Companies Benefit from Fiscal Incentives for Research and Development

A number of local companies and organizations are benefiting from state funding, among other fiscal incentives, to undertake research and development projects under the government of Jamaica’s programme to encourage innovation in science and technology for competitiveness and employment creation.

Commerce, Science and Technology Minister Phillip Paulwell, who made the announcement as he addressed the launch of the 2005 United Nations Conference on Trade and Development (UNCTAD) World Investment Report at JAMPRO’s Trafalgar Road offices on September 29, said that as part of the programme, a tax incentive scheme has been established to encourage innovations for increased productivity and efficiency in the manufacturing and service industries.

Under this scheme, projects involved in research and developmental activities qualify for General Consumption Tax and Customs Duty exemptions for the purchasing of goods, equipment and chemicals.

In addition, a Technology Investment Fund was established to finance investments in commercial activities, which contain new or substantial technological improvements and which would not qualify for funding using the existing criteria of commercial and development banks.

It also provides funding for activities to enhance competitiveness and/or complement productivity in existing commercial enterprises.

“Right now, we have some eight projects benefiting from this Fund under the areas of information technology, energy, agro-industry, agriculture, health, and the extraction of fruit and vegetable flavours using spinning cone column technology,” the Minister informed.

In the area of information technology, there is Quantum Business Solutions Limited, which is using the funds to establish a computer training centre through a franchise agreement with New Horizons, the world’s leading franchise trainer.

Meanwhile, in the area of energy, Jamaica Synthetic Fuels Limited will use the funds to conduct feasibility study and environmental impact assessments on the commercial viability of producing calcium carbide and synthetic natural gas from used tyres.

Also, the Biotechnology Centre at the University of the West Indies (UWI), is carrying out research into the use of genetic modification for the development of disease-resistant papaya, while the Scientific Research Council is looking into the acquisition of low cost technology for artemia biomass production, which can be adopted in several coastal communities as the basis for the establishment of a new cottage industry.

The Jamaica Exporters Association is also benefiting from funds to provide technical assistance, training and project management to four firms involved with ackee processing to prepare them to develop sustainable manufacturing systems through Hazard Analysis and Critical Control Point (HACCP) implementation.

“In agriculture, Sidgrain Limited is involved in demonstrating the use of wastewater in commercial agriculture in Greater Portmore, St. Catherine. This involves the use of wastewater from sewage treatment plant to grow sorghum, corn and cash crops,” the Minister informed.

In the health sector, Health for All Jamaica Limited is benefiting from assistance to facilitate the development of information technology in the delivery of an integrated health care service to persons through the telephone, at any time, anywhere in Jamaica, at an affordable cost.

The Mandeville Weekly Community Development Limited, which is involved in the extraction of fruit and vegetable flavours using Spinning Cone Column Technology, is another beneficiary of state funding.

According to Minister Paulwell, “our investments in science and technology are aimed at supplying the economy with the skills and research it needs, in addition to setting up knowledge networks to speed up the commercial application of science, and to enable a quicker transfer of knowledge from laboratories to businesses.”

He further added that, “we want our businesses to improve their engagement with universities and research establishments – working more closely together to transfer technology from the lab into commercial application, with both becoming more responsive to the needs and experience of the other.”

The 2005 UNCTAD report focused on the move towards internationalization or outsourcing of research and development in transnational corporation strategies and points to a recovery in global Foreign Direct Investment (FDI) flows, led by FDI outsourcing.