BARRIERS TO BUSINESS ACTIVITIES OR PERFORMANCE



All businesses were asked to identify factors which significantly hampered the development or introduction of new or significantly improved goods, services, operational or organisational/managerial processes or marketing methods (i.e. innovation related activities) and factors which significantly hampered core business activities or performance (i.e. those not related to innovation). For the purpose of this release, these factors are referred to as 'barriers to innovation' and 'barriers to core business activities or performance' respectively.

It should be noted that businesses were not provided with a definition of what constitutes a significant level of hampering and were not asked to rank barriers in order of significance.


Barriers to innovation

Barriers to innovation(a)(b)(c), by employment size, 2007 - 08
			0-4 persons	5-19 persons	20-199 persons	200 or more persons	Total
			%	%	%	%	%
	Lack of access to additional funds		16.0	16.7	14.7	8.6	16.0
	Cost of development or introduction/implementation		9.8	12.5	12.5	9.8	10.8
	Lack of skilled persons:
		within the business	11.7	19.7	22.0	12.6	14.8
		within the labour market	11.9	23.8	27.4	21.3	16.6
		in any location(d)	18.0	31.0	34.2	24.4	23.0
	Lack of access to knowledge or technology		3.2	2.9	4.2	2.5	3.2
	Government regulations or compliance		8.9	13.5	14.0	8.6	10.6
	Uncertain demands for new goods or services		10.5	13.3	9.1	9.6	11.2
	Other barriers to innovation		2.5	2.9	2.3	4.7	2.6
	Any barrier to innovation		39.1	52.3	50.7	40.0	43.7
	No barriers to innovation		60.9	47.7	49.3	60.0	56.3
(a) Proportions are of all businesses in each employment size category.
(b) Barriers to innovation are those factors which significantly hampered the development of introduction of any new or significantly improved goods, services, processes or methods.
(c) Businesses could identify more than one barrier and were not asked to rank barriers in order of significance.
(d) Includes businesses that reported lack of skilled persons within the business and/or within the labour market.

Overall 44% of businesses reported at least one barrier to innovation, with the most commonly reported barrier being lack of skilled persons within the labour market. The highest proportion of businesses whose innovative activity was hampered by this barrier were those employing 20-199 persons (27%), which was over double the proportion of businesses with 0-4 persons employed.

Over half of businesses in Manufacturing, Wholesale trade and Other services reported some barrier to innovation. By contrast, 66% of businesses in Rental, hiring and real estate services reported no barriers to innovation.


Barriers to core business activities or performance

Barriers to core business activities or performance(a)(b), by employment size, 2007 - 08
		0-4 persons	5-19 persons	20-199 persons	200 or more persons	Total
		%	%	%	%	%
Lack of access to additional funds		12.5	14.3	11.8	7.0	12.9
Cost of inputs		9.3	16.3	13.7	14.0	11.6
Outstanding accounts receivable limiting cash flow		12.2	16.1	14.1	3.9	13.4
Lack of skilled persons:
	within the business	8.7	16.8	20.4	14.2	11.9
	within the labour market	10.7	23.9	27.9	24.0	15.9
	in any location(c)	15.2	29.0	34.6	28.1	20.7
Government regulations or compliance		9.0	13.4	14.3	8.3	10.6
Lack of customer demand for goods or services		14.3	14.7	12.6	6.6	14.3
Lower profit margins to remain competitive		19.4	27.1	20.7	14.3	21.6
Environmental factors(d)		5.7	6.7	7.7	6.7	6.2
Other barriers		1.8	1.9	2.1	1.7	1.9
Any barriers to core business activities or performance		49.0	61.2	59.2	47.8	53.3
No barriers to core business activities or performance		51.0	38.8	40.9	52.2	46.7
(a) Proportions are of all businesses in each employment size category.
(b) Businesses could identify more than one barrier and were not asked to rank barriers in order of significance.
(c) Includes businesses that reported lack of skilled persons within the business and/or within the labour market.
(d) Examples of environmental factors include drought, insect plague and compliance with water restrictions.

At least one barrier to core business activities or performance was reported by over half of all businesses. The most reported factor hampering core business activities or performance was lower profit margins to remain competitive (22%), however, this was not the case across all employment size ranges. Lack of skilled persons within the labour market was the most commonly reported factor significantly hampering core business activities or performance for businesses employing 20-199 persons and 200 or more persons.

At the industry level, 60% or more of businesses in the Manufacturing, Wholesale trade, Retail trade and Other services reported barriers that significantly hampered core business activities or performance. Environmental factors were reported as hampering 11% of businesses in Mining, Retail trade and Arts and recreation services.