The Australian Government's Innovation Report

CHAPTER 4: Australian Innovation Scorecard
The Australian Innovation Scorecard 2006 is the third in a biennial series designed to provide a snapshot of Australia’s
innovation performance relative to other OECD economies. The previous scorecard appeared in Backing Australia’s
Ability 2004-05 – Real Results Real Jobs while the first scorecard appeared in Backing Australia’s Ability 2002-03
– Real Results Real Jobs.
In the recent Australian Bureau of Statistics (ABS) survey of innovation in Australia, the results of which are
published in Innovation in Australian Business 2001-03 (cat no. 8158.0), the term innovation was defined as the process
of developing, introducing and implementing a new or significantly improved good, service or process. Innovation
can be considered as the process whereby ideas are transformed through economic activity into sustainable,
value-creating outcomes, the emphasis being on the process of converting ideas into economic outcomes.
The indicators
The innovation indicators used in this scorecard have been chosen to reflect the wide range of innovation activities
that are undertaken in Australia and overseas and to allow benchmarking of Australia’s performance against
other OECD countries. The indicators stay as close as possible to those used in previous scorecards but some
changes have been made to accommodate new data and to deal with areas where data are no longer available. The
changes mean the 2006 scorecard uses 18 indicators, three more than were used in previous scorecards.
Three additional indicators, which have become available as a result of the ABS innovation survey mentioned above,
are being used for the first time in this scorecard. Two of these new indicators – the percentage of turnover
accounted for by innovations in new goods and services, and the proportion of businesses that are innovating
– measure market outcomes from innovation. The third indicator shows the percentage of businesses which,
having introduced new or significantly improved goods, services or processes, have also engaged in collaboration
activity. This indicator points to the link between collaboration and innovation. Because of data limitations,
comparisons for these three indicators can only be made with the European Union (EU) members of the OECD.
Two other new indicators included in this scorecard are the number of broadband subscribers per one
thousand of the population (data for which are presented for 2006, 2004 and 2003), and the percentage of
businesses using the internet to sell goods and services. Two indicators used in previous scorecards – the share
of foreign affiliates in manufacturing R&D, and expenditure on innovation as a share of total sales in
manufacturing – have been omitted because recent Australian data are not available. The methodology for the
science graduates indicator returns to its original 2002 scorecard form, having been changed in the 2004
scorecard because the relevant data were not then available.
As was the case with previous scorecards, the indicators are grouped into six categories:
• knowledge creation – the ability to generate new ideas and technologies;
• human resources – the capacity of the labour force to transform these ideas and technologies into
tangible economic outcomes;
• finance – the pool of funds available to commercialise ideas and technologies;
• knowledge diffusion – the capacity to transfer new ideas and technologies throughout the economy;
• international collaboration – the international linkages of Australia’s innovation system; and
• market outcomes – economic returns on the investment in innovation.
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