BUSINESS INNOVATION


Introduction

As indicated in the Explanatory Notes, the Business Characteristics Survey (BCS) collects key indicators of IT use and innovation in Australian business annually and more detailed information for each of these topics is collected every second year (i.e. in alternating years). The 2009-10 BCS collected detailed information relating to the use of information technology by Australian businesses.

Summary innovation data for 2009-10 were first released in Summary of IT Use and Innovation in Australian Business, 2009-10 (cat. no. 8166.0) in June 2011.

This release provides a detailed breakdown of the broad types and status of innovation.

Summary of innovation activity in Australian business, key indicators, by employment size(a), 2009 - 10
		0-4 persons	5-19 persons	20-199 persons	200 or more persons	Total
		%	%	%	%	%
Businesses which introduced any new or significantly improved:
	goods or services	16.5	24.5	25.1	38.7	19.8
	operational processes	11.6	24.0	28.1	40.2	16.9
	organisational/managerial processes	13.8	28.9	39.1	48.7	20.7
	marketing methods	12.6	22.5	24.6	26.8	16.7
	any of the above (i.e. innovating businesses)	30.5	49.2	56.6	69.7	38.6
Businesses with innovative activity which was:
	still in development(b)	15.0	26.4	30.4	44.5	19.9
	abandoned	6.5	8.5	8.8	9.4	7.3
Businesses with any innovative activity (i.e. innovation-active businesses)		35.7	54.7	61.2	74.3	43.8
(a) Proportions are of all businesses in each employment size range.
(b) As at 30 June 2010.

The scope of innovative activity as measured by the Business Characteristics Survey (BCS) covers four types of innovation (goods or services, operational processes, organisational/managerial processes and marketing methods) and three statuses of innovation (introduced, still in development and abandoned). The combination of these yields two measures of innovation: innovating businesses (i.e. those who have introduced or implemented at least one type of innovation) and innovation-active businesses (i.e. those who had undertaken any innovative activity).

During the year ended 30 June 2010, 44% of Australian businesses were innovation-active, with the proportion of innovation-active businesses increasing with each successive employment size range. Over half of all businesses in Wholesale trade, Arts and recreation services and Manufacturing were innovation-active.


Goods or services innovation

Goods or services innovation, by employment size, by status(a), 2009 - 10
		0-4 persons	5-19 persons	20-199 persons	200 or more persons	Total
		%	%	%	%	%
Businesses which introduced any new or significantly improved:
	goods	8.3	14.1	13.4	20.1	10.6
	services	11.4	15.8	16.4	25.7	13.2
	any goods or services	16.5	24.5	25.1	38.7	19.8
Businesses with any activity related to new or significantly improved goods or services which was:
	still in development(b)	6.6	11.5	11.7	22.7	8.6
	abandoned	2.5	3.2	3.0	5.5	2.8
(a) Proportions are of all businesses in each employment size range.
(b) As at 30 June 2010.

Just under 20% of businesses introduced new or significantly improved goods or services during the year ended 30 June 2010. A slightly higher proportion of businesses introduced new services (13%) than new goods (11%). This was the case across all employment size ranges. The proportion of businesses which abandoned the development or introduction of new goods or services during the year ended 30 June 2010 was 3%.

Businesses in Wholesale trade (32%), Retail trade (27%) and Manufacturing (20%) were most likely to have introduced new goods. Businesses in Arts and recreational services (29%) and Financial and insurance services (21%) were most likely to have introduced new services.


Operational process innovation

Operational process innovation, by employment size, by status(a), 2009 - 10
		0-4 persons	5-19 persons	20-199 persons	200 or more persons	Total
		%	%	%	%	%
Businesses which introduced any new or significantly improved:
	methods of manufacturing or producing goods or services	4.8	8.9	10.1	12.5	6.6
	logistics, delivery or distribution methods for goods or services	3.3	6.9	8.3	10.7	4.9
	supporting activities for business operations, such as maintenace systems or processes for purchasing, accounting or computing	6.0	16.3	20.8	30.0	10.5
	other operational processes	0.1	0.2	0.1	np	0.1
	any operational processes	11.6	24.0	28.1	40.2	16.9
Businesses with any activity related to new or significantly improved operational processes which was:
	still in development(b)	4.6	12.1	14.6	28.8	7.9
	abandoned	1.9	2.6	4.8	4.8	2.4
np not available for publication but included in totals where applicable, unless otherwise indicated
(a) Proportions are of all businesses in each employment size range.
(b) As at 30 June 2010.

During the year ended 30 June 2010, 17% of all businesses introduced new or significantly improved operational processes. New supporting activities for business operations, such as maintenance systems or processes for purchasing, accounting or computing was the most reported type of operational process innovation (10%).

