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Latest release

Business Use of Information Technology methodology

Released
20/07/2017
Next release Unknown
First release

Explanatory notes

1 This release presents detailed findings on the incidence of use of Information Technology (IT) in Australian business as collected by the 2015-16 Business Characteristics Survey (BCS).

2 The BCS is an annual survey and it is the vehicle for the ABS' Integrated Business Characteristics Strategy (IBCS). The strategy integrates the collection and quality assurance of data required for input into both longitudinal microdata product (including the ABS' Business Characteristic Longitudinal Statistics (BCLS)) and the production of point in time estimates for use of IT; innovation; and a broad range of other non-financial characteristics.

3 A key part of the IBCS is the production of annual use of Information Technology and innovation indicators, with a more detailed set of items for each of these topics collected every second year (i.e. in alternating years). The 2015-16 BCS collected detailed information relating to the use of Information Technology by Australian businesses.

Statistical units used

4 The Economics Unit Model is used by the ABS to determine the structure of Australian businesses and other organisations. The model consists of:

The Enterprise Group (EG)
Legal Entities (LEs)
Type of Activity Units (TAUs)
Location Units

5 Businesses contributing to the estimates in this publication are sourced from the ABS Business Register (ABSBR), and are selected at either the Australian Business Number (ABN) unit or the Type of Activity Unit (TAU) level, as described below.

6 In the BCS the statistical unit used to represent the majority of businesses, and for which statistics are reported, is the ABN unit. The ABN unit is the business unit which has registered for an ABN, and thus appears on the ATO administered Australian Business Register (ABR). These units are suitable for ABS statistical needs when the business is simple in structure, and are generally referred to as the non-profiled population. In these instances, one ABN equates to one statistical unit.

7 For more significant and diverse businesses where the ABN unit is not suitable for ABS statistical needs, the ABS maintains its own unit structure through direct contact with the business, and the statistical unit used is the TAU. A TAU comprises one or more business entities, sub-entities or branches of a business entity within an Enterprise Group that can report production and employment activities. When a minimum set of data items is available, a TAU is created which covers all the operations within an industry subdivision (and the TAU is classified to the relevant subdivision of the Australian and New Zealand Standard Industrial Classification (ANZSIC)). These units are generally referred to as the profiled population.

Classification of units

8 ANZSIC is used to classify the industry in which the TAU or ABN has productive activity. Further information on this classification can be found in Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 (Revision 2.0) (cat. no. 1292.0).

9 SISCA provides a framework for dividing the Australian economy into institutional sectors. Further information on this classification can be found in Standard Economic Sector Classifications of Australia (SESCA), 2008 (Version 1.1) (cat. no. 1218.0).

Scope and coverage

10 The scope of the estimates in this publication consists of all employing business entities in the Australian economy, except for:

SISCA 3000 General government
SISCA 6000 Rest of the world
ANZSIC06 Division O Public administration and safety
ANZSIC06 Division P Education and training
ANZSIC06 Groups 624 (Financial asset investing) and 633 (Superannuation funds)
ANZSIC06 Groups 954 (Religious services) and 955 (Civic, professional and other interest group services)
ANZSIC06 Subdivision 96 Private households employing staff

11 The frame for the BCS is a subset of the ABSBR and includes employing businesses only. These are defined as those businesses which register for the ATO's Pay As You Go Withholding (PAYGW) scheme. It is not unusual for some of these 'employing businesses' to have zero employment at various times during the reporting period. The frame is updated quarterly to take account of new businesses, businesses which have ceased employing, changes in employment levels, changes in industry and other general business changes. Businesses which have ceased employing are identified when the ATO cancels their ABN and/or PAYGW registration. In addition, businesses with less than 50 employees, which did not remit under the PAYGW scheme in each of the previous five quarters, are removed from the frame. The estimates in this publication include an allowance for the time it takes a newly registered business to be included in the survey frame.

Survey methodology

12 The sample design for this survey is complex due to serving dual purposes: collection of characteristics data for the ABS' BCLS; and production of point in time estimates. While there are scope differences between the BCLS and point in time estimates, the intention is to maximise the number of businesses selected for which data collected can contribute to both purposes. More information about releases for the BCLS is provided in Explanatory Note 27.

