Characteristics of Australian Business

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Selected general business and Principal Manager characteristics, innovation activity and business use of information and communication technology

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Reference period
2024-25 financial year
Release date and time
25/06/2026 11:30am AEST

Key statistics

In 2024–25:

  • Almost half (46%) of all businesses reported being innovation-active, unchanged from 2022–23.
  • Just over one in ten (12%) businesses reported use of Artificial Intelligence (AI), compared to 1% in 2022–23.
  • 59% of businesses reported disruptions to their supply chains.
  • 15% of all businesses reported supply chain issues significantly hampered general business activities or performance.

Following a review of the ABS Forward Work Program, the Business Characteristics Survey (BCS) has been redeveloped. The two previously alternating modules—Innovation (previously released under Innovation in Australian Business) and Digital Activity (previously released under Characteristics of Australian Business)—have been recombined into a single, integrated framework, operating on a biennial cycle.

Under this redeveloped approach, the BCS produces a core suite of measures on business characteristics, innovation, and the use of information and communication technology (ICT) in each cycle. These core outputs are complemented by flexible content designed to address priority information needs. In 2024–25, this flexible content comprises the Principal Manager question suite.

Characteristics of Australian Business, 2024–25 is the first release produced under this redeveloped framework. Please refer to the  'Glossary' section in the Characteristics of Australian Business, 2024–25 Methodology for more information on the terminology used in this release.

For further information on content changes introduced as part of this redevelopment, see the 'History of changes' section in the Characteristics of Australian Business, 2024–25 Methodology.

Business size categories used in this release:

  • Micro (0–4 persons employed)
  • Small (5–19 persons employed)
  • Medium (20–199 persons employed)
  • Large (200 or more persons employed)

Business profile, practices, and performance

In 2024–25:

  • Just over one third (34%) of businesses reviewed workplace practices to reduce work related injuries or illnesses.
  • Almost one quarter (24%) of businesses offered staff the ability to work from home, down from 31% in 2021–22.
  • 42% of businesses reported that uncertainty about economic conditions significantly hampered general business activity, up from 36% in 2021–22.
  • Almost one in three businesses (30%) reported lower profit margins to remain competitive significantly hampered general business activity, compared to 21% in 2021–22.
  • 18% of businesses trained staff in the business’s supply chain practices (compared to 11% in 2021–22).
  • 8% of businesses reported having diversity or inclusion targets or strategies.

For the first time in 2024–25, businesses were asked about factors that disrupted their supply chain(s). Just under three in five (59%) businesses reported disruptions to their supply chains, with economic conditions within Australia (33%) the most frequently reported reason.
 

  1. Proportions are of all businesses in each output category.
  2. Businesses could select more than one option.
     

Business finance and assistance

In 2024–25, 12% of businesses received financial or advisory assistance from an Australian government organisation. The most common type of government assistance was for grants (5%), wage or cash flow subsidies and rebates (both 3%).

Almost one in five (18%) businesses sought debt or equity finance, up from 5% in 2021–22. The most common sources of debt or equity finance were banks (54%), finance companies (42%) and existing owner(s) of the business (20%).

Just over one in ten (11%) businesses reported that uncertainty about economic conditions limited or prevented access to finance, which is similar to 2021–22 (13%).

Businesses that reported seeking debt or equity finance in 2024–25 were also asked to provide the reasons why they were seeking finance. Almost half (42%) of businesses reported the finance was needed to maintain short-term cash flow or liquidity.

  1. Proportions are of all businesses that sought debt or equity finance in each output category.
  2. Businesses could select more than one option.

Skills

The Business Characteristics Survey captures a range of information on skills used by businesses, including whether they were experiencing skill shortages. Customer service (57%) and management skills (51%) were the most frequently reported skills used for core business activities in 2024–25.

Over one third (35%) of businesses reported experiencing a shortage of skills within the business, including:

  • trades – 13%
  • sales and marketing – 7%
  • customer service – 7%
  • financial – 6%
  • human resources – 6%.

Businesses that reported skills shortages were asked to indicate the reasons for them. More than half (57%) of businesses reported that specialist skills or knowledge were required, and almost half (48%) reported that wages or salary costs were too high for the business.
 

  1. Proportions are of all businesses that reported experiencing skill shortages in each output category.
  2. Businesses could select more than one option.

Businesses that reported skills shortages were also asked to indicate what measures had been taken to address the shortages. The top three measures reported were:

  • increased use of on-the-job or internal training of staff – 38%
  • increased wages, salaries, or conditions – 35%
  • invested in upskilling or reskilling of existing employees – 26%.

Almost one in six (15%) businesses experiencing skills shortages reported taking no action to address the shortage. 
 

