Innovation in Australian Business Fact Sheet 

KEY POINTS

• In the 2006-07, 32.4% of Australian businesses reported implementing an innovation.
  
  
• Of the types of innovation implemented, 18.4% of businesses reported introducing new products, 16.9% of businesses implemented new operational processes, 16.4% of businesses implemented new organisational/managerial processes, while 12.7% of businesses implemented new marketing methods.
  
  
• The three industries with the highest proportion of innovating businesses were Information Media & Telecommunications (46.2%), Manufacturing (44.2%) and Wholesale Trade (44%).
  
  
• About 61% of businesses employing 200 or more persons reported introducing an innovation in 2006-07 compared with 41% of businesses employing 5-19 persons, and 26% of businesses employing 0-4 persons.
  
  
• The innovation expenditure most frequently reported by firms was the acquisition of machinery, equipment or technology (47.8%), followed by training (34%) and marketing activities (30%).  About 17% of innovating firms reported expenditure on design, planning and testing activities, while only 15% of innovating businesses reported any R&D expenditure.
  
  
• About 17% of innovation-active businesses collaborated for the purpose of innovation in
  2006-07. 
  
  
• In terms of the types organisations collaborated with, 42% of (collaborating) innovation-active businesses collaborated with Clients, customers or buyers compared with 1.6% who reported collaborating with Universities or other higher education institutions.
  
  
• Over one third of innovation-active businesses (34%) cited a Lack of skilled persons (in any location) as a factor hampering innovation and this was the most commonly cited barrier for every employment size category.
  
  
• Profit related drivers were the most commonly reported reason for undertaking innovative activity (76%) across all employment size categories, followed by Increase responsive to customer needs (52%) and Increase or maintain market share (45%).
  
  
• The most frequently reported sources of ideas or information for innovative activity by innovation-active businesses were Within the business or related company (56%), followed by Clients, customers or buyers (44%).

FACTS AND FIGURES

The ABS Innovation in Australian Business, 2006-07 (ABS, 8158.0) represents the most recent detailed innovation module of the Business Characteristics Survey (BCS).  The frame population was expanded to include firms with 0-4 employees and two additional industry sectors: Health and Community Services and Personal and Other Services.

A random sample of 9,700 businesses, stratified by industry and employment size, was surveyed for the 2006-07 Business Characteristics Survey (BCS). The reference period was for the year ending June 2007. 

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 2006-07 (Source: ABS, 8158.0).

Table 2. Innovation by industry in 2006-07 (Source: ABS, 8158.0).

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.