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 that 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 innovative activity' and 'barriers to general business activity or performance'.

It should be noted that businesses were not provided with a definition of what constituted a significant level of hampering and were not asked to rank barriers in order of significance.


BARRIERS TO INNOVATIVE ACTIVITY

Barriers to innovation, by employment size(a)(b)(c), 2011-12
		0-4 persons	5-19 persons	20-199 persons	200 or more persons	Total
		%	%	%	%	%
Lack of access to additional funds		19.0	22.9	16.5	9.9	19.9
Cost of development or introduction/implementation		13.0	18.0	12.1	17.3	14.4
Lack of skilled persons:
	within the business	9.5	15.6	15.0	9.9	11.8
	within the labour market	7.8	17.5	16.2	11.3	11.4
	in any location(d)	13.8	24.8	23.2	16.5	17.8
Lack of access to knowledge or technology to enable development or introduction/implementation		3.7	5.7	3.5	2.0	4.2
Government regulations and compliance		12.5	16.6	15.4	11.4	13.9
Adherence to standards		3.9	4.7	5.4	3.2	4.3
Uncertain demand for new goods or services		15.9	17.2	11.5	13.6	15.9
Any of the listed barriers to innovation		41.5	53.1	43.5	35.7	45.1
None of the listed barriers to innovation		58.5	46.9	56.5	64.3	54.9
(a) Proportions are of all businesses in each output category.
(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.

Consistent with previous results, 45% of business reported at least one barrier to innovation. One in five businesses reported lack of access to additional funds, making this the most frequently reported barrier, followed by lack of skilled persons in any location (18%).

Businesses with 5-19 persons employed were the most likely to report each of the listed barriers to innovation, with the exception of adherence to standards. Businesses with 20-199 persons employed were as likely as businesses with 5-19 persons employed to report this barrier (both 5%). Businesses with 200 or more persons employed were the most likely to report none of the listed barriers to innovation (64%).

Wholesale trade was the industry most likely to record at least one barrier to innovation, at 53%. Businesses in Mining were the least likely to report lack of skilled persons within the business (6%), they were also most likely to report none of the listed barriers to innovation (65%).

Innovation-active businesses were almost twice as likely as non innovation-active businesses to report at least one barrier to innovation (60% compared with 32%).

Further data relating to barriers to innovative activity can be accessed via the Downloads tab.


BARRIERS TO GENERAL BUSINESS ACTIVITIES OR PERFORMANCE

Businesses were asked to identify the barriers that significantly hampered the general conduct or performance of their business during 2011-12. Businesses were provided with a list of barriers and were asked to select all that applied.

Barriers to general business activities or performance, by employment size(a)(b), 2011-12
		0-4 persons	5-19 persons	20-199 persons	200 or more persons	Total
		%	%	%	%	%
Lack of access to additional funds		15.5	17.6	13.0	9.4	15.9
Cost of inputs		14.0	19.6	15.7	15.4	15.8
Outstanding accounts receivable limiting cash flow		14.2	18.4	14.2	4.2	15.4
Lack of skilled persons:
	within the business	6.8	13.0	11.2	6.4	9.0
	within the labour market	7.1	16.6	18.2	12.9	10.9
	in any location(c)	11.7	22.0	22.7	15.1	15.7
Government regulations or compliance		13.6	16.6	17.4	14.2	14.8
Lack of customer demand for goods or services		22.4	20.6	16.2	12.9	21.3
Lower profit margins to remain competitive		25.1	35.4	29.9	22.4	28.5
Environmental factors(d)		5.0	5.9	5.3	5.4	5.3
Any of the listed barriers to general business activities or performance		54.2	64.3	56.3	45.9	57.3
None of the listed barriers to general business activities or performance		45.8	35.7	43.7	54.1	42.7
(a) Proportions are of all businesses in each output category.
(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 natural disasters and compliance with water restrictions.

Overall, almost three in five businesses reported at least one barrier that significantly hampered general business activities or performance (57%). Lower profit margins to remain competitive was the barrier most commonly reported by all businesses (28%). Since 2008-09, all employment size ranges have consistently reported this barrier as one that significantly hampers their general business activities or performance.

Just over one in four businesses in Financial and insurance services reported government regulations or compliance as a barrier to general business activities or performance (27%). Lack of skilled persons within the labour market was most commonly reported by businesses in the Manufacturing industry (18%). Businesses in Agriculture, forestry and fishing were the most likely to report cost of inputs as a barrier to general business activities or performance (39%), while less than one quarter of businesses in all other selected industries reported this barrier.

Further data relating to barriers to general business activities or performance can be accessed via the Downloads tab.