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8166.0 - Summary of IT Use and Innovation in Australian Business, 2005-06  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 19/11/2007  First Issue
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BUSINESS USE OF IT

Key indicators of business use of IT include: adoption of IT (computer use, Internet use, web presence); use of broadband; and Internet commerce (placing and receiving orders via the Internet or web, Internet income). The move to the BCS vehicle has not had a significant impact on the comparability of key IT indicators with those previously collected. For more information about the impact of moving to a new survey vehicle on business use of IT statistics, please refer to Explanatory Notes 27 to 29.

Business Use of Information Technology, Key Indicators(a)

2002-03
2003-04
2004-05
2005-06

Proportion of all businesses with
Computer use %
83.0
85.2
88.6
88.5
Internet use %
71.4
74.2
76.8
81.3
Web presence %
23.0
25.1
26.7
29.8
Proportion of all businesses which
Placed orders via the Internet or web %
27.8
31.3
32.7
37.3
Received orders via the Internet or web %
13.3
12.0
12.2
20.9
Internet income $b
24.3
33.3
39.6
56.7
Proportion of businesses with Internet use and broadband connection %
. .
41.5
62.7
82.5

. . not applicable
(a) Use of IT indicators was collected through the BCS vehicle in 2005-06. For previous periods these indicators were collected through the BUIT survey.



Adoption of IT

The proportion of Australian businesses with computer use during the year ended 30 June 2006 remained at almost 90%. However, the proportion of businesses reporting Internet use and web presence continued to rise at a steady rate.


Internet use during the year ended 30 June 2006 was reported by 81% of businesses, while 30% of businesses reported having a web presence at the end of the period. Web presence includes website, home page or presence on another entity's website.



Use of broadband

Businesses with Internet use were asked to identify the main type of Internet connection used at the end of June 2006. Strong growth in the proportion of businesses using broadband as the main Internet connection type has occurred over the last two periods. Broadband, which is defined by the ABS as an 'always on' Internet connection with an access speed equal to or greater than 256kbps, was identified as the main Internet connection type by 82% of businesses with Internet use during 2005-06. This compares to 63% reported for 2004-05.

Main type of Internet connection, as at 30 June(a)
Graph: Main type of Internet connection, as at 30 June(a)



Internet commerce

The 2005-06 BCS measured the proportion of Australian businesses using the Internet or web to place orders and/or receive orders, with or without online payments, and the value of Internet or web orders received by businesses (Internet income). Caution should be used when interpreting values of Internet income, please refer to Explanatory Notes 22 to 26.


The proportion of businesses which reported placing orders via the Internet or web during 2005-06 was 37%, showing a continuation of the growth observed over recent years for this business practice.


There was a major increase in the proportion of businesses reporting receipt of orders via the Internet or web for the 2005-06 period compared to earlier periods (from 12% in 2004-05 to 21%). Income received from these orders (i.e. Internet income) grew by approximately 40% from $40 billion in 2004-05 to $57 billion.

Business Use of Selected Technologies, by selected business characteristics, 2005-06

Proportion of all businesses with
Proportion of all businesses which
Proportion of businesses with Internet use



Total
number of businesses
Computer
use
Internet
use
Web
presence
Placed orders
via the Internet
or web
Received orders
via the Internet
or web
Broadband as main
type of Internet
connection(a)
'000
%
%
%
%
%
%

