Fact sheet - Innovation grants

The BIC scheme provides grants relating to eligible expenditure that is directly attributable to research and development activities and product development activities carried on by, or on behalf of, a registered entity in respect of an eligible clothing and household textile activity (section 2.1).

Under the BIC scheme, product development activities include innovative product design activities (section 2.3) and innovative process improvement activities (section 2.4).

An innovative product design activity must be directly concerned with:

• the design, testing, trial and sample production of a particular innovative eligible clothing and household textile product, (section 2.3(1)(b)(i)),or
• innovation in the design, testing, trial and sample production of a particular eligible clothing and household textile product (section 2.3(1)(b)(ii)).

An innovative process improvement activity must be directed at innovative improvement of a production process for an eligible clothing and household textile product.

As the terms 'innovation' or 'innovative' are not defined in the BIC scheme, the natural and ordinary meaning is applied.

The BIC scheme covers the initial development of a particular innovative product design or innovative process improvement activity, but not the repeated application of the same claimed innovation. An activity routinely undertaken would fall outside the BIC scheme.

Similarly, if the innovative product design activity is directed solely at achieving visual product differentiation (for example, it has no other purpose than to effect a fashion change) then it would also fall outside the ambit of the BIC scheme.

Note: Only activities undertaken in Australia will be eligible.

The delegate will need to understand the nature of the activities that were carried out in order to assess whether eligibility can be established. Each case is examined on its merits. Project templates have been developed, and must be completed as part of the claim form. To assist the case for eligibility, consider the following matters.

Describe the product to which the innovative product design activity or innovative process improvement activity is directed.

Describe the activity that was carried on by you, or that another entity carried on, on your behalf, and demonstrate that the activity was carried on in Australia.

For innovative product design activities under section 2.3(1)(b)(i), identify and describe what is innovative about your particular eligible clothing and household textile product. For example, how the product is different from other like products and how it is something other than a copy of an existing product. Diversifying into a new range of products does not of itself demonstrate innovation.

It may be useful to describe what is innovative in terms of new performance features or characteristics that were achieved, for example developing exercise wear with improved compression characteristics as a result of innovative pattern making. Innovation could be demonstrated if the development involved the use of new clothing construction techniques, or other manufacturing or design processes resulting in new features.

For innovative product design activities under section 2.3(1)(b)(ii), what is the innovation in the design, testing, trialling or sample production of the eligible clothing and household textile product. Applicants would need to identify and describe the innovative activity, and the innovation in terms of the challenges experienced, for example, in developing new methods for joining fabrics with differing characteristics in a garment. A pure sourcing activity involving the purchase of innovative fabrics from third-party manufacturers would not be considered to demonstrate innovation in the design process.

For innovative process improvement activities under section 2.4, describe the nature of the innovation in the process improvement. Identify and describe what is innovative about the improvement that was made to your production process. For example, improvements to an existing machine that provides additional functionality beyond original manufacturer specifications. Purchasing and integrating new equipment into an existing production process without any modifications to the manufacturing process is not necessarily an innovative process improvement activity.

Note: A claim undersection 2.4is limited to a production process for an eligible clothing and household textile product.

While the BIC scheme is not intended to subsidise firms undertaking industry catch-up activities, there may be instances whereby innovation is demonstrated, such as where the current state of knowledge is not publicly available or not available on commercial terms. Each case will be considered based on the facts, however, you may want to consider the following:

• what are the functional or performance differences,
• what challenges were faced and solutions tried,
• what planning, testing, trialling and experimentation were undertaken, and what new processes were implemented,
• for research and development activities in particular, the nature of the technical risks involved in the project, and
• how these activities extended beyond a routinely undertaken activity for a business of your type.