Rapid Robot Technology Advancements Supported by R&D Tax Credits

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        Long awaited technology advancements for robots are now gaining momentum and can benefit from federal and select state R & D tax credits. Recent major technology developments in robot-related hardware and software are supporting a new wave of robot innovation. These innovations are serving as an advantage across wide regions of the national economy and are changing many industries, including the fields of surgical equipment, hazardous waste disposal and facility maintenance, and industrial/repetitive processes.

The Research and Development Tax Credit

        Federally enacted in 1981, the R & D tax credit allows a credit of up to 13% of eligible spend for new and improved products and processes. Qualified research must meet the following four criteria:
  • New or improved products, processes, or software
  • Technological in nature
  • Elimination of uncertainty
  • Process of experimentation
        Eligible costs include employee wages, cost of supplies, cost of testing, contract research expenses, and costs associated with obtaining a patent.

Robot Hardware Innovation

        Recent advances in minimally invasive surgical techniques have made it possible to perform extremely precise procedures in the operating room with minimal margin for human error. For instance, the da Vinci Surgical System is capable of performing a surgical procedure for the removal of a diseased gallbladder with only a single incision through the belly button of a patient. The system presents several advantages over traditional techniques, but doctors and researchers most frequently cite the reduced patient discomfort as the greatest benefit. Because surgeons using robots are able to control the operating tools with increased dexterity, only the minimum amount of incisions need to be made to achieve the desired result, thereby posing the least pain and complications.

        In the case of open surgery, robotic systems replace traditional tools and enable doctors to perform certain actions with much smoother, feedback-controlled motions than could never be achieved by a human hand. The main advantage of robots in the open surgery context is that they reduce or eliminate the collateral tissue damage that is often associated with open surgery.

        To date, the most significant obstacle to the widespread adoption of robotic surgical procedures is the cost of the equipment, both directly and indirectly. The direct cost of purchasing the equipment is extremely high and future research will need to evaluate ways to reduce these costs so that hospitals can afford to purchase the robotic equipment. Indirectly, robotic equipment places a strain on hospital staff because it requires intensive training before it can be operated. Therefore, manufacturers of robotic equipment will need to research methods to design more user-friendly equipment.

Hazardous/Honda Humanoid/Fukishma example
        Though Honda's ASIMO robot humanoid has been around since 2000, the importance of humanoids was made much more salient in 2011 in the wake of Japan's Fukushima nuclear meltdown. Since the disaster, Honda's response has been to develop an ASIMO model capable of performing dangerous clean-up tasks that pose a threat to human lives. The increased sensitivity to spacial cues and human-like dexterity of its limbs make the newest humanoid capable of greatly helping humankind not only in disaster scenarios, but also in day-to-day operations that keep civilizations moving.

        ASIMO's enhanced capability to make judgments in real time represents a technological leap that will prompt many countries and industries to rethink their major operations. Most directly, governments will use the technology in scenarios like Fukushima, where the deployment of humanoids will allow for swift and effective responses without putting any humans in danger. Yet in the broader industrial context, manufacturers will be able to increase their output and quality control by effectively using humanoid technology for complex tasks, which will become increasingly capable over the coming years.

        For all the progress that that heretofore occurred in the field of humanoid technology, there is still a great way to go before humanoids like ASIMO are fully capable of performing human tasks. Companies that dedicate considerable time to researching and developing improvements to the current line of humanoids will be well-suited for large R & D tax credits.
Industrial Repetitive

        Probably the most visible field of robotic hardware is industrial repetitive equipment. We've all seen images of the modern assembly line in large factories manufacturing things like automobiles, sheet metal, or CNC machines: industrial repetitive robotic equipment has replaced many workers. These robots engage in repetitive tasks, and are typically capable of performing only a single task or range of tasks. Industrial repetitive robots are reliable and relatively low-maintenance, but in order to make them maximally effective, companies will need to invest in R & D to keep their robots up-to-date.

        The future of industrial repetitive robotics will be determined by the rate and ease with which the technologies can be applied to emerging technologies and adapt to new processes. Adaptability may be the key that researchers will need to focus on when it comes to developing new repetitive industrial robotics, and in so doing many researchers will qualify for the R & D tax credit.

Robot Software Innovations

Eindhoven open protocol
        In much the same way that the Internet began in university labs as a way for researchers to communicate with one another with the goal of building up their knowledge base, Eindhoven University in the Netherlands has publicly encouraged researchers worldwide to help them develop an open source system for robot hardware. An open protocol will enable researchers from any university in any country to share information with each other and standardize processes and products so that the robots of the future will be able to interact with each other. The university has stated that the, "aim is for this to become a large plug and play library to which robot builders worldwide can add their designs or improve existing ones. The higher goal is to accelerate the development of applications such as care robots, and to make them much cheaper than they are at present."

        By building a Wiki database of all existing and developing robotics projects, Eindhoven University hopes that it will make the development of robotics much faster and at a much lower cost. If the rapid development of the Internet after universities decided to share their internal network with the public is any indication, Eindhoven's aspirations will be realized in the not-so-distant future.

        Since 2006, tech giant Microsoft has been developing software designed to manage complex robot behaviors. By using message-passing and a lightweight services-oriented runtime, Microsoft's Robotics Developer Studio (RDS) is able to administer asynchronous parallel tasks, which means that RDS software will be used in a large number of the robots discussed above. Further, from an industry standpoint, Microsoft's entry into the robotics software market highlights the growing importance of robots in all facets of technology since prior to 2006, Microsoft has been almost exclusively focused on operating systems and Internet interface development. In fact, it was this turn towards robotics that resulted in the company's newest video game product, its Kinect for Xbox 360.

Google's Lab X
        Google's secretive offices near the company's headquarters in Mountain View, California have been the subject of much speculation lately. Google X is a clandestine lab researching a variety of truly cutting-edge technologies that they believe will change the future. Though the company is very close-mouthed about the project, many industry insiders believe that Google X consists of two offices, one of which is dedicated to logistics, the other of which is exclusively working on robotics.

        With the brand and brain power to research robot applications in a way very few companies can dream of, Google is betting that robots such as their driverless car, humanoids with artificial intelligence, and highly interconnected home appliances represent the next wave on consumer technologies. While the widespread use of driverless cars, for instance, might still be many years away, Google is trying to position itself at the forefront of the robot marketplace. Within this domain, there is a seemingly unending amount of research and development that will need to take place before these technologies are available to consumers, and Google or its like-minded competitors will be eligible for the R & D tax credit.


        The robotics industry is very much in its infantile stages, but there is substantial momentum in favor of its substantial growth. Both the hardware and software involved in creating robots are garnering attention from governments, major companies, and university analysts, resulting in the belief that a lot more research and development is needed to reach a robotics tipping point akin to the Internet's boom in the 1990's. Companies and universities allocating a large portion of their time to such research and development shall be able to benefit from the 13% federal R & D tax credit, and will likely qualify for its state equivalent.

Article Citation List



Charles R Goulding Attorney/CPA, is the President of R&D Tax Savers.

Spencer Marr is a Tax Analyst with R&D Tax Savers.

Charles G Goulding is a practicing attorney with experience in R&D tax credit projects for a host of industries.

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