5 September 2022
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Why you can claim R&D tax with AR research and development projects?

Augmented reality (AR) is an enhanced version of the physical world that is achieved through the use of digital sounds, sensory stimuli, and visual elements. It allows users to pick a virtual image and overlay it on an image of an actual or real scene, taken with a camera. Therefore, it does not replace reality but, rather, enhances it by adding multiple levels of information such as videos, images, text, or holograms. AR is used in different situations and areas, both at private (games, home environment, purchase of a product, etc.) and professional levels (retailers, aircraft, doctors and military, etc.)

With ongoing research and development (R&D) in AR taking place, AR startups are growing. Tech companies are dedicating considerable R&D resources to it too. Thus, many AR projects qualify for R&D tax credits due to the overall benefits that such technical advances bring to society (see below).

FI Group helps companies to claim R&D tax credits, enabling them to reinvest further into their technology, accelerate development and help with cash flow. Some qualifying expenditures for R&D tax credits include materials, staff costs, software, and utilities.

AR is set to play a motor role in our life in the future, with companies investing in technology areas such as education and training, social media, medicine, retail stores, gaming, and much more.

In this article, we will look at:

  • Some of the benefits of AR.
  • And use cases we will see in the future with linked videos of existing AR in different industries.
AR medical technology

Benefits of Augmented Reality

AR already delivers measurable results, with brands using it to their advantage. Here are four benefits of AR.

1.Unique customer experiences

Augmented Reality creates unique digital experiences that blend the best of digital with the physical world, with mainstream smartphones and mobile apps allowing the user to experience AR. Moreover, the latest developments in AR have made it possible to experience it through web browsers (webAR).

However, how are AR experiences unique in comparison to other experiences? The most common audio-visual experiences we know to exist are either in the physical realm or in the digital realm. AR, on the other hand, blends both realities. It places digital components on top of physical components, thus creating a mirage effect.

For example, users can point their smartphones at a tourist attraction when they are near. When the user then views through the screen, the AR app places digital snippets on the screen, therefore allowing the user to consume both the physical and digital information synchronously. 

3. Heightened user engagement

AR was first labeled as technology for entertainment and gaming. With time, however, it has expanded into several other use cases that deliver solid business opportunities and benefits. Heightened user engagement is one of those benefits.

In recent years there has been one goal for most business leaders to reach, which is improving user engagement. User engagement is the gateway to several other benefits. From buying to brand loyalty. It can develop countless gains for a growing and established business. The challenge is serving the right material at the right time to the user that will make them engage, such as interactive ads, scannable product labels, and catalogs.

4. Competitive differentiation

In a world where brands are offering products similar in nature at similar prices, brands must differentiate themselves. For decades, brands have used traditional advertising to differentiate themselves, however, today, AR can help businesses go out further with creative campaigns that will position them differently in a saturated market.

Let’s take Nike as an example. Although Nike has been around for years, however, with the sports industry booming and becoming one of the most saturated industries, maintaining its market position and continuing to attract millennial customers needs extra effort. 

Nike has kept its position as a global brand and a pioneer in marketing with its AR app. Finding the right shoe size can be tricky, and often, the brand measurements do not always fit your physical size. This is why Nike developed an AR app, where the tool uses your smartphone camera to scan your feet and returns the exact size you should be going with. Now looking for and buying Nike shoes becomes easy, making them stand out from their competition.

Another is IKEA and their AR app, which allows users to see what furniture looks like in their homes before buying by selecting the furniture they want to see and holding the device where they plan to keep it.

2. Eliminates cognitive overload

Cognitive overload happens when your working memory is made to process a huge chunk of information, more so than what it can handle. When you cannot handle it, it leads to frustration and affects your decision-making skills. This can be seen when people are reading manuals, or game rules, with information that is lengthy and detailed, 

However, AR can solve this, as it presents information in smaller digital chunks. It spares the user from processing too much information to know what to do, the conclusion. Whether a user wants to see the popularity of a restaurant with a star rating or identify a component by size, AR can help users make quick decisions without cognitive overload.

Use cases we will [continue to] see in the future

1. Retail and fashion

Continuing from Nike, AR can affect people’s shopping experiences by allowing customers to see how a product might look on them or which size they should buy. You might call this a virtual fitting room, where smart glasses, smartphones, and other handheld or wearable devices will be the main provider for these experiences. Large retailers such as H&M are already using smart mirrors in their stores to facilitate these experiences. 

2.The Metaverse

The combination of AR, Virtual Reality (VR), Artificial Intelligence (AI), 5G networks, and other technologies will make an open metaverse possible [link to Metaverse blog post]. The Metaverse refers to a convergence of augmented, physical, and virtual reality in a shared online space and is the next step in the internet’s evolution. Think of the Metaverse as a 3D or 4D version of the current 2D internet, where you will be inside the internet rather than merely looking at it. It will impact every industry in existence.

3. Education and learning

AR has several applications that can improve the learning experiences for students, especially for more visual-focused learners. One of the primary advantages of AR is the ability for a student to inspect a 3D hologram from different angles, allowing the student to better examine and understand certain concepts by moving around a virtual object or rotating it in space. This can revolutionise education in biology, geometry, anatomy, cosmology, and many more topics. It can even change how students learn history because they can visualise 3D holograms and simulations of historical events.

Furthermore, AR enables students to benefit from homeschooling. Additionally, students can run scientific and mathematical simulations in 3D space and view the results from different angles. This can allow students to see how certain medications affect various organs in the body and may give students the ability for more practical work than just the traditional way of schooling, which has been the same for centuries. 

7. Healthcare

In healthcare, there are three big roles AR will play in the future:

Assisting Doctors: AR can help doctors by creating simulations of how certain procedures should be done. In addition, it can help medical students to see a representation of the human body.

Consumer Education: AR can help patients in healthcare understand the risk factors and benefits of certain medications and procedures.

4. Furniture, Appliances, and tangible products

As previously mentioned with Nike and IKEA, there are already over smartphone apps that make it possible to click on a product and instantly see it overlaid wherever they point their mobile device. Meaning that customers can see how appliances and furniture look in their homes. This allows customers to view room arrangements and color matching before making a purchase. Additionally, customers can view products from every angle in an interactive 360-degree experience.  

5. Outdoor & Indoor Navigation

AR can make it easier to navigate around outdoors as well as indoor environments. An example indoors might be a line guiding you toward boarding, or a shop in a large airport, or a University campus, and so on. An example outdoors might be instead of typing in an address into your map software, you can point to a location you wish to go, and the directions will come up. Perhaps you can even follow an AR-created trail on the ground with consideration to physical obstacles in the way.

6. Automotive Industry

In the automotive industry, car manufacturers such as Nissan, Audi, and Volvo already use AR. They use AR heads-up displays that help drivers process information which enhances their view of roads. This creates more safety as this display can make drivers aware of potential hazards occurring ahead of them on the roads.

In addition, Ar can also be used in car manufacturer advertising. BMW already uses this, where their AR is designed to enable customers to experience a new car in their driveway without having to go to the dealership, as well as what the car will look like in different colours. 

Are you using AR technology in your business?

If you are using innovative AR technology in your R&D projects or developing software or using AR in your projects, you could be eligible for R&D Tax incentives. Contact us today to know how we at FI Group can help you on your journey to claiming R&D tax.

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