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8158.0 - Innovation in Australian Business, 2006-07 Quality Declaration 
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 22/08/2008   
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Contents >> Summary of findings >> KEY MEASURES OF INNOVATION

KEY MEASURES OF INNOVATION

The scope of innovative activity as measured by the Business Characteristics Survey (BCS) covers four broad types of innovation (goods or services; operational processes; organisational/managerial processes; and marketing methods) and three statuses of innovation (introduced or implemented; 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).

Summary of innovative activity in Australian business(a)(b), by status, by employment size, by industry - 2006-07

Businesses with innovative activity which was:
Estimated number of businesses
Businesses with introduced or implemented innovation (innovating businesses)
still in development
abandoned
Businesses with any innovative activity (innovation-active businesses)
'000
%
%
%
%

Employment size
0-4 persons
r444
r26.1
r13.6
5.0
r30.6
5-19 persons
r206
r41.0
r21.6
r6.9
r44.7
20-199 persons
55
r50.6
29.2
r7.3
r55.7
200 or more persons
3
60.7
36.6
7.7
r66.1
Industry
Mining
3
r27.7
16.3
5.0
33.4
Manufacturing
52
44.2
26.2
6.7
50.0
Electricity, Gas, Water and Waste Services
3
36.0
26.6
5.0
43.4
Construction
124
r22.5
11.4
r3.9
r26.8
Wholesale Trade
41
44.0
21.3
8.6
47.9
Retail Trade
77
35.4
18.7
6.8
39.7
Accommodation and Food Services
53
r27.7
r14.5
r7.9
r31.3
Transport, Postal and Warehousing
41
26.1
8.1
2.8
29.1
Information Media and Telecommunications
8
46.2
28.0
9.0
51.5
Financial and Insurance Services
23
42.3
20.8
6.5
46.4
Rental, Hiring and Real Estate Services
r29
r32.6
r17.1
r5.2
r38.0
Professional, Scientific and Technical Services
108
r36.4
r23.9
7.4
r41.1
Administrative and Support Services
35
31.2
14.6
5.2
34.6
Health Care and Social Assistance
52
r26.5
r15.3
r3.3
r32.2
Arts and Recreation Services
13
33.6
20.7
7.3
37.6
Other Services
47
32.5
12.2
3.9
35.6
Total
708
r32.4
r17.3
5.8
r36.8

r revised
(a) Data in this table were originally published in June 2008 in the release Summary of IT Use and Innovation in Australian Business (cat. no. 8166.0.). Further quality assurance following this initial release has resulted in some revisions to the originally published data.
(b) Proportions are of all businesses in each output category.


During the year ended 30 June 2007, 37% of Australian businesses reported undertaking some innovative activity and 32% of Australian businesses introduced or implemented at least one type of innovation. Across the three statuses of innovation, larger businesses were more likely to have undertaken innovative activity than smaller businesses.

In considering these results, users should take into account the populations for each of the employment size groups. For example, for businesses with 200 or more persons employed, an innovation-active rate of 66% represents approximately 2,000 businesses, whereas an innovation-active rate of 31% for businesses with 0-4 employees represents approximately 136,000 businesses.

Summary of innovative activity in Australian business(a)(b), by state/territory(c) - 2006-07

New South Wales
Victoria
Queensland
South Australia
Western Australia
Tasmania
Northern Territory
Australian Capital Territory
Total
%
%
%
%
%
%
%
%
%

Business which introduced or implemented any new or significantly improved:
goods or services
19.1
16.9
20.0
11.5
21.1
^23.9
^19.8
7.0
18.4
operational processes
14.5
15.8
19.6
15.1
22.3
^23.3
^24.2
9.4
16.9
organisational/managerial processes
14.7
16.9
16.7
14.5
20.2
^19.6
^19.4
^18.6
16.4
marketing methods
13.7
10.5
15.6
6.9
13.5
^16.9
^10.8
3.6
12.7
any of the above (i.e. innovating businesses)
32.4
31.3
36.0
26.0
33.9
^32.7
^26.2
^25.3
32.4
Businesses with innovative activity which was:
still in development
17.6
15.7
18.2
15.5
18.8
^23.5
^25.1
9.2
17.3
abandoned
6.4
4.2
5.8
8.4
7.3
1.8
np
1.1
5.8
Businesses with any innovative activity (i.e. innovation-active businesses)
37.4
34.5
40.2
30.0
40.1
^35.2
^32.7
^27.6
36.8

^ estimate has a relative standard error of 10% to less than 25% and should be used with caution
np not available for publication but included in totals where applicable, unless otherwise indicated
(a) Proportions are of all business in each State/territory.
(b) Business counts are not available for state/territory.
(c) These data should be used with CAUTION, please see Explanatory Note 33.



Innovation-active businesses

The proportion of innovation-active businesses (i.e. those which undertook any innovative activity) during the year ended 30 June 2007 was 37%. The proportion of businesses that were innovation-active was greater for each successive employment size range, from 31% for businesses with 0-4 persons employed to more than double this proportion for businesses with 200 or more persons employed (66%).