13 Collection of data included in this release was undertaken based on a random sample of approximately 6,750 businesses via online forms or mail-out questionnaire. The sample was stratified by industry and an employment-based size indicator. All businesses on the ABSBR identified as having 300 or more employees were included in the sample. The 2015-16 BCS was dispatched in late October 2016.

14 As in previous years, the sample design of the 2015-16 BCS does not include state or territory as part of stratification design.

Reference period

15 The reference period for most of the characteristics items included in the 2015-16 Business Characteristics Survey is during the year ended 30 June 2016 or as at 30 June 2016. Financial statistics relates to the most recent financial year ended on or before 30 September 2016.

Defining "internet commerce"

16 In the BCS, the ABS uses the Organisation for Economic Co-operation and Development (OECD) narrow definition of e-commerce transactions when collecting data on internet orders and internet income. The definition states that "an internet transaction is the sale or purchase of goods or services, whether between businesses, households, individuals, governments, and other public or private organisations, conducted over the internet. The goods and services are ordered over the internet, but the payment and the ultimate delivery of the good or service may be conducted on or off-line" (i.e. the commitment to purchase is made over the internet). In Australia, orders placed or received via manually typed email are included.

17 Internet income is defined as income resulting from goods and services ordered over the internet where the commitment to purchase is via the internet. Excluded from these measures are orders, payments or transactions for which the commitment has been made using other arrangements. The ABS collects these data by asking businesses to estimate what percentage of their income from sales of goods or services can be attributed to orders received via the internet. The estimated value of internet income is derived by applying the percentage to business income from sales of goods or services. This method of collecting internet income has been put in place to address reporting errors previously observed when the actual dollar figure was requested.

18 The definition of internet income used in BCS, does not align with the ABS Australian System of National Accounts (SNA). The internet income estimate in BCS is generally higher as this value is derived from the proportion of business income due to orders received via the internet. This includes all business to business, and business to consumer orders.

Business counts in this release and comparability with others published by the ABS

19 Estimates of the number of businesses operating in Australia can be derived from a number of sources within the ABS. They may relate to a particular point in time or may be presented as an average annual figure. However, these estimates will not always show the same results. Variations will occur because of differing data sources, differing scope and coverage definitions between surveys, as well as variations due to sampling and non-sampling error. More information about business counts can be found in the Information Paper: A Statistical View of Counts of Businesses in Australia, Jun 2005 (cat. no. 8162.0).

20 The BCS is not designed to provide high quality estimates of numbers of businesses for any of the output classifications (for example, employment size or industry) and the number of businesses in this publication are only included to provide contextual information for the user. The estimate of the total number of businesses may not equal to the sum of each employment size range due to rounding of business counts to the nearest thousand. A more robust source of counts of Australian businesses is available from Counts of Australian Businesses, including Entries and Exits, (cat. no. 8165.0).

Output classifications

21 For output purposes, businesses are classified to employment size ranges based on actual data reported in the survey. For industry output, the classification is drawn from information held about the business on the ABSBR.

Availability of state/territory outputs

22 As indicated in Explanatory Note 14, the sample is designed to produce efficient estimates for industry and employment size, therefore it does not provide quality estimates for states/territories. As estimates may not reflect change over time for a selected state/territory or adequately enable comparison between states/territories, they are not available.

23 Upcoming ABS statistical releases from the 2015-16 BCS collection family include:

Selected Characteristics of Australian Business (cat. no. 8167.0). This release will include summary characteristics statistics for a selection of topics including business structure and arrangements, performance measures, barriers to innovation and general business activities or performance, government financial assistance, finance sought, markets and competition, innovation rates and IT usage. Online content will include tables and graphs with associated commentary. Detailed statistics (including some output cross-classified by business size, industry and innovator status) will be output as data cubes. This release is scheduled for 17 August 2017.

Management and Organisational Capabilities of Australian Business (cat. no. 8172.0). This release will include statistics on a selection of topics including: key performance indicators; use of data in decision making; strategic plans; skills; supply chain; environmental management; and demographic information related to the principal manager. Statistics are cross classified, where possible, by innovator status; business size (based on employment); and ANZSIC Subdivision. This release is scheduled for 25 August 2017.

