KNOWLEDGE-INTENSIVE BUSINESS SERVICES AS CO-PRODUCERS OF INNOVATION

TLDR

In the knowledge‑based economy, services increasingly play a pivotal role in innovation, yet systematic analysis of this role is lacking. The essay aims to present a four‑dimensional model of service innovation that highlights the importance of non‑technological factors such as new service concepts, client interfaces, and service delivery systems. The authors map the roles of service firms in innovation by identifying five basic service innovation patterns and applying this framework to analyze the role of knowledge‑intensive business services (KIBS). The study finds that KIBS act as facilitators, carriers, or sources of innovation, often co‑producing innovation with clients, and that process‑oriented and intangible knowledge flows are essential, suggesting KIBS may evolve into a second knowledge infrastructure with policy implications.

Abstract

In the unfolding knowledge-based economy, services do matter. But while they are increasingly seen to play a pivotal role in innovation processes, there has been little systematic analysis of this role. This essay presents a four-dimensional model of (services) innovation, that points to the significance of such non-technological factors in innovation as new service concepts, client interfaces and service delivery system. The various roles of service firms in innovation processes are mapped out by identifying five basic service innovation patterns. This framework is used to make an analysis of the role played by knowledge-intensive business services (KIBS) in innovation. KIBS are seen to function as facilitator, carrier or source of innovation, and through their almost symbiotic relationship with client firms, some KIBS function as co-producers of innovation. It is further argued that, in addition to discrete and tangible forms of knowledge exchange, process-oriented and intangible forms of knowledge flows are crucial in such relationships. KIBS are hypothesised to be gradually developing into a "second knowledge infrastructure" in addition to the formal (public) "first knowledge infrastructure", though there is likelihood of cross-national variations in the spill-over effects from services innovation in and through KIBS, and in the degree to which KIBS are integrated with other economic activities. Finally, some implications for innovation management and innovation policy are discussed.