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8158.0 - Innovation in Australian Business, 2003 (Reissue)  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 17/02/2005  Reissue
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INTRODUCTION

1 This publication, Innovation in Australian Business, 2003 presents results from the Innovation Survey 2003. The Innovation survey provides statistics on business innovation in Australia and key characteristics of innovating businesses. The availability of this information facilitates development of government policy and practices to improve Australia's international competitiveness by supporting and promoting innovation in Australian business.


2 This survey was conducted with some funding from the Department of Education, Science and Training and the Department of Industry, Tourism and Resources.



REFERENCE PERIOD

3 The main reference period for the Innovation survey is the three year calendar period 2001-03. Some data from the survey relate to the calendar year 2003. Financial data relates to the most recent financial year ended on or before 30 September, 2003.



SCOPE AND COVERAGE

4 The scope of the Innovation Survey 2003 is based on a combination of factors including user requirements, resource and provider load constraints, and international standards. The scope is all businesses in Australia with employment recorded on the ABS Business Register of more than 4 employees, except those classified to:

  • SISCA 3000 General Government
  • SISCA 6000 Rest of the world
  • ANZSIC Division A Agriculture, Forestry and Fishing
  • ANZSIC Division M Government Administration and Defence
  • ANZSIC Division N Education
  • ANZSIC Division O Health and Community Services
  • ANZSIC Division Q Personal and Other Services

5 The frame for the Innovation Survey 2003, like most ABS economic collections, is taken from the ABS Business Register. Employing businesses are identified primarily based on registrations to the Australian Taxation Office's (ATO) Pay As You Go Withholding (PAYGW) scheme. Businesses which have ceased employing are identified when the ATO cancels their Australian Business Number (ABN) and/or PAYGW registration. In addition, businesses with less than 50 employees which did not remit under the PAYGW scheme in each of the previous five quarters are not included on the frame. The estimates in this publication include an allowance for businesses that are registered after the frame is taken but before the end of the reference period.



STATISTICAL UNITS DEFINED ON THE ABS BUSINESS REGISTER

6 The ABS uses an economic statistics units model on the ABS Business Register to describe the characteristics of businesses, and the structural relationships between businesses. The units model is also used to break groups of related businesses into relatively homogenous components that can provide data to the ABS.


7 In mid 2002, to better use the information available as a result of The New Tax System (TNTS), the ABS changed its economic statistics units model. The new units model allocates businesses to two sub-populations. The vast majority of business are in what is called the ATO maintained population, while the remaining businesses are in the ABS maintained population. Together, these two sub-populations make up the ABS Business Register population.



ATO MAINTAINED POPULATION

8 Most businesses and organisations in Australia need to obtain an ABN, and are then included on the ATO Australian Business Register. Most of these businesses have simple structures; therefore the unit registered for an ABN will satisfy ABS statistical requirements. For these businesses, the ABS has aligned its statistical units structure with the ABN unit. The businesses with simple structures constitute the ATO Maintained Population, and the ABN unit is used as the statistical unit.



ABS MAINTAINED POPULATION

9 For the population of businesses where the ABN unit is not suitable for ABS statistical requirements, the ABS maintains its own units structure through direct contact with each business. These businesses constitute the ABS Maintained Population. This population consists typically of large, complex and diverse businesses. The new statistical units model described below covers such businesses.

  • Enterprise Group: This is a unit covering all the operations in Australia of one or more legal entities under common ownership and/or control. It covers all the operations in Australia of legal entities which are related in terms of the current Corporations Law (as amended by the Corporations Legislation Amendment Act 1991) including legal entities such as companies, trusts, and partnerships. Majority ownership is not required for control to be exercised.
  • Enterprise: The enterprise is an institutional unit comprising (i) a single legal entity or business entity, or (ii) more than one legal entity or business entity within the same Enterprise Group and in the same institutional sub-sector (i.e. they are all classified to a single Standard Institutional Sector Classification of Australia sub-sector).
  • Type of Activity Unit (TAU): The TAU is comprised of one or more business entities, sub-entities or branches of a business entity within an Enterprise Group that can report production and employment data for similar economic activities. When a minimum set of data items are available, a TAU is created which covers all the operations within an industry sub-division (and the TAU is classified to the relevant sub-division of the ANZSIC). Where a business cannot supply adequate data for each industry, a TAU is formed which contains activity in more than one industry sub-division. Where a TAU has significant activity in more than one industry, the ABS will 'split' the TAU to maintain industry homogeneity.


