Open innovation in services: knowledge sources, intellectual property rights and internationalization

Abstract

The paper investigates the direction of knowledge flows and, more generally, the pattern of open innovation that is taking place within services across Europe. Using the Eurostat Fourth Community Innovation Survey (CIS4) dataset, on 17 service sectors across 18 countries, we find significant differences between service innovation leaders and followers. Key findings are that a concentration of radical innovation is to be found mainly in knowledge-intensive research and development sectors; that leading innovators across all sectors tend to use intellectual property rights to protect their ideas; and that leading service innovators engage in international sales. We do not find evidence that external sources of information acquisition are significant in radical service product innovation. By contrast, innovation followers rely more extensively on external sourcing of knowledge and new ideas (with decreasing returns to innovation performance), and tend not to export. These findings contribute significantly to our understanding of the knowledge flows and the asymmetries in knowledge sharing in service sectors across Europe.