8158.0 - Innovation in Australian Business, 2010-11 Quality Declaration 
ARCHIVED ISSUE Released at 11:30 AM (CANBERRA TIME) 23/08/2012   
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1 The purpose of this appendix is to provide a brief history of ABS collection of innovation statistics and a summary of the current program and related outputs.


2 Collection of statistics by the ABS related to the incidence of innovation in Australian business began in the 1990's with the conduct of two surveys in 1994 and 1997. These two surveys predominantly focused on the manufacturing and mining industries (with some indicative information for selected other industries collected in 1994) and generally used the then applicable OECD guidelines as a basis for content. The outputs for these surveys are available in:

3 Consultation undertaken by the ABS in mid-2002 with Federal and State/Territory government agencies as well as a range of other data users, indicated a strong demand for updated innovation statistics. Given interest from policy makers, the ABS was determined to proceed with an innovation survey in 2004, subject to external funding. It was considered likely that this survey would be the start of a new biennial series, however, this was dependant upon some element of continued user funding. Following this re-commencement of ABS innovation surveys, two stand-alone surveys were conducted in 2004 (for the three calendar years, 2001-2003) and 2006 (for the two calendar years, 2004 and 2005). Both surveys drew from the latest version of the Oslo Manual, Guidelines for Collecting and Interpreting Innovation Data available at the time of survey development.

4 While these surveys covered a relatively wide range of industry divisions, they were restricted to businesses with five or more employees. During the development of the survey conducted in respect of the 2004 and 2005 calendar years, it appeared likely that the timing for future surveys would be biennial, therefore, the reference period for the survey was changed to two calendar years.

5 The majority of content in these surveys was limited to practices and characteristics of innovation-active businesses only. The surveys focussed on introduced innovation for goods and/or services; operational processes; and organisational/managerial processes. Outputs from these two surveys can be found in:

6 In the biennial survey program and within the constraint of available resources, there remained unmet user demand for the scope of the survey to be extended to include marketing method innovation; innovation still in development and abandoned innovative activity; and to include businesses with less than five employees.

7 Parallel with the re-commencement of regular innovation surveys, there was strong user demand for the ability to undertake micro data analysis and economic modelling. As a result of this demand, the development of the Business Longitudinal Database (BLD) began. Users indicated that the ability to undertake more sophisticated analysis of business characteristics linked to financial performance was a high priority. Early in the development of the BLD it became evident that a dedicated survey was required and that innovation needed to be included in the topics covered. This resulted in a more comprehensive review of the ABS survey program related to characteristics of businesses, which focused on delivering the best outcomes within the resources available. The outcome of this review was the implementation of the Integrated Business Characteristics Strategy (IBCS), which provided a framework for the collection and dissemination of the majority of these types of statistics including innovation and use of information technology (IT).

8 Associated with the implementation of the IBCS was the introduction of a new annual survey that was designed to produce the inputs required for the BLD and replace the previously separate surveys of innovation and IT use. Included in the new survey every year was a core set of business demographics, activity, performance and characteristics indicators. Basic indicators of innovation and IT use would also be produced annually. In each alternate year, the focus of the survey would switch between innovation and the use of IT. Therefore, detailed data on innovation (i.e. replacing the previously separate Innovation survey), and detailed data on IT use (i.e. replacing the previously separate Business Use of IT survey), would each be produced in alternating years. This new survey, the Business Characteristics Survey (BCS), was first conducted in 2007 in respect of the 2005-06 reference year; this first iteration had a focus on IT use. In 2009-10, the scope of the BCS was changed to include Agriculture, forestry and fishing, concluding the implementation of the IBCS.


9 The opportunity was taken, as part of the introduction of the Business Characteristics Survey (BCS), to substantially expand the range of innovation statistics produced by the ABS. Along with the extension of scope related to business size based on employment and the range of industries included, the full coverage of core innovation concepts as articulated in the 2005 edition of the Oslo Manual was implemented. It also became possible to produce an expanded range of general business characteristics output, cross-classified by innovator status, on an annual basis.

10 Included in the range of annual business characteristics are topics related to business structure and arrangements; ownership; trade; finance; markets and competition; barriers to business activity (both innovation and general); labour and skills; broadband and Internet commerce; and business performance assessment. In alternate years, more detailed information is collected from innovating businesses about practices and influences related to their innovative activities (including sources of ideas/information; drivers; intellectual property; collaboration; and types of expenditure). The 2010-11 BCS re-introduced a question measuring expenditure on innovation. Please see Appendix 2: Innovation Expenditure for further information.