24 The most recent issue of ABS releases related to demography of Australian business is:

Counts of Australian Businesses, including Entries and Exits (cat. no. 8165.0).

25 The most recent issues of other ABS releases related to innovation in business in Australia are:

Innovation in Australian Business (cat. no. 8158.0)
Research and Experimental Development, Businesses, Australia, (cat. no. 8104.0)
Research and Experimental Development, Higher Education Organisations, Australia, (cat. no. 8111.0)
Research and Experimental Development, Government and Private Non-Profit Organisations, Australia (cat. no. 8109.0)

26 The most recent issue of ABS releases related to IT Use and Innovation in Australian Business are:

Summary of IT Use and Innovation in Australian Business (cat. no. 8166.0)
Internet Activity, Australia, December (cat. no. 8153.0)

Business characteristics longitudinal statistics Confidential Unit Record File

27 The primary outputs for the BCLS are Confidentialised Unit Record Files (CURFs). The BCLS design is comprised of panels (or waves) with each panel representing the entire population of in-scope small and medium businesses at the time of initialisation. Each panel is surveyed for five years. The most recent edition of the BCLS CURF was released 20 July 2016 and contained data for the five year period ended 30 June 2014. The CURF is available via the Remote Access Data Laboratory which can be accessed via the ABS website Microdata: Business Characteristics, Australia (cat. no. 8168.0.55.001).

Rounding and other adjustments

28 Estimates of proportions have been calculated using unrounded figures, but are shown in the tables rounded to one tenth of a percentage point. Where figures have been rounded, discrepancies may occur between the sum of the component items and the total. Figures presented in the commentary have been rounded to the whole percentage.

Acknowledgement

29 The ABS acknowledges the ongoing contribution made by the Department of Industry, Innovation and Science towards the conduct of the BCS and the collection of information technology statistics.

Technical note

Introduction

1 When interpreting the results of a survey, it is important to take into account factors that may affect the reliability of the estimates. Estimates in this publication are subject to both non-sampling and sampling errors.

Non-sampling errors

2 Non-sampling errors may arise as a result of errors in the reporting, recording or processing of the data and can occur even if there is a complete enumeration of the population. These errors can be introduced through inadequacies in the questionnaire, treatment of non-response, inaccurate reporting by respondents, errors in the application of survey procedures, incorrect recording of answers and errors in data capture and processing.

3 The extent to which non-sampling error affects the results of the survey is difficult to measure. Every effort is made to reduce non-sampling error by careful design and testing of the questionnaire, efficient operating procedures and systems, and the use of appropriate methodology.

4 Some of the items collected in the BCS are dynamic in nature and the concepts measured are subject to evolution and refinement over time; it is not possible to measure the impact of these changes on data quality.

5 The approach to quality assurance for the BCS aims to make the best use of Australian Bureau of Statistics (ABS) resources to meet user prioritised requirements - both in terms of data quality and timing of release. The approach specifies the level and degree to which each data item is quality assured, noting that only some of the total output from the BCS is able to be quality assured to the highest standards. Different priorities are assigned to groups of data items, with highest priority being assigned to key point in time data on business use of IT and innovation.

6 The 2015-16 BCS had a response rate of 93%.

Sampling errors

7 The difference between estimates obtained from a sample of businesses, and the estimates that would have been produced if the information had been obtained from all businesses, is called sampling error. The expected magnitude of the sampling error associated with any estimate can be estimated from the sample results. One measure of sampling error is given by the standard error (SE), which indicates the degree to which an estimate may vary from the value that would have been obtained from a full enumeration (the 'true' figure). There are about two chances in three that a sample estimate differs from the true value by less than one standard error, and about nineteen chances in twenty that the difference will be less than two standard errors.

8 The following is an example of the use of standard error on the total proportion of businesses with internet access. As presented in this release, the estimated proportion of businesses with internet access was 95.3%. The standard error of this estimate was 0.45%. There would be approximately two chances in three that a full enumeration would have given a figure in the range 94.85% to 95.75%, and 19 chances in 20 that it would be in the range of 94.4% to 96.2%.

