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Different perspectives on barriers to innovation

Many factors can limit innovation activity, or stop businesses from innovating at all. This chapter looks at factors that businesses cited as hampering innovation in 2011, and explores the differences in these factors by business size and industry.

  • The biggest barrier to innovation was the cost to develop or introduce innovations.
  • Barriers differed between industries.
  • Innovators and non-innovators perceived different barriers.

Please see detailed tables 24–26 in the Excel workbook, available from the 'available files' section, alongside this chapter.

Cost is key barrier to innovation

The Business Operations Survey asked businesses to rate the degree to which specific factors hampered their ability to innovate. These obstacles or barriers may have been reasons for not starting innovation activity at all, or for restricting innovation activity.

Figure 10.01 shows that the cost to develop or introduce innovation was the most significant factor limiting businesses' ability to innovate (21 percent reported it hampered them to a high degree and 21 percent to a medium degree), followed by lack of management resources (14 percent to a high degree and 20 percent to a medium degree).

Figure 10.01
Graph, Barriers to innovation, last two financial years at August 2011.  
Factors that businesses reported as not hampering their ability to innovate were:

  • access to intellectual property (82 percent said this was not a barrier)
  • lack of cooperation with other businesses (73 percent)
  • government regulation (68 percent) 
  • lack of information (63 percent).

Results were similar in 2009 across most categories.

Picture of barriers varies for different industries

Some factors affected certain industries more than others. For example, government regulation hampered a high proportion of businesses in the education industry (23 percent), but a low proportion in the rental, hiring, and real estate services industry (2 percent); and the professional, scientific, and technical services industry (2 percent). This difference may be explained by government regulations affecting operations in some industries more than others.

Other factors affected business sizes differently. For example, 15 percent of smaller businesses (6–49 employees) saw lack of management resources as hampering innovation to a high degree, compared with 9 percent of larger businesses (50+ employees).

Innovators have different perception of barriers

While many factors can limit a business's innovation, to get a more detailed picture of innovation we need to look at how these factors relate to each other.

For 33 percent of all businesses, no factors hampered their ability to innovate. However, 50 percent of non-innovators had at least one barrier, compared with 86 percent of innovators. This suggests barriers to innovation were perceived differently. Businesses that innovated were aware of more barriers to innovation – because they were involved in innovation. But businesses that did not innovate might not perceive the same factors as barriers – since they were not innovating.

Table 10.01

Barriers to innovation
Last financial year at August 2011

  Business type(1) 
Non-innovator Innovator  All businesses
No factors hampered the business 50 14  33
At least one hampering factor 50  86 67
All factors hampered:  
   to a high degree 0  1 0
   to a medium degree 1  0 1
   to a low degree 1  1 1
Mixture of hampering factors 48   85  65
1. For more information on the businesses included, see chapter 14 'Information about the survey'.
2. Percentages are of businesses in each business type.
Note: All counts (not percentages) in this survey were randomly rounded to base 3 to protect confidentiality. Due to rounding, some figures may not sum to totals.
Source: Statistics New Zealand


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