The proportion of businesses introducing new or significantly improved operational processes increased with each successive employment size range. Businesses with 200 or more persons employed were more than three times as likely (40%) to introduce any new operational processes than businesses with 0-4 persons employed (12%).

Manufacturing had the highest proportion of businesses introducing new methods of manufacturing or producing goods or services (19%). Businesses in Financial and insurance services were the most likely to have introduced new or significantly improved supporting activities for business operations, such as maintenance systems or processes for purchasing, accounting or computing (18%).

Businesses in Mining had the highest proportion of operational processes still in development (14%). Financial and insurance services had the highest proportion of businesses with abandoned innovative activity related to operational processes (5%).


Organisational/managerial process innovation

Organisational/managerial process innovation, by employment size, by status(a), 2009 - 10
		0-4 persons	5-19 persons	20-199 persons	200 or more persons	Total
		%	%	%	%	%
Businesses which introduced any new or significantly improved:
	Knowledge management processes to better use or exchange information, knowledge and skills within the business	6.6	16.6	20.9	26.4	11.0
	business practices for organising procedures	4.7	11.8	17.3	20.7	8.0
	methods of organising work responsibilities and decision making	6.2	17.3	24.8	33.1	11.3
	methods of organising external relations with other businesses or public institutions	2.7	5.6	6.2	10.4	3.9
	other organisational/managerial processes	np	0.1	1.5	0.1	0.1
	any organisational/managerial processes	13.8	28.9	39.1	48.7	20.7
Businesses with any activity related to new or significantly improved organisational/managerial processes which was:
	still in development(b)	3.2	10.8	15.1	22.0	6.6
	abandoned	1.4	2.4	3.1	3.6	1.8
np not available for publication but included in totals where applicable, unless otherwise indicated
(a) Proportions are of all businesses in each employment size range.
(b) As at 30 June 2010

Overall, 21% of all businesses introduced new or significantly improved organisational/managerial processes. Knowledge management processes to better use or exchange information, knowledge or skills within the business and new methods of organising work responsibilities and decision making were the most likely organisational/managerial processes to be introduced (both 11%).

Arts and recreational services had the highest proportion of businesses introducing organisational/managerial innovation (28%), followed closely by Professional, scientific and technical services (26%). In contrast, businesses in Transport, postal and warehousing (13%) had the lowest proportion of businesses introducing some form of organisational/managerial innovation.

Businesses in Professional, scientific and technical services were most likely to have introduced new or significantly improved knowledge management processes to better use or exchange information, knowledge or skills within the business (17%).

Overall, 7% of businesses had new organisational/managerial processes still in development. A small proportion of businesses (2%) abandoned the introduction or implementation of new or significantly improved organisational/managerial processes.


Marketing methods innovation

Marketing method innovation, by employment size, by status(a), 2009 - 10
		0-4 persons	5-19 persons	20-199 persons	200 or more persons	Total
		%	%	%	%	%
Businesses which introduced any new or significantly improved:
	changes to the aesthetic design or packaging of a good or service	1.7	6.3	6.7	8.2	3.6
	media or techniques for product promotion	8.6	16.5	18.1	20.5	11.9
	methods of product placement or sales channels	2.6	4.5	5.4	5.4	3.4
	methods of pricing goods or services	3.2	5.7	5.1	4.9	4.2
	other marketing methods	0.2	0.2	0.3	0.3	0.2
	any marketing methods	12.6	22.5	24.6	26.8	16.7
Businesses with any activity related to new or significantly improved marketing methods which was:
	still in development(b)	7.9	14.8	12.6	12.2	10.5
	abandoned	3.6	4.1	2.7	2.8	3.7
(a) Proportions are of all businesses in each employment size range.
(b) As at 30 June 2010.

Overall, 17% of businesses introduced new or significantly improved marketing methods in 2009-10. The incidence of businesses introducing new or significantly improved marketing methods increased with each successive employment size range; ranging from 13% for businesses with 0-4 persons employed, to 27% for businesses with 200 or more persons employed. Businesses were three times as likely to introduce new media techniques for product promotion (12%) than any other type of marketing method innovation.

Accommodation and food services had the highest proportion of businesses that introduced some form of marketing innovation (26%). The introduction of new media techniques for product promotion was most common to businesses in Arts and recreational services (20%). Businesses in Accommodation and food services were most likely to introduce changes to the aesthetic design or packaging of a good or services (8%) and new methods of pricing goods or services (10%).

Overall 10% of businesses had new marketing methods still in development, and 4% of businesses abandoned the development of any marketing methods innovation.

The proportion of businesses with new or significantly improved marketing methods still in development ranged from 4% in Mining to 16% in Information media and telecommunications. Businesses in Manufacturing and Rental, hiring and real estate services were most likely to have abandoned marketing methods innovation (both 6%).