BARRIERS TO INNOVATION AND GENERAL BUSINESS ACTIVITIES OR PERFORMANCE


Introduction

All businesses were asked to identify factors which significantly hampered the development or introduction of new or significantly improved goods, services, operational or organisational/managerial processes or marketing 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, 2008 - 09
		0-4 persons	5-19 persons	20-199 persons	200 or more persons	Total
		%	%	%	%	%
Lack of access to additional funds		18.4	21.6	21.0	14.5	19.5
Cost of development or introduction/implementation		10.7	15.9	13.4	15.8	12.5
Lack of skilled persons:
	within the business	10.1	18.2	17.7	13.4	13.2
	within the labour market	9.8	17.4	18.3	12.2	12.8
	in any location(d)	15.1	26.0	26.5	18.2	19.4
Lack of access to knowledge or technology		3.0	3.2	2.5	3.1	3.0
Government regulations or compliance		10.4	13.5	16.9	10.3	11.9
Adherence to standards		3.1	6.0	4.3	2.9	4.1
Uncertain demands for new goods or services		13.5	12.5	11.5	11.9	13.0
Any barrier to innovation		39.0	49.9	49.8	39.8	43.2
No barriers to innovation		61.0	50.1	50.2	60.2	56.8
(a) Proportion 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.

Overall, 43% of businesses reported at least one barrier to innovation, with the most commonly reported barrier being lack of access to additional funds, at 20%. The proportion of businesses with innovative activity that was hampered by this barrier was highest among businesses with 5-19 persons employed (22%), and lowest among businesses with 200 or more persons employed (14%).

At industry level, businesses in Manufacturing (53%) were the most likely to have reported at least one barrier to innovation. Businesses in the Arts and recreation industry were the most likely to report lack of access to additional funds as a barrier to innovation, at 34%.

Innovation-active businesses (60%) were almost twice as likely to report barriers to undertaking innovative activity than non innovation-active businesses (32%).


Barriers to general business activities or performance

Barriers to general business activities or performance(a)(b), by employment size, 2008 - 09
		0-4 persons	5-19 persons	20-199 persons	200 or more persons	Total
		%	%	%	%	%
Lack of access to additional funds		15.8	18.4	16.4	12.0	16.6
Cost of inputs		10.3	11.5	14.8	14.8	11.1
Outstanding accounts receivable limiting cash flow		13.0	17.9	17.5	7.4	14.8
Lack of skilled persons:
	within the business	7.8	15.1	14.8	9.7	10.6
	within the labour market	8.2	18.7	19.2	15.8	12.4
	in any location(c)	12.7	24.9	24.8	19.7	17.5
Government regulations or compliance		9.6	13.5	15.0	11.8	11.2
Lack of customer demand for goods or services		19.3	17.7	16.1	18.9	18.5
Lower profit margins to remain competitive		21.6	29.0	26.2	19.8	24.2
Environmental factors(d)		5.6	6.4	5.7	5.2	5.8
Any barriers to general business activities or performance		49.1	60.8	60.4	52.9	53.6
No barriers to general business activities or performance		50.9	39.2	39.6	47.1	46.4
(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, insect plague and compliance with water restrictions.

Overall, 54% of businesses reported at least one barrier that significantly hampered their general business activities or performance. The most reported factor hampering general business activities or performance was lower profit margins to remain competitive, at 24%. Lower profit margins to remain competitive was the most commonly reported barrier significantly hampering general business activities or performance for businesses across all employment size ranges.

At industry level, businesses within Manufacturing were the most likely to report at least one barrier to general business activities or performance, at 67%. Lack of skilled persons within the labour market as a barrier to general business activity was reported by one in five businesses within the Construction industry.

Innovation-active businesses (25%) were almost twice as likely to report lack of skilled persons in any location as a barrier to general business activities than non innovation-active businesses (13%).