BARRIERS TO INNOVATION AND GENERAL BUSINESS ACTIVITIES OR PERFORMANCE


BARRIERS TO INNOVATIVE ACTIVITY

All businesses were asked to identify, from a list, barriers that significantly hampered the development or introduction of new or significantly improved goods, services, operational or organisational/managerial processes or marketing methods during the year ended 30 June 2011. More detailed barriers data relating to innovation-active businesses were released as part of Innovation in Australian Business, 2010-11 (cat. no. 8158.0).

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, by employment size(a)(b)(c), 2010 - 11
		0-4 persons	5-19 persons	20-199 persons	200 or more persons	Total
		%	%	%	%	%
Lack of access to additional funds		20.5	22.8	19.9	12.5	21.1
Cost of development or introduction/implementation		12.5	19.5	17.1	13.6	15.0
Lack of skilled persons:
	within the business	10.3	17.4	17.6	13.1	13.1
	within the labour market	9.3	17.0	19.2	15.8	12.5
	in any location(d)	15.9	26.4	26.5	21.5	20.0
Lack of access to knowledge or technology to enable development or introduction/implementation		3.0	5.0	2.3	3.2	3.6
Government regulations and compliance		12.2	14.4	13.8	8.4	13.0
Adherence to standards		3.7	4.6	4.9	3.4	4.1
Uncertain demand for new goods or services		11.7	14.6	14.1	8.7	12.8
Any of the listed barriers to innovation		41.1	51.3	50.4	36.9	44.9
None of the listed barriers to innovation		58.9	48.7	49.6	63.1	55.1
(a) Proportions are of all businesses in each output category.
(b) Barriers to innovation are those factors which significantly hampered the development or 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, 45% of businesses reported at least one barrier to innovation, with the most common being lack of access to additional funds (21%).

Businesses in Wholesale trade (54%) were the most likely to have at least one barrier to innovation. Businesses in Manufacturing (18%) was the most likely to report lack of skilled persons within the labour market as a barrier to innovation followed by Agriculture, forestry and fishing and Mining (both 16%).

Innovation-active businesses (63%) were almost twice as likely to experience barriers to undertaking innovative activity when compared to non innovation-active businesses (33%).


BARRIERS TO GENERAL BUSINESS ACTIVITIES OR PERFORMANCE

All businesses were asked to identify, from a list, barriers that significantly hampered their business activities or performance during the year ended 30 June 2011. 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 general business activities or performance(a)(b), by employment size, 2010 - 11
		0-4 persons	5-19 persons	20-199 persons	200 or more persons	Total
		%	%	%	%	%
Lack of access to additional funds		17.7	18.1	18.1	10.3	17.8
Cost of inputs		11.9	16.4	14.2	11.0	13.5
Outstanding accounts receivable limiting cash flow		14.2	21.2	14.6	7.6	16.4
Lack of skilled persons:
	within the business	8.8	14.7	12.2	12.2	10.9
	within the labour market	9.4	19.5	22.7	19.4	13.6
	in any location(c)	13.5	25.1	26.6	23.1	18.2
Government regulations or compliance		13.9	15.2	15.6	10.9	14.4
Lack of customer demand for goods or services		19.4	18.7	18.7	15.8	19.1
Lower profit margins to remain competitive		22.0	30.3	28.4	17.8	25.1
Environmental factors(d)		7.1	10.0	9.6	9.5	8.2
Any of the listed barriers to general business activities or performance		54.8	64.6	60.9	48.8	58.3
None of the listed barriers to general business activities or performance		45.2	35.4	39.1	51.2	41.7
(a) Proportions are of all businesses in each output 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.

Overall, 58% of businesses reported at least one barrier that significantly hampered their general business activities or performance. The most common barrier hampering general business activities or performance was lower profit margins to remain competitive (25%). Lower profit margins to remain competitive was the most common barrier significantly hampering general business activities or performance for businesses across the three smaller employment size ranges. For businesses with 200 or more persons employed, the most common barrier was lack of skilled persons within the labour market (19%).

Lower profit margins to remain competitive as a barrier to general business activities or performance was experienced by two in five businesses in Retail trade. Businesses in Retail trade were also the most likely to report lack of customer demand for goods or services (32%). Businesses in Financial and insurance services were the most likely to report government regulations and compliance (30%) as a barrier to general business activities or performance.