The NSW Innovation and Productivity Council (IPC) released a first-time report on the economic impact that different businesses sizes have when measured against key indicators like numbers of jobs created, profitability and innovation.
“This report will help us develop a better picture of employing businesses and contribute to a greater understanding of NSW’s economic potential. It provides a useful resource for any future policy development relating to business,” he told InnovationAus.com.
“The Innovation and Productivity Council also encourages the business community and other interested stakeholders to use this report to stimulate discussions around the growth and contributions of all business sizes, particularly those that employ people, and their innovation activity and productivity in the NSW economy.”
The report found that small businesses with 19 or fewer full-time employees account for 94 per cent of all employing businesses in NSW. The same group also create 28 per cent of all jobs and make 37 per cent of all profits, despite contributing only 9 per cent of turnover.
IPC also examined the innovation levels within each business size. It found that only 36 per cent of micro businesses with one to four full-time employees were innovating, compared with 57 per cent of other small businesses with five to 19 full-time employees.
Innovation activities were slightly higher for medium businesses with 20 to 199 full-time employees, with 61 per cent were carrying out innovation activities, and large businesses with 200 or more full-time employees were recorded as the most innovation-active with 70 per cent.
At the same time, unsurprisingly large businesses were the top investors in research and development, having spent $9.5 billion in 2015-16.
The report also showed that 72 per cent of large businesses had a written business strategy and 86 per cent rely on predictive analytics for business decision-making.
IPC also uncovered that the biggest barrier to innovation for medium and large businesses was the lack of skilled persons. Meanwhile, for small businesses it was the lack of additional funding.
Collaboration was weak across the board, the report said. Just under a third (28 per cent) of large businesses were involved in a collaborative arrangement.