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8167.0 - Selected Characteristics of Australian Business, 2007-08 Quality Declaration 
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 17/09/2009   
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EXPLANATORY NOTES


INTRODUCTION

1 This release presents summary data for a selection of topics as collected by the 2007-08 Business Characteristics Survey (BCS). Data included are additional to those outputs from the BCS released previously in Summary of IT Use and Innovation in Australian Business, 2007-08 (cat. no.8166.0) and Business Use of Information Technology, 2007-08 (cat. no. 8129.0).

2 The BCS is an annual survey and it is the survey vehicle for the ABS Integrated Business Characteristics Strategy (IBCS). The strategy integrates the collection and quality assurance of data required for input into both the ABS Business Longitudinal Database (BLD) and the production of point in time estimates for: Business Use of Information Technology (BUIT); business innovation; and, a broad range of other non-financial business characteristics.

3 A key part of the IBCS is the production of annual BUIT and business innovation indicators, with a more detailed set of items for each of these topics collected every second year (i.e. in alternating years). Previously, IT use and innovation indicators were produced from the separate annual BUIT and biennial Innovation surveys, respectively. The 2007-08 BCS is the third fully integrated collection and had a focus on IT use. The 2008-09 BCS will collect detailed information about practices related to business innovation.


STATISTICAL UNITS USED

4 Statistical units are those entities from which statistics are collected, or about which statistics are compiled. In ABS economic statistics, the statistical unit is generally the business. The ABS Business Register (ABSBR) is used to record information about statistical units and is used to create the frames for most ABS economic collections.

5 The ABS uses an economic statistics units model on the ABSBR to describe the characteristics of businesses, and the structural relationships between related businesses. Within large, complex and diverse business groups, the units model is used also to define reporting units that can provide data to the ABS at suitable levels of detail.

6 This units model allocates businesses to one of two sub-populations:

  • Businesses with a simple structure - Most businesses and organisations in Australia need to obtain an Australian Business Number (ABN). They are then included on the whole-of-government register of businesses, the Australian Business Register (ABR), which is maintained by the Australian Taxation Office (ATO). Most of these businesses have simple structures therefore, the unit registered for an ABN will satisfy ABS statistical requirements. For these businesses, the ABS has aligned its statistical units structure with the ABN unit. The businesses with simple structures constitute the ATO maintained population (ATOMP), and the ABN unit is used as the statistical unit for all integrated ABS economic collections.
  • Businesses with a complex structure - For the population of businesses where the ABN unit is not suitable for ABS statistical requirements, the ABS maintains its own units structure through direct contact with the business. These businesses constitute the ABS maintained population (ABSMP). This population consists typically of large, complex and diverse businesses. For businesses in the ABSMP, statistical units comprise the Enterprise Group, the Enterprise and the Type of Activity Unit (TAU). The range of activities across the Enterprise Group can be very diverse. The TAU represents a grouping of one or more business entities within the Enterprise that cover all of the operations within an industry subdivision and for which a basic set of financial data, production and employment can be reported.

7 Together these two sub-populations (of ABN units and TAUs) make up the ABSBR population, from which the BCS sample is taken.

8 The current economic statistics units model was introduced into the ABS in mid 2002, to better use the information available as a result of The New Tax System (TNTS). For more information please refer to Information Paper: Improvements in ABS Economic Statistics - Arising from the New Tax System, (cat. no. 1372.0).


SCOPE AND COVERAGE

9 The businesses that contribute to the statistics in this publication are classified:
10 The scope of the estimates in this publication consists of all business entities in the Australian economy, except for:
      SISCA 3000 General government
      SISCA 6000 Rest of the world
      ANZSIC06 Division A Agriculture, forestry and fishing
      ANZSIC06 Division O Public administration and safety
      ANZSIC06 Division P Education and training
      ANZSIC06 Groups 624 (Financial asset investing) and 633 (Superannuation funds)
      ANZSIC06 Groups 854 (Religious services) and 955 (Civic, professional and other interest group services)
      ANZSIC06 Subdivision 96 Private households employing staff

11 The frame for the BCS is a subset of the ABS Business Register and includes employing businesses only. These are defined as those businesses which register for the ATO's Pay As You Go Withholding (PAYGW) scheme. It is not unusual for some of these 'employing businesses' to have zero employment at various times during the reporting period. The frame is updated quarterly to take account of new businesses, businesses which have ceased employing, changes in employment levels, changes in industry and other general business changes. Businesses which have ceased employing are identified when the ATO cancels their ABN and/or PAYGW registration. In addition, businesses with less than 50 employees, which did not remit under the PAYGW scheme in each of the previous five quarters, are removed from the frame. The estimates in this publication include an allowance for the time it takes a newly registered business to be included in the survey frame.


