Innovation is the implementation of a new or significantly improved product or process, a new marketing method, or a new organisational method in business practices, workplace organisation or external relations.
The Australian Government's National Innovation and Science Agenda identified innovation and science as two of the critical elements for Australia to deliver new sources of growth, maintain high‑wage jobs and seize the next wave of economic prosperity.
Innovative firms are more competitive, better able to capture increased market share and more likely to increase employment.
An important innovation activity is research and development (R&D). Literature suggests that R&D related activities can explain up to 75 per cent of total factor productivity growth (once externalities are considered) and that R&D has a significant rate of return.
This section of the Industry Monitor measures Australia’s performance on innovation, expenditure on R&D and collaboration. Further analysis is provided in the Australian Innovation System Report.