In 2011, the ABS released a research paper – Business Innovation and the Use of Information and Communications Technology by Jessica Todhunter and Ruel Abello – investigating the relationship between Information and Communication Technology (ICT) use by businesses and innovation activity. This paper replicates that study using more recent firm level data from the ABS Business Longitudinal Database (BLD) and the Business Characteristics Survey (BCS).
A similar approach to the 2011 study was used to summarise the diverse types of ICT usage (broadband internet connection, business web presence, use of e-commerce) into a single ordered categorical variable, to determine a measure of a firm’s intensity of ICT use. This ICT intensity ‘index’ reflects the business’ highest degree of ICT sophistication and is used in the analysis to determine its relationship to innovation. The results of this analysis again show businesses which use ICT more intensely are more likely to undertake: innovation of all types, more types of innovation, more novel innovations; and are more likely to develop their innovations in-house.