Online sales are driving Australian business despite overall innovation dipping, the Australian Bureau of Statistics (ABS) has found.

In its Business Use of Information Technology and Innovation in Australian Business report, the ABS revealed Australia’s internet income for 2016-17 reached $394.2 billion.

This was up from $285.5 billion in 2014-15.

“More than a third of businesses reported having received orders via the internet (37%), with income obtained from these orders totalling an estimated $394 billion,” the report stated.

Growth was perhaps due to Australian businesses increasing their online presence.

The total number of businesses with a web presence reached 51.1%, while the number of businesses with a social media presence was up at 40.4%

This change was particularly within the retail trade industry, where 59% of companies now have a web presence and 56% are on social media.

Although these figures indicate that more Australian companies are embracing the challenge of moving business online, this does not necessarily translate to innovation at a broader level.

The report made a summary of “innovative activity” in Australian business, which suggested innovation had in fact slowed down.

The percentage of businesses with any innovative activity dropped from 48.7% in 2015-16 to 44.5% in 2016-17.

This figure was also down from 45.0% in 2014-15.

The measure of “innovative activity” was based around the Oslo Manual, which was last updated in 2005 by Eurostat and the Organisation for Economic Co-operation and Development (OECD).

It looked at whether businesses had introduced any new or significantly improved goods, services, organisational or managerial processes and marketing methods.

There was again a large discrepancy between large and small businesses.

Seventy percent of businesses with a staff of 200 people or greater were innovation active compared to just 36% of businesses with 0-4 staff.

Information media and telecommunications was the most innovative industry, with 54% of businesses having introduced at least one type of innovation.