Business innovation includes the development or introduction of new or significantly improved goods, services, processes or methods. According to figures released by the Australian Bureau of Statistics (ABS), more than a quarter of innovative-active businesses (27%) have reported that a lack of access to additional funds is the main barrier to innovation. Another commonly reported barrier is a lack of skilled people, either within the labour market or within the business.
Almost two-thirds (63%) of innovation-active businesses conducted innovation activity for profit-related reasons, while over a third (37%) reported undertaking innovative activity to be at the cutting edge of their industry. Increase export opportunities was the least commonly reported driver for undertaking innovative activity (4%).
Considered by industry, the ABS findings show that the financial and insurance services sector had the highest proportion of innovation-active business undertaking innovative activity in response to government regulations (18%), while the wholesale trade sector had the highest proportion of innovation-active businesses with increasing or maintaining market share as a driver of innovative activity (44%).
Overall, innovation-active businesses most commonly sourced their ideas and information for the development of innovation from within the business or related company (61%). The proportion of businesses that reported this as a source of ideas or information for innovation increased along with employment range; 57% of businesses employing zero to four people and 76% of businesses employing 200 or more people used this source.
Innovation ideas also came from sources including:
- clients, customers and buyers;
- competitors and other businesses from the same industry;
- websites, journals, research papers and publications; and
Collaboration is an arrangement where organisations work together for mutual benefit, including sharing some technical and commercial risk. Overall, 15% of innovation-active businesses had at least one type of collaborative arrangement. Joint marketing or distribution was the most common of the collaborative arrangements, used by 7% of businesses. The most common collaboration partners within Australia were clients, customers or buyers and suppliers of equipment, materials, components or software (both 36%), while the most common overseas partners were suppliers of equipment, materials, components or software (9%).
The ABS research also showed that innovation has led to benefits for most businesses. Overall, 89% of innovating businesses reported some form of benefit as a result of the introduction of new or significantly improved goods, services, processes or methods. Increased revenue was the most commonly reported benefit (42%), followed by improved customer service (41%). However, almost a quarter (24%) of innovating businesses reported that it was too early to measure benefits.
The Australian Government offers a range of support for small businesses, including possible tax and duty concessions. There are currently over 250 grants available available provided by the State and Federal Government across various industries. You can search the Government Grants Finder to see if you are eligible for any of the available grants.
For further information of assistance with accessing these grants please contact our accountants in North Sydney