Playing devil's advocate here. There are a large number of jobs that fall under this R&D classification in the software space that I do not feel carry the weigh

Playing devil's advocate here. There are a large number of jobs that fall under this R&D classification in the software space that I do not feel carry the weight that a term like R&D ought to imply. This carve out was clearly intended to be for fundamental research in hard technical disciplines. Much of where it is being claimed however is really more accurately described as product development and market research at best. Not the kind of hard technical R&D that this is pitched as. It seems that the number of software engineers involved in actual R&D (according to my admittedly made up and subjective definition) is vanishingly small, much less than 1% in all likelihood if we do some quick napkin guestimates. So to what extent do we want to provide tax incentives to (an already profitable in some cases but also commonly accused of setting big piles of money on fire) industry for normal run of the mill product development? That's what's really going on here imo, and it's not obvious to me that there is any way to justify that. There has to be some line drawn somewhere between applications development / product development, and true R&D ala some systems research group working on scheduling algorithms or whatever. I admit that the line here is blurry and not well defined. That needs to change if there are tax incentives involved. At the very least, anything that you know for sure is going to end up in an end product is NOT R&D. The definition ought to depend on what a reasonable and informed observer would classify the risk of total failure to be. True R&D tends to have a very high risk of complete failure in either a technical sense or a product integration sense (as in, you find a solution to your question but it cannot be made into a commercially viable product, often for technical reasons or the specifics of your solution). That is what laws like this are intended to incentive, because we have collectively decided that we want this research to take place even if the risk calculus is such that it is entirely unprofitable for a lot of companies.