KEY MEASURES OF INNOVATION

The Business Characteristics Survey (BCS) covers four broad types of innovation (goods or services, operational processes, organisational/managerial processes and marketing methods) across three innovation statuses (introduced, still in development and abandoned). These are combined to group businesses into two categories of innovation: innovating businesses (includes businesses that introduced at least one type of innovation during the reference period) and innovation-active businesses (includes businesses that undertook any innovative activity irrespective of whether the innovation was introduced, still in development or abandoned).

INNOVATION IN AUSTRALIAN BUSINESS - SUMMARY

Summary of innovative activity in Australian business(a), key indicators, 2009 - 10 and 2010 - 11
			2009-10	2010-11
Estimated number of businesses (b)		'000	776	764
Businesses which introduced any new or significantly improved:(c)
	goods and/or services	%	19.8	17.3
	operational processes	%	16.9	16.4
	organisational/managerial processes	%	20.7	18.9
	marketing methods	%	16.7	16.8
Businesses which introduced innovation (innovating businesses)		%	38.6	33.3
Businesses with innovative activity which was:(c)
	still in development(d)	%	19.9	19.6
	abandoned	%	7.3	5.7
Businesses with any innovative activity (innovation-active businesses)		%	43.8	39.1
(a) Proportions are of all businesses in each output category.
(b) Business counts are provided for contextual information only, please refer to Explanatory Notes 18 and 19.
(c) Businesses may be counted in more than one category.
(d) As at the end of the reference period 30 June 2011.

The proportion of businesses which were innovation-active (i.e. those which undertook any innovative activity) in 2010-11 was 39%, a decrease of five percentage points from the previous year.

Summary of innovative activity in Australian businesses, by employment size(a), 2010-11
			0-4 persons	5-19 persons	20-199 persons	200 or more persons	Total
Estimated number of businesses (b)		'000	464	238	58	4	764
Businesses which introduced innovation (innovating businesses)		%	24.9	43.6	56.0	53.7	33.3
Businesses with innovative activity which was:(c)
	still in development(d)	%	14.1	26.2	34.5	38.2	19.6
	abandoned	%	5.4	6.3	5.7	7.3	5.7
Businesses with any innovative activity (innovation-active businesses)		%	30.5	49.6	61.9	65.9	39.1
(a) Proportions are of all businesses in each output category.
(b) Estimated number of businesses is as at the end of the reference period 30 June 2011 and are provided for contextual information only. Please refer to Explanatory Notes 18 and 19.
(c) Businesses may be counted in more than one category.
(d) As at the end of the reference period 30 June 2011.

The proportion of innovation-active businesses was greater for each successive employment size range. Just under one third of businesses with 0-4 persons employed reported being innovation-active compared with almost two thirds of businesses with 200 or more persons employed.

It is important for users to note that the population varies considerably between each employment size range. For example, 66% for businesses with 200 or more persons employed reporting being innovation-active represents approximately 2,600 businesses, whereas 30% for businesses with 0-4 persons employed being innovation-active represents approximately 139,000 businesses.


Innovation-active businesses

Almost 40% of Australian businesses (approximately 300,000 businesses) were classified as innovation-active (businesses that undertook any form of innovative activity) during 2010-11.

During 2010-11, innovative activity was reported by more than half of all Wholesale trade businesses (58%). Businesses in Transport, postal and warehousing were least likely to have innovative activity (21%).


Innovating businesses

Innovating businesses are those which introduced any of the four types of innovation during the 2010-11 reference period.

During the year ended 30 June 2011, one third of Australian businesses reported introducing at least one type of innovation, a decrease of six percentage points from the previous year.

During the year ended 30 June 2011, new organisational/managerial processes were the most common type of innovation introduced (19%). The least likely to be reported was new operational processes (16%).

By industry, Wholesale trade recorded the highest proportion of innovating businesses (51%) followed by Retail trade (42%). The lowest proportion of introduced innovation was recorded by businesses in Transport, postal and warehousing (18%).

Wholesale trade had the highest proportion of businesses which reported the introduction of both new goods or services and marketing methods (32% and 30% respectively). Manufacturing recorded the highest proportion of businesses that introduced new operational processes (24%), while Professional, scientific and technical services recorded the highest proportion of businesses that introduced new organisational/managerial processes (26%).

Transport, postal and warehousing recorded the lowest proportion of businesses which introduced new goods or services (7%) and marketing methods (6%). The industries which recorded the lowest proportion of businesses to have introduced new operational processes were Construction and Other services (both 10%). Other services and Agriculture, forestry and fishing recorded the lowest proportion of businesses which introduced new organisational/managerial processes (both 12%).


Innovation still in development

Overall, one in five businesses reported innovation still in development as at 30 June 2011. The proportion of businesses reporting innovation still in development was greater for each successive employment size, ranging from 14% for businesses with 0-4 persons employed to 38% for businesses with 200 or more persons employed.

New goods or services and marketing methods were the most commonly reported types of innovation that were still in development as at 30 June 2011 (both 10%).

By industry, Wholesale trade recorded the highest proportion of businesses with innovative activity still in development (32%), followed by Information media and telecommunications (30%) and Professional, scientific and technical services (27%). Businesses within Transport, postal and warehousing were least likely to report innovation still in development (9%).

The highest proportion of businesses with new goods or services still in development was in the Information media and telecommunications industry (20%). Businesses within the Financial and insurance services industry recorded the highest proportion of businesses with new operational processes still in development (16%), while businesses within the Professional, scientific and technical services industry reported the highest proportion of new organisational/managerial processes still in development (13%). The industry with the highest recorded proportion of new marketing methods still in development was Arts and recreation services (18%).


Abandoned innovation

During the year ended 30 June 2011, 6% of Australian businesses abandoned at least one type of innovative activity. Businesses with 0-4 persons employed reported the lowest proportion of abandoned innovative activity during the year ended 30 June 2011 (5%). The three remaining employment size ranges all recorded abandoned innovative activity of between 6% and 7%. The type of innovative activity that was most frequently reported as abandoned in 2010-11 was new marketing methods (3%).

By industry, the highest proportion of businesses that reported abandoned innovative activity was in Arts and recreation services (11%), followed by Retail trade (10%).

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