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 in August as part of Selected Characteristics of Australian Business, 2014-15 (cat. no. 8167.0).

Barriers to innovation, by innovation status(a)(b)(c), 2013-14 and 2014-15
		2013-14			2014-15
		Innovation-active businesses	Non innovation-active businesses	All businesses	Innovation-active businesses	Non innovation-active businesses	All businesses
		%	%	%	%	%	%
Lack of access to additional funds		28.0	9.3	18.4	26.7	11.5	18.4
Cost of development or introduction/implementation		22.7	6.0	14.1	19.5	7.1	12.7
Lack of skilled persons:
	within the business	18.8	5.0	11.7	17.7	5.2	10.9
	within the labour market	13.9	5.1	9.4	13.3	5.9	9.3
	in any location(d)	25.0	8.3	16.4	24.8	9.5	16.4
Lack of access to knowledge or technology to enable development or introduction/implementation		5.5	1.4	3.3	5.7	1.8	3.6
Government regulations or compliance		15.6	8.5	11.9	12.7	9.0	10.7
Adherence to standards		5.7	2.1	3.8	5.2	2.6	3.8
Uncertain demands for new goods or services		18.7	7.8	13.1	15.8	8.5	11.8
Any of the listed barriers to innovation		58.3	24.1	40.7	56.2	27.0	40.3
(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 2015, the proportion of all businesses that had any of the listed barriers to innovation was 40%. The proportion of innovation-active businesses that had any of the listed barriers to innovation (56%) was more than double that of non innovation-active businesses (27%).

Lack of access to additional funds was the most commonly identified barrier to innovative activity for all businesses (18%).

Innovation-active businesses: Barriers to innovation, by employment size(a)(b)(c), 2014-15
		0-4 persons	5-19 persons	20-199 persons	200 or more persons	Total
		%	%	%	%	%
Lack of access to additional funds		25.9	29.0	22.9	11.7	26.7
Cost of development or introduction/implementation		19.3	19.3	20.6	18.4	19.5
Lack of skilled persons:
	within the business	17.6	17.5	19.1	16.7	17.7
	within the labour market	10.2	16.1	18.3	9.6	13.3
	in any location(d)	23.2	26.1	27.9	19.1	24.8
Lack of access to knowledge or technology to enable development or introduction/implementation		6.1	5.3	4.9	3.5	5.7
Government regulations and compliance		12.1	13.7	11.5	10.1	12.7
Adherence to standards		5.6	4.5	6.0	2.8	5.2
Uncertain demands for new goods or services		16.1	15.5	15.2	12.6	15.8
Any of the listed barriers to innovation		55.4	57.6	56.4	41.9	56.2
(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.

For innovation-active businesses, lack of access to additional funds was the barrier to innovation most commonly reported (27%).

Across the employment size ranges, innovation-active businesses with 5-19 persons employed had the highest proportion of businesses that reported any of the listed barriers to innovation (58%). Lack of skilled persons in any location was most commonly reported by innovation-active businesses with 20-199 persons employed (28%), while lack of access to additional funds was most commonly reported by innovation-active businesses with 5-19 persons employed (29%).



By industry, Mining had the highest proportion of innovation-active businesses that reported lack of access to additional funds (41%) as the most common barrier to innovation, while Financial and insurance services had the lowest proportion of innovation-active businesses reporting this as a barrier (10%).

Further data relating to barriers to innovation can be accessed via the Downloads tab.