9 In this publication, indications of sampling variability are measured by relative standard errors (RSEs). The relative standard error is a useful measure in that it provides an immediate indication of the percentage errors likely to have occurred due to sampling, and thus avoids the need to refer to the size of the estimate. Relative standard errors are shown in the Relative Standard Error table in this section. RSEs for all statistics included in this release (including data cube content) are available upon request.

10 To annotate proportion estimates, a value of 50% has been used in the calculation of RSE rather than the estimated proportion from the survey data. This avoids inconsistencies between the way very low and very high proportions are annotated. Relative standard errors for estimates in this publication have been calculated using the actual standard error and the survey estimate (referred to as x) in the following manner: RSE%(x) = (SE(x)*100)/50.

11 Using the previous example, the standard error for the estimated proportion of businesses with internet access was 0.45%. Multiplied by 100 and then divided by 50 gives an RSE calculated on this basis of 0.9%. It is these figures that appear in the table appended to this chapter.

12 For the tables in this publication, estimates with RSEs between 10% and 25% are annotated with the symbol '^'. These estimates should be used with caution as they are subject to sampling variability too high for some purposes. Estimates with RSEs between 25% and 50% are annotated with the symbol '*', indicating that the estimates should be used with caution as they are subject to sampling variability too high for most practical purposes. Estimates with an RSE greater than 50% are annotated with the symbol '**', indicating that the sampling variability causes the estimates to be considered too unreliable for general use.

13 For estimates of proportion the symbol '^' means that the estimate from full enumeration could lie more than a decile away so the estimate should be used with caution. For example a proportion estimate of 30% annotated with '^' means the full enumeration value could lie beyond the range 20% to 40%. The symbol '*' means the estimate from full enumeration could lie more than a quartile away and is subject to sampling variability too high for most practical purposes. A proportion estimate of 30% annotated with '*' means the full enumeration value could lie beyond the range 5% to 55%. Proportion estimates annotated with the symbol '**' have a sampling error that causes the estimates to be considered too unreliable for general use.

14 Readers of this release should note that most of the statistics have an RSE of less than 10%.

Relative Standard Error - business use of information technology selected indicators(a), by employment size(b), 2015-16

   0-4 persons5-19 persons20-199 persons200 or more personsTotal
   %%%%%
 Total number of businesses(c)
1.19
2.47
4.79
6.15
0.44
 Businesses with(d):     
  internet access
1.41
1.43
0.24
0.02
0.90
  web presence
3.04
3.71
4.27
4.23
2.23
  social media presence
2.54
4.11
5.18
4.92
1.87
 Businesses that:     
  placed orders via the internet
2.57
3.59
3.94
4.25
2.00
  received orders via the internet
2.37
3.50
5.40
6.51
1.93
 Internet income(e)
14.75
9.05
12.47
2.89
3.71
 Businesses with internet access which reported broadband as their main connection(d)
0.50
0.63
1.21
0.04
0.33
a. RSEs for 2015-16 are on proportions basis.
b. Proportions are of all businesses in each output category.
c. Business counts are provided for contextual information only, please refer to Methodology page 19 and 20.
d. As at the end of the reference period, 30 June 2016.
e. Refer to Methodology page 16 to 18.

Glossary

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ATM (Asynchronous Transfer Mode)

A connection based transfer system which sends information in cells of a fixed size.

Broadband

Defined by the ABS as an 'always on' internet connection with an access speed equal to or greater than 256kbps.

Cable

Broadband internet technology that uses the cable television (CATV) infrastructure. The connection uses a coaxial cable or Hybrid Fibre Coaxial (HFC) and is typically used as the 'last mile' or 'access network' technology. Cable includes Fibre to the Node (FTTN) and Fibre to the Curb (FTTC) where a coaxial cable has been used for the 'last mile'.

Cloud computing

Cloud computing refers to IT services that are used over the internet to access software, computing power or storage capacity.

Data analytics

The process of examining data sets in order to draw conclusions about the information they contain. Examples include big data or geospatial technology.

Dial-up (analog)

Connection to the internet via modem and dial-up software utilising public switched telecommunications network.

