BARRIERS TO BUSINESS ACTIVITIES OR PERFORMANCE


BARRIERS TO BUSINESS ACTIVITIES OR PERFORMANCE

All businesses were asked to identify factors which significantly hampered the development or introduction of new or significantly improved goods, services, processes or methods (i.e. innovation related activities) and factors which significantly hampered general business activities or performance (i.e. those not related to innovation). For the purpose of this release, these factors are referred to as 'barriers to innovation' and 'barriers to general business activities or performance' respectively.

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

Barriers to innovation(a)(b)(c), by employment size - 2006-07
		Employment size
		0-4 persons	5-19 persons	20-199 persons	200 or more persons	Total
		%	%	%	%	%
Lack of access to additional funds		14.8	18.6	14.8	7.1	15.9
Cost of development or introduction/implementation		9.5	13.5	12.6	11.3	10.9
Lack of skilled persons:
	within the business	11.5	24.8	20.5	19.4	16.1
	within the labour market	12.6	29.3	27.8	27.6	18.7
	in any location(d)	18.9	38.0	33.8	32.4	25.7
Attitude of staff towards change		3.7	9.4	11.2	7.5	6.0
Lack of access to knowledge or technology		3.4	3.5	2.9	4.2	3.4
Government regulations or compliance		8.8	12.9	12.1	10.1	10.3
Uncertain demands for new goods or services		8.3	9.9	8.4	5.1	8.8
Other barriers to innovation		5.9	5.1	4.2	2.9	5.5
Any barriers to innovation		40.5	56.9	52.6	46.1	46.3
No barriers to innovation		59.5	43.1	47.4	53.9	53.7
(a) Proportions are of all businesses in each employment size 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.

At least one barrier to innovation was reported by almost half of all businesses, with the most commonly reported barrier being Lack of skilled persons in any location. The highest proportion of businesses whose innovative activity was hampered by this barrier were those employing 5-19 persons (38%), which was twice the proportion of businesses with 0-4 persons employed.

The most frequently reported barrier to innovation was Lack of skilled persons within the labour market. This barrier was the most frequently reported barrier to innovation by businesses in each of the three larger employment size ranges, whereas businesses employing 0-4 persons were approximately half as likely to be hampered by Lack of skilled persons within the labour market than larger businesses. Overall, Lack of skilled persons in any location is the highest barrier for each of the employment size ranges. Lack of access to knowledge or technology was the lowest reported barrier across all employment size ranges.

Businesses in the Manufacturing; Construction; and Arts and Recreation Services industries reported the highest proportion of any barriers to innovation.


Barriers to general business activities or performance

Barriers to general business activities or performance (a)(b), by employment size - 2006-07
		Employment size
		0-4 persons	5-19 persons	20-199 persons	200 or more persons	Total
		%	%	%	%	%
Lack of access to additional funds		9.2	12.7	9.3	5.6	10.2
Cost of inputs		7.2	11.3	8.5	8.4	8.5
Outstanding accounts receivable limiting cash flow		8.3	13.6	8.6	6.2	9.9
Lack of skilled persons
	within the business	6.8	16.9	17.4	16.8	10.5
	within the labour market	9.2	23.1	22.9	29.3	14.3
	in any location(c)	12.2	28.0	28.3	32.0	18.1
Government regulations or compliance		6.2	12.0	11.3	10.1	8.2
Lack of customer demand for goods or services		8.9	7.2	5.3	4.5	8.1
Lower profit margins to remain competitive		14.8	21.6	17.1	11.1	16.9
Lower price received due to market driven factors		9.1	10.3	8.3	7.2	9.4
Environmental factors(d)		5.6	7.5	7.9	6.7	6.4
Other barriers to general business activites or performance		2.0	1.8	1.3	3.5	1.9
Any barriers to general business activities or performance		38.9	51.2	49.0	49.1	43.2
No barriers to general business activities or performance		61.3	48.8	51.0	50.9	56.9
(a) Proportions are of all businesses in each employment size 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 and insect plague.

Overall 43% of businesses reported that at least one factor significantly hampered the business in general business activities or performance. While the most reported factor hampering general business activities or performance overall was Lowering profit margins to remain competitive, this was not the case across all employment size ranges. Lack of skilled persons within the labour market was the most commonly reported factor significantly hampering general business activities or performance for businesses in the three larger business sizes.

Businesses employing 5-19 persons tended to record higher proportions for most of the listed barriers than businesses employing 0-4 persons. Lack of skilled persons in the labour market as a barrier was four times higher for businesses employing 200 or more persons than for those employing 0-4 persons. Businesses employing 0-4 persons were the least affected by Government regulations or compliance factors.

Over half of all businesses in Other Services and Construction reported barriers that significantly hampered general business activities or performance, compared to just over a quarter of businesses in Health Care and Social Assistance. The Construction industry (13%) reported the highest proportion of businesses for which Government regulations or compliance hampered general business activities or performance.

Businesses in Other Services and Construction reported the highest proportion of businesses hampered by
Lack of skilled persons in any location, both at 25%. Environmental factors as a barrier were most prevalent in the Accommodation and Food Services industry, at 13%.