8158.0 - Innovation in Australian Business, 2005  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 07/12/2006   
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Active joint participation with other organisations which involves some sharing of technical or commercial risk. Straight fee-for-service arrangements are deemed not to be collaborative and are therefore excluded.


Refers to the operating expenses and capital expenditure as recorded in the Statement of Financial Performance and Statement of Financial Position for the business.

Financial reference period

Financial year ended 30 June 2005. Businesses with a different financial year were asked to report for a 12 month period which ended between 1 October 2004 and 30 September 2005.


The process of developing, introducing and implementing a new or significantly improved good or service or a new or significantly improved process.


A businesses which, in the reference period, undertook any innovative activity irrespective of whether that activity has been abandoned, not yet completed or implemented or introduced.

Innovating business

A business which, in the reference period, introduced any new or significantly improved good or service and/or implemented any new or significantly improved operational and/or organisational/managerial process.

Innovative activity

Innovative activity includes any work that was intended to result in the introduction or implementation of new or significantly improved goods, services or processes.

Intellectual property

Refers to the ownership of ideas and control over the tangible or virtual representation of those ideas.

New good or service

Any good or service or combination of these which is new to the business. Its characteristics or intended uses differ significantly from those previously produced by the business. Examples of new goods include: change of materials in goods; inclusion of environmentally-friendly components; introduction of smart-card; new type of paper for specific printers; development of flexible customer software; introduction of Global Positioning System (GPS); supply of multimedia applications; and cleaning cloths that don't require detergents. Examples of new services include: introduction of an extended warranty; introduction of pick-up service for customers; introduction of sale via Internet (e-commerce); existing services combined in a new form; introduction of electronic clearing systems; new or significantly improved insurance services; introduction of automated voice-response system; and introduction of telephone or internet bill payments system.

Businesses were asked to include significant improvements to existing goods or services, but to exclude: routine upgrades of equipment; renaming or repackaging of existing goods or services; routine customisation of goods or services (e.g. individual tax returns produced for each client but using the same method and tools); and regular seasonal changes where a good or service is only produced at certain times of the year, but is essentially unchanged from the previous year.

New operational process

A significant change for the business in its methods of producing or delivering goods or services. Examples of new operational processes include: digitalisation of printing processes; introduction of computer-assisted/based methods for product development; introduction of digital product labelling; development and introduction of digital distribution channels; reconstruction or reorganisation of sales rooms, if this enables easier shopping for customers; implementation of call-centre solutions; training of skilled labour to offer specially trained consulting services to customers; new or improved software or PC networks; introduction of electronic data interchange; new software tools for supply chain management; and introduction of automated or electronic ticketing system.

Businesses were asked to include significant improvements to existing operational processes.

New organisational/managerial process

A significant change in the strategies, structures or routines of a business which aim to improve the performance of the business. Examples of new organisational/managerial processes include: changed corporate directions; introduction of new management techniques; improved business diagnostics or performance measures; significant workplace reorganisation; and significant changes to communication and information networks.

Non-innovating business

A business which, in the reference period, did not undertake any innovative activity.

Percentage of foreign ownership

The percentage of ordinary shares or voting stock of a business held by non-residents of Australia.

Research and Experimental Development

Comprises creative work carried out systematically to increase the stock of knowledge and its use to devise new applications.