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8158.0 - Innovation in Australian Business, 2008-09 Quality Declaration 
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 26/08/2010   
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EXPLANATORY NOTES


INTRODUCTION

1 This release presents key indicators on the incidence of innovation and related practices by Australian businesses, as collected by the 2008-09 Business Characteristics Survey (BCS).

2 The BCS is an annual survey and it is the survey vehicle for the ABS' Integrated Business Characteristics Strategy (IBCS). The strategy integrates the collection and quality assurance of data required for input into both the ABS' Business Longitudinal Database (BLD) and the production of point in time estimates for: Business Use of Information Technology (BUIT); business innovation in Australia; a broad range of other non-financial business characteristics; and other data from administrative sources.

3 A key part of the IBCS is the production of annual BUIT and business innovation indicators, with a more detailed set of items for each of these topics collected every second year (i.e. in alternating years). Previously, these IT and innovation indicators were produced from the separate annual Business Use of IT and biennial Innovation surveys, respectively.


STATISTICAL UNITS USED

4 Statistical units are those entities from which statistics are collected, or about which statistics are compiled. In ABS economic statistics, the statistical unit is generally the business. The ABS Business Register (ABSBR) is used to record information about statistical units and is used to create the frames for most ABS economic collections.

5 The ABS uses an economic statistics units model on the ABSBR to describe the characteristics of businesses, and the structural relationships between related businesses. Within large, complex and diverse business groups, the units model is also used to define reporting units that can provide data to the ABS at suitable levels of detail.

6 This units model allocates businesses to one of two sub-populations:

  • Businesses with a simple structure - Most businesses and organisations in Australia need to obtain an Australian Business Number (ABN). They are then included on the whole-of-government register of businesses, the Australian Business Register (ABR), which is maintained by the Australian Taxation Office (ATO). 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 (ATOMP), and the ABN unit is used as the statistical unit for all ABS economic collections.
  • Businesses with a complex structure - 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 the business. These businesses constitute the ABS maintained population (ABSMP). This population consists typically of large, complex and diverse businesses. For businesses in the ABSMP, statistical units comprise the Enterprise Group, the Enterprise and the Type of Activity Unit (TAU). The range of activities across the Enterprise Group can be very diverse. The TAU represents a grouping of one or more business entities within the Enterprise that cover all of the operations within an industry subdivision and for which a basic set of financial production and employment data can be reported.

7 Together these two sub-populations (of ABN units and TAUs) make up the ABSBR population, from which the BCS sample is taken.

8 The current economic statistics units model was introduced into the ABS in mid 2002, to better use the information available as a result of The New Tax System (TNTS). For more information please refer to Information Paper: Improvements in ABS Economic Statistics - Arising from the New Tax System, (cat. no. 1372.0).


SCOPE AND COVERAGE

9 The businesses that contribute to the statistics in this publication are classified by:
10 The scope of the estimates in this publication consists of all employing business entities in the Australian economy, except for:
      SISCA 3000 General government
      SISCA 6000 Rest of the world
      ANZSIC06 Division A Agriculture, forestry and fishing
      ANZSIC06 Division O Public administration and safety
      ANZSIC06 Division P Education and training
      ANZSIC06 Groups 624 (Financial asset investing) and 633 (Superannuation funds)
      ANZSIC06 Groups 854 (Religious services) and 955 (Civic, professional and other interest group services)
      ANZSIC06 Subdivision 96 Private households employing staff

11 The frame for the Business Characteristics Survey is a subset of the ABS Business Register and includes employing businesses only. These are defined as those businesses which register for the ATO's Pay As You Go Withholding (PAYGW) scheme. It is not unusual for some of these 'employing businesses' to have zero employment at various times during the reporting period. The frame is updated quarterly to take account of new businesses, businesses which have ceased employing, changes in employment levels, changes in industry and other general business changes. 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 removed from the frame. The estimates in this publication include an allowance for the time it takes a newly registered business to be included in the survey frame.


