Australia’s small and medium-sized businesses rank highly, an impressive 5th in the OECD, when it comes to innovation, according to a report by Australia’s Chief Economist.
Large companies – our main exporters – are not “innovation leaders”, however, and rank only 21st in the OECD. Innovation was defined as the implementation of a new or significantly improved product or service, process or business practice.
The report finds that Australian businesses of all sizes are performing poorly on new to market innovation, with the situation continuing to decline.
At the same time, the level of collaboration between research organisations and industry in Australia is one of the lowest in the OECD, the Australian Innovation System Report 2014 says. From 2008-10, Australian SMEs ranked 29 out of 30 OECD countries for industry-research collaboration, while our large firms ranked in 30th position, behind countries including Finland, Korea, Spain, Estonia and Mexico.
The report found:
- Australia’s SMEs ranked fifth for innovation in the OECD, proving a boon for domestic competitiveness
- Large businesses, which do most of Australia’s exporting, ranked only 21st in the OECD in terms of innovation
- 42 per cent of employing businesses were innovative in 2012-13. In that same year those businesses accounted for a 70 per cent share of the Australian economy’s employment, capital expenditure and business income
- Australia has several – mostly resource – industries that are internationally competitive and have high innovation capability. However the number is low compared to similar countries
- Businesses that innovate are 46 per cent more likely to report increased income
- The more a business innovates, the more likely it is to be exporting.
To read the full report, click here.