11 This expanded range of innovation statistics has been developed within the constraint of available resources and minimising reporting load on businesses. There continues to be some areas of demand that cannot be addressed within the existing constraints, including more comprehensive outputs for states/territories.

Annual core indicators of innovation in Australian business

12 Key indicators for the incidence of innovation in Australian business are now collected and released annually. The reference period for these indicators is a single financial year (i.e. the year ended 30 June). These key indicators include detailed measures for the type and status of innovation (see Glossary). These data are released as soon as possible after the conduct of the survey in:

13 There have been six issues of this release (2005-06, 2006-07, 2007-08, 2008-09, 2009-10 and 2010-11). It is intended to release these data within twelve months of the end of the reference period.

Annual business characteristics by innovator status

14 A comprehensive range of diverse topics are collected annually as part of the Business Characteristics Survey (BCS). These have been identified by policy makers as being essential for measuring business performance and productivity. Outputs for these topics are available from the BCS and can be cross-classified by innovator status. These are published annually in:
15 To date, there have been five issues of this release in respect of 2005-06, 2006-07, 2007-08, 2008-09 and 2009-10. The next issue (in respect of 2010-11) will be released 13 September 2012. Accompanying each release is a comprehensive set of data cubes. Most of these data cubes include output cross-classified by innovator status.

Biennial innovation statistics for innovation practices and influences

16 Every second year, the BCS is used to collect a range of detailed information about practices related to, and influences on, innovative activity. These data are similar to those collected by the stand-alone innovation surveys conducted in 2004 and 2006. The reference period for these indicators is a single financial year (i.e. the year ended 30 June). Most of the topics collected are limited to innovating businesses, however, some data related to barriers and collaboration are collected from all businesses irrespective of innovator status. Topics covered include: degree of novelty; sources of ideas/information; drivers; labour and skills; intellectual property; collaboration; and types of expenditure. This range of statistics is released in:

17 This release is available every second year and is accompanied by a comprehensive set of data cubes. The approximate timing of release is August in years ending with an even number.


18 In addition to the above suite of directly collected innovation statistics, the ABS has a range of other related statistics currently available or intended for release in the future.

Research and Experimental Development

19 The ABS conducts a program of surveys related to Research and Experimental Development (R&D) undertaken by business, government, private not-for-profit organisations and higher education institutions. The business survey is conducted annually and the other surveys on a biennial basis. ABS R&D surveys are based on the concepts outlined in the publication Proposed Standard Practice for Surveys of Research and Experimental Development (Frascati Manual), 2002 OECD, Paris 2003 . Key outputs for these surveys include expenditure and person years of effort.

20 The latest releases from the ABS R&D surveys are:

Business Longitudinal Database: Confidentialised Unit Record File

21 The primary output for the Business Longitudinal Database (BLD) will be a suite of Confidentialised Unit Record Files (CURFs). The BLD design is comprised of panels (or waves) with each panel representing the entire population of in-scope small and medium businesses at the time of initialisation. Each panel is surveyed for five years. The first wave of the BLD (Panel 1) was initiated via a stand-alone survey conducted in respect of the 2004-05 reference year.

22 Primarily to more readily meet ABS confidentiality requirements, the scope of the BLD is restricted to small and medium business. Included in the BLD are a core set of data excluding detailed innovation and IT content. However, the BLD includes this same set of data for non-employing businesses across a range of industries and those in Agriculture, Forestry and Fishing. The latest BLD CURF was released in December 2011:

Analytical outputs

23 The ABS undertakes value added micro data analysis based on unit level data contained within the full, unconfidentialised ABS version of the Business Longitudinal Database. This version of the BLD (which combines survey data from the Business Characteristics Survey with financial data from administrative sources or other ABS surveys, and includes all sizes of businesses), differs from the BLD released as confidentialised unit record files. This difference in versions is due to the presence of large businesses which, for confidentiality reasons, cannot be included in the BLD CURF. Any analytical outputs are, like all other ABS outputs, subject to confidentiality considerations.
With each iteration of the BCS, data from the new reference period is added, therefore building a rich, longitudinal data set. ABS legislation provides some scope to engage external researchers to assist with undertaking analysis.

24 An example of output from analytical work undertaken by the ABS includes:

Innovation statistics for international comparisons

25 The Oslo Manual recommends that innovation surveys are conducted every two years and, where this is not economically feasible, a frequency of three to four years may be chosen. Examples of timing include:

      In New Zealand detailed innovation data is collected every second year through Statistics New Zealand Business Operations Survey; this survey also enables the production of annual indicators of innovation.

      The European Union, through its member countries, conducts the Community Innovation Survey every two years.

26 For more data on international innovation comparisons visit www.oecd.org