Characteristics of Businesses in Selected Growth Sectors, Australia methodology

1 This release presents statistics on a selection of topics including nature of business ownership, collaborative arrangements, performance measures, barriers, innovation, business use of information technology, skills and markets in selected Growth Sectors, as collected by the 2013-14 Business Characteristics Survey (BCS).

2 The BCS is an annual survey and it is the 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: use of IT; innovation; and a broad range of other non-financial characteristics.

3 The Economics Unit Model is used by the ABS to determine the structure of Australian businesses and other organisations. The model consists of:

The Enterprise Group (EG)
Legal Entities (LEs)
Type of Activity Units (TAUs)
Location Units

4 Businesses contributing to the estimates in this publication are sourced from the ABS Business Register (ABSBR), and are selected at either the Australian Business Number (ABN) unit or the Type of Activity (TAU) level, as described below.

5 In the BCS the statistical unit used to represent the majority of businesses, and for which statistics are reported, is the ABN unit. The ABN unit is the business unit which has registered for an ABN, and thus appears on the ATO administered Australian Business Register (ABR). These units are suitable for ABS statistical needs when the business is simple in structure, and are generally referred to as the non-profiled population. In these instances, one ABN equates to one statistical unit.

6 For more significant and diverse businesses where the ABN unit is not suitable for ABS statistical needs, the ABS maintains its own units structure through direct contact with the business, and the statistical unit used is the TAU. A TAU comprises one or more business entities, sub-entities or branches of a business entity within an Enterprise Group that can report production and employment activities. When a minimum set of data items is available, a TAU is created which covers all the operations within an industry subdivision (and the TAU is classified to the relevant subdivision of the Australian and New Zealand Standard Industrial Classification (ANZSIC)). These units are generally referred to as the profiled population.

7 ANZSIC is used to classify the industry in which the TAU or ABN has productive activity. Further information on this classification can be found in Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 (Revision 2.0) (cat. no. 1292.0).

8 SISCA provides a framework for dividing the Australian economy into institutional sectors. Further information on this classification can be found in Standard Economic Sector Classifications of Australia (SESCA), 2008 (Version 1.1) (cat. no. 1218.0).

9 The Growth Sectors are defined as part of the Government's Industry Innovation and Competitiveness Agenda. For the purposes of producing statistics, each of the five Growth Sectors has been mapped to the Australian and New Zealand Standard Industry Classification. The ANZSIC classes specified for each sector were selected by the Department of Industry and Science to enable robust measurement of their performance over time, and may be used to compare to other economic data. The use of ANZSIC classes to define the scope of each of the Growth Sectors enables the production of comparable statistics over time. Substantial effort was made to ensure that only ANZSIC classes likely to have a high proportion of businesses involved with the Growth Sectors are included in the scope of the survey. Users of these statistics should note that businesses are classified to an ANZSIC class based on their primary activity. Businesses that undertake Growth Sector activities as secondary activities (i.e. not the primary activities of the businesses) are not in scope of the survey. For information about eligibility for Government assistance programmes for the Growth Sectors, please go to www.business.gov.au.

10 A full list of the ANZSIC classes included in each of the Growth Sectors is available for download as a data cube.

11 As some activities undertaken by businesses could be considered part of multiple Growth Sectors, a number of ANZSIC classes are included in more than one Growth Sector. For example, 2412 Medical and surgical equipment manufacturing is included in both the Advanced manufacturing and the Medical technologies and pharmaceuticals Growth Sectors.

12 In addition to the five Growth Sectors identified, an additional set of ANZSIC classes from the Professional, scientific and technical services industry were identified as potentially providing services to the Growth Sectors. These classes were included in the Growth Sector sample and more information is available upon request.

13 The Growth Sectors ANZSIC definition provided in this publication reflects an update from the original definition used in the Australian Industry Report (Department of Industry, 2014). ANZSIC classes included in the definition were refined based on analysis of results from this survey, and are planned to be used by the Department in future analyses of the Growth Sectors.

