New findings on how intellectual property (IP) impacts the innovation system

The annual Australian Innovation System (AIS) Report was released on 30 November 2016. The report presents information about the state and performance of Australia’s innovation system, including some new findings relating to intellectual property (IP).

In the foreword, Chief Economist of the Department of Industry, Innovation and Science, Mark Cully, confirms innovation systems are essential to the progression of our society: ‘knowledge is the basis for what drives growth in our living standards and wellbeing…innovation systems transmit and diffuse knowledge.’

‘A well-functioning innovation system requires the participation of a range of actors across the spectrum of business, government, academia and other parts of the community,’ he added.

IP Australia is one of these actors.

The report helps us understand how our role in the innovation system has been effective and allows us to develop ways to improve our service to the innovation community.

IP’s role in the Australian innovation system

Here are some key findings relating to IP Australia:

  • investment in IP and other forms of intangible capital have been shown to facilitate business growth and spur productivity improvements
  • businesses that innovate ten or more times per year are almost twice as likely to use some type of IP protection compared to businesses that innovate less than three times a year
  • innovative exports are twice as likely to invest in IP compared to non-innovative exports
  • improving IP protection and enforcement in destination countries increases Australia’s exports to those countries
  • there is a significant correlation between IP Protection, R&D (research and development), and new-to-market innovation around the world
  • applications for patents, designs, trademarks and plant breeder’s rights all increased in 2015
    • 10 per cent of innovation-active Australian businesses applied for patents (ranked at 24 out of 26 countries)
    • 9 per cent registered a design (ranked 21 out of 23 countries)
    • 29 per cent registered a trademark (ranked 15 out of 24 countries)
    • 31 per cent indicated they were using trade secrets (ranked at 18 out of 22 countries).

Holistically, the report provided us with some deep insights about Australia’s innovation community and expanded our knowledge of the economic value of innovation.

The Australian innovation system

Here are some key findings on the Australian innovation system as a whole:

  • 50 per cent of long-term economic growth in Organisation for Economic Co-operation and Development (OECD) countries can be attributed to innovation and this percentage is expected to grow
  • Australia ranks fifth out of 30 OECD countries in terms of overall proportion of innovation-active businesses
  • total expenditure on innovation by Australian businesses in 2014-15 was between $26 billion and $30 billion
  • income from new or significantly improved goods and services was 7.2 per cent of total sales in Australia compared to an average of 19.1 per cent of total sales in the top five OECD countries
  • innovation-active businesses in Australia make up 45 per cent of all employing businesses but contribute to over 60 per cent of sales and employment
  • compared to non-innovation-active businesses, innovation-active businesses in Australia are:
    • 40 per cent more likely to increase income and profitability
    • twice as likely to export
    • two to three times more likely to report increased productivity, employment and training
  • persistent innovators significantly outgrow other businesses in terms of sales, value added, employment and profit growth:
    • 18 times the value added growth of intermittent innovators
    • four times the employment growth of regular innovators
    • five times the sales growth of regular innovators.

More information

  • Read the full AIS report to learn more about the Australian innovation system.
  • Not sure what IP protection covers? Have a look at our guide to the types of IP.
  • To see how Australians are protecting their IP see this interactive National Innovation Map.
Published: 
30 November 2016

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