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8158.0 - Innovation in Australian Business, 2010-11 Quality Declaration 
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 23/08/2012   
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BENEFITS OF INNOVATION

Innovation activity is generally undertaken to increase profits, levels of service or business competitiveness. Businesses that introduced an innovation (i.e. innovating businesses) were asked what benefit, if any, had been derived from the introduction of new or significantly improved goods, services, processes or methods during the year ending 30 June 2011. Businesses could identify more than one benefit and a ranking of importance was not required. This is the first time these data have been collected by the Business Characteristics Survey (BCS).

Overall, 91% of innovating businesses reported some form of benefit as a result of the introduction of new or significantly improved goods, service, processes or methods. Improved customer service (43%) was the most commonly reported benefit, followed closely by increased revenue (42%). Almost a third (30%) of innovating businesses reported it was too early to measure benefit, while 9% reported there was no benefit.

Benefits of introduced innovation(a)(b), by employment size, 2010 - 11

0-4 persons
5-19 persons
20-199 persons
200 or more persons
Total
%
%
%
%
%

Increased revenue
43.3
40.2
39.2
43.3
41.5
Reduction in cost
16.8
23.6
26.0
44.7
21.1
Gain a competitive edge
22.5
28.0
33.0
30.8
26.2
Improved customer service
39.0
45.4
48.5
44.3
42.9
Too early to measure benefit
30.5
31.3
24.1
22.4
29.9
Other benefit
1.1
1.7
1.7
2.2
1.5
Any benefit(s)
88.7
93.2
92.0
97.6
91.1
No benefit
11.3
6.8
8.0
2.4
8.9

(a) Proportions are of innovating businesses only in each output category.
(b) Businesses could identify more than one benefit of introduced innovation.

Businesses with 200 or more persons employed and those with 0-4 persons employed were the most likely to report increased revenue as a benefit of their introduced innovation (both 43%). Innovating businesses with 20-199 persons employed were the most likely to report improved customer service as a benefit of their new innovation (48%). Businesses with 0-4 persons employed were the most likely to report that the innovation had been of no benefit to the business (11%).

By industry, Arts and recreation services recorded the highest proportion of businesses reporting increased revenue (54%) as a benefit of introduced innovation. Businesses in Financial and insurance services were the least likely to report this benefit (28%). Reduction in costs was most likely to be reported by businesses in Agriculture, forestry and fishing (36%), Electricity, gas, water and waste services (35%) and Mining (33%). Businesses in Health care and social assistance were the least likely to report this benefit (11%). Having gained a competitive edge was most likely to be reported by businesses in Information media and telecommunications (38%), with businesses in Agriculture, forestry and fishing least likely to report this benefit (15%). Health care and social assistance recorded the highest proportion of businesses that reported improved customer service (65%). Agriculture, forestry and fishing businesses were the least likely to report this benefit (20%).

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