8167.0 - Selected Characteristics of Australian Business, 2005-06  
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 01/02/2008  First Issue
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BARRIERS TO BUSINESS ACTIVITIES OR PERFORMANCE


All businesses surveyed were asked to identify factors which significantly hampered the development or introduction of new or significantly improved goods, services, processes or methods (i.e. innovation related activities) and those which significantly hampered other business activities or performance (i.e. those not related to innovation). For the purpose of this release, these factors are referred to as 'barriers to innovation' and 'barriers to business activities or performance not related to innovation' respectively.


It should be noted that businesses were not provided with a definition of what constitutes a significant level of hampering and were not asked to rank barriers in order of significance.

Barriers to innovation, 2005-06(a)(b)(c), by employment size

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

Barriers to innovation
Cost of development or introduction/implementation
9.6
14.8
11.4
10.1
11.1
Skilled persons
Lack of skilled persons within the business
10.1
22.5
20.5
^28.1
14.3
Lack of skilled persons within the labour market
12.0
26.6
29.5
26.6
17.3
Any lack of skilled persons(d)
16.1
34.6
37.4
^41.8
22.8
Attitude of staff towards change
3.7
9.8
12.4
^19.3
6.1
Lack of access to knowledge or technology
3.5
3.2
3.7
4.1
3.4
Uncertain demands for new goods or services
9.3
9.5
10.1
6.1
9.4
Other barriers to innovation
4.3
4.2
4.6
2.9
4.3
Any barriers to innovation
33.0
46.8
50.2
^50.9
38.1
No barriers to innovation
67.0
53.2
49.8
^49.1
61.9

^ estimate has a relative standard error of 10% to less than 25% and should be used with caution
(a) Barriers to innovation are those factors which signiificantly hampered the development or introduction of any new or signficantly improved goods, services, processes or methods.
(b) Proportions are of all businesses in each employment size category.
(c) Businesses could identify more than one barrier and were not asked to rank barriers in order of significance.
(d) Includes businesses that reported lack of skilled persons within the business and/or lack of skilled persons within the labour market.


At the Australian level, a total of 38% of businesses reported at least one barrier to innovation during the year ended 30 June 2006. Lack of skilled persons within the labour market was the most commonly reported barrier to innovation, reported by 17% of businesses, followed by lack of skilled persons within the business (14%) and cost of development or introduction/implementation (11%).


Lack of skilled persons within the labour market was also the most commonly reported barrier to innovation for businesses in the three smallest employment size ranges, while lack of skilled persons within the business was the most commonly reported barrier by businesses with employment of 200 or more persons.


The greater the employment size of a business, the more likely it is that attitude of staff towards change was a perceived barrier to innovation: 19% of businesses that employed 200 or more persons reported this as a barrier to innovation compared to only 4% and 10% of businesses that employed 0-4 persons and 5-19 persons, respectively.

Barriers to business activities or performance not related to innovation, 2005-06(a)(b)(c), by employment size

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

Barriers to business activities or performance not related to innovation(a)
Lack of access to additional funds
12.2
15.6
17.6
^16.7
13.5
Cost of inputs
8.6
11.9
13.3
9.6
9.9
Outstanding accounts receivable limiting cash flow
12.9
18.6
11.5
2.4
14.3
Skilled persons
Lack of skilled persons within the business
9.1
18.3
17.0
^24.6
12.3
Lack of skilled persons within the labour market
10.2
23.7
26.2
24.9
15.1
Any lack of skilled persons(d)
15.0
30.7
32.6
^38.2
20.7
Government regulations or compliance
7.1
14.4
14.0
11.4
9.6
Lack of customer demand for goods or services
10.3
10.2
7.5
7.8
10.1
Lower profit margins to remain competitive
17.3
27.6
24.4
20.1
20.7
Lower price received due to market driven factors
9.5
16.3
9.5
12.1
11.3
Environmental factors(e)
5.5
9.8
9.1
6.4
6.9
Other barriers
2.7
1.7
2.6
2.8
2.4
Any barriers to business activities or performance not related to innovation
44.3
62.2
60.7
^59.0
50.4
No barriers to business activities or performance not related to innovation
55.7
37.8
39.3
^41.0
49.6

^ estimate has a relative standard error of 10% to less than 25% and should be used with caution
(a) Business performance or other activities exclude any innovation related activities.
(b) Proportions are of all businesses in each employment size category.
(c) Businesses could identify more than one barrier and were not asked to rank barriers by significance.
(d) Includes businesses that reported lack of skilled persons within the business and/or lack of skilled persons within the labour market.
(e) Environemntal factors include drought, insect plague etc.


Of all businesses, 50% reported having at least one barrier to business activities or performance not related to innovation during the year ended 30 June 2006. Having lower profit margins in order to remain competitive and lack of skilled persons within the labour market were the most commonly reported barriers, significantly hampering 21% and 15% of businesses respectively. These two factors were also the two most commonly reported barriers by businesses that employed 5-19 and 20-199 persons.


For businesses that employed 0-4 persons, outstanding accounts receivable limiting cash flow was the second most prevalent barrier to business activities or performance not related to innovation, after lower profit margins to remain competitive. Businesses with employment of 200 or more persons reported the highest rates for lack of skilled persons within the labour market and lack of skilled persons within the business.