BARRIERS TO INNOVATION


Understanding the barriers to innovation is important for policy makers, as it supports the targeting of resources and programs designed to encourage innovative activity. All businesses were asked to report whether any of the listed factors impacted on their ability to develop or introduce new goods, services, processes or methods. Businesses could select more than one of these factors and a ranking of importance was not required.

While the focus in this release is on innovation-active businesses and factors that influence innovation, the BCS collects a comprehensive range of factors that hamper the ability of a business to undertake innovation as well as factors that may impact on more general business activities or performance. The complete data for all businesses will be released as part of Selected Characteristics of Australian Business, 2012-13 (cat. no. 8167.0).

Barriers to innovation(a)(b)(c), by innovation status, 2011-12 and 2012-13
		2011-12			2012-13
		Innovation-active businesses	Non innovation-active businesses	All businesses	Innovation-active businesses	Non innovation-active businesses	All businesses
		%	%	%	%	%	%
Lack of access to additional funds		28.2	12.8	19.9	29.3	13.7	20.3
Cost of development or introduction/implementation		22.2	7.7	14.4	21.7	9.5	14.6
Lack of skilled persons:
	within the business	18.2	6.2	11.8	17.1	9.0	12.4
	within the labour market	16.4	6.9	11.4	12.4	8.1	9.9
	in any location(d)	26.2	10.5	17.8	23.0	12.9	17.2
Lack of access to knowledge or technology to enable development or introduction/implementation		5.9	2.8	4.2	3.8	2.9	3.3
Government regulations or compliance		18.0	10.4	13.9	15.4	10.8	12.7
Adherence to standards		5.2	3.4	4.3	6.1	3.3	4.5
Uncertain demands for new goods or services		22.1	10.6	15.9	17.8	12.5	14.7
Any of the listed barriers to innovation		60.4	31.7	45.1	58.3	33.8	44.1
None of the listed barriers to innovation		39.6	68.3	54.9	41.7	66.2	55.9
(a) Proportions are of all businesses in each output category.
(b) Barriers to innovation are those barriers that significantly hampered the development or introduction of any new or significantly improved goods, services, processes and/or methods.
(c) Businesses could identify more than one barrier and were not asked to rank barriers in order of importance.
(d) Includes businesses that reported lack of skilled persons within the business and/or lack of skilled persons within the labour market.

During the year ended 30 June 2013, the proportion of businesses that had any of the listed barriers to innovation was 44%. Innovation-active businesses were more likely to identify facing any of the listed barriers to innovation than their non innovation-active counterparts (58% compared to 34%).

INNOVATION-ACTIVE BUSINESSES, Barriers to innovation(a)(b)(c), by employment size, 2012-13
			0-4 persons	5-19 persons	20-199 persons	200 or more persons	Total
			%	%	%	%	%
	Lack of access to additional funds		29.8	29.6	27.1	17.7	29.3
	Cost of development or introduction/implementation		18.6	24.3	26.8	21.8	21.7
	Lack of skilled persons:
		within the business	13.1	21.3	21.1	11.1	17.1
		within the labour market	6.4	18.2	19.1	11.4	12.4
		in any location(d)	15.6	31.1	28.7	19.1	23.0
	Lack of access to knowledge or technology to enable development or introduction/implementation		2.7	4.1	7.9	3.6	3.8
	Government regulations and compliance		14.7	16.5	15.0	10.9	15.4
	Adherence to standards		6.2	5.9	6.4	6.2	6.1
	Uncertain demands for new goods or services		17.8	18.9	14.7	11.1	17.8
	Any of the listed barriers to innovation		54.8	62.8	59.6	44.1	58.3
	None of the listed barriers to innovation		45.2	37.2	40.4	55.9	41.7
(a) Proportions are of innovation-active businesses in each output category.
(b) Barriers to innovation are those barriers which significantly hampered the development or introduction of any new or significantly improved goods, services, processes and/or methods.
(c) Businesses could identify more than one barrier and were not asked to rank barriers in order of importance.
(d) Includes businesses that reported lack of skilled persons within the business and/or lack of skilled persons within the labour market.

Lack of access to additional funds was the most frequently identified barrier to innovative activity, at 29%. Businesses with 5-19 persons employed were the most likely to identify at least one of the listed barriers to the introduction of innovation (63%), while those businesses with 200 or more persons employed were the least likely (44%). Lack of skilled persons in any location was the most prevalent barrier for businesses with 5-19 persons employed (31%) and 20-199 persons employed (29%), while businesses with 0-4 persons employed were most likely to have lack of access to additional funds (30%).

Lack of access to additional funds was the most common barrier to innovation for 13 of the 17 industries. Businesses in the Information media and telecommunications and the Arts and recreation services industries were the most likely to have this barrier (both 36%), while businesses in the Electricity, gas, water and waste services industry were the least likely, at 16%.

The highest proportion of innovation-active businesses with no barriers to undertaking innovation was within the Agriculture, forestry and fishing industry (57%).