SURVEY METHODOLOGY

12 The sample design for this survey is complex due to serving dual purposes: collection of characteristics data for the ABS BLD and production of point in time estimates for a range of non-financial business characteristics. While there are scope differences between the BLD and point in time estimates, the intention is to maximise the number of businesses selected for which data collected can contribute to both purposes. More information about releases for the BLD is provided in Explanatory Note 30. For more information about the survey design or methodology for the BCS, please email your query to innovation.technology@abs.gov.au.

13 Collection of data included in this release was undertaken based on a random sample of approximately 9,500 businesses using a mail out questionnaire. The sample was stratified by industry and an employment based size indicator. All businesses on the ABSBR identified as having 200 or more employees were included in the sample. The 2007-08 BCS was dispatched in early November 2008.

14 The sample design of the 2007-08 BCS does not include state or territory as part of stratification design. The loss of state or territory stratification has had an impact on the quality and breadth of state or territory estimates that are able to be released from the BCS.


REFERENCE PERIOD

15 The reference period for most of the characteristics items included in the 2007-08 BCS is the year ended 30 June 2008. Financial data relates to the most recent financial year ended on or before 30 September 2008.


QUALITY ASSURANCE STRATEGY

16 The approach to quality assurance for the BCS aims to make the best use of ABS resources to meet user prioritised requirements - both in terms of data quality and timing of release. The approach specifies the level and degree to which each data item is quality assured, noting that only some of the total output from the BCS is able to be quality assured to the highest standards. Different priorities are assigned to groups of data items, with highest priority being assigned to key point in time data on business use of IT and innovation.

17 In general, the data items contained in this release have a lower user priority and, therefore, have been given relatively less attention during the quality assurance phase of processing. Most of the data contained in this release are 'as reported' by businesses with limited editing and cross-validation being applied. One of the most visible impacts of the current approach to quality assurance can be seen in tables where, in theory, the components should add to 100%. For example, items where businesses have been asked to 'tick one box only' yet multiple responses may have been provided. In these cases, contact would need to be made with the respondent to ascertain the correct response, however, resources do not permit contact with all businesses that may have reported in this way.

18 References to any relevant quality issues that the reader should take into consideration are made within the commentary associated with the respective data item. More information is available from the contact person for this release.


DEFINING "INTERNET COMMERCE"

19 In the BCS (and previous BUIT surveys), the ABS uses the Organisation for Economic Co-operation and Development (OECD) narrow definition of e-commerce transactions when collecting data on Internet orders and Internet income. The narrow definition is "an Internet transaction is the sale or purchase of goods or services, whether between businesses, households, individuals, governments, and other public or private organisations, conducted over the Internet. The goods and services are ordered over the Internet, but the payment and the ultimate delivery of the good or service may be conducted on or off-line" (i.e., the commitment to purchase is made over the Internet).

20 Internet income is defined as income resulting from goods and/or services ordered over the Internet where the commitment to purchase is via the Internet or web. Excluded from these measures are orders, payments or transactions for which the commitment has been made using other arrangements. The ABS collects these data by asking businesses to estimate what percentage of their income from sales of goods and/or services can be attributed to orders received via the Internet or web. The estimated value of Internet income is derived by applying the percentage to business income from sales of goods and/or services. This method of collecting Internet income has been put in place to address reporting errors previously observed when the actual dollar figure was requested.


DEFINING "INNOVATION"

21 The 2007-08 BCS draws on the conceptual definitions and guidelines included in the Oslo Manual, Guidelines for Collecting and Interpreting Innovation Data (Third Edition, 2005). This manual provides a framework for the collection of innovation statistics and specifies the definitions of innovating businesses and innovation-active businesses that are used by the ABS. The 2007-08 BCS draws on this manual for the questions used in the BCS and in presentation of outputs from the survey.

