Drivers of Innovation, Dynamics of Innovation Dimension and Performance: The Case of Small of Food Businesses in Australia

Abstract

This dissertation investigates the dynamic relationships among the key drivers of innovation, innovation persistence and business performance within small businesses in the food industry in Australia. Using a panel of business-level data collected through the ABS Business Characteristics Survey (2006/07 to 2010/11 Australian Bureau of Statistics’ Business Longitudinal Database Confidential Unit Record File), this dissertation provides evidence on: (1) the factors driving small food businesses to innovate in any of the four innovation dimensions—goods and services, organisational and managerial processes, operational processes and marketing methods; (2) the degree and dynamics of innovation persistence; and (3) their impacts on four business performance measures—gross output, gross value-added, labour productivity and productivity dispersion. The author employs several complex dynamic panel data modelling techniques with bootstrapping and other econometric procedures in the empirical analyses. The dissertation reveals significant, positive and direct associations among the key drivers of business innovation, innovation persistence, business growth performance and productivity dispersion within small food businesses in Australia. The empirical results support the Australian government’s innovation agenda and initiatives which would motivate and trigger the small food businesses in Australia to start and/or continue to engage in innovation through development of new products or services, new operational processes, new marketing strategies and methods, and new organisational and managerial processes, for job creation, global competitiveness, and income growth.