Australia Yearbook - 2001

Chapter 25—Science and innovation 861
25.16 OBJECTIVES OF UNDERTAKING TECHNOLOGICAL INNOVATION—1996–97
Importance of the objective
Not applicable Not important
Important
Objective
%
%
%
Reducing costs 4.1 3.9 92.0
Maximising profits *4.4 *3.7 91.9
Improving productivity 6.2 4.7 89.2
Responsiveness to customers 6.0 6.3 87.7
Improving quality/speed of service 6.9 5.5 87.6
Increasing market share 7.3 8.1 84.6
Being at industry forefront 11.7 8.3 79.9
Expanding product range 10.7 10.3 79.1
Improving staff safety/working conditions 11.2 10.1 78.7
Establishing a new market 10.8 11.5 77.7
Being environmentally aware 16.0 14.4 69.6
Meeting Government standards/regulations 13.4 17.2 69.5
Seeking/expanding export opportunities 31.8 17.7 50.6
Source: Innovation in Manufacturing, Australia (8116.0).
In 1996–97, the rate of technological innovation
was lower than in 1993–94, when almost
one-third of manufacturing businesses undertook
technological innovation. This decline was largely
due to the drop in the rate of small businesses
undertaking technological innovation from
28% in 1993–94 to 22% in 1996–97.
Even though only just over a quarter of
manufacturing businesses undertook
technological innovation, because of the higher
proportion of larger businesses, innovative
businesses in total contributed about two-thirds
of the total employment and three-quarters of the
total turnover of all manufacturing businesses.
Almost two-thirds of large businesses had staff
dedicated to innovation work, while less than
one-quarter of small businesses had staff
dedicated to this work. Large businesses were
almost three times more likely than small
businesses to take staff off-line to undertake
innovation work.
Objectives of undertaking
technological innovation
As table 25.16 shows, most businesses (around
90%) undertaking technological innovation rated
‘reducing costs’, ‘maximising profits’ and
‘improving productivity’ as important objectives
of undertaking technological innovation. Most of
the objectives listed in the table were considered
important by a large majority of businesses.
Costs of undertaking innovation
The total amount spent by manufacturing
businesses on technological innovation during
1996–97 was estimated at $3.9b. About half of this
was spent on research and development ($2.0b).
A further $1.1b was spent on tooling-up,
industrial engineering and start up.
On average, businesses with expenditure on
innovation activities spent $296,100 on
innovation, or $6,300 per employee. As would be
expected, expenditure on innovation increased
with size of business; expenditure ranged from an
average of $61,000 for small businesses to
$4.1m for large businesses. The average
innovation expenditure per employee showed
the reverse trend, ranging from $8,900 for small
businesses to $5,600 for large businesses.
Similarly, the ratio of innovation expenditure to
the total turnover of the business fell as size of
business increased. In the case of small
businesses undertaking innovation expenditure,
7% of their total turnover on average was spent
on innovative activities, while large businesses
spent only 2% of their total turnover on such
activities (table 25.17).
25.17 COSTS OF UNDERTAKING
TECHNOLOGICAL INNOVATION(a)—1996–97
Turnover per
employee
Innovation
costs per
employee
Innovation
costs as a
proportion of
turnover
Business size $’000 $’000
%
Small 132 9 7
Medium 185 7 4
Large 266 6 2
All 238 6 3
(a) Restricted to businesses with innovation expenditure.
Source: Innovation in Manufacturing, Australia (8116.0).