DSL (Digital Subscriber Line)

More properly referred to as xDSL as this covers several digital technologies (e.g. Asymmetric DSL or ADSL and Symmetric DSL or SDSL) for fast two-way data connections over the public switched telecommunications network.

EDI (Electronic Data Interchange)

The transfer of strictly formatted data between different computer systems or networks. Commonly used for e-commerce purposes, such as sending orders to warehouses or tracking their orders.

FTP (File Transfer Protocol)

A standard network protocol used to transfer files from one host to another.

Fixed wireless internet access

Point to point microwave link, generally building to building or tower to building which allows subscribers within the receiving building to access the Internet. Sender and receiver must be within line of sight and no more than 22 kilometres apart, although newer generations of this technology have overcome some of these obstacles. Examples of technologies included as fixed wireless are fixed WiMax, LMDS and MMDS.

Frame relay

Communications protocol used to ensure that data is delivered correctly over a packet-switching system transmitting at up to 2Mbps.

ICT (Information Communication Technology)

The integration of telecommunications, computers, software, storage, and audio-visual systems, enabling businesses to access, store, transmit, and manipulate information.

Intelligent software systems

A software system that uses Artificial Intelligence (AI) that assists a business to satisfy the goals of their clientele. Examples include Enterprise Resource Planning systems.

Internet

A world-wide public computer network. Organisations and individuals can connect their computers to this network and exchange information across a country and/or across the world. The internet provides access to a number of communication services including the World Wide Web and carries email, news, entertainment and data files.

Internet of things

The inter-networking of physical objects embedded with electronics, software, sensors, and network connectivity that enables these object to collect and exchange data. Examples include smart metering, digitally-networked physical devices or assets.

ISDN (Integrated Services Digital Network)

A digital access technique for both voice and data. It is a digital alternative to an analog public switched telephone service and carries data or voltages consisting of discrete steps or levels, as opposed to continuously variable analog data. ISDN enables digital transmission over the public switched telecommunications network.

Mobile wireless broadband

An internet connection which provides short range, high data rate connections between mobile data devices and access points connected to a network. Examples include mobile WiMAX and 3G accessed through a datacard, USB modem, tablet SIM card or any other device used to connect a computer to a cellular network (excluding a mobile handset).

Other broadband

Includes ATM and Frame Relay.

Social media presence

Social media presence includes web and mobile-based technologies which are used to turn communication into interactive dialogue among organisations, communities and individuals.

Web presence

Web presence includes a website, home page or, in the case of a presence on another entity's website, it is included providing the business has substantial control over the content. A website or home page is an electronic document that is accessed via a unique address on the World Wide Web. The document provides information in a textual, graphical or multimedia format. Web presence excludes online listings or directories.

Quality declaration

Institutional environment

The statistics presented in this release are compiled from the 2015-16 Business Characteristics Survey (BCS). The BCS provides population/cross sectional estimates for a range of business characteristics topics and themes (e.g. use of Information Technology and innovation). The survey also provides characteristics data for the Business Characteristics Longitudinal Statistics (BCLS). The BCS is conducted under the authority of the Census and Statistics Act 1905.

For information on the institutional environment of the Australian Bureau of Statistics (ABS), including the legislative obligations of the ABS, financing and governance arrangements, and mechanisms for scrutiny of ABS operations, please see ABS Institutional Environment.

Relevance

The Integrated Business Characteristics Strategy (IBCS) is the strategy for bringing together the collection of business characteristics statistics. The BCS is the survey instrument for the IBCS.

The data collected by the BCS supports the BCLS and are used to build a statistical longitudinal database for public and private sector analysts. It aims to provide users with business characteristics data augmented with financial data from administrative sources and other existing ABS surveys. Access to the BCLS is through a Confidentialised Unit Record File (CURF).

The IBCS specifies the collection of annual point in time core characteristics data including key indicators of Information Technology (IT) use and innovation with more detailed information collected for these two topics in alternating years. Population and cross-classified outputs can be produced for most BCS content not just use of IT and innovation. The much larger volume of characteristics data (particularly, annual indicators of innovation and the ability to produce cross-classified outputs) has expanded the range of information available about Australian business. These additional outputs represent a substantial increase in the nature and volume of this type of information.

