The research study provides an overview of the main patterns of innovation in Australian businesses, the general characteristics of innovators and an analysis of expenditure on innovation. The paper represents the first consolidated analysis of innovation across Australian businesses as part of a collaboration between the Department of Industry Tourism and Resources (DITR) and ABS. The research is based on micro-level data from the ABS Innovation in Australian Business 2003 survey, which covers businesses with five or more employees in most industries.