Globally, innovation is recognised as a key pathway to productivity, sustainability and effectiveness in both the public and private sector. In order for Australia to remain internationally competitive, all areas of the economy need to be actively involved in innovation. This is especially true in regional Australia, given that regions are major contributors to national productivity.

It is critically important that innovation policy and programming are developed based on a strong evidence base. Despite this, there is a paucity of research reporting on the levels of innovation in regional Australia, and few accounts of the experiential knowledge regarding what support measures are likely to be most effective in terms of increasing innovation. This paper addresses that knowledge gap by presenting the results of an online Australian innovation survey, conducted with a sample of respondents who are familiar with the issues faced in regional Australia. This survey contrasts the track record and perceptions of innovation between urban and regional areas.

Overall, significant differences were hardly detected between the views of respondents from urban and regional areas. Nevertheless, the key themes were that innovation is well understood by regional businesses, with innovative activities mainly reported in marketing, management and operational processes. Businesses predominantly reported that they collaborated with other businesses for innovation, albeit many respondents indicating they did not feel there was a need for collaboration. The primary driver for innovation was to increase responsiveness to customer need and increase efficiency; whereas barriers were the cost of development or lacking funds. These findings suggest that support for (regional) businesses is likely to be most effective if centered on innovation-specific business planning advice and developing links and networks between businesses. Respondents also expressed a desire for government organisations, universities and economic development organisations to support and foster business innovation through improved networking and alliance building.