8158.0 - Innovation in Australian Business, 2006-07 Quality Declaration 
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 22/08/2008   
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LABOUR AND SKILLS

Businesses may seek and use a range of skills when undertaking innovation and they may locate these skills from a wide range of sources (located both in Australia and overseas). One of the impediments to a business undertaking innovative activity effectively (or even at all) can be a shortage or deficiency in the skills needed. The Business Characteristics Survey collected information about the sources of labour used for innovative activity (by source and location); and the types of skills used to undertake innovative activity. For this same set of skills, businesses were also asked to report if, for the purposes of innovative activity, they had experienced a shortage or deficiency of available skills.


SOURCES OF LABOUR

Businesses which had undertaken innovative activity were asked from where they had sourced labour used for developing or introducing new goods, services, processes or methods. Businesses could report more than one source of labour and a ranking of importance was not requested.

INNOVATION-ACTIVE BUSINESSES: Sources of labour for innovation(a)(b), by location, by source - 2006-07

Within Australia
From overseas
Any location
%
%
%

Used persons already within the business or related company.
75.7
3.9
77.0
Employed:
new graduates
6.9
0.6
7.2
other new persons
21.6
1.2
22.1
Contracted out work to/used consultants from:
higher education or research institutions
3.8
0.3
4.0
other organisations
17.7
1.6
19.0
Used persons employed by the business's collaboration partners
12.7
1.1
13.2

(a) Proportions are of innovation-active businesses.
(b) Businesses could identify more than one source of labour or location.


Sourcing labour from overseas for the purposes of innovation appears to be a relatively uncommon practice for innovation-active Australian businesses. By far the majority of innovation-active businesses sourced labour for innovative activities from Within Australia and from Within their own business or related company (76%). Contracting out work to or using consultants from higher education or research institutions located Within Australia was not common, with only 4% of innovation-active businesses reporting this practice.

INNOVATION-ACTIVE BUSINESSES: Australian sources of labour(a)(b), by employment size - 2006-07

0-4 persons
5-19 persons
20-199 persons
200 or more persons
Total
%
%
%
%
%

Used persons already within this business or related company
76.1
73.9
78.2
90.7
75.7
Employed:
new graduates
5.7
7.2
9.8
18.8
6.9
other new persons
12.6
28.9
34.9
35.6
21.6
Contracted out work to/used consultants from:
higher education or research institutions
4.0
3.0
5.3
7.1
3.8
other organisations
18.1
15.9
20.6
29.0
17.7
Used persons employed by the business's collaboration partners
14.8
10.1
12.4
10.8
12.7

(a) Proportions are of innovation-active businesses in each employment size category.
(b) Businsses could identify more than one source of labour within Australia.


Employing new graduates from within Australia for purposes of innovation were more commonly reported by businesses with 200 or more persons employed (19%) than businesses with 0-4 persons employed (6%). For most sources of labour, the proportion of innovation-active businesses reporting each source of labour supply tended to increase with each successive employment size range. However, businesses employing 0-4 persons were more likely to use Persons employed by their collaboration partners (15%), than those in other employment size ranges.

Businesses in Professional, Scientific and Technical Services (17%) and Accommodation and Food Services (10%) were more likely to employ New graduates from within Australia to undertake innovative activities than those in other industries. Contracting out work to or using consultants from higher education or research institutions was most prevalent in the Mining industry (10%).


SKILLS USED FOR INNOVATION

Innovation-active businesses were asked to identify the types of skills that were used for innovative purposes. The list of skills was developed in consultation with key users of Innovation statistics and limited to those shown in the tables; businesses were not required to list any other skills. Businesses were able to report more than one type of skill and were not asked to rank skills in order of importance.

