What Australian businesses count as innovation, from micro firms to large firms

One measure includes projects that have yet to launch

A business is innovation-active when it introduced, was developing or abandoned an innovation. The narrower innovating measure requires an introduction during the reference period. Among large businesses 71% were active and 57% introduced something. Among micro businesses the corresponding shares were 39% and 32%. Source 1 Source 2

Process changes account for much of the size gap

Large businesses were 27 percentage points ahead of micro businesses on introducing processes, 48% to 21%. The corresponding gap for goods and services was 10 points, 31% to 21%. These categories can overlap because one business can introduce both. Source 1

Novelty can be local to the business

The ABS survey distinguishes new-to-business innovations from innovations that are also new to an industry, Australia or the world. An internal change to an existing process can therefore qualify. The survey addresses the adoption of new ways to operate as well as the introduction of new products. Source 1 Source 2

The new survey window affects comparisons

ABS moved from a two-year innovation reference period to a one-year period for 2024-25 and advised caution in comparison with 2020-21 and 2022-23. A project may take more than a year to move from development to introduction. The size comparison here uses groups observed under the same reference period. Source 1 Source 2

Sources

• ABS Characteristics of Australian Business, 2024-25
• ABS Business Characteristics Survey methodology