PROPORTION OF BUSINESSES WITH ANY INNOVATIVE ACTIVITY, by industry, 2006-07
Graph: PROPORTION OF BUSINESSES WITH ANY INNOVATIVE ACTIVITY, by industry, 2006–07


The industry with the highest proportion of innovation-active businesses was Information Media and Telecommunications at 52%, followed by Manufacturing (50%). Four other industries recorded an innovation-active rate of over 40%. Construction recorded the lowest proportion of innovation-active businesses at 27%, slightly below Transport, Postal and Warehousing (29%).


Innovating businesses

The proportion of innovating businesses (i.e. those which introduced or implemented any innovation) during the year ended 30 June 2007 was 32%. The proportion of innovating businesses increased with each successive employment size range, from 26% for businesses with 0-4 persons employed to 61% for businesses with 200 or more persons employed.

PROPORTION OF BUSINESSES WHICH INTRODUCED INNOVATION, by type, 2006-07
Graph: PROPORTION OF BUSINESSES WHICH INTRODUCED INNOVATION, by type, 2006–07


The most frequently reported broad type of innovation introduced or implemented by businesses was new or significantly improved goods or services (18%), closely followed by new or significantly improved operational processes (17%) and new or significantly improved organisational/managerial processes (16%). While the results are not directly comparable, this pattern is a change from that shown for earlier issues of this release, where the proportion of businesses introducing or implementing new or significantly improved operational processes was consistently higher than the results for the proportion of businesses introducing or implementing new or significantly improved goods or services. New or significantly improved marketing methods are included for the first time as part of a dedicated innovation release, with 13% of businesses reporting this type of innovation.

PROPORTION OF BUSINESSES WHICH INTRODUCED INNOVATION, by industry, 2006-07
Graph: PROPORTION OF BUSINESSES WHICH INTRODUCED INNOVATION, by industry, 2006-07


The industry with the highest proportion of innovating businesses was Information Media and Telecommunications at 46%, followed by Manufacturing and Wholesale trade, both at 44%. Construction reported the lowest proportion of innovating businesses at 22%, slightly below Transport, Postal and Warehousing, and Health Care and Social Assistance (both 26%).

Information Media and Telecommunications and Wholesale Trade (both 30%) had the highest proportion of businesses that reported having introduced new goods or services. Manufacturing recorded the highest proportion of businesses which had introduced new operational processes (27%), followed by Information Media and Telecommunications at 24%. Financial and Insurance Services (25%) had the highest proportion of businesses reporting new organisational/managerial processes and Information Media and Telecommunications (24%) had the highest proportion of businesses reporting new marketing methods.

Mining (10%) recorded the lowest proportion of businesses reporting introduction of new goods or services, while Accommodation and Food Services (12%) reported the lowest proportion for implementation of new or significantly improved operational processes. Retail trade (11%) had the lowest proportion of new organisational/managerial processes introduced and Mining, at 4%, had the lowest proportion of new marketing methods implemented.


Innovation still in development

The proportion of businesses which had innovation still in development as at the end of June 2007 was 17%. The proportion of businesses with innovation still in development increased with each successive employment size range, with the highest proportion (37%) being for businesses with 200 or more persons employed.

PROPORTION OF BUSINESSES WITH INNOVATION STILL IN DEVELOPMENT, by type, 2006-07
Graph: PROPORTION OF BUSINESSES WITH INNOVATION STILL IN DEVELOPMENT, by type, 2006–07


The most frequently reported broad type of innovation still in development as at the end of June 2007 was new goods or services (9%), followed by new marketing methods (8%), new operational processes (7%) and new organisational/managerial processes (6%).

PROPORTION OF BUSINESSES WITH INNOVATION STILL IN DEVELOPMENT, by industry, 2006-07
Graph: PROPORTION OF BUSINESSES WITH INNOVATION STILL IN DEVELOPMENT, by industry, 2006–07


The industry with the highest proportion of innovation still in development was Information Media and Telecommunications at 28%, followed by Electricity, Gas, Water and Waste Services (27%). At 8%, businesses in the Transport, Postal and Warehousing industry reported the lowest proportion of innovation still in development.

The industry reporting the highest proportion of businesses with new goods or services still in development was Information Media and Telecommunications (19%), while Rental, Hiring and Real Estate Services reported the lowest (4%). Manufacturing had the highest rate of new operational processes still in development (12%) and Transport, Postal and Warehousing had the lowest, at 4%. The highest rate for new organisational/managerial processes still in development was in Manufacturing; Professional, Scientific and Technical Services; and Financial and Insurance Services, all reporting 9%, while the lowest rate was for Transport, Postal and Warehousing (2%). The highest rate for new marketing methods still in development was recorded for Financial and Insurance Services (12%) with Mining (2%) recording the lowest rate.


Abandoned innovation

The proportion of businesses that abandoned at least one innovative activity (i.e. those who ceased development of an innovation prior to completion or introduction) during the year ended 30 June 2007 was 6%. Overall, the proportion of businesses that reported abandoning at least one innovative activity was low across all four types of innovation.

PROPORTION OF BUSINESSES WHICH ABANDONED INNOVATIVE ACTIVITY, By industry, 2006-07
Graph: PROPORTION OF BUSINESSES WHICH ABANDONED INNOVATIVE ACTIVITY, By industry, 2006–07


The Information Media and Telecommunications and Wholesale Trade industries (both 9%) reported the highest proportion of abandoned innovation, followed by Accommodation and Food Services (8%). Transport, Postal and Warehousing and Health Care and Social Assistance reported the lowest proportion of abandoned innovation, both at 3%.





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