INNOVATION-ACTIVE BUSINESSES: Skills used for innovation(a)(b), by employment size - 2006-07

0-4 persons
5-19 persons
20-199 persons
200 or more persons
Total
%
%
%
%
%

Engineering
9.1
8.5
16.4
31.1
9.9
Scientific and research
8.8
6.9
7.7
15.0
8.0
Information Technology
34.4
35.2
39.1
54.6
35.4
Trades
18.2
21.5
18.0
17.0
19.3
Transport, plant and machinery operation
7.2
7.8
10.3
13.9
7.8
Marketing
31.5
35.9
36.5
37.3
33.7
Project management
9.2
8.8
18.6
39.9
10.5
Business management
26.9
33.7
40.2
47.8
31.1
Financial
17.8
23.6
27.2
42.9
21.2

(a) Proportions are of innovation-active businesses in each employment size category.
(b) Businesses could identify more than one type of skill used for innovative activities and were not required to report skills other than those listed.


Overall, Information Technology skills (35%) were the most commonly reported skills used to develop or introduce new goods, services, processes or methods, and this also increased across each successive employment size range. Interestingly, Marketing (34%) and Business Management (31%) were the next most commonly reported skills used for innovation.

The three most commonly reported skill types used by innovation-active businesses with 0-4 persons were Information Technology (34%), Marketing (32%) and Business Management (27%). By comparison, businesses employing 200 or more persons indicated the main type of skills used were Information Technology (55%), followed by Business Management (48%) and Financial (43%).

The most prevalent type of skill used for innovation by industry tended to highlight the relationship between industry of business and associated type of skill. For example, innovation-active businesses in the Information, Media and Telecommunications industry recorded the highest use of Information Technology skills (61%). Mining and Manufacturing had the highest use of Engineering skills at 32% and 30%, respectively; and Trades skills were most used by innovation-active businesses in the Construction industry (43%). The use of Scientific and Research skills for innovation were not the most commonly reported skill type for businesses in the Professional, Scientific and Technical Services industry (10%), with both Mining (19%) and Health Care and Social Assistance (33%) recording higher usage of these skills.


SHORTAGES OR DEFICIENCIES IN SKILLS NEEDED FOR INNOVATION

As indicated in the Barriers section, over a third of innovation-active businesses reported skill shortages as a significant impediment to undertaking innovative activity. Innovation-active businesses were asked if there was a shortage or deficiency in types of skills needed to undertake innovation. Businesses were asked to report for all skills shortages or deficiencies irrespective of whether they had been able to address the shortage or deficiency. Businesses were able to report for more than one type of skill and were not required to rank the skills.

Shortages or deficiencies in skills needed for innovation(a)(b), by employment size - 2006-07

0-4 persons
5-19 persons
20-199 persons
200 or more persons
Total
%
%
%
%
%

Engineering
4.9
2.5
8.6
15.5
4.6
Scientific and research
2.0
1.9
2.0
2.9
2.0
Information Technology
7.3
6.6
9.0
11.4
7.3
Trades
10.6
18.3
17.1
11.8
14.1
Transport, plant and machinery operation
2.2
3.7
3.2
2.7
2.9
Marketing
4.4
5.3
3.4
2.9
4.6
Project management
3.0
2.8
5.7
7.4
3.3
Business management
5.8
4.8
7.5
6.9
5.6
Financial
5.2
4.4
6.6
9.6
5.1

(a) Proportions are of innovation-active businesses in each employment size category.
(b) Businesses could identify more than one type of skill used for innovative activities for which there was a shortage or deficiency and were not required to report skills other than those listed.


Trades skills needed to undertake innovative activity were the most commonly reported type of skill for which there had been a shortage or deficiency during the year ended 30 June 2007. This was also evident across employment size ranges with the exception of businesses employing 200 or more persons, where Engineering skills were the most commonly reported skill type for which there had been a shortage or deficiency.

While the proportion of businesses in the Mining industry that reported undertaking any innovative activity was at the lower end of the range, businesses in the Mining industry were at the higher end for most of the skill types where there had been a shortage or deficiency. For example, innovation-active businesses in Mining reported the highest proportions of shortages or deficiencies for Engineering (19%), Business Management (10%) and Scientific and Research skills (8%). One third of businesses in the Construction industry reported a shortage of Trades skills that were needed to assist them in innovative activities. Businesses in the Financial and Insurance Services industry reported Financial (13%) and Marketing (11%) as the two skills used for innovation for which they had the most commonly reported shortages or deficiencies.





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