Chapter OverviewBusiness Innovation

Some of the data presented in this chapter was collected prior to the COVID-19 pandemic. Pending further updates, the COVID-19 page summarises some of the impacts of COVID-19 on Australian businesses during the first year of the pandemic.

The Australian economy is in transition. Once a nation that relied heavily on its agricultural exports and manufacturing, Australia is moving towards more digitally-enabled, service-oriented industries, on the back of its strength in mining. As the global economy becomes more integrated, the relative advantages of businesses and regions are changing in terms of trade and investment patterns. And with continuing technological advances, businesses and consumers are also changing their behaviours. Innovation in various forms plays a central role in this process.

Australian businesses have been innovating more than ever and reaping the rewards. The number of innovation-active businesses has steadily increased over the last 10 years, with reported benefits ranging from increased revenue to improved customer service and reduction in costs. Australian businesses generally tend to opt for adapting innovations developed by other parties, rather than introducing more novel kinds. They report barriers to undertaking innovation activity such as lack of skills and access to funds. New technologies continue to re-define what is traded, in turn presenting new export opportunities.

Digital technology is revolutionising business. A growing number of businesses use online services for managing finances, sharing information, staff training and other business activities. Social media usage has grown rapidly with more and more firms using it as a new channel for marketing, communication and recruitment. Access to reliable digital infrastructure, including mobile internet and high-speed broadband, is considered crucial as more Australian businesses introduce formal management practices to complement their substantial ICT investments. Against this backdrop, globalisation has accelerated the spread of new technologies and services, as well as new players with connections to international markets.[7]