22 For more information about ABS Innovation statistics, please refer to Appendix 1: Overview of ABS Innovation Statistics included in the 2006-07 issue of Innovation in Australian Business, (cat. no. 8158.0).


BUSINESS COUNTS IN THIS RELEASE AND COMPARABILITY WITH OTHERS PUBLISHED BY THE ABS

23 Estimates of the number of businesses operating in Australia can be derived from a number of sources within the ABS. They may relate to a particular point in time or may be presented as an average annual figure. However, these estimates will not always show the same results. Variations will occur because of differing data sources, differing scope and coverage definitions between surveys, as well as variations due to sampling and non-sampling error. More information about business counts can be found in the information paper A Statistical View of Counts of Businesses in Australia (cat. no. 8162.0).

24 The BCS is not designed to provide high quality estimates of numbers of businesses for any of the output classifications (for example, employment size or industry) and the number of businesses in this publication are only included to provide contextual information for the user. A more robust source of counts of Australian businesses is available from Counts of Australian Businesses, including Entries and Exits, Jun 2003 to Jun 2007 (cat. no. 8165.0).


OUTPUT CLASSIFICATIONS

25 For output pertaining to business employment size, businesses are classified to employment size ranges based on data reported in the survey. For output relating to industry, the classification is drawn from information held about the business on the ABSBR. Output classifications not used in this publication may be available upon request, e.g. employment size group of 5 or more persons.


AVAILABILTY OF STATE/TERRITORY OUTPUTS

26 As indicated in Explanatory Note 14, state/territory is not included in the stratification for sample design and, therefore, the BCS sample is generally not representative of the business population in each state or territory. Statistical techniques are applied to adjust for the lack of representation. However, the sample available for some states/territories is not sufficient for this adjustment to improve quality substantially. In particular, the volatility of estimates for all but the larger states is high. State/territory outputs are, therefore, subject to more than the usual sampling error (as measured by standard error) and the quality is highly variable from year to year. Comparisons over time are not advisable. For the 2007-08 BCS, ABS assessment of data quality concluded that data will only be made available for the states/territories where the sample is considered to be reasonably representative. Data may be available upon request. Please see contact details within Main Features for details.


MOST RECENT RELATED RELEASES

27 The most recent issue of ABS releases related to demography of Australian business is listed below:
28 The most recent issues of other ABS releases on the use and production of information and communication technologies (ICT) in Australia are:
29 The most recent issues of other ABS releases related to innovation in business in Australia are listed below:

BUSINESS LONGITUDINAL DATABASE (BLD) - CONFIDENTIALISED UNIT RECORD FILE

30 The primary outputs from the BLD will be a suite of Confidentialised Unit Record Files (CURFs). The BLD design is comprised of panels (or waves of businesses) with each panel representing the entire population of in-scope small and medium businesses at the time of initialisation. Each panel is surveyed for five years. The first CURF is due for release in October 2009 and will contain confidentialised unit record information for Panels One and Two (with 3 and 2 years of characteristics and financial data, respectively). The CURF will be made available via the Remote Access Data Laboratory which can be accessed via the ABS website.


ABS WEBSITE

31 Other information relating to Information Technology (both supply and demand), innovation and characteristics of business, particularly updates about additional analytical work can be found on the ABS website www.abs.gov.au; see the Innovation, Science and Technology Home page under Themes/Industry. Readers can also subscribe to the Innovation and Technology Update (cat. no. 8101.0).


ROUNDING

32 Estimates of proportions have been calculated using unrounded figures, but are shown in the tables rounded to one tenth of a percentage point. Where figures have been rounded, discrepancies may occur between the sum of the component items and the total. Figures presented in the commentary have been rounded to the whole percentage.


GLOSSARY

33 A glossary of the terms used in this release can be found under the theme pages for Innovation, Science and Technology.


COMMENTS

34 The ABS welcomes comments and suggestions from users regarding business characteristics including IT and innovation statistics. These comments should be addressed to the Director, Innovation and Technology Business Statistics Centre, Australian Bureau of Statistics, GPO Box K881, Perth, WA, 6842, or email innovation.technology@abs.gov.au.


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