Scientific or Technological Uncertainty may occur in either of two ways:
Either the firm is uncertain whether the goals can be achieved at all, or
The firm may be fairly confident that the goals can be achieved but may be uncertain as to which of several alternatives will either work or be feasible to meet the desired specifications or cost targets.
Attempting to achieve a particular cost or deadline target can at times create a technological challenge, which may need to be resolved. Thus, technological uncertainties may arise as a result of the incorporating of these imposed constraints into the factors to be considered. These constraints are not, by themselves, sufficient to establish eligibility but can act as “multipliers”, by forcing the firm to use or develop new and unproven approaches or designs that take them “off the standard” path, thus increasing the levels of uncertainty. Uncertainty could also arise from substituting new materials or components, or adapting a piece of machinery in order to enable it to be used in ways in which it was not originally designed.
Improvement of existing technologies and methodologies using well established "routine engineering or routine development" would be ineligible if the outcomes are predictable. For example, the development of a new product that used only a straightforward design change would not be an eligible activity. However, if the routine engineering is carried out in support of an eligible experimental development project, then the activity is eligible. Routine engineering is defined by CRA as being the practice of providing known engineering methodologies to achieve desired objectives. If the outcome is reasonably predictable at the start of the project this may indicate that there is little technical uncertainty present. This may indicate that that type of work in and of itself would not be eligible.
Some areas in which experimental development takes place include situations when the outcome is uncertain because the present level of technology is insufficient or where there are compatibility problems. The work undertaken to resolve this uncertainty should result in a technological advance, which would cause the activity to become eligible for the SR&ED program.
The definition of system uncertainty indicates that there is recognition that combination of technologies having fairly well known attributes may require SR&ED if the combinations result in certain unknowns in terms of how these different components would work together. In other words if two or more pieces of machinery are linked together there may be uncertainty as to whether the new unit will operate as planned.