The challenge is shifting your mindset—from simply getting the job done to actively fostering innovation at every level. This is where the R&D Tax Incentive (RDTI) can help—as a financial boost and a tool to create an innovation-first culture.

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R&D: More Than Just Big Ideas

R&D isn’t just about groundbreaking inventions or futuristic products. It’s about problem-solving. Every time your team improves a process, enhances a service offering, develops a new solution to a customer challenge, they may be doing R&D for tax purposes.

“Many businesses think R&D is something they don’t do when, in reality, they’re innovating all the time,” says Michael Barry, Head of Growth at Swell. “It’s about rethinking what R&D means and understanding how it is defined for Tax Incentive purposes. It’s not only about the big, novel stuff — it’s the daily innovations and incremental product and process improvements that keep your business moving forward.”

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Shifting from ‘What We Do’ to ‘How We Innovate’

The biggest leap for businesses? Moving from focusing solely on outputs—what you deliver—to building a culture that’s all about how you can improve at every step.

“The R&D Tax Incentive supports this shift, giving businesses the financial backing to encourage more innovation, not just reward what’s already being done.”

Once you understand what does and doesn’t qualify, it becomes easier to talk about and record R&D activity day to day. You can create an environment where teams feel empowered to experiment and optimise—whether it’s improving the design of an existing product, reducing waste or increasing automation in a production process, digitising a service-based process, or integrating disparate technologies.

The incentive isn’t just about receiving a tax credit; it about highlighting R&D activity across a business and giving it a formal seat around a meeting table and becoming a powerful tool for growth.

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The Benefits of an R&D Mindset

Embracing an R&D mindset doesn’t just give you financial benefits. It drives long-term rewards, including:

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• Building a Culture of Innovation

When R&D becomes part of your everyday operations, it changes how your team approaches their work.

A LinkedIn survey found that 63% of job seekers prioritise working at innovative companies. These businesses have a 1.5x higher talent retention rate compared to their non-innovative counterparts.

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• Staying Competitive

As industries evolve, businesses that can innovate rapidly are better positioned to stay ahead. R&D incentives allow you to spend more today, knowing you’ll claim some of the expenditure back down the line.  

PwC’s Global Innovation 1000 study showed that the most innovative companies grew their revenues 16% faster than the least innovative companies over a five-year period.

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• Strengthening Your Brand‍‍

Companies known for innovation often have a stronger industry presence. Showing a commitment to ongoing improvement sets you apart from the competition. Both for customers, partners and talented people.

“Businesses that position innovation at the heart of what they do are often the ones that thrive over sustained periods of time, survive economic downturns and ultimately bounce back faster” says Michael. “While the RDTI can be challenging to understand and access for the first time, it can be hugely beneficial for those who take it seriously and start early. What impact could $1m of non-dilutive capital have on your business over a 3–5-year period?”

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Embedding Innovation into Your Operations‍

Ready to shift from ‘what we do’ to ‘how we innovate’? Here’s how to make R&D thinking part of your company’s DNA:

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• Encourage Curiosity

Give your teams the freedom to ask questions and try out new ideas. Fostering curiosity creates the ideal environment for innovation.

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• Incentivise Experimentation

Mistakes are a natural, and very important part of R&D and often lead to breakthroughs. Build a culture where rapid experimentation is valued, and teams are rewarded for taking risks.

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• Track Your R&D Activities

Many businesses aren’t aware of how much R&D they’re doing because they’re not tracking it. Keep a record of your projects and improvements—not only for R&D tax claims but to spot and celebrate where and when innovation is happening.

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• Leverage R&D Tax Credits

The R&D Tax Incentive is about reinvesting in your ability to innovate, every year. By knowing that you will claim back 15% of your R&D expenditure on a project, before you start, can be a powerful level to play with.

Swell can help you to evolve your internal definition of R&D, identify qualifying activities and costs and help you to streamline the claim process.

“The first step is awareness,” Michael explains. “Understanding what sort of project work qualifies and what doesn’t if the first step on the journey for many businesses. Once the ‘penny drops’ everything becomes easier thereafter.”

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Final Thoughts: Turning R&D Into a Competitive Edge

Shifting from an operational mindset to an innovation mindset can transform your business. By embracing R&D as part of your daily practice, you’ll unlock financial opportunities and build a stronger, more future-ready company.

“With the right mindset, R&D activity becomes more than just an annual tax credit—it can be your sustainable competitive advantage” says Michael.

If you’re ready to explore the R&D opportunities hidden in your day-to-day operations, contact Swell today.

In today’s fast-paced business world, innovation isn’t just a nice-to-have—it’s essential. Yet, many New Zealand companies still think of R&D as something reserved for scientists in labs or tech giants with huge budgets. The reality? R&D may well be happening across your business everyday.