Although an impressive two-thirds of the CEOs of 355 fast-growing U.S. privately held companies responding to a recent PricewaterhouseCoopers (PwC) survey claim innovation is an organization-wide priority, there are causes for concern.
Some 24% of those citing innovation as a priority do not have an R&D budget. And some may be overlooking a federal tax credit. "Unfortunately, these responses may reflect a belief that only the lab coat, cutting-edge clean room environment is considered R&D," says Kendall Fox, the leader of PwC's research and experimentation tax services practice. "And some may be more innovative than they are getting credit for -- tax credit that is. The IRS [Internal Revenue Service] has loosened the eligibility requirements for product and process improvements that qualify for the federal research and experimentation (R&E) tax credit."
The companies included in the surveyed range from about $5 million to $150 million in revenues or sales.