INNOVATION SURVEY STATISTICAL UNIT

10 For the Innovation Survey 2003, the statistical unit is the ABN unit for businesses with simple structures, and the TAU for businesses with complex structures.



SURVEY METHODOLOGY

11 The Innovation Survey 2003 was conducted by mail. It was based on a random sample of approximately 8,500 businesses which was stratified by industry, state/territory and number of employees. All businesses with 200 or more employees were included in the sample.



INNOVATING BUSINESSES

12 Businesses were not directly asked if they undertook any innovation in the three years ending December 2003. Instead, businesses were classified as innovating by at least one affirmative response to any one of three questions asked on the survey form. They were asked if:

  • the business introduced any new or significantly improved goods or services
  • the business implemented any new or significantly improved operational processes
  • the business implemented any new or significantly improved organisational/managerial processes.


COMPARABILITY OF RESULTS

Historical

13 Results from the previous ABS surveys Innovation in Australian Manufacturing, 1994, Innovation in Selected Industries 1993-94, Innovation in Manufacturing, 1996-97 and Innovation in Mining, 1996-97 are not fully comparable with those from this survey, Innovation in Australian Business, 2003. The main differences are listed below:
  • The previous Manufacturing and Mining surveys' definition of innovation did not include new and/or improved services and non-technological innovations to new or significantly improved goods and services and operational processes.
  • The 1996-97 Mining survey used an industry specific form that explicitly asked if businesses used a range of advanced mining technologies. These were then classified as innovative processes. The 2003 industry wide form used generic examples of innovative processes, and mining businesses made their own judgements on whether their processes were innovative. This may have led to a lower proportion of mining businesses identifying themselves as innovating in 2003.
  • Innovation in Australian Business, 2003 excludes businesses with less than 5 employees whereas the previous Manufacturing and Mining surveys included all employing businesses.
  • The introduction of TNTS in mid 2002 had a number of significant impacts on the population from which the Innovation Survey 2003 was drawn. These are discussed in Information Paper, Improvements in ABS Economic Statistics [Arising from the New Tax System] (cat.no. 1372.0). Apart from a smaller survey frame and different statistical units, compositional changes due to the new methodology for determining the employment variable and the use of ATO industry codes impacted on the stratification of units on the survey frame.

14 Adjustments were made to the data from the 1993-94 and 1996-97 Manufacturing industry surveys and the Innovation Survey 2003 to allow the comparisons provided in the Main Features of this publication to be made (see paragraphs 12 and 13 for more detail). These changes consisted of excluding:
  • innovation associated with the implementation of new or significantly improved organisational/managerial processes from the 2003 data
  • businesses with less than 5 employees recorded on the ABS Business Register using data from the previous Manufacturing surveys.

European Union

15 Eurostat conducted a business innovation survey in respect of the years 1998-2000 (except for Norway where the survey covered 1999-2001), releasing the publication Innovation in Europe, Results for the EU, Iceland and Norway, in 2004. Users should note that the Eurostat data is not directly comparable with Australian data. The Eurostat survey differed in definition, scope and coverage. The Eurostat definition of innovation excluded the implementation of new or significantly improved organisational/managerial process and combined innovation for new goods and services and operational processes. Their population scope differed from the ABS survey in that businesses were included if they had 10 or more employees. Businesses classified to the following Statistical Classification of Economic Activities in the European Community (NACE Rev.1) were included from the Eurostat survey:
  • Business economy defined as Industry Sector:
      Mining and quarrying
      Manufacturing
      Electricity, gas and water supply
  • Business economy defined as Services Sector:
      Wholesale trade and commission trade
      Transport and communication
      Financial intermediation
      Business services (Computer activities; R & D; engineering activities and consultancy; and technical testing and analysis)

16 Adjustments have been made to the Australian data to allow the comparisons provided in the Main Features of this publication to be made. These changes consisted of excluding:
  • innovation associated with the implementation of new or significantly improved organisational/managerial processes
  • businesses with less than 10 employees
  • businesses in ANZSIC industry subdivision 77 Property Services.