Timeliness

The reference period for most of the characteristics items included in the 2015-16 BCS is during the year ended 30 June 2016 or as at 30 June 2016. Financial data relates to the most recent financial year ended on or before 30 September 2016.

The 2015-16 BCS forms were despatched to businesses in late October 2016. Key indicators related to use of IT and innovation in Australian business are published within 12 months of the end of the reference period. Subsequent, and more detailed, releases are published in the 2 months after the first release.

Accuracy

The ABS aims to produce high quality data from its industry collections, while minimising the reporting burden on businesses. To achieve this, extensive effort is put into survey and questionnaire design, collection procedures and processing.

The approach to quality assurance for the BCS aims to make the best use of ABS resources to meet user prioritised requirements, both in terms of data quality and timing of release. The approach specifies the level and degree to which each data item is quality assured, noting that only some of the total output from the BCS is able to be quality assured to the highest standards. Different priorities are assigned to groups of data items, with highest priority being assigned to key point in time data on business use of IT and innovation.

The 2015-16 BCS had a response rate of 93%.

Some of the items collected in the BCS are dynamic in nature and the concepts measured are subject to evolution and refinement over time. As changes are made to the questions, survey scope and survey procedures, it is not possible to measure the impact of all of these changes on data quality.

In this publication, indications of sampling variability are measured by Relative Standard Errors (RSEs). The Relative standard error is a useful measure in that it provides an immediate indication of the percentage errors likely to have occurred due to sampling, and thus avoids the need to refer to the size of the estimate. To annotate proportion estimates, a value of 50% has been used in the calculation of RSE rather than the estimated proportion from the survey data. This avoids inconsistencies between the way very low and very high proportions are annotated. Relative standard errors for estimates in this publication have been calculated using the actual standard error and the survey estimate (referred to as x) in the following manner: RSE%(x) = (SE(x)*100)/50.

For more information about the sampling errors, please refer to the Technical Note for this release.

Coherence

There are established international frameworks or reporting models for the collection of use of IT and innovation data (i.e. the Organisation for Economic Co-operation and Development (OECD) model questionnaire and OSLO Manual respectively). The application of these in ABS collections is in the context of the Australian situation and, for some elements, it is not appropriate to adhere to the international framework, although they are used, where possible, in the BCS. However, some compromise is required to balance BCLS and BCS population estimate requirements with the available resources.

The System of National Accounts and the Australian Accounting Standards are used for directly collected or administrative data as appropriate. The survey uses Standard Question Wording (which are used in most ABS economic business-based collections) to collect standard financial data items. A core set of characteristics questions have been developed.

Interpretability

Further information on the technical aspects (including item definitions) associated with the statistics from the BCS can be found in the Methodology page and Glossary associated with this release.

Accessibility

Outputs from the 2015-16 BCS will be available in the following suite of electronic releases and associated data cubes:

Summary of IT Use and Innovation in Australian Business, 2015-16 (cat. no. 8166.0), released 15 June 2017;
Business Use of Information Technology, 2015-16 (cat. no. 8129.0), released 20 July 2017; and
Selected Characteristics of Australian Business, 2015-16 (cat. no. 8167.0), to be released 17 August 2017.

These are available free of charge from the ABS website.

Abbreviations

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'000Thousand
ABNAustralian Business Number
ABRAustralian Business Register
ABSAustralian Bureau of Statistics
ABSBR ABSMPAustralian Bureau of Statistics Business Register Australian Bureau of Statistics maintained population
ANZSICAustralian and New Zealand Standard Industrial Classification
ATOAustralian Taxation Office
BCSBusiness Characteristics Survey
BERDBusiness Expenditure on R&D
BLDBusiness Longitudinal Database
CURFConfidentialised Unit Record File
EGEnterprise Group
EU IBCSEuropean Union Integrated Business Characteristics Strategy
ITInformation Technology
LELegal Entity
OECDOrganisation for Economic Co-operation and Development
PAYGWPay-as-you-go withholding
R&DResearch and experimental development
RSERelative standard error
SEStandard error
SISCAStandard Institutional Sector Classification of Australia
TAUType of activity unit
TOLOType of Legal Organisation