on such development, you have no way (or very limited ways) to make money/profit in those 9-16 R&D years. In such a case, R&D tax benefits are really useful.