Internet connectivity and activities

In 2024–25:

  • The proportion of businesses that reported using satellite connectivity more than doubled to 11%, compared to 5% in 2021–22.
  • Over 91% of businesses reported their internet met most or all of their business needs, up from 88% in 2021–22.
  • More than half (51%) of businesses used social media for their online presence, an increase from 47% in 2021–22.

The proportion of businesses receiving orders online (32%) was similar to 2021–22 (30%). 
 

Cyber security

Just over one in five (21%) businesses reported experiencing a cyber security incident during 2024–25, which remained similar to 2021–22 (22%).

Businesses that reported experiencing a cyber security incident were asked about the impacts on the business. Of those adversely impacted (63%), loss of time (36%), financial losses (18%), downtime of service (17%) and loss of staff productivity (16%) were the most commonly reported impacts.

  1. Proportions are of all businesses that reported experiencing a cyber security incident in each output category.
  2. Businesses could select more than one option.
     

More than one quarter (28%) of businesses reported having no measures in place to prevent cyber security incidents, down slightly from 30% in 2021–22.

Business use of Information and Communication Technology (ICT)

During 2024–25:

  • The proportion of businesses that measured the contribution of digital activities to overall business performance was more than double than that in 2021–22 (7% compared to 3%).
  • One in seven (14%) businesses reviewed their contracted internet plan.
  • One in ten (10%) businesses actively collected or analysed data to make informed decisions, down from 24% in 2021–22.
  • 6% of businesses used predictive analysis to plan business activities, down from 18% in 2021–22.

In 2024–25, businesses were presented with a list of information and communication technologies (ICTs) and asked to indicate which ones were used in the business. The question is not designed to measure intensity or extent of use within the business.

Almost one in eight (12%) businesses indicated they used Artificial Intelligence (AI) in 2024–25, compared to 1% in 2021–22.

The AI adoption rate was higher for innovation-active businesses (20%) compared to non-innovation-active businesses (6%). 

The AI adoption rate for innovation-active small businesses was 19%, almost five times greater than the rate for those that did not undertake any innovation activity (4%) in 2024–25.

  1. Proportions are of all businesses that reported using AI in each output category.
  2. Business use of AI was one response option from a selection of ICTs used by business. Businesses could select more than one option.

The industry that recorded the highest level of AI use was Information, Media and Telecommunications at 38%. This industry also recorded the largest percentage point movement (30 percentage points) up from 8% in 2021–22.

  1. Proportions are of all businesses that reported using AI in each output category.
  2. Business use of AI was one response option from a selection of ICTs used by business. Businesses could select more than one option.

All businesses were asked to report whether the use of information and communication technologies (ICTs) were important in achieving a list of specific business outcomes. In 2024–25, over one third (34%) of businesses reported that the use of ICTs improved responsiveness to customer needs (up from 31% for 2021–22), followed by better sales or marketing methods (23%) unchanged from 2021–22.

Businesses were also asked to provide an indication on factors that may have prevented or limited their use of ICTs. The most common reasons reported in 2024–25 were:

  • insufficient staff skills and capabilities – 16% 
  • uncertainty around cost/benefits of ICTs – 13%.
     

Clean technology

Clean technology refers to technology which helps lower greenhouse gas emissions or reduce environmental impacts.

Businesses were asked about their use of clean technologies and whether there were barriers to adopting clean technologies. Almost one in five (18%) businesses reported they used at least one type of clean technology in 2024–25.

  1. Proportions are of all businesses in each output category.
  2. Businesses could select more than one option.

The three most common factors preventing or limiting businesses from adopting clean technologies were:

  • cost of introduction or implementation – 16%
  • lack of information or awareness – 11%
  • lack of time or staff resources – 10%.

Innovation Activity

As part of the 2024–25 review and redevelopment of the Business Characteristics Survey (BCS), the innovation reference period was changed from two years to a single year. As a result, caution is advised when comparing 2024–25 innovation data with data from 2020–21 and 2022–23.

An innovation-active business is one that introduced any type of innovation (i.e., new good, service or process), or had innovation which was still in development (as at 30 June 2025) or abandoned during the reference period.

An innovating business is one that introduced any type of innovation (i.e., new good, service or process), during the reference period.

Innovation status (a)(b), and types of innovation in Australian business, by employment size, 2024–25(%)
 Micro businessesSmall businessesMedium businessesLarge businessesAll businesses
Businesses with innovation activity which was: 
introduced (innovating businesses)               32               48525738
still in development(c)               2031375325
abandoned81210129
any innovation activity (innovation-active businesses)3956627146
Types of innovation 
Goods or services2127253123
Processes2138464828
  1. Proportions are of all businesses.
  2. Businesses could report more than one innovation activity.
  3. Businesses were asked whether they had innovation still in development as at 30 June 2025.

