Research and development is done by many companies to develop new ideas and gain new knowledge for the growth of their businesses. R&D helps businesses to keep up with the fast changing level of competition, customer preferences and innovations. Without research and development, a company will slowly sink and be left out from other businesses. Aside from surviving the industries competition, R&D can also give additional incentives companies such as R&D tax credit.

Businesses in Canada can take advantage of the Scientific Research and Experimental Development or SRED program of their government. This program encourages local businesses to conduct R&D to develop new products, develop new procedures and increase the general knowledge of industries. The Canadian government does not pay cash incentives to companies to encourage them. Instead, a deduction to the total tax payable or R&D tax credit is given.

Research and development can give a great advantage to businesses in two ways: they can help to survive competition and avail of incentives from programs like SRED.