SURVEY METHODOLOGY

12 The sample design for this survey is complex due to serving dual purposes: collection of characteristics data for the ABS Business Longitudinal Database (BLD); and production of point in time estimates for a range of non-financial business characteristics. While there are scope differences between the BLD and point in time estimates, the intention is to maximise the number of businesses selected for which data collected can contribute to both purposes. More information about releases relating to the BLD is provided in Explanatory Note 30. For more information about the survey design or methodology for the BCS, please email your query to innovation.technology@abs.gov.au.

13 Collection of data included in this release was undertaken based on a random sample of approximately 9,500 businesses using a mail out questionnaire. The sample was stratified by industry and an employment based size indicator. All businesses on the ABS Business Register identified as having 300 or more employees were included in the sample. The 2008-09 BCS was dispatched in late October 2009.

14 The sample design of the 2008-09 BCS does not include state or territory as part of the stratification design.


REFERENCE PERIOD

15 The reference period for most of the business characteristics items included in the 2008-09 BCS is the year ended 30 June 2009. Financial data relates to the most recent financial year ended on or before 30 September 2009.


DEFINING "INNOVATION"

16 The 2008-09 BCS draws on the conceptual definitions and guidelines included in the 'Oslo Manual, Guidelines for Collecting and Interpreting Innovation Data' (Third Edition, 2005). This manual provides a framework for the collection of innovation statistics and specifies the definitions of innovation that are used by the ABS.

17 Key indicators of innovation include: measures of business innovation (innovating, innovation-active); types of innovation (goods and/or services, operational processes, organisational/managerial processes, marketing methods); and status of innovation (introduced, still in development, abandoned).

Measures of business innovation

18 Two measures of business innovation are included in this release:
      Innovating businesses - businesses which introduced any type of innovation during the reference period.
      Innovation-active businesses - businesses which had undertaken any innovative activity during the reference period including: introduction of any type of innovation and/or businesses with work on the development or introduction either still in progress or abandoned.

Types of innovation

19 Four types of innovation are included in this release:
      Goods and/or services - Any good or service or combination of these which is new to a business (or significantly improved). Its characteristics or intended uses differ significantly from those previously produced/offered.
      Operational processes
      - New or significantly improved methods of producing or delivering goods and/or services of a business (including significant change in techniques, equipment and/or software).
      Organisational/managerial processes
      - New or significantly improved strategies, structures or routines of a business which aim to improve performance.
      Marketing methods
      - New or significantly improved design, packaging, placement, pricing, promotion or sales methods aimed to increase the appeal of goods and/or services of a business or to enter new markets.

Status of innovation

20 Three statuses of innovation are included in this release:
      Introduced - the business introduced an innovation during the reference period (although the innovation does not need to have been commercially successful).
      Still in development
      - the business was in the process of developing, introducing or implementing an innovation during the reference period but work on the innovation was still in progress at the end of the period.
      Abandoned
      - the business abandoned the development or introduction of an innovation during the reference period (i.e. work on the innovation ceased without full introduction occurring).


INNOVATION CONTENT OF THE BCS

21 Basic indicators of innovation by type and status are collected annually in the BCS. These data are released every year as part of the two regular BCS releases Summary of IT use and Innovation in Australian Business (cat. no. 8166.0) and Selected Characteristics of Australian Business (cat. no. 8167.0).

22 Every second year more detailed information about business practices or factors that influence innovative activity are collected from businesses that have undertaken innovative activity. It is these data that form the majority of the content for this release. Outputs for most of the topics are available for innovation-active businesses only as these questions were not asked of businesses that did not undertake any innovative activity during the reference period. For more information about ABS Innovation statistics, please refer to Appendix 1: Overview of ABS Innovation Statistics.


BUSINESS COUNTS IN THIS RELEASE AND COMPARABILITY WITH OTHERS PUBLISHED BY THE ABS

23 Estimates of the number of businesses operating in Australia can be derived from a number of sources within the ABS. They may relate to a particular point in time or may be presented as an average annual figure. However, these estimates will not always show the same results. Variations will occur because of differing data sources, differing scope and coverage definitions between surveys, as well as variations due to sampling and non-sampling error. More information about business counts can be found in the information paper A Statistical View of Counts of Businesses in Australia (cat. no. 8162.0).