New Zealand

17 Statistics New Zealand conducted a business innovation survey in respect of the three years ended August 2003, releasing the publication Innovation in New Zealand 2003, in July 2004. Users should note that the New Zealand data is not directly comparable with Australian data. The New Zealand survey differed in definition and scope compared with the ABS survey. The New Zealand definition of innovation excluded the implementation of new or significantly improved organisational/managerial process and combined innovation for new goods and services and operational processes.
  • Their population scope differed from the ABS survey in that businesses were included if:
      they had 10 employees or more
      they had annual GST turnover of greater than $NZ30,000
      they were operating for one year or more
  • Additionally, businesses:
      classified to ANZSIC industry division Agriculture Forestry and Fishing were included
      classified to ANZSIC industries Retail trade; Accommodation, cafes and restaurants, Property services, and Sport and recreation were excluded.

18 Adjustments were made to the data from both the Innovation Survey, 2003 and the Innovation in New Zealand, 2003 survey to allow the comparisons in the Main Features of this publication to be made. These changes consisted of excluding:
  • innovation associated with the implementation of new or significantly improved organisational/managerial processes from the Australian data
  • businesses with less than 10 employees from Australian data
  • businesses in ANZSIC industry subdivision 77 Property Services in order to produce data for ANZSIC industry subdivision 78 Business Services from the Australian data
  • businesses classified to ANZSIC industry division Agriculture Forestry and Fishing from the New Zealand data.

Research and Experimental Development

19 Data from the ABS Business Research and Experimental Development (R&D) publication are not directly comparable to the Innovation Survey 2003. R&D includes all ANZSIC divisions except Division A (Agriculture, forestry and fishing). The scope of the R&D collection is different to that of the Innovation survey as its frame is not based on the ABS Business Register but derived from various coverage sources. R&D is also a census of all businesses identified as performing R&D, whereas the Innovation Survey is a sample survey providing data which are weighted estimates. Care should be taken when comparing expenditure estimates as R&D collected information using a series of detailed questions, whereas in the Innovation survey information was collected as aggregates.


Other ABS surveys

20 Business counts shown in this publication may vary from other ABS sources. This reflects the differences in the scope and methodology between the Innovation survey and other ABS business surveys.



OUTPUT CLASSIFICATIONS

21 For output purposes, businesses are classified to employment and income ranges based on actual data reported in the survey. For other output groups (industry, State or Territory, Capital city, other areas) the classification is drawn from information held about the business on the ABS Business Register. The head office location of a business determined the State or Territory or region the business was classified to.



RELATED PUBLICATIONS

22 Other ABS publications relating to innovation in business in Australia are listed below:

  • Innovation in Manufacturing, 1996-97, (cat. no. 8116.0)
  • Innovation in Mining, 1996-97, (cat. no. 8121.0)
  • Innovation in Australian Manufacturing, 1994 (cat. no. 8116.0)
  • Innovation in Selected Industries, 1993-94, (cat. no. 8118.0)
  • Research and Experimental Development, Business, Australia, 2002-03, (cat. no. 8104.0)


ABS WEB SITE

23 Other information relating to Innovation in business can be found on this web site; see the Science and Innovation Home page under Themes/Industry.



DATA AVAILABLE ON REQUEST

24 As well as the statistics included in this publication, the ABS may have relevant data available on request. The availability of more detailed data are subject to confidentiality and quality checks. Inquires should be made to the National Information and Referral Service on 1300 135 070.



ROUNDING

25 Estimates of proportions shown in the tables are rounded to one tenth of a percentage point.


26 Where figures have been rounded, discrepancies may occur between the sum of the components/items and the total. In addition, percentages have been calculated using the unrounded figures.



COMMENTS

27 The ABS welcomes comment and suggestions from users regarding future surveys of Innovation in business in Australia. These comments should be addressed to the Director, Innovation and Technology Business Statistics Centre, Australian Bureau of Statistics, GPO Box K881, Perth, WA, 6842.


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