Innovation in Australian Business Fact Sheet 

KEY POINTS

• In 2007-08, 39.1 per cent of Australian businesses reported implementing an innovation. This represented a 7.0 percentage point increase from the year 2006-07.
• Of the types of innovation implemented, 21.9 per cent of businesses reported introducing new goods or services, 17.6 per cent of businesses implemented new operational processes, 19.0 per cent of businesses implemented new organisational/managerial processes, and 14.6 per cent of businesses implemented new marketing methods.
• The wholesale trade industry reported the highest proportion of innovating businesses at 51.4 per cent; this was higher than any of the other industries. The retail, trade and manufacturing industries reported the next highest proportions of innovating businesses at 50.9 per cent and 45.6 per cent respectively.
• Business size was positively correlated with the introduction of innovations. The survey showed that 65.9 per cent of businesses employing 200 or more persons reported introducing an innovation compared to only 31.6 per cent of businesses employing 0-4 persons reporting introducing an innovation.
• In 2007-08, 43.7 per cent of all Australian businesses surveyed reported at least one barrier to innovation, this compares to 46.3 per cent of businesses in 2006-07. The three most frequently cited barriers by all businesses to innovation include: lack of skilled persons (23.0 per cent of businesses); lack of access to additional funds (16.0 per cent of businesses); and uncertain demand for new goods and services at 11.2 per cent of businesses.
  
  
  Latest Available Statistics on Collaboration, Drivers and Sources of Innovation
  (2006-07 Reference Year)
  
  
• About 17 per cent of innovation-active businesses collaborated for the purpose of innovation in 2006-07. In terms of the types of organisations collaborated with, 42 per cent of innovation-active businesses collaborated with clients, customers or buyers compared with 1.9 per cent who reported collaborating with universities or other higher education institutions.
• In 2006-07, competition, demand and market related drivers were the most commonly reported reason for undertaking innovative activity at 76.9 per cent of businesses, followed by profit related drivers (75.9 per cent) and production and delivery drivers (58.0 per cent). Innovation in response to government regulations or standards only accounted for 11.4 per cent of responses.
• The most frequently reported sources for innovative activity by innovation-active businesses in 2006-07 were ideas or information within the business or related company (55.6 per cent), followed by clients, customers or buyers (44.1 per cent).

FACTS AND FIGURES

Each year, the ABS collects statistics relating to innovation in Australian businesses as part of the Business Characteristics Survey (BCS). A detailed innovation module (Innovation in Australian Business, ABS Cat no.8158.0) is collected every second year beginning with the 2006-07 reference year period. A summary of innovation and IT use module together with selected characteristics is collected each alternate year beginning with the 2005-06 reference year period. In 2007-08, the ABS collected summary statistics on Innovation and Use of IT (ABS Cat no.8166.0) and Selected Characteristics of Australian Business (ABS Cat no.8167.0).

A random sample of approximately 9,500 businesses, stratified by industry and employment size, was surveyed for the 2007-08 Business Characteristics Survey (BCS). The reference period was for the year ending June 2008. 

Due to changes in the survey population frame and stratification since 2005-06, the ABS advises against comparing the current data with that from previous surveys.

Table 1.  Innovation by firm size in 2007-08 (Source: ABS, 8166.0).

Table 2. Innovation by industry in 2007-08 (Source: ABS, 8166.0).

The ABS adopts the definitions of the Oslo Manual (3^rd edition, 2005, OECD/Eurostat) as the basis for their innovation surveys.

DEFINITIONS

"An innovation is the implementation of a new or significantly improved product (goods or services), or process, a new marketing method, or a new organisational method in business practices, workplace organisation or external relations" (Oslo Manual 3rd ed., 2005).  The minimum requirement for an innovation is that the product, process, marketing method or organisational method must be new (or significantly improved) to the firm.

Innovation Types

• A product innovation is the introduction of a good or service that is new or significantly improved with respect to its characteristics or intended uses. This includes significant improvements in technical specifications, components and materials, incorporated software, user friendliness or other functional characteristics.
• A process innovation is the implementation of a new or significantly improved production or delivery method. This includes significant changes in techniques, equipment and/or software.
• An organisational innovation is the implementation of a new organisational method in the firm’s business practices, workplace organisation or external relations.
• A marketing innovation is the implementation of a new marketing method involving significant changes in product design or packaging, product placement, product promotion or pricing.