Innovation is key for productivity growth and an important focus for policy in many countries. Innovation novelty, increasing from new-to-firm to new-to-world, is linked with firm growth and spillover effects. We examine the role of R&D, management capability and business skills in innovation novelty. Using detailed firm-level data, we find that firm-specific variables such as R&D, collaboration, foreign ownership, business focus on innovation and management capability are significantly associated with higher levels of innovation novelty. We also find that innovation strategy can vary based on firm size. We provide new evidence for Australia.