DRIVERS OF INNOVATION



The key drivers of innovation represent the underlying reasons why businesses may initiate innovation. Together with barriers to innovation, they represent part of a continuum of key factors that influence innovative activity within a business. Innovation-active businesses were asked to report the drivers for developing or introducing new goods, services, processes or methods. Businesses could select more than one driver and a ranking of importance was not required.

Drivers of innovation(a)(b), by employment size, 2012-13
			0-4 persons	5-19 persons	20-199 persons	200 or more persons	Total
			%	%	%	%	%
	Profit related reasons(c)		69.0	73.6	78.1	81.3	72.0
	Competition, demand and marketing related drivers
		be at the cutting edge of the industry	25.8	34.6	41.1	48.7	31.3
		increase responsiveness to customer needs	47.0	51.7	65.5	60.9	51.2
		ensure the business' products are competitively priced	27.1	30.9	37.2	40.2	29.9
		increase or maintain market share	38.9	45.8	53.3	56.1	43.4
		establish new markets	32.6	37.7	38.6	38.3	35.3
		increase export opportunities	7.4	5.9	5.6	6.6	6.6
		any of the above competition, demand and market related drivers	71.7	77.6	81.2	82.1	75.2
	Production and delivery drivers
		increase efficiency of supplying/delivery goods or services	30.7	35.9	42.2	58.9	34.4
		improve quality of goods or services	33.9	41.4	40.4	49.7	37.7
		improve IT capabilities or better utilise IT capacity	19.4	23.9	29.3	38.9	22.5
		increase capacity of production or service provision	15.8	20.2	20.8	29.0	18.2
		any of the above production and delivery drivers	48.7	61.2	62.0	75.2	55.4
	Reduce environmental impacts		9.7	12.3	16.8	22.4	11.7
	Improve safety or working conditions		15.0	25.1	36.3	42.8	21.8
	In response to government regulations		7.7	11.5	14.5	25.0	10.1
	Adherence to standards		14.8	19.0	24.8	29.6	17.8
	Other reasons		2.0	1.4	2.4	1.3	1.8
(a) Proportions are of innovation-active businesses in each output category.
(b) Businesses that were innovation-active were asked for the reasons they had undertaken innovation. Businesses could identify more than one reason.
(c) Including to improve revenue or productivity and to reduce costs.

Almost three quarters of innovation-active businesses undertook innovative activity for profit related reasons, while over half of these businesses undertook innovative activity to increase responsiveness to customer needs. Increase export opportunities was the least common driver for undertaking innovative activity (7%).

Businesses with 200 or more persons employed were almost three times as likely to undertake innovative activity to improve safety or working conditions (43%) as businesses with 0-4 persons employed (15%), and more than twice as likely to reduce environmental impacts (22% and 10% respectively).

By industry, businesses in the Financial and insurance services industry were the most likely to undertake innovative activity in response to government regulations (24%).