Employment size
0-4 persons
466
85.4
77.6
21.5
33.1
18.6
79.2
5-19 persons
195
93.2
86.3
40.7
42.4
24.3
86.6
20-199 persons
52
98.3
94.9
59.8
53.9
28.5
91.4
200 or more persons
^4
100.0
99.9
94.1
65.7
28.0
97.7
Industry
Mining
3
87.1
81.3
36.2
41.3
13.6
85.0
Manufacturing
57
89.0
80.0
38.4
41.8
34.9
85.3
Electricity, gas and water supply
1
94.8
88.9
50.6
49.5
18.4
84.9
Construction
116
87.7
80.3
13.0
25.2
13.3
82.3
Wholesale trade
47
96.7
91.1
46.3
41.9
38.6
89.4
Retail trade
120
83.0
72.4
28.1
35.7
18.9
74.2
Accommodation, cafes and restaurants
38
75.5
66.5
33.9
26.0
18.8
79.6
Transport and storage
35
77.5
^66.3
15.4
21.5
17.3
^74.1
Communication services
8
83.2
68.1
26.3
38.9
21.0
88.3
Finance and insurance services
20
94.3
92.7
^49.0
^43.4
21.8
91.9
Property and business services
166
93.8
89.9
36.8
49.2
24.6
84.6
Health and community services
52
96.4
91.6
14.6
35.7
2.1
84.6
Cultural and recreational services
19
95.3
92.4
53.8
48.4
33.8
82.3
Personal and other services
34
80.5
69.9
30.9
32.7
16.0
80.6
Region
Capital cities
500
88.9
81.9
32.9
37.9
21.5
85.2
Other areas
216
87.6
80.1
22.7
36.0
19.5
76.1
Total
716
88.5
81.3
29.8
37.3
20.9
82.5

^ estimate has a relative standard error of 10% to less than 25% and should be used with caution
(a) Businesses identified broadband as the main type of Internet connection used as at 30 June 2006



Employment size

A strong association exists between the employment size of a business and the likelihood that the business is using IT. The proportion of Australian businesses using IT is greater for each successive employment size range. For example, during the year ended June 2006 all businesses with 200 or more persons employed used computers, almost all used the Internet, while 94% had a web presence. A lower proportion of businesses with 0-4 persons employed used IT: 85% used computers, 78% used the Internet and 22% had a web presence.


For businesses with Internet use during the year ended June 2006, the proportion using broadband as the main Internet connection type at the end of June is also greater for larger businesses compared to smaller businesses.


The likelihood of a business placing orders for goods or services via the Internet or web also was greater for each successive employment size range. During 2005-06, the proportion of businesses with 200 or more persons reporting placing orders via the Internet or web was double that of businesses with 0-4 persons (66% and 33%, respectively). This same relationship does not exist for businesses which received orders via the Internet or web: proportions for receipt of orders are similar for businesses which employed 5-19 persons (24%), 20-199 persons (28%) and 200 or more persons (28%), compared to 19% for businesses which employed 0-4 persons.



Industry

During the year ended June 2006, the proportion of Australian businesses which used IT varied considerably across industries. The industries with the highest proportions of businesses with computer use were Wholesale trade (97%) and Health and community services (96%), while Accommodation, cafes and restaurants (76%) had the lowest. Internet use was highest for Finance and insurance services (93%) and Cultural and recreational services (92%), whereas the lowest rate of Internet use was in Transport and storage (66%). Cultural and recreational services had the highest proportion of businesses with a web presence (54%) at the end of June 2006, followed by Electricity, gas and water supply (51%). The lowest occurrence of web presence was within the Construction industry (reported by 13% of businesses).


As with Internet use, broadband (as the main Internet connection type at the end of June 2006) was most prevalent in Finance and insurance services and least common in Transport and storage, identified by 92% and 74%, respectively, of businesses with Internet use in these industries.


Electricity, gas and water supply had the highest proportion of businesses which placed orders via the Internet or web (50%), only marginally higher than Property and business services (49%). In contrast, Transport and storage had the lowest proportion of businesses (22%) placing orders in this manner. The industries with the highest proportions of businesses which received orders via the Internet or web were Wholesale trade and Manufacturing at 39% and 35%, respectively. Health and community services had the lowest at 2%.



Region

Business use of IT during the year ended June 2006 was higher in Capital cities than Other areas for all key indicators. Proportions of businesses in Capital cities and Other areas were similar (all 2 percentage points or less of each other) for each of the following indicators: computer use; Internet use; orders placed via the Internet or web; and orders received via the Internet or web. However, there are larger differences between the proportions of businesses in Capital cities and Other areas for web presence and use of broadband (differences of 10 and 9 percentage points, respectively).

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