1307.8 - Australian Capital Territory in Focus, 2007  
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Contents >> Business and Industry >> Innovation in Business

INNOVATION IN BUSINESS

The ABS 2005 Innovation Survey defined innovation as the process of developing, introducing and implementing a new or significantly improved good or service or a new or significantly improved process. Information about three types of innovative activity were collected:

  • New or significantly improved good or service - any good or service or combination of these which is new to a business and its characteristics or intended uses differ significantly from those previously produced.
  • New or significantly improved operational process - a significantly change for a business in its methods of producing or delivering goods or services.
  • New or significantly improved organisational/managerial process - a significant change to the strategies, structures or routines of a business which aim to improve performance.

During 2004 and 2005 28% of the 2,435 ACT businesses surveyed reported business innovation. This was the lowest proportion of any state or territory, with the majority reporting between 30% and 35%.


Across all states and territories, the predominant type of innovation introduced was the introduction of new organisational/managerial processes (24% of ACT businesses and 25% nationally). One in five ACT businesses reported new or significantly improved operational processes (compared with 22% nationally), while 15% reported new or significantly improved goods or services (compared with 19% nationally).

11.4 Innovating businesses, By states and territories - 2002 & 2003 and 2004 & 2005
Graph: 11.4 Innovating businesses, By states and territories—2002 & 2003 and 2004 & 2005




Drivers of innovation

In the 2005 Innovation Survey, drivers of innovation were split into three categories: profit related; market related; and legal related drivers. Profit related drivers were most frequently cited by ACT innovating businesses, with 84% reporting Improve productivity, 67% reporting Increase revenue and 80% reporting Reduce costs. Nationally, these drivers were reported by 71%, 72% and 54% of innovating businesses, respectively.

11.5 Profit related drivers of innovation, By states and territories - 2004 and 2005
Graph: 11.5 Profit related drivers of innovation, By states and territories—2004 and 2005



Within market related drivers, the most frequently reported driver was Increase responsiveness to customer needs, reported by 62% of ACT innovating businesses, and 65% nationally. High degree of price competition in this business's product markets was the second highest market related driver for ACT innovating businesses (50%), compared with 28% nationally.


Within legal related drivers, 26% of ACT innovating businesses reported Improve safety or working conditions, while 15% reported Be environmentally responsible and 12% reported Meet government regulations or standards. Nationally, these drivers were reported by 37%, 19% and 34% of innovating businesses, respectively.



Sources of ideas and information

Eighty-two per cent of ACT innovating businesses sourced ideas or information for innovative activity from Internal sources (compared with 76% nationally), while 72% used Market sources (70% nationally), 13% used Institutional sources (8% nationally), and 60% used Other sources (44% nationally).


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