Australian firms fall short on R&D

04 July 2012

SYDNEY: Less than half of Australian firms pursued innovation programmes over the last financial year, with activity in this area actually declining.

The Australian Bureau of Statistics, the government body, polled 9,000 businesses, and found 39.1% engaged in some kind of "innovative activity" in the 2010/11 period, down from 43.8% on an annual basis.

Of these firms, 18.9% updated managerial or business processes, 17.3% rolled out products, 16.8% adopted fresh marketing methods and 16.4% implemented organisational changes.

More specifically, 33.3% of respondents successfully introduced their innovation ideas, while 19.6% had plans that were still in development. But 5.7% had abandoned such efforts.

By size, some 65.9% of large companies, with at least 200 staff, had committed to R&D, falling to 61.9% of operators boasting between 20 and 199 employees, and fewer than half of their even smaller peers.

The failure rate was slightly stronger than the norm among the biggest enterprises on 7.3%, 53.7% of which had completed R&D schemes. These totals hit 5.7% and 56% for mid-tier firms with headcounts of no more than 200 employees.

In terms of category, wholesale traders were the most likely to have launched innovation programmes, on 58%. This total declined to around 50% of retailers, and a similar number of information technology and telecoms providers.

Members of the transport, postal and warehousing sectors posted the lowest scores here, on 21%. This figure also fell below 30% for the construction industry, the second weakest return.

Overall, the biggest corporations demonstrated the highest interest in pursuing organisational, operational and managerial innovation, with 37% of relevant firms doing so. Companies with 20–199 staff registered 32.3% here.

For marketing, 24.8% of the largest brand owners questioned embraced new tools in this field, hitting 28.1% for their mid-tier counterparts. Around 27% of both these cohorts rolled out new products.

More broadly, the analysis showed that Australian businesses received A$189bn in online orders in the 2010/11 financial year, a 32% improvement compared with the previous 12 months.

Another 43% of companies had a presence on the net, up by three percentage points in an annual basis. The number of players generating orders via this route more than doubled from 13% to 28%.

Data sourced from Australian Bureau of Statistics; additional content by Warc staff