Given the importance of innovation for economic prosperity and growth, this result suggests Australian industry has used innovation as part of its increased focus on growing and competing in a global marketplace.
However, figures for the most recent study period (2005 relative to 2004) point to a small downturn in the rate of innovation in Australia by -2.6 per cent. During this period only two components of the index - R&D intensity and trade mark intensity - reported increases in the rate of activity.
Of particular interest during this period is a fall in organisational, managerial and marketing innovation which suggests some companies are overlooking the need to reorganise themselves in order to meet the demands of globalisation and its emerging market shifts.
Despite the fall in 2005, most Australian industries experienced innovation growth in the period from 2000 to 2004.
Industry sectors that invested strongly in R&D and ICT had the highest innovation and productivity index ratings.
After reaching its peak in 2002, the rate of patenting activity in Australian industry has experienced a downward trend to 2005. At the same time, however, the level of R&D intensity has been steadily increasing and has been the strongest growth of the index from 1990 to 2005.
This is consistent with the government's introduction of the R&D tax concession program to support industry in achieving innovation outcomes, according to the index.
From an industry perspective, the stand out performer over the entire 15 year period was the wholesale trade industry (7.4 per cent per annum). With a 2005 innovation index score of 218.7 (1990=100), the wholesale trade industry score in 2005 was 30.8 points higher than the index score of the next highest industry.
However, this score also masks the fact that the index for wholesale trade actually fell in 2005 by -12.6 per cent compared to the 2004 score of 250.3.
The other significant industry performers over the 15 year period were manufacturing (3.8 per cent per annum) and finance and insurance industries (5.5 per cent per annum), with innovation Index rankings in 2005 of 161.2 and 187.9 respectively.
Despite high growth and record revenues, the mining industry has experienced a fall in the rate of innovative activity since 2001, after an increase of approximately 80 per cent from 1990 to 2001.
Its performance in 2005 with an index score of 138.8 suggests it is now only just above the average industry in terms of innovative activity, the study said.
"Much of this seems to be attributable to a dramatic decrease in patenting activity in the industry," it added.