By the numbers: selling old stuff, the old way

Latest figures show that Australian businesses are slow when it comes to introducing new products and adapting to new ways of selling things.

It's long been clear that Australia suffers from branch office syndrome; we simply take products built for larger markets, then find ingenious ways to tell the local market that this is exactly what they want. That probably explains why such a small proportion of Australian businesses are using technology to introduce innovative new goods and services.

Figures from the Australian Bureau of Statistics show the extent of this problem. The "Summary of IT Use and Innovation" defines innovation as the introduction of anything new or greatly improved (whether its products or processes), set to very specific international guidelines.

It shows how the wholesale, retail, telco and media sectors lead the way, as far as introducing new or significantly improved goods or services is concerned (see graph). Even so, less than a third have such products in the marketplace, many are still a work in progress and more than 4 per cent of retail and wholesale businesses have abandoned their attempts.

Okay, it's early days. It's not bad news, so long as there's some progress, right? Sadly, though, there is a trend across all business sectors to be doing less with product innovation — not more. For example, in banking and finance, for which localisation of products could be achievable, just 16 per cent introduced anything new or improved last year (2010-11), compared to 23 per cent a year earlier. Telcos, media and information businesses are also going backwards, at a time that they desperately need to be coming up with new offerings — their innovation rate for goods and services has slipped from 25 per cent to 19.5 per cent.

Credit: Phil Dobbie/ZDNet Australia

The banks have been a little quicker to introduce innovative ways to market their products: a third have new processes in place or they are working on them. Retail, as you'd expect, is even further ahead: a quarter have new innovative marketing processes in place, with a further 15 per cent saying implementation of the processes are underway.

Some sectors just seen to be exempt from innovation. Mining, so crucial to Australia's livelihood, might find it difficult to introduce innovative products — a rock will always be a rock — but only 9 per cent of businesses have done anything exciting in the realm of marketing. Logistics, a sector that you'd assume would be going through a period of positive transformation, thanks to IT advancements, lags on both products (7 per cent) and marketing (6 per cent).

The silver lining in these figures is that the size of a business has little influence on the potential for innovation. When it comes to introducing innovative goods or services, a business with 20 to 199 employees is just as likely to have done it (27 per cent) as a 200+ company. And when it comes to marketing innovation, there's marginal difference between the biggest of companies and those employing just a handful of people.


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