Business Innovation1.3 Benefits of Innovation
1.3.1 Benefits of introduced innovation
Most Australian innovation-active businesses (89.4 per cent in 2018–19) report having reaped some kind of benefit from innovation. Improved customer service and Increased revenue have been the most frequently reported benefits over the period from 2010–11 to 2018–19. In responding to this survey question, innovation-active businesses could identify more than one type of benefit. In each iteration of the survey, roughly a quarter to a third of businesses say that it is Too early to measure the benefits of innovation for the given reference period of one financial year. This suggests that at least some are pursuing longer-term investments.[28] In addition to these direct benefits, innovation often provides spillover benefits that accrue to local industries, communities and the rest of society.
1.3.2 Business performance by innovation status
Compared to Australian businesses that do not innovate, a notably higher proportion of innovation-active businesses consistently report increased sales, profitability, and productivity, as well as other growth-related performance measures. In 2019–20, differences between innovation-active and non-innovation-active were particularly pronounced in terms of increased IT spending, productivity and product range.[29] Furthermore, the positive impact of innovation gets stronger when businesses innovate more frequently. Persistent innovators significantly outperform other businesses in terms of sales, value added, employment and profit growth.[30]
1.3.3 Employment, productivity and sales outcomes, by innovation status and collaboration
Innovation-active businesses are consistently more likely to report increased employment, productivity and sales, compared to businesses that do not innovate. This is even more pronounced for innovation-active businesses that undertake collaboration compared to those that do not. The evidence is less clear about differences in the scope of collaboration in terms of collaboration partners. It appears that once businesses collaborate outside their own sector they gain advantages, irrespective of whether their collaboration partners were from multiple other sectors or just one. Innovation-active businesses that collaborate internationally do, however, tend to report better outcomes more often than other collaborators but the difference is only marginal and may not be statistically significant.[31]
Footnotes
[28] ABS, Characteristics of Australian Business, Cat. No. 8129.0, Cat. No. 8158.0, Cat. No. 8166.0, Cat. No. 8167.0 and ABS.Stat
[29] ABS, Characteristics of Australian Business, Cat. No. 8129.0, Cat. No. 8158.0, Cat. No. 8166.0, Cat. No. 8167.0 and ABS.Stat
[30] Department of Industry, Innovation and Science (2016) Australian Innovation System Report 2016, Office of the Chief Economist
[31] Customised ABS data commissioned by the Department of Industry, Innovation and Science