We often tell people that failed projects are embraced by the SRED program, and sometimes it can be a little hard to understand exactly why. I mean, isn’t the program meant to promote innovation, and to encourage technological development? If so, then why are projects that don’t result in a more innovative product or process applicable for the SR&ED program?
This goes back to the three criteria of the program: Technological Advancement, Technological Obstacles and Technical Content.
When looking at a failed project, you most likely faced a number of Technological Obstacles while working on it – these obstacles are anything that prevented you from getting to the final objective, so obviously in a failed project you faced a number of obstacles.
The technical content shows the systematic investigation that was done while trying to reach the final objective, which would be done for both failed and successful projects.
Lastly, your knowledge has been expanded in the instance of failed projects as well – in these instances, you now have the knowledge that there is no way that you have found to get to the final objective.
So yes, failed projects definitely qualify for the SR&ED program, as long as they too fulfill the three criteria of the program.