What is a Hypothesis?
Product Design Melbourne

An article by our friend and guest Daniel Weinstock.

Conducting Research and Development (R&D) can be a difficult and costly process for Australian businesses. To encourage industry to conduct R&D, a main initiative of the Australian federal government is the Research & Development Tax Incentive. This offers a generous tax offset of up to 43.5% of eligible R&D expenses incurred in 2016-17. This reduces tax a business would have to pay, and the rest is paid in cash in many cases.

To be eligible, companies must experiment in a scientific way to generate knowledge (including improved materials, products, devices, processes or services) that is not available in the public arena world-wide and cannot be known in advance – even by an experienced professional in that field.

A hypothesis is an important condition to ensure the experiments are conducted systematically and not merely by trial and error. A hypothesis is a statement focusing on a technical or scientific idea that can be proven true or false by specific experiments. It reflects a cause-and-effect relationship between variables. It is formulated before the experiments are conducted.

Here’s an example of a hypothesis from the R&D guidelines: Combining a new polyurethane with metal flakes that have been coated with magnesium fluoride to a general water-based paint will produce a glossy, stable, two-coat, metallic paint without the need for a coat of clear lacquer.

Now let’s unpack it. A and B will produce C:

• A is a new type of plastic combined with coated metal flakes
• B is a water-based paint
• C is a metallic paint that is glossy, stable, only needs two coats and doesn’t need an extra coat of clear lacquer.

So now you know what a hypothesis is and how it fits in to the R&D Tax Incentive. When you want to know more, please let us know! Contact - Daniel Weinstock, mob: 0419 319 718, email: This email address is being protected from spambots. You need JavaScript enabled to view it.

Daniel leads a team of scientists and engineers, IT specialists and chartered accountants to save client’s time and effort by assisting with understand and carrying out all aspects of planning, documenting, preparing and managing Applications under this and other government grant programs.

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Daniel Weinstock,  31 July 2017