Productivity growth is about harnessing our ingenuity to do more with the resources we already have — working smarter, not harder — and investing in the latest technology and the best ideas. The Productivity Inquiry focuses on the enablers of productivity growth in a modern, market-based, service-oriented world.

Between 1 and 2 per cent of Australian businesses innovate in ways that are new to the world. Such leading innovations promote productivity but are already the focus of industry policy. What of the neglected 98 per cent for which the potential for, and desirability of, new-to-the-world innovation is weaker? Much productivity improvement involves the wider adoption of established, even dated, technologies and practices among those millions of businesses.

This third interim report explores how innovation can be encouraged across the vast majority of Australian businesses and in the government sector to improve Australia's productivity.