14 The scope of the estimates in this publication consists of all employing units in scope of either of the BCS or the BLD frame, belonging to at least one of the Growth Sectors. The scope of the Growth Sectors frame consists of all employing business entities in the Australian economy, except for:

SISCA 3000 General government
SISCA 6000 Rest of the world

15 The frame for the BCS is a subset of the ABSBR 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.

16 Collection of data included in this release was undertaken based on a total random sample of approximately 7,867 businesses using mail-out and web based questionnaires. The total Growth Sector sample included businesses from the main BCS sample within the ANZSIC classes defining each Growth Sector supplemented by an additional sample which only contributed to the Growth Sector estimates. The number of businesses in each of the Growth Sector samples (excluding businesses in the Professional, scientific and technical services industry) is provided in the table below. As outlined in Explanatory Note 11, there are a number of ANZSIC classes that are included in more than one Growth Sector, resulting in some businesses contributing to multiple Growth Sector samples. More information about this is available upon request.

17 The Growth Sectors sample was stratified by ANZSIC class and an employment-based size indicator. All businesses on the ABSBR identified as having 300 or more employees were included in the sample. The 2013-14 BCS was dispatched in late October 2014. The sample design of the 2013-14 Growth Sectors does not include state or territory as part of stratification design.

18 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, Jun 2005 (cat. no. 8162.0).

19 The BCS is not designed to provide high quality estimates of numbers of businesses for any of the output classifications and the number of businesses in this publication are only included to provide contextual information for the user. For the 2013-14 reference period, higher than expected BCS sample loss made business count estimates more volatile than previous years. A more robust source of counts of Australian businesses is available from Counts of Australian Businesses, Including Entries and Exits Jun 2009 to Jun 2013 (cat. no. 8165.0).

20 The reference period for most of the characteristics items included in the 2013-14 BCS is during the year ended 30 June 2014 or as at 30 June 2014.

21 In the BCS, 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 states that "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). In Australia, orders placed or received via email are included. This is not the case in many other OECD countries. The broad definition of e-commerce transactions includes sale or purchase of goods and services via any other computer-mediated networks. This mode of e-commerce is not common in Australia.

22 The 2013-14 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 2013-14 BCS draws on this manual for the questions used in the BCS and in the presentation of outputs from the survey.

23 Key indicators of innovation include: measures of business innovation (innovating, innovation-active); types of innovation (goods or services, operational processes, organisational/managerial processes, marketing methods); and status of innovation (introduced, still in development, abandoned). Definitions for each of these measures of business innovation are provided in the Glossary.

24 For output purposes, businesses are classified to employment size ranges based on actual data reported in the survey.

25 The most recent issue of ABS releases from the Business Characteristics Survey are:

Summary of IT Use and Innovation in Australian Business (cat. no. 8166.0)
Summary of IT Use and Innovation in Selected Growth Sectors, Australia (cat. no. 8166.0.80.001)
Business Use of Information Technology (cat. no. 8129.0)
Selected Characteristics of Australian Business (cat no. 8167.0)

26 The most recent issue of ABS releases related to demography of Australian business is:

Counts of Australian Businesses, including Entries and Exits (cat. no. 8165.0)

27 The most recent issues of other ABS releases on the use and production of information and communication technologies (ICT) and innovation in business in Australia are:

Household Use of Information Technology, Australia (cat. no. 8146.0)
Internet Activity, Australia (cat. no. 8153.0)
Innovation in Australian Business (cat. no. 8158.0)
Research and Experimental Development, Businesses, Australia (cat. no. 8104.0)
Research and Experimental Development, Higher Education Organisations, Australia (cat. no. 8111.0)
Research and Experimental Development, Government and Private Non-Profit Organisations, Australia (cat. no. 8109.0)

28 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.

29 The collection and publication of Growth Sector statistics is fully funded by the Department of Industry and Science.

1 When interpreting the results of a survey, it is important to take into account factors that may affect the reliability of the estimates. Estimates in this publication are subject to both non-sampling and sampling errors.

2 Non-sampling errors may arise as a result of errors in the reporting, recording or processing of the data and can occur even if there is a complete enumeration of the population. These errors can be introduced through inadequacies in the questionnaire, treatment of non-response, inaccurate reporting by respondents, errors in the application of survey procedures, incorrect recording of answers and errors in data capture and processing.

3 The extent to which non-sampling error affects the results of the survey is difficult to measure. Every effort is made to reduce non-sampling error by careful design and testing of the questionnaire, efficient operating procedures and systems, and the use of appropriate methodology.

4 The approach to quality assurance for the production of the Growth Sector statistics aims to make the best use of Australian Bureau of Statistics (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 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 internet commerce and innovation.

5 Businesses selected in the 2013-14 Growth Sectors sample had a response rate of 96%.