Revenue’s R&D Tax Credit Guidelines state that identifying which Technology Readiness Level (“TRL”) stage an R&D process is operating may be beneficial in identifying qualifying R&D expenditure. Created by NASA in the 1990’s as a way to measure the development stage or maturity of a given technology, the TRL typically spans over nine levels. Generally, products will go through the various TRL stages during their lifecycle and it is possible that iterations may occur during R&D activity.
The Revenue's TRL scale is designed to used on a self-assessment basis and the headings are quite broad. This creates challenges when trying to determine what TRL is appropriate for a product, process or system that is under development. Limited information is provided on the use of the TRL scale, therefore we have looked to other TRL scales and complied description of what each stage might include to assist you with your selection.
| Revenue TRL | Revenue definition | TRL | *H2020 | **EARTO | KPMG definition and description |
|---|---|---|---|---|---|
| 0 | Idea | 0 | Idea formulation | ||
| 1 | Basic Research | 1 | Basic Principles Observed | Basic Principles Observed | Basic principles translated from scientific research. |
| 2 | Technology Formulation | 2 | Technology Concept Formulated | Technology Concept Formulated | A technology concept is formulated in terms of how the basic principles can be applied. |
| 3 | Applied Research | 3 | Experimental Proof of concept | First assessment of feasibility of the concept and technologies | First assessment of concept through actual research assessing technical and market feasibility. |
| 4,5 | Small Scale Prototype ----------- Large Scale Prototype |
4 | Validation of integrated prototype in a laboratory | Validation of integrated prototype in a laboratory | Early feasibility tested in laboratory by integrating basic technological components. |
| 6 | Prototype System | 5 | Testing of prototype ina user environment | Testing of prototype ina user environment | System, actual use and manufacturing tested and validated in user environment |
| 7 | Demonstration System | 6 | Technology demonstrated in relevant environment | Per-production of the product,including testing in a user environment | Full integration of product and manufacturing technology now established in pilot line/ plant. |
| 8 | First kind of commercial System | 7 | Low scale pilot production, producing actual commercial products | Low scale pilot production demonstrated | Low scale pilot production demonstrated. Product launched to early markets. |
| 9 | Full commercial application | 8 | System Completed and qualified | Manufacturing fully tested, validated and qualified | Manufacturing of system has been fully completed. Product is launched to majority markets. |
| 9 | Market expansion, incremental changes in product create new versions | Production and product fully operational and competitive | Product fully operational and competitive. Production and manufacturing optimised through continuous incremental innovations. |
Industry Specific Examples
| Industry | Prototype System | Demostration System | First Kind of Commercial System |
|---|---|---|---|
| Biotechnology | GMP Pilot Production, phase 1 clinical trials |
Scale-up,initiation of GMP Process Validation, phase 2 clinical trials | GMP Validation Consistency Lot Manufacturing, Efficacy Studies, FDA approved |
| Software | Operational environment integrated with actual external entities. “Beta” SW releases. | SW releases are in distinct versions. Verification Validation & Accreditation completed. | SW releases are production versions and configuration controlled, in a secure environment. SW deficiencies are rapidly resolved through support structure. |
| Electronics | RTL Model, Simulated Model, Gate Level Simulation (GLS), Testing (Regression, Functionality, Unit, System, Integration) |
Functional SoC (System on Chip) with limited functionality, HW finished, SW still may have improvements | nth Stepping, Production unit (Tests and quality checks should be passed and deemed a certain quality by company before being rolled out) |
| Manufacturing | Device prototypes built and tested Engineering Verification Testing (EVT) | Process Validation Process Qualification | Commercial batches of devices |
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Do you have an R&D-related query?
Contact us. If you would like to request an R&D tax credits brochure, require information on how we can assist your company, or would like us to call you directly to discuss your particular circumstances, please email us at info@kpmg.ie.
We will endeavour to respond to your initial query within two working days.
Ken Hardy
Partner
KPMG in Ireland
Damien Flanagan
Partner
KPMG in Ireland
