Barriers to Small Business Innovation in Rural Australia

This paper examines barriers to innovation by small businesses in rural Australia. A qualitative methodology is employed involving focus group meetings with small business owners in six cotton communities. The findings reveal common as well as unique barriers to business innovation. Common barriers include poor infrastructure, skill shortages, resource dependence, lack of access to finance and political uncertainties. Some communities were more affected by the small size of their local markets than others. The quality of local leaders, conservative attitude of residents, and high cost of living had greater impact as barriers in some communities than others. Infrastructure development using resource taxes as well as decentralising responsibility for development to regional leaders can help address the innovation barriers in these communities.