1504.0 - Methodological News, Mar 2007  
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 23/03/2007   
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Does IT Matter?

This is the question a recently completed Analytical Service Branch (ASB) study pursued. In particular, the study examined the relationship between business use of IT and innovation using firm-level records linked from the 2003 Innovation Survey and the 2002-03 Business Use of Information Technology (BUIT) Survey. The study investigated the association between different types of innovation and IT use by businesses, using a multivariate regression approach.

Previous studies on the determinants of innovation made use of a broad dichotomy of innovation, that is, a firm either innovated or not. This study progressed from that by modelling different types of innovations and combinations of innovation activities. By definition, innovation can occur in three areas: goods and services, operational processes, and organisational/managerial operations.

The study postulated that IT variables such as computer use, Internet access, website presence, e-business (such as receiving orders via the Internet) and broadband connection have varying associations with different types, combinations or intensities of innovative activities.

Results suggest some evidence of a positive association between a host of IT variables and a range of innovation indicators. It is found that apart from IT variables, other firm-level and industry-specific variables influence the propensities of firms to innovate in one type or another. The variables that stand out from amongst the models are IT human resource and collaboration variables. These factors, including the spatial and institutional aspects of collaboration, have been shown to influence the odds of innovating.

The study is undertaken as a collaborative research between the ASB and the Integration, Coordination and Innovation Branch in Economic Statistics Group (ESG).

For more information, please contact Ruel Abello on (02) 6252 6307.