DRIVERS OF INNOVATION

The key drivers of innovation represent the underlying reasons why businesses may initiate innovation. Together with barriers to innovation, they represent part of a continuum of key factors that influence innovative activity within a business. Innovation-active businesses were asked to report the drivers for developing or introducing new goods, services, processes or methods. Businesses could select more than one driver and a ranking of importance was not required.

Drivers of innovation(a)(b), by employment size, 2010 - 11
		0-4 persons	5-19 persons	20-199 persons	200 or more persons	Total
		%	%	%	%	%
Profit related reasons(c)		70.5	74.9	72.2	78.0	72.5
Competition, demand and marketing related drivers
	be at the cutting edge of the industry	26.0	32.2	37.9	41.3	30.1
	increase responsiveness to customer needs	48.5	50.0	56.3	48.8	50.0
	ensure the business's products are competitively priced	27.6	30.7	33.5	29.9	29.6
	increase or maintain market share	36.1	41.5	49.4	45.4	39.9
	establish new markets	35.2	33.5	34.4	27.7	34.3
	increase export opportunities	5.5	6.3	7.0	5.3	6.0
	any of the above competition, demand and market related drivers	74.9	74.1	77.6	76.7	74.9
Production and delivery drivers
	increase efficiency of supplying/delivery goods and/or services	28.7	35.7	40.1	40.4	33.0
	improve quality of goods and/or services	31.8	38.0	42.6	43.7	35.7
	improve IT capabilities or better utilise IT capacity	18.7	24.0	28.6	32.5	22.2
	increase capacity of production or service provision	14.4	16.1	21.0	24.0	15.9
	any of the above production and delivery drivers	48.7	58.9	64.0	69.0	54.8
Reduce environmental impacts		11.3	14.0	15.0	21.3	12.9
Improve safety or working conditions		14.3	24.0	32.5	36.9	20.6
In response to government regulations		7.6	13.4	15.7	12.3	10.9
Adherence to standards		14.2	17.9	19.4	18.8	16.3
Other reasons		0.3	0.3	-	0.5	0.3
- nil or rounded to zero (including null cells)
(a) Proportions are of innovation-active businesses in each output category.
(b) Businesses that were innovation-active were asked for the reasons they had undertaken innovation. Businesses could identify more than one reason.
(c) Including to improve revenue or productivity and to reduce costs.

Across all employment size ranges, profit related reasons were the most reported driver for undertaking innovative activity. Overall, increase responsiveness to customer needs (50%) and increase or maintain market share (40%) were the next most reported drivers.

More than a third of businesses reported that a driver for innovative activity was to establish new markets, while increase export opportunities was the lowest reported driver for innovative activity across all employment size ranges.

Businesses with 200 or more persons employed were more than twice as likely to report improve safety or working conditions as a driver of innovation (37%), compared to businesses with 0-4 persons employed (14%).

By industry, businesses in Information media and telecommunications were most likely to report competition, demand and market related reasons (87%) and production and delivery reasons (70%) as drivers of innovation. Businesses in Electricity, gas, water and waste services were almost twice as likely than any other industry to report the reduction of environmental impacts as a driver of innovation (42%).

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