IP Outreach Research > IP Creation

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Main Findings

During the two years to December 2005, innovating businesses (businesses that introduced or implemented a goods, services or process innovation during the reference period) in Australia represented 33.5% of all businesses (up by 3.9% from the two-year period ended December 2003). Larger firms were more likely to be innovating than smaller ones. Businesses operating under current ownership for 9 years or more had the lowest proportion of innovators. Entirely or partially foreign-owned businesses were more innovative (with almost 60% of them undertaking innovative activities) than their wholly Australian-owned counterparts (with just 33.6% of them innovating).

The most innovative sectors were the electricity, gas and water supply industry (with 48.8% of businesses innovating during 2004 and 2005), wholesale trade (43.4%), and manufacturing (41.7%). The least innovative sectors were construction (30.8%), property and businesses services (30.3%), and retail trade (27.5%).

During 2004-5, innovating businesses derived about 4.5% of their total income from sales of goods/services introduced or implemented in the reference period. Innovation expenditure represented 3.7% of total business expenditures. Funds for expenditure on innovation-related activities came mostly from internal sources (90%), but also from borrowings (33.8%) and the federal government (2.7%)

Non-innovating respondents were far more likely to report no barriers to innovation (48.1%) than innovating businesses (26.7%). The most common barriers to innovation cited were: cost (cited as a factor hampering innovation by 58.4% of innovating businesses, and by 36.5% of non-innovating ones), market related barriers (36.7% versus 27%), and lack of skilled staff (27.2% versus 20.6%).

Drivers of innovation were profit related (reported by 94.2% of innovating businesses), market related (88.9%) or legal related (53.1%). Within the profit-related drivers, “increase revenue” (71.5%) and “improve productivity” (70.9%) dominated. “Increase responsiveness to customer needs” (65.3%) and “increase market share” (46.6%) were the most commonly reported market-related drivers. “Improve safety or working conditions” (37%) was the most important legal innovation driver.

The most commonly reported sources of ideas or information for innovative activities were “internal sources” (at 75.8%, including information from within the business or the enterprise group), followed by “market sources” (69.6%, including clients/customers, consultants, competitors and suppliers), “other sources” (43.6%, including professional conferences, meetings, fairs and exhibitions, web sites and journals), and “institutional sources” (7.7%, including universities, higher education institutions, government agencies, private non-profit research institutions and commercial laboratories).

[Date Added: Nov 20, 2008 ]