Businesses that pursued innovation are more than twice as likely to improve their productivity, than those that do not, according to figures released Thursday by the Australian Bureau of Statistics (ABS).
"Productivity increased for a third of businesses that took steps to innovate during 2011-12," said Andrew Puljic from the Australian Bureau of Statistics in a press release.
On the other hand, "only 14 per cent of non innovation-active businesses reported any increase in productivity," he said.
The data released also shows that in the year ended June 30, 2012, up to 18 per cent of all businesses sought debt or equity finance. Of those businesses seeking debt finance, 88 per cent reported that it had been obtained.
ABS figures are based on innovation-activity that businesses have undertaken or are working on. Innovative activity includes new or significantly improved goods or services, operational processes, organisational/managerial processes, marketing methods.
Businesses with innovative activity were twice as likely to seek finance as non innovation-active businesses (24 per cent compared with 12 percent) the release said.
Irrespective of whether they were innovating, the most common reason for seeking finance was to maintain the short-term cash flow of the business.
Importantly, Australia slipped from the top 20 for the first time in the Global Competitiveness Report 2013-14 ranking released recently by the World Economic Forum. However, interestingly the Competitiveness Index reported Australia and New Zealand as two of the 37 innovation-driven economies. The latest figures by ABS further supplements the importance of innovation for increased productivity and competitiveness.
"Businesses with innovative activity were also more likely to have reported an increase in the total number of new jobs or positions within the business, along with an increase in business profitability." said Mr Puljic
"Innovation in a business can take a number of different forms - it can be the introduction, development or abandonment of a new or significantly improved product or service, it can be improvements in the way a business manages or runs itself, or it can simply be a better way of marketing its products," he said.
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