24 The Business Characteristics Survey is not designed to provide high quality estimates of numbers of businesses for any of the output classifications (for example, employment size or industry) and the counts of businesses in this publication are only included to provide contextual information for the user. Users should also note that the estimates in this publication are only for the population of businesses in scope of the BCS. A more robust source of counts of Australian businesses is available from Counts of Australian Businesses, including Entries and Exits, June 2003 to June 2007 (cat. no. 8165.0).


OUTPUT CLASSIFICATIONS

25 For output purposes, businesses are classified to employment size ranges based on data reported for the last pay period in the reference year, i.e. the last pay period ended before 30 June 2009. It is possible for businesses classified on the ABS Business Register at the time of selection as employing, to report nil employees for the last pay period. For output by industry, the classification is drawn from information held about the business on the ABS Business Register.


AVAILABILITY OF STATE/TERRITORY OUTPUTS

26 As indicated in Explanatory Note 14, state/territory is not included in the stratification for sample design and, as such, the included sample may not be representative of the business population in each state or territory. Also as changes in the composition or structure of the state/territory business population are not accounted for in design, movements for a particular indicator (for example, innovation) may not reflect a real change. State/territory outputs are, therefore, subject to more than the usual sampling error (as measured by standard error) and the quality is highly variable from collection to collection. Dependent on ABS assessment of quality, data from a particular reference period may not be released as they may not be fit for purpose. For example, they may not reflect change over time for a selected state/territory or adequately enable comparison between states/territories. After assessment of the 2008-09 data, it was decided that no state/territory data would be released.


UPCOMING RELATED RELEASES

27 Upcoming ABS data releases from the 2008-09 Business Characteristics Survey are:
      Selected Characteristics of Australian Business, 2008-09 (cat. no. 8167.0). This release will include summary characteristics data for a selection of topics including business cooperative arrangements, performance measures, barriers, government financial assistance, finance sought, markets and competition, innovation rates and IT usage. On-line content will include tables and graphs with associated commentary. Detailed data (including some output cross-classified by business size, industry and innovator status) will be output as data cubes. This release is scheduled for 16 September 2010.


MOST RECENT RELATED RELEASES

28 The most recent issue of ABS releases related to demography of Australian business is:
29 The most recent issues of other ABS releases related to innovation in business in Australia are:

BUSINESS LONGITUDINAL DATABASE - CONFIDENTIALISED UNIT RECORD FILE

30 The primary outputs from the BLD are a suite of Confidentialised Unit Record Files (CURFs). The BLD design is comprised of panels (or waves) with each panel representing the entire population of in-scope small and medium businesses at the time of initialisation. Each panel is surveyed for five years. The first CURF was released in October 2009 and provides information for the first two panels included in the BLD. Panel One contains three reference periods of data (2004-05, 2005-06 and 2006-07) and Panel Two contains two reference periods of data (2005-06 and 2006-07). For more information please refer to:

ABS WEBSITE

31 Other information relating to Information Technology (both supply and demand), innovation and characteristics of business, particularly updates about additional analytical work can be found on the ABS website www.abs.gov.au; see the Innovation, Science and Technology Home page under Topics @ a Glance. Readers can also subscribe to the Innovation and Technology Update (cat. no. 8101.0).


ROUNDING

32 Estimates of proportions have been calculated using unrounded figures, but are shown in the tables rounded to one tenth of a percentage point. Where figures have been rounded, discrepancies may occur between the sum of the component items and the total. Figures presented in the commentary have been rounded to the percentage point.


COMMENTS

33 The ABS welcomes comments and suggestions from users regarding business characteristics including IT and innovation statistics. These comments should be addressed to the Director, Innovation and Technology Statistics, Australian Bureau of Statistics, GPO Box K881, Perth, WA, 6842, or email innovation.technology@abs.gov.au.


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