BARRIERS TO INNOVATION AND GENERAL BUSINESS ACTIVITIES OR PERFORMANCE


Introduction

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

Barriers to innovation, by employment size(a)(b)(c), 2009 - 10
		0-4 persons	5-19 persons	20-199 persons	200 or more persons	Total
		%	%	%	%	%
Lack of access to additional funds		16.3	21.8	21.6	15.3	18.4
Cost of development or introduction/implementation		11.0	17.0	13.9	14.8	13.1
Lack of skilled persons:
	within the business	9.5	20.1	18.6	12.6	13.6
	within the labour market	9.2	18.6	21.6	18.8	13.2
	in any location(d)	15.3	27.8	29.0	24.5	20.4
Lack of access to knowledge or technology		3.0	5.5	2.8	3.1	3.8
Government regulations or compliance		12.2	18.2	17.4	10.5	14.5
Adherence to standards		4.3	6.9	5.9	3.5	5.2
Uncertain demands for new goods or services		12.4	15.1	14.6	12.0	13.4
Any barriers to innovation		39.5	51.7	55.1	45.0	44.6
No barriers to innovation		60.5	48.3	44.9	55.0	55.4
(a) Proportions are of all businesses in each employment size range.
(b) Barriers to innovation are those factors which significantly hampered the development or introduction of any new or significantly improved goods, services, processes or methods.
(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 within the labour market.

Overall, 45% of businesses had at least one barrier to innovation, with the most common being lack of access to additional funds (18%).

Businesses in Manufacturing (56%) were the most likely to have at least one barrier to innovation. Businesses in Manufacturing and Construction were the most likely to cite lack of skilled persons within the labour market as a barrier to innovation (20%).

Innovation-active businesses (63%) were more than twice as likely to experience barriers to undertaking innovative activity than non innovation-active businesses (30%).


Barriers to general business activities or performance

Barriers to general business activities or performance, by employment size(a)(b), 2009 - 10
		0-4 persons	5-19 persons	20-199 persons	200 or more persons	Total
		%	%	%	%	%
Lack of access to additional funds		13.9	17.9	18.8	11.6	15.5
Cost of inputs		10.8	14.8	12.6	10.3	12.2
Outstanding accounts receivable limiting cash flow		11.9	19.6	16.0	11.6	14.6
Lack of skilled persons:
	within the business	7.5	15.5	14.8	11.9	10.6
	within the labour market	7.7	18.7	22.1	22.0	12.4
	in any location(c)	12.5	25.5	27.3	26.2	17.8
Government regulations or compliance		12.6	16.2	15.9	10.4	14.0
Lack of customer demand for goods or services		18.0	19.9	20.6	14.9	18.8
Lower profit margins to remain competitive		20.8	29.6	28.5	18.8	24.2
Environmental factors(d)		9.1	9.9	6.2	8.7	9.2
Any barriers to general business activities or performance		52.0	62.8	63.2	54.2	56.2
No barriers to general business activities or performance		48.0	37.2	36.8	45.8	43.8
(a) Proportions are of all businesses in each employment size range.
(b) Businesses could identify more than one barrier and were not asked to rank barriers in order of significance.
(c) Includes businesses that reported lack of skilled persons within the business and/or within the labour market.
(d) Examples of environmental factors include drought, insect plague and compliance with water restrictions.

Overall, 56% of businesses had at least one barrier that significantly hampered their general business activities or performance. The most common barrier hampering general business activities or performance was lower profit margins to remain competitive (24%). Lower profit margins to remain competitive was also the most common barrier significantly hampering general business activities or performance for businesses across the three smaller employment size ranges. For businesses with 200 or more persons employed, the most common barrier was lack of skilled persons within the labour market (22%).

Lack of skilled persons within the labour market as a barrier to general business activities or performance was experienced by one in five businesses in Manufacturing.

Innovation-active businesses (24%) were almost twice as likely to experience a lack of skilled persons in any location as a barrier to general business activities or performance than non innovation-active businesses (13%).