In 2024–25, almost half (46%) of businesses were innovation-active, and more than one in three (38%) were innovating.

Almost a quarter (23%) of businesses introduced a new good or service, and 28% of businesses introduced a new process. 

  1. Proportions are of all businesses in each industry.

Innovation practices are the actions businesses may take to support innovation-related activities. They are often used to describe the characteristics of an innovation-active or innovating business in relation to its performance and growth over time. 

In 2024–25, more than one in four (26%) businesses reviewed their business model, including its products or services offered, customer markets targeted, and distribution methods, down from 30% in 2022–23. 

Businesses may introduce new goods, services or processes that are new to the world, new to Australia, new to the industry or new within the business only. Of those businesses that were innovating, three quarters (75%) introduced new goods or services within their business only, and 88% introduced new processes within their business only. 

Innovation-active businesses were also asked to provide an indication on the source of ideas or information used for innovation activities. More than half (56%) of innovation-active businesses reported that the idea or information came from within the business or from another business owned by the same group, followed by clients, customers or buyers (44%). 
 

  1. Proportions are of innovation-active businesses in each output category.
  2. Businesses could select more than one option.
  3. For the 2022–23 survey, businesses were asked to identify sources of ideas or information for innovation during the two years ended 30 June 2023.

Innovation-active businesses were also asked to indicate the types of specialist skills used for innovation. Business management (46%) was the most commonly reported specialist skill used for innovation activities, however almost one in four (24%) innovation-active businesses reported that no specialist skills were used for innovation activities.

  1. Proportions are of innovation-active businesses in each output category.
  2. Businesses could select more than one option.
  3. For the 2022–23 survey, businesses were asked to identify the specialist skills needed for innovation during the two years ended 30 June 2023.

Collaboration and fee-for-service for innovation

Almost one third (32%) of innovation-active businesses either collaborated or entered into a fee-for-service arrangement for innovation purposes. Of these collaborating businesses, most (95%) collaborated with organisations from within Australia, up slightly from 89% in 2022–23.

Innovation-active businesses were most likely (40%) to collaborate through informal arrangements, which is similar to 2022–23 (37%).

Innovation-active businesses were asked to indicate factors that prevented or limited collaboration (for innovation) with other organisations. In 2024–25, insufficient time (26%) and insufficient funds (22%) were the two most commonly reported barriers to collaboration for innovation, similar to 2022–23 (23% and 26% respectively).
 

  1. Proportions are of innovation-active businesses in each output category.
  2. Businesses could select more than one option.
  3. For the 2022–23 survey, businesses were asked to identify barriers to collaboration for innovation during the two years ended 30 June 2023.

Innovation finance, benefits, and barriers

In 2024–25, the three most common sources of finance for innovation-active businesses were:

  • banks – 13%
  • existing owners of the business – 11%
  • finance companies – 9%.

Three quarters (74%) of innovating businesses reported benefits of innovation, including increased revenue (40%), improved customer service (33%) and increased productivity (32%). Just over one in ten (11%) innovating businesses reported it was too early to measure the benefits of innovation, and 14% reported no benefits were achieved from innovating.

Over one third (35%) of businesses reported they experienced barriers to innovation, down from 42% in 2022–23. Lack of access to additional funds (15%), lack of skilled persons within the business (11%) and the cost of development, introduction or implementation (also 11%) were the most common factors reported by businesses.

  1. Proportions are of all businesses.
  2. Businesses could select more than one option.
  3. For the 2022–23 survey, businesses were asked to identify barriers to innovation during the two years ended 30 June 2023.

Principal Managers

The 2024–25 cycle of the Business Characteristics Survey included four questions on the characteristics of the principal manager of the business.

The principal manager was defined as the most senior person responsible for making decisions related to the strategic direction of the business.

Please refer to the 'Glossary' section in the Characteristics of Australian Business, 2024–25 Methodology, for examples of principal manager roles.

Businesses were asked to answer questions for the principal manager who was in the role as at 30 June 2025:

  • 6% of businesses had a principal manager under 30 years of age.
  • One quarter of all businesses had a principal manager who had been in the role for 20 years or more.

Prior to becoming the principal manager of the business:

  • 43% were in a senior position within the business or another business.
  • Just over one in four (26%) were in a non-senior role within the business or another business.
  1. Proportions are of all businesses in each output category.

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Methodology

Scope

All employing businesses in the Australian economy (exclusions apply)

Geography

Data is available for:

  • Australia
  • States and territories

Source

Business Characteristics Survey

Collection method

Online collection

Concepts, sources and methods

Not applicable for this release

History of changes

In 2024–25, the Business Characteristics Survey was merged into a biennial framework on Innovation and Digital Activity, with Characteristics of Australian Business 2024–25 as the first release.

View full methodology

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